posted
Back when we bought our router one of my employees stated that we could now drop our prices because we could do things so much faster than before.
It made me shake my head. We never priced based on time and materials before, and I wasn't about to start with the purchase of the router.
Price should be based on VALUE of what you create... nothing else. The router actually allowed me to INCREASE my prices because we could now do things better than before, therefore increasing VALUE of the merchandise.
I price the things we make based on their design. The more complex the more expensive it is. We purposely do things that few others can, therefore making our stuff a rare commodity... and therefore we are able to price it based on its value.
I look at my router as a skilled employee sitting in the corner. As such it should make 80-100 thousand dollars each year for itself plus profit and operating cost for the company as well as my wage (and profit) when I design for it and operate it.
Don't sell yourself or the router short.
-grampa dan
-------------------- Dan Sawatzky Imagination Corporation Yarrow, British Columbia dan@imaginationcorporation.com http://www.imaginationcorporation.com
Being a grampa is one of the the most wonderful things in the world!!! Posts: 8740 | From: Yarrow, B.C. Canada | Registered: Nov 1998
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If you are doing a couple of quickie jobs for someone, DON'T LET THEM WATCH!
Their mind seems to only think they should have to pay for what they seen done and not for what it is worth.
They seem to forget the training hours, payments, and your skills that made that a quickie!
Enjoy! I could not be without my router
-------------------- Sam Staffan Mackinaw Art & Sign 721 S. Nokomis St. Mackinaw City, MI dstaffan@sbcglobal.net Posts: 1697 | From: Mackinaw City, MI | Registered: Mar 2004
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posted
That's a tuff one. I've had my router for about 8 months now. I price everything as normal. It may take less time, but the price is still what I normally charge. I've had stuff done for me before I bought my own and the price was $140 per hour for router time. Whatever that means. I still compare several prices from local and national companys. I price routered signs just like sandblasted signs. Cut-out letters just like bandsaw cut-outs. The price around here seems to be dropping, but I still do a better design to keep the quality and price up to my liking. Better designs sell the job. I just don't want to do every job that comes along. Let us know how you price things.
-------------------- John Arnott El Cajon CA 619 596-9989 signgraphics1@aol.com http://www.signgraphics1.com Posts: 1443 | From: El Cajon CA usa | Registered: Dec 1998
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posted
A good friend of mine runs a bulldozer service. He purchased a new but bigger cat dozer. He raised his prices a bit because his machine could do more faster. The older machine would do a job in 4 hours but his newer one would do it in 3 and he would be less tired. The value of the work was still there. He could do more in one day than before so he made lots more over time. The customer loved it because he could get his project started much sooner.
More productivity per hour does not mean lower price. Better productivity means higher profits.
I think every first time buyer who spends $20 grand on any machine should also get a course in economies of scale included with the owners manual.
-------------------- Leaper of Tall buildings.. If you find my posts divisive or otherwise snarky please ignore them. If you do not know how then PM me about it and I will demonstrate. Posts: 5274 | From: Im a nowhere man | Registered: Jul 2001
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We're having some fun with the new equipement... it's really revitalized everyone. Dan, when we can get the time together we'll surely be coming to one of your workshops!
Regarding pricing I am sensitive to trying to maximize the value for the finesse work. I do however second guess myself often (usually at my own expense) and like to try to have some basic benchmarks to try to justify the cost of time especially when estimating. (Maybe it's from being puck shy from customer's reactions to estimates.(Isn't it funny how no one seems to think twice when a plumber charges $145 to show up for a service call then $85 +/hr for their time on site).
It took us a while to realize that in most cases nobody's going to be able to do the work any quicker or better and that we should charge fairly for the time we spend on a customer's project - especially the planning and design. That said, we've tried to set some "hourly" rates for things. Some of these are based on overhead costs but most are based on feel(ie. similar occupational rates). We try to charge: $95/hr for design time, $85/hr for shop production time, $75/hr for installation time, $125/hr for install with the crane. However, usually just before we finalize a quote, we play a bit of a "game" in the shop by asking "what do you think this ones worth?" to try to cover the intangible.
I was thinking of estimating the router like we do the crane $75 - $85/hr for the operator plus another $50/hr or so for the router. Any file prep or setup time would be additional.
-------------------- Allan Gane Allograph Sign & Mural Co. Palgrave, ON agane@allograph.com Posts: 13 | From: Palgrave, Ontario, Canada | Registered: Jan 2001
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posted
While we mention that we have state of the art equipment on our website I don't make a big deal of it to customers. On the occasion when I do give a tour of the shop to a customer inevidably when they see the router they say... 'oh the computer makes the stuff eh?' like its effortless or something. They place no value on the creative process or the fact that the router is but one single tool of many in our workshop.
When we relocate our router to the back room of our shop I won't ever take our customers there... but rather keep the magic in what we do somewhat secret... and mysterious.
How we create our work isn't important to our customers... only the design and work itself. THAT's the magic. And that's what we charge for... not how its done or how long it takes.
The minute we allow our customers to know what each aspect of our business is worth on an hourly basis we have reduced our work to a commodity... and compete on price alone... NOT WHERE I WANT TO BE!
Refusing to go there in Yarrow...
-grampa dan
-------------------- Dan Sawatzky Imagination Corporation Yarrow, British Columbia dan@imaginationcorporation.com http://www.imaginationcorporation.com
Being a grampa is one of the the most wonderful things in the world!!! Posts: 8740 | From: Yarrow, B.C. Canada | Registered: Nov 1998
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posted
Cut out a panel shape in MDO, it isn't worth any more or less than if you cut it with a sabre saw.Just better and faster. Routing for another shop, maybe time and material. A 3-d sign,by the square foot and what you think it is worth. These prices should be based on your market value. If you think you can charge by pulling a figure out of the sky, good luck. What it is worth is based only on what someone else is willing to pay.
-------------------- Tom & Kathy Durham House Springs, MO Posts: 654 | From: House Springs, MO | Registered: Apr 1999
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