What's it worth?

How do you base your prices? Do you use a formula to help you adjust your price or do you make it and just sell it for market value? When I did PI work I would tell people that “You can go to Walmart and pick this up off the shelf.” Which is true. That always helped me to convince folks that they were not paying more than they should. I was always a little more expensive than my competitors. But I rarely had complaints when the job was done. We always parted ways as friends.
As most of you may have done, I make a few signs because they are easy and it allows me to lean into this learning curve that has come with the X-Carve. With success I now have business’ asking for larger more detailed signs that will be worth more than $40-$65 each. I still use furniture grade wood and quality paints and stains and try to give people more than they ask for. So I was just wondering how you set your price and if you are willing to share.

I am pretty sure this topic comes up from time to time but for one reason or another I am having problems finding what I’m looking for using the search function. Could be the strings I’m using or the places I’m looking but it’s a struggle. Please excuse my cluttering the forum with yet one more post but I promise I looked for this prior to posting.

This has always been tough for me as well. I take into account the material cost, time to machine and most importantly my time to design and do the setup. The more complex, the more time it takes to do the computer work to prepare to cut.

One big difference for me, I am not doing this as a business, it is a hobby for me. So all of my sales are really geared to keep me in materials and carving bits to keep making things, not necessarily to make money (I have made a bit, but that was never my goal).

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I am not there yet (and like Erik, this is more a hobby than a day-to-day business for me) … but a local CNC’er that I met in the area used this formula.

Cost of Materials + $2/minute carving time.

If the client gives you a design on the back of a napkin and asks if you can make it, then you should likely come up with a standard design cost as well. But if they email you a ready-made design, then the above formula kind of makes sense.

The benefit he found is that most clients will gladly pay the cost of the material, and if there is any left over, you can use for another job, etc…

Anyway, certain there are other formulas, and others will certainly chime in but gives you a base to start the discussion…

Good luck !

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I guess I should have mentioned that this is also a hobby for me. I have a full time job and do this because I love the potential of it all and have always love the smell of sawdust in the morning! :stuck_out_tongue:
Your post highlight a great point that I hadn’t thought much about. I’m not really doing this to feed my family. I do however have one at the Citadel and another that’s a junior in high school so if it eases that burden I would never turn it away. I haven’t worried as much about the setup either but the more complex things become it will have to be a factor as well.

Thanks Ron. That is a great place to start. I’m not sure I can get that in my small town. A $100 for something simple that takes 45 minutes to cut seems a bit out of my league. With experience I’m sure I will get faster and maybe that will help too. Sounds like he may be cutting with something more advanced than I am.

For instance, this sign. It was fairly simple to do. I had about three total hours in it from design to delivery. Started out as a 1 inch piece of Maple ( I don’t remember the board foot price). It’s 16x7.5 and was painted and covered in outdoor urethane. I charged $45 for it. I don’t feel like I lost money but I didn’t make a lot either.

Thoughts?

This weeks cnc router tips podcast talks about pricing you work.

http://www.cncroutertips.com

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In my world, that sign would have been a minimum of $125. If you didn’t pay anything for materials, your machine, utilities, insurance, etc, according to your numbers you’re working for $15 an hour.

Plus what if something went wrong and you had to do it over?

Don’t undersell your work. (Or yourself.)

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I typical CNC in a real shop environment runs at about 80$/hour for machine runtime on parts… I’ve seen people run the X-Carve at about 20$/hour. So, if you have an efficient program, calculate that plus materials costs… Profit should be around 40% of machining time, 14% of material costs for sourcing stock and total 4% loss for accounting. So, for a 2 hour program at 20$/hour, you charge 40$ plus material and add 16$ (machine) and X amount of materials for profits. Mind you, this is a full production environment, where one man can set-up and operate between 2-4 machines.

My 2 cents.

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What about your actual hours and skills. Don’t sell yourself short!

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I’ve worked for local small business for 20+ years, and been an owner for close to 5. When I’m doing stuff at home I don’t get off the couch unless I can bill at $20 per hour. You really have to figure out what your time is worth. 1x8 maple runs about $5 per foot around here, so you’ve got $8 into wood. Add paint and urethane, assuming you will use remainder on another job and you’re out $10 in materials. Without figuring any wear and tear on the machine or your bits, cost of brushes, thinner, heat & electricity… Even if you only double the price you go paid $25 for labor - $8 an hour. For $8 an hour id go back to work for another three hours - potential screw-ups don’t come directly out of my pocket there. If your customer base can’t afford you doing the job for anything above free, you need to either accept the fact that you’re doing this at a potential net loss or find a different target customer base.

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Well one thing for sure, I’ve been selling myself short. I wanted people to feel like they were getting a deal and want to tell others about it but it looks like if I’m going to keep the shop solvent I’d better put more thought into it. I have to find a happy medium between affordability for the customer and my costs. I sure am happy this is a hobby. Hats off to all of you that do this for a living. Thanks to everyone who took time to help me.