Beginners Laser Cutting Cost Saving Guide: Part 5

Ponoko Cost Saving Guide

Product Recipe #1 – Part 5

Jill is a graphic designer from Oakland, CA. While riding her bike to work, she was inspired to create a set of custom-made bike gear-themed coasters to sell at local bike shops and in her Etsy Store.

Here Jill takes you step-by-step through the process she used to turn her idea into a profitable product with Ponoko. Making her coasters at the lowest price possible means she pockets a healthy margin selling to stores and direct to customers.

You can apply these steps to your own project, or you can download all the files here.

Laser Cutting Cost Saving Guide Part 5: Sell It

With my product line ready to go, it was time to make some money …

Packaging Your Product

Time to consider packaging. l wanted it to look great, but be very low cost. After a bit of experimentation, I came up with this for the cost of $1 per package:

Setting a Profitable Price

With all costs now calculated, it was time to finalize my retail and wholesale pricing.

To start, I used a simple ‘cost plus margin’ pricing model to ensure profitability …

First – Calculate Your Total Production Cost at Various Order Volumes

Total Production Cost = Making + Materials + Shipping + Packaging Costs:

Sets of 4 Coasters 1 11 56 461
Material Sheets 1 x P1 1 x P3 5 x P3 45 x P3
Free Account Cost $18.64 $123.67 $618.33 $5,070.33
Prime Account Cost $15.69 $91.93 $447.42 $3,028.12
Prime Cost / Set $15.69 $8.36 $7.99 $6.56
Packaging Cost / Set $1.00 $1.00 $1.00 $1.00
Total Cost / Set $16.69 $9.36 $8.99 $7.56

Second – Calculate Your Profitable Pricing

My rule of thumb is 1 : 2 : 4 … $1 of cost means a $2 wholesale price, means a $4 retail price. In other words:

Profitable Retail Price = 2 x Wholesale Price = 2 x Total Production Cost.

Hence:

Sets of 4 Coasters 1 11 56 461
Total Cost / Set $16.69 $9.36 $8.99 $7.56
My Wholesale Margin 50% 50% 50% 50%
Wholesale Price / Set $33.38 $18.72 $17.98 $15.12
My Retail Margin 75% 75% 75% 75%
Retail Price / Set $66.76 $37.44 $35.96 $30.24
Overall Profit 50/50 62.5% 62.5% 62.5% 62.5%

To profit, this shows my retail price needs to be between $30.24 and $66.76 per set of 4 coasters to retain a profit margin of 62.5% assuming a 50:50 split in sales across both retail and wholesale channels.

Third – Set a Retail Price that Feels About Right

The information above coupled with knowing the market price ranges from $15 to $50 per set, I decide that my original retail price target of $30 per set is a good place for me to start.

Hence my profits will actually be:

Sets of 4 Coasters 1 11 56 461
Retail Price / Set $30 $30 $30 $30
Total Cost / Set $16.69 $9.36 $8.99 $7.56
My Retail Margin 44% 69% 70% 75%
Wholesale Price / Set $16.69 $15 $15 $15
My Wholesale Margin 0% 38% 40% 50%
Overall Profit 50/50 22% 54% 55% 62.5%
Prime + Packg Cost $16.69 $102.93 $503.42 $3,489.12

This third table tells me a few important things:

1) My Minimum Order Size - To hit a 54% overall profit margin, I need to order & package at least 11 sets of coasters at $102.93 per order. This is a good place for me to start my business.

2) My Most Profitable Order Size - To hit my goal of a 62.5% overall profit margin, I need to order & package at least 461 sets of coasters at $3,489.12 per order. This is a good place for me when I get a reliable stream of retail and/or wholesale orders.

3) Minimum Wholesale Order Size - To hit a 54% overall profit margin, I need to sell to retailers in a minimum batch of 10 sets of coasters at $150.

4) Tough Retailer Negotiation - To retain my profit margin, a retailer will need to order at least 461 sets of coasters to get a wholesale price less than $15 per set.

5) Taking a Tiny Step First - I know I can order & package just one set of coasters at $16.69 and sell them retail at a 44% profit margin, which is really nice to know if I do not want to spend the next level up at $102.93. But I also know that I can not sell this small order size at the $15 wholesale price because I will make a loss.

Of course, if I’m just getting started I can relax some of these 1:2:4 pricing ‘rules’. But they’re a great place to benchmark what is actually going on with my cash.

Without profit I can not continue my passion of making things for others. With profit I create new possibilities for myself :-)

Profiting from On-Demand Inventory

Continuing on my theme of keeping costs low, I decided to keep my stock digital until I had customer orders. This way I have zero cost until I make a sale and collect the cash.

The third table above shows that I can order just 1 set at $16.69 to fulfill a $30 retail order at a 44% retail margin. But I make nothing on a wholesale order – which tells me I need to set a minimum wholesale order size of at least 10 sets. And, in general, to maintain healthy profits I probably want to produce at least 11 sets each time I get an order, so I have a tiny stock on hand for fast delivery.

My friendly bike store owner pre-ordered 10 sets of 4 cork coasters when I was user testing in his store. He paid me the $150 wholesale price.

So I made the following design (of 45 coasters):

Download design file for this step.

I sold 10 sets for $150 at a cost to me of $93.57 (= $83.57 production + $10 packaging). A 38% wholesale profit margin to get me started ($150 wholesale price – $93.57 total cost = $56.43 profit).

Promoting Your Product

I sell my coasters to retailers and on Etsy. Here are my top tips.

Good Photos Sell

Well lit, crisp high-resolution photos of your product are a must.

Describe Your Product Well

I describe what it is made of, what the dimensions are and what it feels like. I share a bit about myself as well, so folks can identify with me as a person.

Be Pro-Active

Don’t just sit back and wait for customers to come to you. In the case of local bike shops, I just walk in, introduce myself and start a conversation. For larger retailers, I search company websites to get in touch with vendor departments. Wherever possible, I speak directly to their buyers.

Go for it!

  • Imagine it
  • Design it
  • Prototype it
  • Make it
  • Sell it

It really is that easy and low cost to make money selling your own products. You’re only limited by your imagination and determination. Ponoko can help you with the rest :-)

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Beginners Laser Cutting Cost Saving Guide: Part 4

Ponoko laser cut cost saving guide 1

Product Recipe #1 – Part 4

Jill is a graphic designer from Oakland, CA. While riding her bike to work, she was inspired to create a set of custom-made bike gear-themed coasters to sell at local bike shops and in her Etsy Store.

Here Jill takes you step-by-step through the process she used to turn her idea into a profitable product with Ponoko. Making her coasters at the lowest price possible means she pockets a healthy margin selling to stores and direct to customers.

You can apply these steps to your own project, or you can download all the files here.

Laser Cutting Cost Saving Guide Part 4: Make It

And now for the fun stuff…

My Final Design & Material Choice

From the price testing and cardboard prototype earlier, I decided on this final design. And from the three $2.50 material samples I bought earlier, I decided to do my first real test using the cork material:

Download design file for this step.

Make a Few for User Testing

I laid out my winning coaster design onto a template for the smallest P1 material sheet size and ordered:

Yippeee! My Final Product

A few days later I received a very special delivery. I was pretty excited!

Time for User Testing

I tested my coasters with potential customers – biking friends, my friendly bike store owner and his customers. They loved the design and I took pre-orders.

But some wanted a different material. So I repeated the process above to make some in black acrylic …

Final Product Line!

With cork and black acrylic coasters in my new product line, I was ready to sell.

Making tests in the final material choice enables you to trial your actual product with potential customers. This way, you can get a real feel for how people will respond to your design, and also make any last-minute changes in response to genuine feedback before moving ahead with the final production run. It was through this process that Jill discovered a demand for alternate material options, an important marketing opportunity that she otherwise may have missed.

Next up in Part 5 of this Ponoko Product Recipe we look at preparing the product for sale and making sure that the final pricing is right for the coasters to sell at a profit.

How have you tested your production-ready designs before moving on to the final sale item? Tell us about your experience in the comments below.

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Ideas for Creative Agencies and Brands – Laser Cut Flat Pack Vases

Laser Cut Flat-Pack Vase

Flowers in a vase can mean so many things, and bringing a beautiful snippet of nature into our lives has a unique magic to it. Where to put those flowers can be as personal as the choice of flowers themselves, but sometimes it can help to give people something to work with.

As we’ve seen many times before, laser cutting is a great way to quickly achieve novel 3D forms from sheet materials. These vase examples from the Ponoko Showroom by Colin Francis and Chromatophobic use a test tube as the vessel, with a laser cut structure to hold it in place.

How would you use this as inspiration for a promotional product? Let us know in the comments below. To get you started – imagine placing branding on a slot-together structure that assembles around a standard water bottle, that can then become a functional keepsake for conference attendees or clients to take home with them.

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Beginners Laser Cutting Cost Saving Guide: Part 3

Keep your laser cutting costs down with the Ponoko Product Recipe

Product Recipe #1 – Part 3

Jill is a graphic designer from Oakland, CA. While riding her bike to work, she was inspired to create a set of custom-made bike gear-themed coasters to sell at local bike shops and in her Etsy Store.

Here Jill takes you step-by-step through the process she used to turn her idea into a profitable product with Ponoko. Making her coasters at the lowest price possible means she pockets a healthy margin selling to stores and direct to customers.

You can apply these steps to your own project, or you can download all the files here.

Laser Cutting Cost Saving Guide Part 3: Prototype It

My goal was to find a happy compromise between design aesthetics (look/feel) and efficient engineering (cost).

Zero Cost Prototyping!

Before I paid to make anything, I used my Personal Factory to price lots of design iterations instantly. I learned a whole lot and it didn’t cost me a bean …

Summary:

Target Production Cost = $1.88 per coaster (75% off retail).
First Quote – #1 = $5.40 per coaster (28% off retail).
Final Quote – #9 = $1.64 per coaster (78% off retail) !!

Here’s what I did to reduce my production cost, without actually making anything:   (more…)

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Ideas for Creative Agencies & Brands – #9

Laser Cut DVD Sleeves

Distributing large files on optical media continues to provide significant bang for your buck… even in these times of ever-cheaper flash storage. So if you’re still using discs as a way to distribute your digital wares, why not show off some creative flair with the packaging that goes along with your promotional CD, DVD or Blu-Ray?

The particularly refined laser cut case pictured above comes from designer Jazz Tigen and it is a great example of the impact that can be achieved when you break away from the standard DVD sleeve.

Here are a few more approaches that others have taken in creating unique CD and DVD sleeves through clever use of laser cutting.

Sarah Holbrook

Stine Strand

Neslihan Ulus

What examples have you seen of businesses or musicians using laser cut packaging designs for optical media? Let us know in the comments below, or jump straight in and make your own with Ponoko!

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Beginners Laser Cutting Cost Saving Guide: Part 2

Keep your laser cutting costs down with the Ponoko Product Recipe

Product Recipe #1 – Part 2

Jill is a graphic designer from Oakland, CA. While riding her bike to work, she was inspired to create a set of custom-made bike gear-themed coasters to sell at local bike shops and in her Etsy Store.

Here Jill takes you step-by-step through the process she used to turn her idea into a profitable product with Ponoko. Making her coasters at the lowest price possible means she pockets a healthy margin selling to stores and direct to customers.

You can apply these steps to your own project, or you can download all the files here.

Laser Cutting Cost Saving Guide Part 2: Design It

Now that I had an idea of where I wanted to go, it was time to prepare my first design for laser cutting. Here are my top tips.

Download a Laser Design Template

Open a Personal Factory laser design template in Adobe Illustrator. Using the template makes it so much easier to get a good result.

Use Existing Images

I did an image search to find a few gears with crisp images on a clean white background to make outlining easier:

Next – I imported the images into Adobe Illustrator, and converted the gears into black outlines:

Get the Essentials Right – Line Colors & Widths

I needed to use these settings to cut along the lines of the gear drawings:

* Stroke Color – Blue (R0, G0, B255).

* Stroke Width – 0.01mm.

To engrave along the lines of the gear drawings I needed to use these settings:

* Stroke Color – Red (R255, G0, B0).

* Stroke Width – 0.01mm.

To summarise Part 2 of the Laser Cutting Cost Saving Guide; Jill downloaded a design template from Ponoko, selected an image and refined the linework in Illustrator, and then ensured that the line colors and widths were compatible with the laser cutting guidelines provided in the template.

With the design sorted, our next step is to look at making a prototype. Continue reading Part 3 of this Ponoko Product Recipe for handy tips that will keep your laser cutting costs as low as possible.

How do you prepare your designs so that they are ready for laser cutting? Tell us about your process in the comments below.

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Beginners Laser Cutting Cost Saving Guide: Part 1

Keep your laser cutting costs down with the Ponoko Product Recipe

Product Recipe #1

Jill is a graphic designer from Oakland, CA. While riding her bike to work, she was inspired to create a set of custom-made bike gear-themed coasters to sell at local bike shops and in her Etsy Store.

Here Jill takes you step-by-step through the process she used to turn her idea into a profitable product with Ponoko. Making her coasters at the lowest price possible means she pockets a healthy margin selling to stores and direct to customers.

You can apply these steps to your own project, or you can download all the files here.

Laser Cutting Cost Saving Guide Part 1: Imagine It

First up, I needed a plan. A clear idea of my product, who it would appeal to and how much I needed to make and sell it for in order to turn a profit.

Your Product User

Take a moment to consider who will be using your product, and why. I had bicycle enthusiasts and their thirsty friends in mind.

Your Product Design

Rough out your design. I mostly tried to get a few ideas I had floating around in my head onto paper.

Your Product Materials

My coasters needed to look good, but also stand up to repeated use. I was thinking materials like black acrylic or natural cork. So I bought a few $2.50 material samples. I kinda liked the cork:

Your Target Price, Cost & Profit

Some basic research showed a set of 4 custom-made coasters retails for between $15 and $50 – with many sitting around $30. Working backwards, I calculated my ideal price points.

Your Design Challenge

Now you have your design challenge. Mine was to design a set of 4 bicycle themed coasters at less than $7.50 for making, materials and shipping from my Personal Factory. That’s a target production cost of $1.88 per coaster (75% less than a retail price of $7.50 each).

To summarise Part 1; Jill has identified her market, roughed out a design, investigated material options and worked out her design challenge based on a realistic retail price point.

In the next instalment for this Ponoko Product Recipe, we take a look at the digital design process for making a laser cut bike gear coaster. Jill talks us through preparing a file that is ready to send to the laser cutter.

Have you used Ponoko material samples to help in the early stages of your own design process? Tell us about it in the comments below.

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Top Ten Ways to Reduce Laser Cutting Costs – Tip #9

Material Thickness

How flexible are you on material choice for your design? To cut out a shape, the laser is burning through the material. Different materials burn at different rates, and also the thinner a material is, the faster it will cut. For example, 4mm cardboard cuts very quickly, and 9mm acrylic cuts very slowly.

Choosing the right material can reduce laser cutting costs considerably. If your design allows for it, create prototypes in paper (Tip #2) or cardboard (Tip #3) before moving on to thicker or harder materials. You can then have greater confidence in a successful outcome once you move up to the premium materials for your final design.

Have you had experience where changing the material thickness helped reduce laser cutting costs? Let us know in the comments below.

For more complex designs or projects that have a larger vision behind them, it’s time for Tip #10: Ponoko Prime.

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Ideas for Creative Agencies & Brands – #8

Multi-Layered Laser Cut and Etched Images

When an image is laser etched it takes on a whole new emotive feel, as many artists have demonstrated in recent years. This example from Malaysian laser cutting service Passion Woody uses a clever combination of photographic imagery with laser cut and etched wood.

It is a simple but very effective technique that gives the printed material a depth and visual presence that really catches the eye. Using laser cutting and etching in a selective way to enhance key aspects of an image enables your messaging to have a totally different impact.

Can you think of other ways to combine laser cutting with traditional printed material? Let us know in the comments below.

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7 Tips for Sucessful Selling this Father’s Day

Our top 7 tips for those selling their wares this Father’s Day

I can hear my dad now: “When I was your age, we didn’t start our Father’s day campaigns until June!”. Ah, dad how things have changed.

Father’s day is June 21, and if you’ve selling your Ponoko-made goods online, you’ll want to start planing now. Here are our top seven tips to share your men’s wares with those buying Father’s Day gifts.

1. Reach Out

Folks who have bought from you in the past are more likely to buy from you again. They are already familiar with your products and right now they’re scratching their heads trying to figure out what to get their old man, so let them know! Send out an email with an update on your newest products, and any specials you’re running for Father’s day.

2. Get in Gear

Planning ahead is essential if you want to make sure your products get up in front of your customers in time. You can start marketing right before Mother’s Day and carry your efforts through to Dad’s Day itself. Use our Guaranteed Order Deadlines for Father’s Day as a starting point and work backwards to ensure you’ve got everything ready and in stock when the orders start rolling in.

3. Be Inclusive

Don’t forget all of the different dads out there – The grandads, step-dads, first-time dads, households with two dads, god fathers and father figures. Don’t limit your potential sales to just one kind of relationship.

4. Add a Dad

If visitors are quickly scanning over your shop, they won’t notice that an item is a great Father’s Day gift unless it’s immediately obvious. Getting a dad in your product photo is a great way to visually hint that your product will make a great Father’s day gift. You don’t even have to use your own father – any roommate, spouse, or co-worker than can pass as a dad will do the job.

5. See What Folks are Looking for

Google’s search suggestion feature (shown above) is a quick and easy way to see what folks are looking for this Father’s day. Use the auto-complete function to gather intelligence on search terms like “father’s day gifts” & “gifts for dad”. Do a quick search for “father’s day gift guide” to see what’s popular in your particular niche.

6. Change it Up for Dad

Changing a color scheme from pinks and yellows to blues, grays, or blacks can put a masculine touch on a product. You can also explore swapping out materials like leather or wood. Those gold acrylic stud earrings? Boom, now they are manly wooden cufflinks. You can also put a spin on your items by adding sports or gaming elements.

7. Group Dad Items Together

As you can see in tip #5 above, “father’s day baskets” are a hot search right now. You don’t have to put your products in a literal basket, but grouping together a few complimentary items like a gift & a laser cut greeting card will help. You’re giving your customers an opportunity to save some time with a more impressive looking gift – and you can boost your sales in the process.

Use these notes, as well as our Guaranteed Order Deadlines for Father’s Day as a jumping-off point to create an attention-grabbing campaign around Father’s Day. Feel free to share your big plans below!

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