I am a huge fan of Andy and appreciate what he is trying to do here which is to encourage people to upsell the value of their products instead of "Giving them away for maybe 5 or 10 dollars". He does misuse the terminology of business multiple times. What you sell something for is the Sales Price or Gross Revenue. It doesn't matter whether this is a side hustle or a business, Profit is determined after all Costs are deducted. So to determine Profit, one must deduct all production, sales, and marketing costs. The production cost would be materials cost, equipment cost (to include utilities, wear and tear on equipment and tooling, and most importantly, production LABOR. Sales and Marketing would include any listing fees, advertisement fees, transportation, etc, and also LABOR spent selling or marketing. The reason so many people fail at business is that they aren't honest with themselves about what their costs are. Even if your argument was that you were going to own a CNC, and a workshop anyway, they still represent the costs(money) you spent to produce your product. Once you know exactly what your costs are, you can focus on reducing them at every opportunity. Furthermore, don't confuse cost as having any relationship to establishing Price. The market and your ability to sell establish the price. The only consideration cost gives to price is to decide if you are happy with the Profit you make when you subtract Cost from Gross Revenue
also depends on where you live, I cannot even ask for half the price since nobody is gonna spend such an amount. been selling inlay cutting boards for 20 eur for few months now, still waiting for my first costumer, at the same time i can see other people selling their cutting boards for same price or even higher. its very unmotivating when none of you stuff is being bought.
I'd see this shallow dish as more of a coin tray due to depth. If you made the unit deeper, it could then hold larger items such as multiple pieces of jewelry etc. Just a thought..... :) Love the design and your input!
Prices seem a bit ambitious. Would love to see some evidence similar to how Hamilton Dillbeck makes his videos. Go check out his most recent Whiskey Smoker vid. Put your designs and prices to the test!
I disagree. The cost to create something has little to do with what it is worth. It has everything to do with individual markets and your ability to sell.
I don't think it's ambitious. It is standard and commonplace to set the price at 200% of the total cost, in other words 100% profit. It's called "keystone pricing". The material costs are low, but after you add in the labor costs and additional expenses (marketing, credit card fees, listing fees, taxes, maintenance costs, etc.), I think the price is very reasonable.
Good that you are creating nice products and you can sell them. But your calculation doesn't work. Like you said, you have to sell it. And that means thinking where you sell it, making pictures, maybe going to markets, spend time to sell it, spend time to pack it and ship it, handle returns, etc. So at the end of the day, it cost you a lot more than your production cost.
Hi Andy! Really enjoy your videos and tips. I'm planning on going to craft fairs this summer. If I v carve the image of a local theater, am I ok, or do I need to worry about copyright? I have a 12x12 already made. What would you suggest for a ballpark starting point for the price? Thanks for any help
Hi Tom. Thanks for watching. If you're worried about copyright, I'd go talk to the theater and see what they say. There are many factors that go into price, but a video not to long ago about it. ua-cam.com/video/bXCA1ipRC0o/v-deo.html
Great info. Thanks for sharing. What do you think about adding a custom element? Adding initials, for example. How would that change things like time, price, marketing, and where you sell?
Once you add a custom element, you're essentially removing in person sales (unless you have a way to bring a laser engraver to a craft fair, which does happen!) and impulse purchasing. You're now selling on your own website (which needs to have traffic driven to it), or an online market place (which is a race to the bottom for pricing, and full of crazy people). But, it does increase the value to a customer, and allow you to charge more. Often quite a bit more - and of course the hope is you make back what you don't make at the in person sales.
Hello Andy, how many did you sell like this, or do you think you will sell? I.e. did you produce 100 each and now you will sell them and make roughly 10,000 USD? How long do you think it will take you to sell 200 pieces? And let's say you need two weeks to do that going to shows, working online, packing, shipping, etc., how do you calculate that time? I think many of us who see your channel like what you are doing, and you seem to be a nice guy. And some of us have the experience in private or in a company that they had a great product they wanted to sell. And then we found out how much work and sometimes money is involved to actually sell something. Or in other words: There is a reason why sales people and companies charge a lot, because their job is often difficult.
I've shared my pricing formula in previous videos. I always start with materials + labor × 1.5. But the reality is that this number does not decide what I charge for an item, the market, and my ability to sell does. This video is simply to show my thought process on these 2 examples.
@@AndyBirdBuilds Thanks for your reply. I agree, the price which you can demand has little to do with the production cost. What some of us try to point out is that there is a lot most cost involved than only the production.
I am a huge fan of Andy and appreciate what he is trying to do here which is to encourage people to upsell the value of their products instead of "Giving them away for maybe 5 or 10 dollars". He does misuse the terminology of business multiple times. What you sell something for is the Sales Price or Gross Revenue. It doesn't matter whether this is a side hustle or a business, Profit is determined after all Costs are deducted. So to determine Profit, one must deduct all production, sales, and marketing costs. The production cost would be materials cost, equipment cost (to include utilities, wear and tear on equipment and tooling, and most importantly, production LABOR. Sales and Marketing would include any listing fees, advertisement fees, transportation, etc, and also LABOR spent selling or marketing. The reason so many people fail at business is that they aren't honest with themselves about what their costs are. Even if your argument was that you were going to own a CNC, and a workshop anyway, they still represent the costs(money) you spent to produce your product. Once you know exactly what your costs are, you can focus on reducing them at every opportunity. Furthermore, don't confuse cost as having any relationship to establishing Price. The market and your ability to sell establish the price. The only consideration cost gives to price is to decide if you are happy with the Profit you make when you subtract Cost from Gross Revenue
Thank you for sharing. I like what you said, "your costs does not dictate your price." This also means that your costs don't dictate your profit.
also depends on where you live, I cannot even ask for half the price since nobody is gonna spend such an amount. been selling inlay cutting boards for 20 eur for few months now, still waiting for my first costumer, at the same time i can see other people selling their cutting boards for same price or even higher. its very unmotivating when none of you stuff is being bought.
Great point. Thanks for sharing
None of the marketing ideas were/are worthwhile. This is the struggle for 95% of Wood CNC'ers.
I'd see this shallow dish as more of a coin tray due to depth. If you made the unit deeper, it could then hold larger items such as multiple pieces of jewelry etc. Just a thought..... :) Love the design and your input!
Thanks for watching Lance!
Prices seem a bit ambitious. Would love to see some evidence similar to how Hamilton Dillbeck makes his videos. Go check out his most recent Whiskey Smoker vid. Put your designs and prices to the test!
I disagree. The cost to create something has little to do with what it is worth. It has everything to do with individual markets and your ability to sell.
I don't think it's ambitious. It is standard and commonplace to set the price at 200% of the total cost, in other words 100% profit. It's called "keystone pricing". The material costs are low, but after you add in the labor costs and additional expenses (marketing, credit card fees, listing fees, taxes, maintenance costs, etc.), I think the price is very reasonable.
Whoa, just realized you're in a new shop! Congrats!
Hey, thanks! I've taken over part of the garage😀
The Everyman’s guru of CNC. Thanks!
Hope you found it helpful. Thanks for watching!
Good that you are creating nice products and you can sell them. But your calculation doesn't work. Like you said, you have to sell it. And that means thinking where you sell it, making pictures, maybe going to markets, spend time to sell it, spend time to pack it and ship it, handle returns, etc. So at the end of the day, it cost you a lot more than your production cost.
Thank you very much
Hi Andy! Really enjoy your videos and tips. I'm planning on going to craft fairs this summer. If I v carve the image of a local theater, am I ok, or do I need to worry about copyright? I have a 12x12 already made. What would you suggest for a ballpark starting point for the price? Thanks for any help
Hi Tom. Thanks for watching. If you're worried about copyright, I'd go talk to the theater and see what they say. There are many factors that go into price, but a video not to long ago about it. ua-cam.com/video/bXCA1ipRC0o/v-deo.html
You could make something inside the box to hold the top and put a mirror inside the top so it has more functionality
Cool idea
Great info. Thanks for sharing. What do you think about adding a custom element? Adding initials, for example. How would that change things like time, price, marketing, and where you sell?
Thanks. Good thoughts. You know, I thought about this. It would certainly make the product more sellable and for a larger price.
Once you add a custom element, you're essentially removing in person sales (unless you have a way to bring a laser engraver to a craft fair, which does happen!) and impulse purchasing.
You're now selling on your own website (which needs to have traffic driven to it), or an online market place (which is a race to the bottom for pricing, and full of crazy people).
But, it does increase the value to a customer, and allow you to charge more. Often quite a bit more - and of course the hope is you make back what you don't make at the in person sales.
Hello Andy, how many did you sell like this, or do you think you will sell? I.e. did you produce 100 each and now you will sell them and make roughly 10,000 USD? How long do you think it will take you to sell 200 pieces? And let's say you need two weeks to do that going to shows, working online, packing, shipping, etc., how do you calculate that time?
I think many of us who see your channel like what you are doing, and you seem to be a nice guy. And some of us have the experience in private or in a company that they had a great product they wanted to sell. And then we found out how much work and sometimes money is involved to actually sell something. Or in other words: There is a reason why sales people and companies charge a lot, because their job is often difficult.
I've shared my pricing formula in previous videos. I always start with materials + labor × 1.5. But the reality is that this number does not decide what I charge for an item, the market, and my ability to sell does. This video is simply to show my thought process on these 2 examples.
@@AndyBirdBuilds Thanks for your reply. I agree, the price which you can demand has little to do with the production cost. What some of us try to point out is that there is a lot most cost involved than only the production.