How To Increase Profits with the Best Pricing For Retail

Keep your expectations realistic to secure the highest returns 

Without a careful, methodical approach, it can be difficult for makers (and indeed small businesses) to find the right balance when it comes to pricing their products. Let’s take a look at the considerations and contributing factors, so that this critical part of running a maker business can be controlled to work in your favor.

If you’re making as a hobby, then profits may not be such a priority – but a business cannot be sustainable if it does not turn a profit.

Setting a price for your products

In the creative marketplace, there are 3 key components to consider:

  1. Your cost price
  2. Your wholesale price
  3. Your retail price

This is the simplest breakdown, where the cost price refers to the sum of all the cash costs that go into making each product; the wholesale price is the cost price plus the amount you want to earn for your idea and your time (this can be seen as a ‘creative fee’, but we’ll get to that later); and the retail price is made up of your wholesale price plus the retail margin.

When seen in this way, a general guideline can be followed with the ratio of 1:2:4 where $1 of cost will have a $2 wholesale price and a $4 retail price.

Looking at it from the other direction can also help, as the focus on starting with the final selling price has a stronger connection to the reality of your target market – ie, the price of competing products. There is no point working out a price based on your own production costs, only to find that you are no longer competitive in the marketplace once your product reaches retailers.

Therefore, the simple equation looks like this:

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

How do you calculate your Creative Fee?

The tricky part, particularly when you are just starting out, is how to account for your creative spark and your design/assembly/packaging/marketing/etc time. How long do you spend assembling each product? What about all those trips to the post office? Every moment you spend doing ‘work’ should be accounted for, and given an appropriately proportioned value to insert into your calculations.

There is a handy Ponoko walkthrough on how to calculate these figures that can really help to prevent you from falling into the common trap of under-pricing your products.

Tough negotiations with retailers

Selling direct from your bedroom home office is one thing, but when retailers put the squeeze on you for tighter and tighter margins, the figures you carefully worked to when just starting out can suddenly leave you operating at a loss!

The Ponoko Cost Saving Guide uses a set of laser cut coasters to simulate the full process from initial design through to high turnover retail product. It makes for interesting reading, with a guided navigation through all the considerations that contribute to product pricing.

These include:

Minimum Order Size
Most Profitable Order Size
Minimum Wholesale Order Size
Tough Retailer Negotiations 

Knowing where your boundaries are in terms of lowest acceptable price and also highest realistic goals before you engage in large volume orders can make the difference between whether you actually realise a profit or not.

Making a Profit

Profit is very important, if you are seeing your making as a business venture.

There is no rule that you have to make a profit! It is totally ok to be making for the joy of making, but consider that without profits from your efforts, it can be very difficult to continue your passion for making things for others. When you make a profit, you are also creating new possibilities for yourself… so without a profit, you are not going to be running a business for very long.

Once dollars are involved, rules become very important. In Chris Anderson’s 10 Rules For Maker Businesses, profit heads the list, and with good reason. Reading through these articles will give you many tools and insights that can help to set and maintain realistic goals for your maker business.

“…if you don’t get the price right at the start, you won’t be able to keep making” – Chris Anderson

Let us know in the comments below what your personal experience has been in balancing the tricky task of how to achieve the best pricing for your retail products.

 

10 Rules For Maker Businesses

Ponoko Cost Saving Guide

Stop Under-Pricing your Design Products

 

 

Burning Through the Bills: Laser Cut Money

Scott Campbell’s Laser Cut Skull

Scott Campbell Skull detail

At a time of year when spending patterns can make it seem like people have money to burn, this laser cut skull by Scott Campbell sends a sobering message. Produced as a one in a series of laser cut US currency sculptures, the thought-provoking collection pokes fun at all those cashed-up buyers with their wallets out.

Highlighting the arbitrary nature of money

The leering skull featured above is an image familiar in the world of tattoo art (Scott happens to be a former tattoo artist himself). By placing this iconic form into a dead-man’s chest made out of $11,000 in real, legal currency, the value of money is brought into question as we reconsider how much the items that we buy are really worth.

scott campbell skull full

Laser cut layers

Using the technique of layered construction creates a solid three-dimensional object from the 2 x 2 foot sheets of currency. This is an effective way to generate 3D forms, as it takes advantage of the precision enabled by laser cutting and (as Scott shows here) the resulting topographical layers create a distinctive visual texture.

For further pieces that challenge the big spenders, you can find additional skulls laser cut from dollar bills at Scott Campbell’s Studio.

 

Ideas for Creative Agencies & Brands – #25

Wrapped in a Living Hinge: Laser Cut Clutch

laser cut living hinge bag michael harwood

There is something almost magical about the way a flat sheet of rigid material becomes flexible when laser cut using the ‘living hinge’ technique. This method of achieving a 3D shape from 2D material is ideally suited to laser cutting, as it exploits the natural tendency for stiff materials to flex around voids or notches. With a distinctive visual identity, the functional design elements can also be quite eye-catching.

The result is a smooth, organic curve that can be controlled rather efficiently if you are willing to either put your head far enough into the mathematics of how it works, or simply enjoy the prototyping process through several rounds of trial and error.

About living hinges

Learn more in our post on How To Design a Living Hinge where the mathematics behind this construction technique are revealed. While many examples of living hinges use simple lines as the decorative and functional element, it is in fact possible to adapt complex graphics (such as icons or company logos) to achieve a similar physical manipulation in the material.

See the following examples of patterns increasing in complexity, and how they respond when they are a part of a living hinge. To the left is a basic staggered line element, similar to the clutch bag design featured above from Michael Harwood. Moving through to chevrons, larger voids in a plus symbol and then the more detailed Space Invader sprite, it is clear that visually recognisable icons can indeed become living hinge elements.

Applying this technique to your brand

Staggered lines are an excellent starting point when looking at living hinges, as the behavior of the material is much more predictable and therefore easier to control. To keep things interesting, we do also encourage exploring more complex designs for maximum impact. Consider both the form that is created when the material bends around the living hinge, and how best to incorporate brand identity.

Have you bagged the perfect fashion accessory using the Ponoko Personal Factory? Let us know in the comments below. For more ideas for Agencies and Brands, see the other posts in the series.

Stand Out
At Your Next Event.

Your Promo Products Designed By 171,793 Designers.

Get 5 Fresh Ideas For Free »

How To: Laser Cut Wooden Keyboard

Using a Laser Cutter To Customize Your Keys

 

lazerwood macbook keys

With all of the time people spend at their personal computers, there is a growing demand for new ways to give these devices a more natural, human touch. One popular solution to complement the cool sheen of the portable computer is to create custom keys and removable keyboard decals.

The laser cut and etched example pictured above faithfully recreates the features on the buttons, from the classic fonts all the way to proportion and composition. It also pays to experiment; if you get the laser etched details just right, there is even scope to allow for light to pass through from the backlit keys below.

This is an effective way to give your computer added tactile and visual warmth. If you don’t have the means to make your own, you can see if the full Lazerwood example suits your needs. For those who would like to try their own design for keyboard customizations, try this instructable as a starting point. Load in the design files to your Ponoko Personal Factory and you’ll soon be typing away on an individualized upgraded keyboard with some serious creative flair.

How To Create Strength Using Origami and Laser Cutting

New structural options from everyday materials 

In recent years, the boundary between art and engineering has continued to blur with scientists and researchers turning their formidable minds toward traditional craft techniques. The results are starting to get quite exciting, with surprise breakthroughs such as the Japanese origami-inspired ‘zippered tube’ featured above demonstrating that there is still much to learn about how we use familiar materials.

This example highlights a novel process of combining thin flexible sheets of material that have precise cuts and folds in them. The location and combination of these elements enables the material to become rigid when assembled in specific configurations, gaining structural integrity far beyond the original material’s capacity.

The research that developed this construction technique emerged from a collaboration between University of Illinois grad student Evgueni Filipov, Georgia Institute of Technology professor Glaucio Paulino and professor Tomohiro Tachi from the University of Tokyo.

“…we’re starting to see how it has potential for a lot of different fields of engineering” – Evgueni Filipov

Filipov and his colleagues focus on an origami technique known as Miura-ori folding, where a tube is constructed from two precisely folded ziz-zag strips. Individually, the strips are highly flexible but when combined the resulting tube has a remarkable rigidity and controllable degree of compression or folding.

What does this mean for Ponoko users? While much of the focus in the origami research is currently centered around potential uses in architecture and for space exploration; many of the options from the Ponoko Materials Library would be a great fit for this approach to assembly and construction.

via Georgia Tech News Center

 

Ideas for Creative Agencies & Brands – #24

Delicious decorative details

laser cut sushi

For a tasty treat that is as much a feast for the stomach as it is for the eyes, laser cutting opens up a whole new world of possibilities. The precision and intricacy enabled by laser cutting is perfectly suited to many delicious everyday ingredients, as is demonstrated with the laser cut maki sushi rolls pictured above.

Laser Cutting In The Kitchen

The laser cutting we know and love works in two dimensions, transforming any flat material into an open creative canvas. Taking this into the kitchen where so many ingredients are rolled, stretched and beaten flat gives enterprising chefs a new tool with which to win over your heart. Sheets of nori (dried seaweed) are a great example, as they respond much like thin paper when laser cut. Then when they are assembled into a sushi roll the dramatic visual impact really draws attention.

Branding Good Enough To Eat

Applying brand identities and iconic imagery to ingredients creates quite a different engagement for the consumer than if the same elements are used on printed materials or packaging. With good reason, the way we pay attention to something edible triggers a response from somewhere deeper inside… how does that old proverb go? The way to a Man’s heart… (following images via meatcards.com)

meatcards.com

How can you tickle some taste buds using the Ponoko Personal Factory? Let us know in the comments below. For more ideas for Agencies and Brands, see the other posts in the series.

Stand Out
At Your Next Event.

Your Promo Products Designed By 171,793 Designers.

Get 5 Fresh Ideas For Free »

Ideas for Creative Agencies & Brands – #23

Laser Cut Fashion

laser cut fashion example

The intricate designs enabled by laser cut textiles are no longer an exclusive novelty for the haute couture runway scene. The bold fashion statements enabled by laser cutting are now within the grasp of the everyday consumer, with leather, silk and other textiles ideally suited to the digital manufacturing process.

Delicate patterns reminiscent of fine lace and needlework lend themselves well to laser cutting, but as we can see in the image above, bold shapes and iconic imagery can be just as effective.

With some clever design thinking, laser cutting has also enabled more exotic materials to become wearable garments. The wooden t-shirt below by Pauline Marcombe uses laser cut panels attached together with wire, transforming what was once a rigid material into a malleable interlocking form of modern body armour.

laser cut fashion wood shirt pauline marcombe

Why would you turn to laser cutting for brand promotion? For one, the eye-catching impact of these fashion items invites attention and a healthy curiosity… but also, thanks to the laser cutting process, there is much scope for design freedom and customization at a price that is accessible to the consumer.

How can your brand stand out amongst all the other fashonistas using the Ponoko Personal Factory? Let us know in the comments below. For more ideas for Agencies and Brands, see the other posts in the series.

Stand Out
At Your Next Event.

Your Promo Products Designed By 171,793 Designers.

Get 5 Fresh Ideas For Free »

How To make a Laser Cut Local Landmark

City of Bath Georgian House flat-pack model

Pitch_26_Bath_Terrace_House_1024x1024

Miniature models of local landmarks are a popular choice when it comes to souvenirs and keepsakes. In this example, the iconic Georgian terrace houses from the city of Bath in the UK are recreated with loving attention to detail.

Available as a flat-pack kit of three neatly stacked cosy homes, you can choose from either 1.5mm card or 3mm poplar ply, and the straightforward assembly process will only take a few minutes.

Ideal for Laser Cutting
Laser cut architectural models are the ideal choice to make use of tab-and-slot construction techniques that allow for quick and easy construction, often holding together without the need for glues or adhesives. Basic elevations of the structure can be traced out in your preferred drawing program (inkscape is a Ponoko favorite) and prepared for laser cutting. Take the guesswork out of designing with interlocking slots using one of several freely available tools and plugins. For a landmark or object with a more sculptural form, 3D models can also be sliced up into panels or interlocking sections that are just right to send to the laser cutter.

Optimise for Production (and add a little extra)
Once you have the profiles and parts that make up your object, arrange them neatly within one of the Ponoko laser cutting templates and add useful notes or assembly tips as etched details. The Ponoko guide to keeping laser cutting costs down contains important information that will save you time and money, so be sure to read through before starting to avoid common (and costly) pitfalls.

It can also be nice to add a little something extra to the assembled model. The Georgian terrace kits by Bob Kann come supplied with a little light to install inside, so that there is a warm welcoming glow that completes the homely feel.

via Bob Kann

Ideas for Creative Agencies & Brands – #22

Laser Cut Pop Up Text

anthropologiepopuptext

It makes sense that with many promotional products and messaging items, the choice of typography plays a major role in whether your messaging gets through to people. One way to literally stand out from the crowd can be to create something that looks interesting and encourages a simple physical interaction, all within the text itself.

This eye-catching example of 3D text with a difference came from the forward-thinking fashionistas at Anthropologie. The event invitation would have looked appropriately refined and stylish printed onto white card, if only a more traditional approach had been taken. However, the simple transformation of laser cutting a portion of the font outline completely changes how the recipient reads the message. Each word can be folded out to stand proud from the surface, making perspective, light and shadow all contribute to a more memorable sensorial experience.

Could your corporate messaging take on a whole new impact using the Ponoko Personal Factory? Let us know in the comments below. For more ideas for Agencies and Brands, see the other posts in the series.

Stand Out
At Your Next Event.

Your Promo Products Designed By 171,793 Designers.

Get 5 Fresh Ideas For Free »

How To Find Open Source Design Files

Design resources that help you get started with laser cutting

obrary-collage

The learning curve can be a steep one for some people when it comes to wrapping your head around digital manufacturing. Not only do you need to understand how to design for CNC, 3D printing or laser cutting; starting from scratch is daunting and design resources can be hard to come by.

In an attempt to de-mystify the process of digital manufacturing, Obrary takes inspiration from the changes enabled by the Open Source movement and has set up a resource supplying design files and code for anyone to use or improve on. Their motto is “Making it easy to make.”  They do that by providing the Maker community with a library full of open designs and a series of eBooks full of information about the making process.  The site has open designs from Makers from across the globe.

“Beyond improved sharing of design resources, new design approaches and engineering patterns are enabled”.

Users are encouraged to make their own tweaks to the designs, learning by trial and error in much the same way that made development for the Raspberry Pi so popular.

Have you ever wanted to build a cage gear mechanism? They’ve got one of those. How about an adding machine or even something simple like a robust shelving system… these are but a few of the designs that have been made freely available to the Obrary community. The design file package includes a number of file types including CAD files, interchange files (DXF, PDF, etc) and CAM files.  So you should be able to find a file format that fits into your manufacturing process.

And one nice feature of the site is that all of their designs and eBooks have the same license – Creative Commons-BY-SA.  This is a truly open license that even lets you sell products made from the designs.

“…making, building, and collaborating, not because we have to, or because it’s research, but because it’s so fun.”

Already a digital maker? Use the comments form below to tell us about other resources that were useful when you were just getting started, and how you’ve taken these skills and design adaptations into the Ponoko Personal Factory to turn them into reality.

See more collaborative designs and handy resources at Obrary.