Let your competition do them. They will be out of business soon and he will come back to you and pay your price.

Dee

Philadelphia, PA (Really Bensalem)

Jer,

My cost of materials is WAY high because of the freight I need to pay. A quarter sheet of rowmark plastic costs me about $20.00...so I used THAT as my base.

I charge $1.25 per minute for laser time.

With that in mind, I come up with .89 cost for the plastic. Add to that an arbitrary .50 for the magnetic strip ( just a guess here) and use the industry multiplier of 3 you come up with $4.17.....add to that $3.75 for your laser time, ( figuring three minutes to engrave and cut the piece, unless you are cutting with shears) and it seems to "me" you are right on the money and your competition is missing the boat.

So I think Dee is right. Your customer will be back when your competion goes out of business and in the meanwhile you will have had a price increase due to the rising cost of the plastic which of course is a petroleum product......

Anyway, the short answer is NO you are not out of line. Your competition is.

Just my two cents. Want change?

Well you have the option , lose your client to your opposition or better your price. You dont have to go as low as them , but offer some incentive for your client to stay with you. Tell em its reducing your profit a lot , but you don't want to lose em or something like that.
A good rule of thumb is to charge 5-6x material cost.
Problem is your client might NOT come back to you.
If I were them , I prolly wouldn't considering you almost 4x the oppositions price and regardless of whether its fair or not , you will be regarded as gouging them. If the cheapy supplier let me down , I would be looking for another but not at 3-4x the price.
It's not always the greatest strategy to refuse to budge on price.

I could be "nice" and symnpathize with the OP and tell him all the platitudes and the things he wants to hear re his pricing , but I wont be. If hes 3x more expensive , he has a BIG problem right now.

At the end of it all , in the face of competitors that can do the same thing as us , we are merely purveyors of a product or service thats not unique.
If you are being undercut in a product or process , the fact is that you are not efficient or have adopted the wrong pricing structure. No one goes into business to make a loss , least of all your competition.
If they can do it at 1/3rd of your price , your price is wrong for the market or that product. Be aware , the price you charge might be right for you , but that doesnt matter a whit.
The choice is yours , stick to your guns and watch your market share dwindle and your machinery idle , or be proactive to your competitors pricing. If you cant even begin to match their pricing , then you need to seriously consider whether you should be competing in that market.

I take 5-6x the cost of materials as a good rule of thumb in terms of pricing a fabricated object - its not cast in stone.
if your expenses in running a business mean your selling price is 3x more than your competitors , being blunt , you are innefficient in that market or with that product. Its a wake up call to examine your pricing or production or cost of production.

If your competition has an overhead of $0 per month, and you have $6000 per month, meeting his prices will bankrupt you fast.

Getting every job out there is NOT a sign of good business, usually just the opposite.

I would much rather lose a job that will result in a loss, than lose established customers that represent a gain.

Philadelphia, PA (Really Bensalem)

When you finally understand it completely... it changes.

A long time ago, I decided that I was not going to work for free. Price is not what you sell, service is. We have large clients that don't even ask what the price is going to be... their primary concern is "is it going to be on time" and "will they deliver it". The item in question is worth at least $10.... unless you like working for free. Then it's worth about $3.

Possible solutions:

go fishing

reduce your overhead

stop eating

live in a cave

I like #1.

Mark

Ok, you got a competitor out there thats a 1/3rd of your price and is already taking your customers - Its yet to be proven that their service is significantly worse than yours.
In my book if you dont react to that your business is in major trouble. You can wait till your competitor takes your market share and perhaps folds , and you maybe get your customers back after he goes belly up oir delivers bad service , thats if you havent gone down the tubes in that time.
Or failing that , you can abandon that particular product or market segment if you cant compete there and find some other area where you can. Either way , you have to react.

There is a significant difference between your price being 3x the competitors and their price being 1/3rd of yours. You are taking the stance that the OP is wrong in his pricing/production and he needs to take action to correct the problem. I submit that the "problem" is with the other business - he doesn't value his work highly enough and is undercutting his profitability and needs to correct his pricing accordingly.

Just because a competitor is whoring himself out doesn't mean I have to, or that I am wrong!

Not sure why you accused the OP of being the person who is wrong, it could just as easily been the competitor. For that matter, it could be both - the OP was a bit high and the competitor is a bit low.

Gary

My question is why would the customer even bother coming back to show an invoice for a cheaper price anyway?? Sounds like something is being left out here.

But I agree that the $8 price is more than fair, if not on the low side.