Pricing Ones work

[genek]

I had a customer contact me to make a product. He said the other person Had quit Making the part for them. He had no drawing Just a proto type. I drew the part up, checked price of wood. Ran a simulation to see how long it would take and gave him a price of $9.52 each. This product is a bit eater unless you pocket out one section that takes time. Then you have to cut out the outside of the part.

This is what I got back from the customer.

Thanks for getting back with me. The last person that did them did it for about $4 per piece so I think we are going to have to go in another direction. Thanks for taking a look at it




The part looks simple but time pocketing out is the killer. Vaccum would have a hard time holding the small part.
I think the low price is why the other company quit making them.

here is what the part looked like (there is several mistakes put into this file. )

[rb99]

It sucks you did so much work for free. Check out this video about spec work...


https://www.youtube.com/watch?v=essNmNOrQto

[Brady Watson]

Brilliant!

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper,
and the people who consider price alone are that person’s lawful prey.

It’s unwise to pay too much, but it’s worse to pay too little.

When you pay too much, you lose a little money — that is all.

When you pay too little, you sometimes lose everything,
because the thing you bought was incapable of doing the thing it was bought to do.

The common law of business balance prohibits paying a little and getting a lot —
it can’t be done.

If you deal with the lowest bidder,
it is well to add something for the risk you run,
and if you do that you will have enough to pay for something better.”

-B

[myxpykalix]

I like the old greek guys attitude..."first you pay, then you eat!" and "you work for the government don't you?" There doesn't seem to be much loyalty anymore.

[rb99]

When someone has you figuring stuff out to get the job, that is called "Building A Specification".

Building a specification is billable.

What you can tell the potential customer is "I will have to create the artwork/3D model, create the toolpaths, run some tests and cut a sample. It will cost $ X to build your specification. Once the pricing is approved, that cost will be deducted from the order."

Give them a quote to get the quote.

[mikeacg]

http://www.talkshopbot.com/forum/attachment.php?attachmentid=26561&stc=1

[joe]

This makes me laugh because it's an extension of capitalism. You can't blame the customer for trying to save money. We all do it. Everyone with a Shopbot knows what I mean.

Joe

[Brian Harnett]

http://www.talkshopbot.com/forum/attachment.php?attachmentid=26561&stc=1

Thats funny, brings me back when I did interior trim work, contractor found someone cheaper then came to me because it was not right.

Paid for his mistake and my original rate.

[genek]

I loved all of the post. all of you are right. We all need to start charging for our design time. Especially me. This is the 8th time this year I have drawn something up and then lost the bid.

[Brady Watson]

Rather than just state the obvious, what do you fellers think would be the best way to educate the customer and build value? What is the solution to this problem?

There seems to be little value placed on most kinds of craftsmanship these days and I would imagine that has something to do with the fact that few people actually do anything tangible anymore. Few know first hand what goes into creating a one-off or a production run of parts. How did the idea that what you do is easy go lucky come to pass?

Is it just the flawed thinking of the customer or something else? For example, when I see something that a fellow craftsman has made, I imagine in my mind's eye what it would take for me to do it, walking through the steps. I then have a deeper appreciation for the object in question, because I recognize the time and effort investment.

What would you do to stave off some of the attitudes/thoughts about your products, given the vid/pic examples in this thread? I think we can all relate & we can also complain...but maybe if we put our heads together we could find ways to win over hearts and wallets, and create a better listening for what we do.

-B

[Davo]

I'm speaking only from my limited knowledge thus far

But it seems customers are completely ignorant on the technology and have to be told and given the ideas before the light goes off

They see engraved wood but are astonished it can also be done on a wooden door/cabinet...

Unless I have an example or tell them they never think further than what they see in front of them

I cannot get a brochure big enough to cover everything in the area im marketing for - seems I have to find a way to explain it all or miss out on someone approaching me because they just don't understand it all

[James M]

It sucks you did so much work for free. Check out this video about spec work...


https://www.youtube.com/watch?v=essNmNOrQto

This video sums up what another member talked about intellectual property. Where you do the work and they own the "intellectual property". The main actor comes across as big business pushing their weight around.

James

[Brady Watson]

I like the Greek guy. Reminds me of when I've thrown people out of the shop and told them not to come back. Try enjoying that level of sovereignty when you work in an office...or somebody else!

-B

[genek]

Brady That is a good point to bring up what can all of us do. That is actually a Million dollar question, I would love to know how to get that point over to customers. I design a lot of products each year to sale to my customers, Most of the time I have to prove to them that the product will move and make them money. When I design Prodcut for my self I try to add some pay to the finished product. When and If the product sales for several years I do gain my design time back, however if it does not take off or only lasts for a short time I never gain my design time. I try to come up with at least four new products each year. I know as soon as the product takes off I will be copied, most try to come in cheaper to try to get the edge on the market, Some good products I end up taking out of production because they have under cut the price to the point that I can not justify keeping that product in stock. Sometimes I let the product die off and then re introduce it years down the road. Copying and cutting prices hurst everyone. We all as artist, Craftmen etc need to be working on the same scale.

Our compaines new Logo this year is A good Artist is not cheap and a cheap Artist is not good. I have started wearing the shirts I have had printed up at all shows and events. As the new shop is finished we are having customers to come in and watch us make product. I plan on having a day each Month that anyone can come in and try to make something to help them understand how much labor goes into products. (This Idea came about when one of my customers came in and asked me to help him turn a rolling pin for his wife, he had a patern drawn out on paper, after he spent the biggest part of the day turning one rolling pin he realized that arts and crafts was not that easy.) Now he tell everyone how hard it was for him to turn a fancy rolling pin.

[Brian Harnett]

Most of the time I do not have an issue with my custom work, but that is from dealing with a few contractors that know what I do. The other part is face to face at art and craft shows when I explain the process I will use when making them a custom piece to a potential customer, many that go to these events are educated in value to start with.

That level of communication is difficult over the phone, email or website presentation. It may be I am not a good salesman the best salesmen I know cant even figure out a screwdriver but they can sure sell you some.

[rb99]

There was a thread on a sign forum the other day where the sign guy has a contract that the artwork is his and cannot be used for anything else until he is paid an extra fee and releases the ownership. That is great for me because I have designed hundreds of signs that become the companies entire image forever, and all I got to do was make a $300 4' x 8' sign.

[tri4sale]

Part of the issue is people see cheap CNC and laser machines and think the equipment is not expensive, and everyone and their sister is selling designs from Silhouette machines and think what we do on a CNC must be just as easy if Aunt Susy can make out of vinyl, how much harder can wood be. Fivrr.com advertised $5 for logo design, so they think designing must be easy and cheap if all they have to do is go online and click a few buttons and whamo, logo designed. GlowForge coming out with a laser anyone can use on their kitchen table :) Mass marketing says everything is cheap cheap cheap. Now like Gene says, once they try to make one themselves they realize it's not so easy. But the perception is there. And then you get the guys making, who have no understanding of business and pricing, who make on the cheap, and it takes them a while to realize they aren't actually making any money selling a widget for $5 so they stop, but when the customers go looking for the next guy to make the widget at $4.50, are shocked to get a price of $10 where you can actually make a profit, and complain that they used to buy it for $4.00 (yup, they lie, trying to get their cost cheaper and cheaper.)

[Alex Naumenko]

How did you get to $9.52 price. Can you break it down?

[bleeth]

Gene:
Thinking a little about a lot of what you do you may benefit bigtime by a second z.
One with a dedicated cutout bit and the other your ballnose.
Particularly if you have wider bed already.
If not you may be able to rig a small spindle like the 1 HP on a bracket off the front of your existing similar to the drill setup.

[gundog]

I do both custom work and I have a line of products that for the most part are production parts. For example I make fillet & rigging tables from marine grade plastic both custom and what I call stock tables. The plastic is over $200 a sheet so they are not cheap and the work is about half CNC cutting time and half hand finishing time. I can sell my stock tables much cheaper than I can sell the custom tables due to the drawing time & one off nature of all the setup time to finish.

I have all but almost quit doing the custom tables most folks don't want to spend the money for the custom work so rather than spending time getting them an accurate quote I give them a ball park price that can go up or down when they get serious I draw it and give them a final price. I have enough work I don't need that work anyway.

I have one like that now I told the guy I could build a copy of one of my custom tables he had seen on TV that I built for $385 then he gives me all his measurements and I tell him it will cost $500 I don't think he gets it I will make a copy of that table for $385 I will redesign it to suit his needs for $500. I have not heard back from him it has been about a week. I can make 3 or 4 stock tables in the same time it will take me to make that one custom table and I would make twice the money on the stock tables.

I am getting older and grumpier and I don't have patience for penny pinchers. My slogan is "I make quality products using the best materials I can get I don't make the cheapest stuff I make the best if you want cheap see my competitors". I also don't copy anyone's work everything I make is designed from scratch and so if you want it you will pay my price because no one else makes the same stuff until I get copied and that happens.

Mike