Machinery and tools should be accounted for in the overhead costs. The specific costs would be based on depreciation (for expensive tools) and the costs of maintenance and supplies necessary to operate the machine. Provision for the purchase of new machines should be included in the overhead cost pool of the budget that supports your business plan. Your pricing must support your plans for business growth and not just enough to cover costs. Overall, I'd say you've got a good handle on the basics of cost accounting. The rough part about competing with people in a market dominated by hobbyists is the competition often operates at either break even or a loss. Quite often, they only consider the cash flow and aren't properly accounting for costs. The best thing about competing with hobbyists is they get tired of the grind and drop out of the market over time.

Note to self, never let your teenager be in the room when listening to Samcraft. All she caught was "who else is going to be playing in that arena with your widget"...her response? "Mom would probably want to know that info also." Anyone want a kid?

@Samcraftcom

Жыл бұрын

Bwahahaha!!!

Hey Sam, well said. I've been looking into these types of videos and YOU are right there on top. Thanks for sharing and I have been using some of your store products, again, thank you

As for machine cost, I use kilawatt meters, so I know what each machine costs me to run for one hour based on the power rate of the time. My CO2 Laser is the most expensive, and heat presses come in second. My dad always told me as a kid, create something that costs a dime, sells for a dollar. Lord knows, I never would have imagined he was talking about cigarettes at the time...lol

@Samcraftcom

Жыл бұрын

Thanks for sharing!

@bojakcates2817

11 ай бұрын

so .13 cents per hour?

Spot on Sam! Well done, it isn’t complicated but the process is correct. But also, take into consideration the who would be your customer. What type person/company would buy your product. Some high end products involve some higher end subjects.

Thanks for this video and your many others! I really appreciate you doing these for people like me trying to even understand anything at the beginning.

Thanks Adam for all your videos . I'm a newbie & have learned a lot from you

Thanks Sam! Blessings of Easter to you, Angela and your family! 🥚🐣💐

@Samcraftcom

Жыл бұрын

Thank you so much!

GREAT video AS ALWAYS!! Great content ! I always enjoy your videos and always take something away that I didn't know or hadn't considered before. Thanks again Sam. God Bless you and your family.

Excellent advices 🙇‍♂ I'm sort of struggling with similar issues on my 3D printing and Engraving/Cutting shop.

Excellent as always..many things to consider..thanks

Hi Sam, came across your channel while researching lasers for a business idea I have. Watched the video, was impressed so decided this is a channel I need to subscribe to. First notification I got was this message on pricing a job. Great advice, very useful and made me realise I was missing key considerations when thinking about pricing and selling. Thank you very much and I plan to watch much more of your content. By the way, spending time with family is never cheesy. I am close to 60 and it took me over 50years to learn this. Goes to prove you can teach the old dogs new tricks.

This vids is crammed full of info. Going to need repeat watching. I need to prototype much more than I thought.

I have been looking over your shoulder since you put your french cleat wall up. I have been wondering how and when you might do a video on your brackets. I would love to have some of your brackets. Excited about your video.😊

Great video Sam. Two expenses that I see missing is shop time and yes machine time. Shop time is odds and ends such as electricity, sand paper, glue etc. Machine time is important as it pays for replacement parts, saw blades, lasers, and new tools. On the laser for the very least figure what the expected life of that CO2 laser tube and replacement cost then charge what by the hour for that.

WE NEED MORE CONTENT LIKE THIS!!!!

Love it Sam. Always inspirational !! ❤

@Samcraftcom

Жыл бұрын

Thanks so much!!

Great strategy and suggestions for the newcomer to setting up a business.

@Samcraftcom

Жыл бұрын

Glad you enjoyed it!

I've been wondering why you haven't been talking about your french cleat system that has been behind you so often. Now I know. Can't wait to see your pieces. My "shop" is going to be a 10' x 8' garden shed, if I can ever get 2 good weather days in a row where I can stay home to put it together. I may very well be in the market for your storage pieces.

Thank you you have explained that better then anyone else has and I will be using or trying that method out.🤙🤙🤙🤙🤙

@Samcraftcom

Жыл бұрын

Glad it was helpful! I really tried to be concise but fully inclusive with data. :)

Definitely an eye opener Sam, thanks for all of the tips :)

@Samcraftcom

Жыл бұрын

My pleasure!

yet another great video, thanks for sharing this info, a lot of detail which helps us new ones with lasers. I notice you are using the Gweike cloud laser there, some lovely 1 pass clean cuts your creating there, I'm finding that I have to cover my wood with brown stick on paper then peel it off after my cut, any tips on speed and power to eliminate or reduce the soot marks would be helpful Sam as this would reduce creation time, cheers mate and keep up the great work.

Sam - great information. 2 things: 1. Make sure you upcharge your labor. If you charge $30 an hour and pay yourself $30 an hour, your business isn’t making any money - only the employee of the business is. 2. Your bit about sunsetting products is spot on. I had a best seller for over two years. I HATED making it and it was far too labor intensive for what I was charging. I was afraid to give it up because it was a best seller. Soooo…I set about making 50 of them at one time so I would have them on hand and get the pain of making them over with in one fell swoop. Well…I still have 46 of them on hand. Customer tastes changed and now I’m stuck with them. I should have sunset them instead of forcing myself to do something I didn’t enjoy and wasn’t where I wanted to take my business long-term. Valuable lesson learned.

I like the idea of adding machine time as every minute they run is wear and tear and hastening the day they need to be repaired or replaced. That time should help you recoup the cost of the machines. It is an expense just like materials, supplies, etc....

Nice video. a lot of comments i see complain of little things, i call that overhead costs. it's just one more line item. people get lost in the details of the small and replaceable items. i have a hobby and am amazed that most of that is cheap or even free because big biz throw that stuff in the trash.

Thank you for sharing your selling advice. I really appreciate. I rent a space at a traders mall. I don't really sell much. I know my price is on target. I do painting, resin, lazor cutting, and some wood working.

@Samcraftcom

Жыл бұрын

I used to do similar and found that the number of eyes on my products just weren't enough to justify the costs. The difficult part with something like that is never having a real idea of the number of impressions your products received and the conversion rates. You get this data with online sales. Don't get me wrong, there are many who are successful at this, it just didn't work for me.

THIS part of the business is my absolute bane... I'll defintely be going through this video multiple times...

@heffe2001

Жыл бұрын

If you don't mind me asking, what wood are you using for these things? That's been one of my biggest issues, consistant price/quality wood supplies. For the stuff my wife has me make for her crafting, I usually use the 5mm luan boards from Home Depot or Lowes, but I'm not sure if they're really sturdy enough to make something 'functional' like your tool shelves.

I think you're spot on with this video. I've been involved in several businesses over the years and did much of what you covered. There are those that say " this is a hobby, I'm not worries about naming money!" Hobbies can get real expensive!! If you're not at least breaking, even why do it?

@DavZell

Жыл бұрын

I just want to back the idea that hobbies aren't necessarily for making money or breaking even. Most hobbies don't even have income potential. It's OK to do something for fun, relaxation, and/or intellectual curiosity.

👍😃Danke für das Video. Sehr professionell. Ich bin jetzt 37 Jahre selbstständig. Läuft. Wäre schön gewesen wenn ich zu Anfang schon solch eine Liste hätte.

@doen.8724

Жыл бұрын

Stimmt, ich auch😁👍🏼

Good information brother...keep it up..

@Samcraftcom

Жыл бұрын

Thanks!

GREAT Video!

@Samcraftcom

Жыл бұрын

Thanks!

$100.00 item over 10 $10.00 items. Spot on $100.00 one all day long. PS give your self a raise you deserve it 😃

@Samcraftcom

Жыл бұрын

I shall write a formal letter to my employer right now! :D

@mattsara2802

Жыл бұрын

🤣😂

Sam I can't speak to laser because I just include laser time into operating cost. I do have a shapeoko 4 pro Xl and a 5 Pro 4x4 I charge $1 per minute for custom one-off type things and $0.50 per minute for production type quantities.

One of the big things is competition. Too many people think, "oh, they're selling it, it must be a money maker, I will too" - well, you better be good at marketing or something because they have the established business, you're playing catch up, and 20 other people think the same thing. If you want to make money, come out with a niche item that no one else has.

Good content.

From a consomer to a seller I won't even look at a product if there is too little info about the product, more info more interest. Love your channel. 💖💖✝✝🙏🙏

Your channel has really taken off!so proud for you and Angela! You were one of the first channels I started watching! Love those Feral boys!

The $1/minute figure I hear thrown around a lot I originally heard was based on an $80K Epilog. Then the less your machine cost, you scale the $1/min down, so if your machine was $40K, it was 50 cents/min, and so on. The rationale is that something the Epilog cut in one minute may take your diode laser 20 minutes. You can't charge $20 because your cheap machine is slow, so you scale down the rate. Others base it on minimum shop rate, but that will vary from one market to another. In one area you may be able to charge a minimum of $50 and people will pay it without batting an eye. Yet in other areas you won't be able to even get $20.

@Samcraftcom

Жыл бұрын

Very good points! All of my machines are very low cost when compared to Epilog and other business-class machines for sure.

Great video with lots of insights. This is laser business 101 😀 Sam, there's one thing you didn't address yet. After all your calculations there's a competitor that has the (almost) same product at a lower price. So you decide not to go to the market with your product. But is your brand-name also not a part of the price? And thus makes it worth to pay a bit extra. In other words I can buy a pair of sneakers from a lesser known brand name or one from Nike. In general Nike let's you pay for their name while their product doesn't necessarily have a superior quality in comparison to the lesser known brand. Just a thought.

@kenbatteate7141

Жыл бұрын

That is a Great Point. Well said dir

My wife and I are still very new to the world of lasers. We have one product in particular right now that we have a good retail price set for it. The problem we have, is that this product is easily a bulk sale product that can then be resold. We struggle with trying to figure out wholesale pricing. Maybe a video on how to figure wholesale and retail on a single item could be a good follow up video to this one.

@andrewhavens9993

Жыл бұрын

I can offer some insight from the aspect of an online b2b and b2c seller. As a rule of thumb, the starting place for pricing was 50% (retailers calculate margin from the SELLING price so an item costing $1 would be sold for $2. I'm fairly certain wholesalers work on a lesser margin but I cannot say for sure except a lot depends on the market and the competition. Price is not the only factor in pricing. Quality and delivery factor in. With all this in mind, what about your product? Are you getting a good markup? If not, then it may not be a good candidate for wholesaling. Who would be your wholesale customers? If they are retailers, they will want that 50% markup. If they sell b2b then maybe you can get away with less. Other considerations is how much product can you deliver in what time frame? If you got an order for 100,000 today, how long before you could ship? 200,000? 500,000? Can you be knocked off? You also want to have a handle on market saturation, keeping both you and your competition in mind. Consider hand-picking a select few wholesale customers to see how it goes.

Sam your presentation is gold! Many college students would have paid $10,000 Plus for one semester to learn the information you just presented! Sam your Hourly rate should be more much more than you stated as an example. As for machine cost you need to factor in replacement cost of things such as a co2 laser tube replacement. Ie on larger aircraft such as corporate jets the operating cost for brake ware needs to be factored in to cost per landing. Thus an operating cost. Just for brakes only. Brake replacement cost $50,000 how many landings do you expect to get out of a set of brakes. Yes they are that expensive an these are cheap brakes. Your machine cost are critical and they need to be factored in as well. You are a sharp man to consider all of these things! 😁🛫

Great Video, Thanks. I have a spreadsheet to calculate all you went over. I enter the costs of material and time then magically the grand total appears at the bottom. This was created from various videos and information from others and how they do this process. Still waiting for the video on the tool wall behind you... 😇

@nicky23981

10 ай бұрын

Are you selling that spread sheet anywhere, be great to have it all compiled and ready to imput the figures🙏

@homezero

10 ай бұрын

@@nicky23981 I do not have it as a download. I wouldn't know what to sell it for. Since you are the only request I have received I'd be willing to email it to you. I am not sure how to get your email without everyone here seeing it as well? If we can figure that out it is yours. I'll try and give this some thought making it accessible another way.

Sam…This was great thank you! This is what I’m currently doing myself. Started my wood working as a small business around two years ago now. Been trying to find unique products to make and sell. When I got the Shapoko CNC it was a game changer. Struggle to get over the learning curve of it. I then came up with unique cutting boards that I carve with animals or peoples pets that kinda thing but I cast them in resin .the labor and materials are kinda high. And as you well know you can’t leave the CNC and I’m guessing your laser un attended for safety reasons. Having to waste time babysitting a machine was not working for me. So what I decided and how I treated it was to think of the machine as an employee. I task it with a job and while its working on a product I make sure I have something else to work on at the same time. Enter batch runs…so while the machine is cutting new blanks I’m sanding and finishing the boards that are ready or prototyping the next something. I figure if I can work like this then shop time is doubled so I can charge less but make more if this makes since? Where I have hit the wall is dragging my feet to set up an etsy store. Mostly due to some of my wood products can be really heavy such as large 24inch charcuterie river table boards . So I have mostly only sold my products at craft fairs. So thanks a lot for making me re think the etsy deal I’m going to force myself to get that going shortly. Thanks again for always having great ideas! I wish you a lot of luck with your coasters I love the way they look! Your advantage with those is they are light weight so not bad for shipping!

This is timely for me as I have been looking at a side hustle and the XTool 20w and 40w. Crazy how powerful these diode lasers have gotten. Do you build inventory or cut to order? I know from looking at Etsy that many laser-cut items have a time frame from order to shipping. i.e Order placed, Order shipped (usually about 7 days), then an Order Delivered date.

@Samcraftcom

Жыл бұрын

Happy to help! My items are made to order. It just makes sense as the variety grows of possible products and for personalization, too.

Hi Sam, when I was getting my items lasered before I bought my own laser machine, I was being charged $1 per minute, so I have carried this over and charge the same. I am located in Northwest Georgia.

@Samcraftcom

Жыл бұрын

Thanks for sharing!

Do you have a video on the bitsetter for the shapeoko 4 xxl. I don't think it is right. It try to set the bit up before a bit is put into the router. In joy your videos.

@Samcraftcom

Жыл бұрын

I don't, I only have a Shapeoko Pro and never had issues with the built-in bitsetter. It is automatic. Contact Carbide 3D

4:37 onwards... What brand of laser is that? I've never seen one with that kind of head.

Everyone that wants to operate as a for profit operation should educate themselves about business accounting, profit and loss statements and so on. When it comes to business, everything that it takes to produce a widget has to be accounted for and included in the selling price otherwise you are setting yourself up for failure. If you are using what others charge to determine what you will sell items for you first have to understand if what they are charging is profitable or not.

Hi, I heard no mention of operating costs, lighting, power, heat etc. machine costs, aside from original cost of machinery there is replacement cost to consider if your not factoring in running costs. I suppose it depends on wether your trying to pay for a hobby/workshop or looking to run a business for many years to come. I worked in hotels/restaurants for a while and they costed down to butter pats for toast 🤓. Nice and informative video, cheers 👍.

@pblais404

Жыл бұрын

At 6:45, he actually said he was NOT including those costs

@H2Dwoat

Жыл бұрын

@@pblais404 hi, apologies I have just reread my comment and I was not clear. I’m saying I think those expenses should be included.

Hey Sam, not directly related to this video, but I am looking for your opinion. If you were going to buy your first Laser today, what would you get? what is the best bang for the buck in your opinion.? hey... maybe that is another whole Video topic for you. ;-) keep up the great content!

@Samcraftcom

Жыл бұрын

I would probably go with the xTool D1 Pro + air assist, honeycomb bed, enclosure. It's really a versatile machine and relatively affordable. The user base out there is enormous, too, so help is easy to find in various online places.

@davedayton

Жыл бұрын

@Samcraft thanks for the input Sam 👍

What tablet do u use again in your shop. I know I saw u talk about it in a previous video but can't remember which video it was

@Samcraftcom

Жыл бұрын

I don't use that tablet anymore, I've since upgraded to a PC for running multiple lasers at once & to use for designing. BUT here's the link to the Fusion 5 tablet that I used for a long time and that is still in my shop --- just over at the CNC for running that machine solo now. amzn.to/3UsXbbO

I have hobby machines so I tend to struggle with machine time. I think there should be a charge but I don't think you can charge $1 minute for a thunder 54 and an xtool d1. I think the xtool would get $.33 or so. I don't need paid twice for my shop time watching the machine work, and if I do things right I should be doing other tasks while machines run so no idle time. I know the machines should be paid for, but again I have a hard time using someones laguna pricing strategy on a shapeoko.

What happened to you Goonies sign?

Thanks for the video Sam, about the taxes, don't you still have to pay income tax whether or not you're charging taxes on your sales?

@Samcraftcom

10 ай бұрын

Yes, if you're in an area where income tax is required. Sales and Income Tax are two very different beasts. :)

@nicky23981

10 ай бұрын

@@Samcraftcom bumber all i needed to hear😭... lol thanks for the reply 👊

The advertising groups call it the 3/33 rule. If you are happy you will tell 3 people. If you are unhappy, then 33. Now with the internet... sky's the limit.

My best selling item cost me $1.25 each. I use 1 to make 6 companion products. So a set (raw stock - 2 whole and 2 partial) cost me ~$3.50 plus the 10 minutes of fabrication/finishing time. I sell the finished product for $30, plus offer additional kustom engraving. I know I'll never retire a millionaire but the pocket change is good!

What is best shipping available cost wise?

@Samcraftcom

Жыл бұрын

This depends on many factors: origin, destination, weight, package size, delivery requirements (signature, insurance). I use USPS for all domestic orders in the USA.

@johnnyspropshop

Жыл бұрын

@@Samcraftcom I just signed up for Pirate Ship and still can't believe how easy it was to setup, pay and print my postage. Takes more time at USPS playing with their machine. I do a bunch of Ebay and have let them handle the shipping side, now that might change. Thanks for sharing Sam.

Having a machine charge of $1/item or 5% of selling price allows you to accounr for and have funds for new or replacment tools and machines. I am selling $10,000/month, I have $6,000/yr for new equiptment.....

Attention to detail and the customers experience really makes a great product a PREMIUM product. I never actually thought about it but it definitely makes a difference.

@2:19 That sounds dirty.... hahahahaha

@Samcraftcom

Жыл бұрын

Hahahaha I debated cutting it out vs. leaving it in. LOL

👍👍👍👍👍👍👍❤️❤️❤️❤️❤️❤️

Hi Sam, IMHO 1$/mn is pretty low. At this price I'm afraid you cannot replace your laser when it will be time to. Laser tubes and laser diodes won't last that much. This is the main problem on laser based small businesses. I don't know your specific machines but on mine I calculate to fully buy new machines within a very low mileage. Because this is business, don't expect pushing your machines to maximum lasting. First, you'd better sell the machine before it's outdated or close to death or they worth nothing. Second, you want your machines to be at maximum potential during production time. Maintenance is an expense in time and money, especially if you have a startup business. When you'll have over 5 machines working 16h/5d/week, you can afford some spare machines, but when you only have one or two and your whole production depends on them, don't try to trick the devil. You want machines you can trust, and this have a cost. Regards.

My brain hurt after 3 minutes :) This is why I just give stuff away and have fun making it. I am a better worker than I am an owner. Someone else set the price and I will make it. I would love to make money with my 3d printers and laser but I just do not have the patience to handle all the stuff.....this looks like $5 and this looks like $10 - there we go, I can do that LOL