DSC
New Member
I had that last year to no avail.. although I did not really use it.
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Substrate pricing
- Thread starter DSC
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I had that last year to no avail.. although I did not really use it.
FireSprint.com
Trade Only Screen & Digital Sign Printing
The answer to this question (op) is a competitive advantage in business. I have heard of cell phone batteries costing under $.10 to make and can sell for as much as $50. I would start out doubling your material costs plus an hourly rate for labor. When we used to do stuff like this I calculated my hourly rate based on this...
Take all your fixed expenses per month and total that up. Include everything that you would pay even if you didn't get a dimes worth of business. Divide that by 80. Add double what your cost is per hour (either a wage for yourself or a wage for an employee). That will give you an hourly rate you should charge if you have only one person doing the work.
Cost of staying in business each month - $2000
Divide by 80 (there are 160 working hours, cut that in half) - $25
Cost you would like to pay yourself while working - $15 x 2 = $30
Total = $55/hour.
So if substrate and materials is $20, and the job will take 2 hours, we would have charged $150.
This is not the 'right' way to do it, not that there is one, but here's my logic...
You might mess up on materials once, so doubling it covers the cost of materials. Also, in a bad month, you might have up to 50% waste...same concept.
Labor costs you twice what you think it does, so doubling that will tend to keep you in the black.
Running a business takes about as much time as working in a business, so you figure you'll only get about 80 billable hours in a month. If you work out a way to bill more than that...when then we call this profitability.
Take all your fixed expenses per month and total that up. Include everything that you would pay even if you didn't get a dimes worth of business. Divide that by 80. Add double what your cost is per hour (either a wage for yourself or a wage for an employee). That will give you an hourly rate you should charge if you have only one person doing the work.
Cost of staying in business each month - $2000
Divide by 80 (there are 160 working hours, cut that in half) - $25
Cost you would like to pay yourself while working - $15 x 2 = $30
Total = $55/hour.
So if substrate and materials is $20, and the job will take 2 hours, we would have charged $150.
This is not the 'right' way to do it, not that there is one, but here's my logic...
You might mess up on materials once, so doubling it covers the cost of materials. Also, in a bad month, you might have up to 50% waste...same concept.
Labor costs you twice what you think it does, so doubling that will tend to keep you in the black.
Running a business takes about as much time as working in a business, so you figure you'll only get about 80 billable hours in a month. If you work out a way to bill more than that...when then we call this profitability.
10sacer
New Member
Geez... my single sheet pricing for .040 styrene is $10.82
Anyway, a poor man's methodology to cover your butt for all costs is to charge AT LEAST 3.5X your material cost. This logically works out ok on stuff like 6mm PVC where your average sell price would be about $6 a square foot, but if you did .020 Styrene - you would definitely be leaving money on the table. Same with Coro - I buy 4x8 sheets of opaque Coro for $8 a sheet, but I am not going to sell that whole 4x8 for only $28
You can not discount the perception of value of what you are producing. BMWs sell for more in affluent sections of the country than they do in middle class suburbs.
Your plumber analogy is flawed because your more financially secure homeowner can afford a house with copper pipes and the perception of fixing that is far greater than a guy who only owns a house with polyethylene pipes. That plumber will not charge the same to fix each house because of the perception of value to fix the problem. In the long run, the plumber makes more money fixing more cheaper houses on return visits than the single visit every 10 years on the copper house.
Anyway, a poor man's methodology to cover your butt for all costs is to charge AT LEAST 3.5X your material cost. This logically works out ok on stuff like 6mm PVC where your average sell price would be about $6 a square foot, but if you did .020 Styrene - you would definitely be leaving money on the table. Same with Coro - I buy 4x8 sheets of opaque Coro for $8 a sheet, but I am not going to sell that whole 4x8 for only $28
You can not discount the perception of value of what you are producing. BMWs sell for more in affluent sections of the country than they do in middle class suburbs.
Your plumber analogy is flawed because your more financially secure homeowner can afford a house with copper pipes and the perception of fixing that is far greater than a guy who only owns a house with polyethylene pipes. That plumber will not charge the same to fix each house because of the perception of value to fix the problem. In the long run, the plumber makes more money fixing more cheaper houses on return visits than the single visit every 10 years on the copper house.
DSC
New Member
It's not really flawed, I did not assume to know what type of pipes were in the house.. And without knowing that, for my example specifically, I was working with apples for apples.
Perception of value is based on a "product value" not just the standard things that we make.. A specific product value is decided up front if I am a vendor on an annual basis or sales basis.. Which is not what I was referring to in my question..
A yard sign has a national average for example, a laminated mdo sheet 4x8 with 2 colors has a national average.
I f we create a product for say an online reseller and they sell it for $25, they pay me $12. Than that is worth more than the average mark up cost to an everyday customer I was referring to..
I hope that makes sense..
Who the customer is most definitely is a factor in what I charge. Prior relationship? Future relationship? Immediate payment? Purchase order? Is product in stock or need to be ordered? Customer's perceived value of the product. Nothing wrong with getting what you can for something...within a reasonable band. There are many costs that you may incur that you may never have dreamed of. Price to stay ahead of the curve.