Chicken & Egg....

[pitkin2020]

Surely you should making 50% profit on your actual material costs, not accounting for other over heads or time. With out that sort of profit margin you have no room for error so on small orders you could be making a loss should you damage some of the stock. Maybe mugs is different but i aim at twice the material cost plus labour.

[Lee]

I reckon Im 100% not including time - but that is getting less and less...... and (touch wood) I havent printed an error for a while now - did loads in the beginning though!)........ I would say theres not a massive margin on mugs, how some people sell em for £4 INC delivery and make a profit I dont know!!

[Kaz]

"how some people sell em for £4 INC delivery and make a profit I dont know!! "

Maybe they sell mugs at that price as loss leaders to attract more customers in

[JSR]

Surely you should making 50% profit on your actual material costs, not accounting for other over heads or time.

That's not what was said. 50% upfront means the 50% of the order value. If 50% of the order value is costs, then profits=costs (because everything that isn't costs is profits) so profits is 100% of the costs.

So for an order of 50 mugs, you're doubling your costs to reach a selling price. I wish I could do that. You'd have to be sure you've doubled your costs on every item you sell at every quantity you sell to be able to say "50% upfront to cover costs" for everything.

Personally, I don't see why you would use "material costs" rather than total costs. Costs are costs and if I can't reclaim them, then they need to be paid somehow. Half a day printing mugs may not be material costs but it's still a loss if the order isn't paid for - because it's half I day I could be using to make money rather than lose it.

[JSR]

I reckon Im 100% not including time

Why would you say "not including time"? If the customer doesn't pay, will you get that time back? No. You must ensure that everything is covered when doing your calculations.

Don't undervalue your efforts. Your time is no less valuable to your business than your stock. Without one, the other is useless.

[pitkin2020]

Your taking it out of context yes your time has to be paid for, but the only way all your costs are going to be covered is if 100% is paid. Having 50% paid upfront will atleast mean you haven't lost money on your materials which can't be used elsewhere.

If a job is quoted at £300 then roughly that would break down to £100 in material costs £200 labour. My actual material costs would be £100 but I have another £100 to play with should something happen, if I don't screw up then I have a higher profit margin. My deposit would £150 (50%) so that covers atleast my materials and some of my time. If the customer then refuses to pay the balance or cancels lets say I have only lost my time and as precious as that is I haven't lost actual stock of value that can't be used elsewhere.

[JSR]

Your taking it out of context yes your time has to be paid for, but the only way all your costs are going to be covered is if 100% is paid. Having 50% paid upfront will atleast mean you haven't lost money on your materials which can't be used elsewhere.

If a job is quoted at £300 then roughly that would break down to £100 in material costs £200 labour. My actual material costs would be £100 but I have another £100 to play with should something happen, if I don't screw up then I have a higher profit margin. My deposit would £150 (50%) so that covers atleast my materials and some of my time. If the customer then refuses to pay the balance or cancels lets say I have only lost my time and as precious as that is I haven't lost actual stock of value that can't be used elsewhere.

This is why I do stick with 100% upfront because I see no difference between stock I can't reclaim and time I can't reclaim. The only flexible area is in profit.

I'm a little confused, though. You say a job quoted at £300 is £100 material and £200 labour, so what is the profit? £100+£200=£300, which seems like zero profit to me.

[Lee]

personally, I dont charge that much for labour now, as I can print a pre-designed mug quick enough, and its the one thing I can be flexible on, providing im making profit on my material/overhead costs - for now.....because Im still learning and trying to build something with longevity....as long as I make around 50% on cost Im happy...

[pitkin2020]

I'm a little confused, though. You say a job quoted at £300 is £100 material and £200 labour, so what is the profit? £100+£200=£300, which seems like zero profit to me.

I'm using labour just to show all the costs and profit rather than giving you an exact break down, in reality though it would be around £100 for materials and labour would only really be around £100 approx 4 hours @ £25 which leaves £100 profit which any mistakes I make are going to come out of my profit. My hour rate covers my actual costs including time, rent, tax, phone etc.

[JSR]

I'm using labour just to show all the costs and profit rather than giving you an exact break down, in reality though it would be around £100 for materials and labour would only really be around £100 approx 4 hours @ £25 which leaves £100 profit which any mistakes I make are going to come out of my profit. My hour rate covers my actual costs including time, rent, tax, phone etc.

Ah, so the profit is 1/3rd of the order value, and you're willing to cut into your labour costs as well as profits. I understand better now.