Need Help Am I calculating my cost correctly?

[MJDallas]

Hi there,
I am trying to see if my material cost seems right... It appears REALLY low- but it may be correct on a small decal.

Size: 3" by 2.5".
Equipment: Epson S60600.
I use a formula that calculates the ink per sq/ft to be about 25 cents. Using IJ35 vinyl and GMS' Tuff-Cover UV9 laminate, I come up with a total cost of FIVE CENTS per decal...


I feel like I am missing something big here. Can someone take a look and let me know what you think?

 

[ikarasu]

Hi there,
I am trying to see if my material cost seems right... It appears REALLY low- but it may be correct on a small decal.

Size: 3" by 2.5".
Equipment: Epson S60600.
I use a formula that calculates the ink per sq/ft to be about 25 cents. Using IJ35 vinyl and GMS' Tuff-Cover UV9 laminate, I come up with a total cost of FIVE CENTS per decal...


I feel like I am missing something big here. Can someone take a look and let me know what you think?

View attachment 135169

Your calculations are correct, if theres zero wastage, no spacing, etc.

https://docs.google.com/spreadsheet...Df1x-KRrmR67vwinHa0Unie88/edit#gid=1108862314

This is a great one to use. You can enter your media cost, add your ink cost... Then tell it the size, how many decals, the spacing... and it'll tell you total sqft.

 

[MJDallas]

Your calculations are correct, if theres zero wastage, no spacing, etc.

https://docs.google.com/spreadsheet...Df1x-KRrmR67vwinHa0Unie88/edit#gid=1108862314

This is a great one to use. You can enter your media cost, add your ink cost... Then tell it the size, how many decals, the spacing... and it'll tell you total sqft.

Thank you so much! I really appreciate it.

 

[henryz]

Why don't you try doing 500 pcs. from setup, print, trim and cut to figure labor and your materials. I'm sure if someone walks in the door you are not going to sell him a decal for $$$?

 

[JTBoh]

Small decals are outside of normal square footage calculation. Additional time to finish/trim/weed/plot the products.
We make up a price that the customer will agree with, and go from there. for a small decal like that we'd likely be around 50 cents per, ranging up to $2.00 depending on quantity. We also have a $40.00 shop minimum because once rent/hourly cost of designer/production is factored in, it's not worth it.

 

[unclebun]

The one thing nobody ever seems to include in the calculation is a pro-rating of the purchase cost of the printer and an average of 1-2 service/repair charges and a printhead a year or two, and the overhead cost of having a building and the people you pay and the insurance you buy....

 

[2B]

there are more factors that come into play than just the cost of the material.
rent / mortgage
utilities
Payroll
Insurance
maintenance
Etc.

what you have to do is find and calculate EACH AND EVERY expense that you have, then break that down.
That is where the reference comes from for a shop minimum. you have to make XXX each and every hour to cover all of your costs

 

[Billct2]

I am trying to see if my material cost seems right The OP never said they were figuring a selling price, just asking if they were correctly figuring the cost of the materials in a job like this.

 

[ams]

I charge about 65 cents for that size decal. But of course in bulk not a one off.

 

[Gino]

It would help to set a shop minimum. Ours is $125.00, regardless of how small the order might be. I can break that rule, if I so choose, but it's right there on the wall for everyone to see, when I point to it. I usually follow it up and then say, you'll get more bang for your buck if you do 100 or so. Then, quote them $185.00 for the first 100. So on, from there.

 

[ikarasu]

We use a spreadsheet with a few different #'s.

First is for internal use... Ink cost / Vinyl cost, Labour hour cost, travel time/ etc So we know exactly what it costs us... This is what I presume OP is doing.

From there we have another column... What we plan on charging the customer. Xx per piece, discount at xx, etc. Usually it's 30-40% higher than total cost, depending on what we're doing / how busy we are. We do have a column saying xx decal is 5 cents per decal, just so we know our true costs though.

 

[eahicks]

We have a small decal price sheet. Basically anything under 2 sq. ft. is referenced on it. I'm not sure of all the calcuations involved, but basically it includes the same overhead values as it would for, say, a 2' x 6' banner. Yes your material/ink costs are super low on a 2" x 3" decal, but you are spending the same amount of labor, electricity costs, rent, machine cost, etc. for either one. So your 5 cents in cost decal, even if you times TEN, doesn't make you any money and cover your overhead. This is also where set minimum order amounts come in.

 

[MJDallas]

Why don't you try doing 500 pcs. from setup, print, trim and cut to figure labor and your materials. I'm sure if someone walks in the door you are not going to sell him a decal for $$$?

Correct, I am just trying to calculate the material cost. Turns out I had my Tuff Cover priced wrong. the cost per decal is actually 13 cents each, mainly due to the laminate.

 

[MJDallas]

there are more factors that come into play than just the cost of the material.
rent / mortgage
utilities
Payroll
Insurance
maintenance
Etc.

what you have to do is find and calculate EACH AND EVERY expense that you have, then break that down.
That is where the reference comes from for a shop minimum. you have to make XXX each and every hour to cover all of your costs

2B, I get that and appreciate it. I truly do. I was just trying to figure out where I was going wrong on material costs- turns out my $ were wrong anyway (Tuff Cover was priced wrong on my spreadsheet) which lead to an 8 cent discrepancy.

Now, if you or anyone else has a spreadsheet for calculating costs (that you would not mind sharing), I certainly would not mind taking a look at it. I want to make sure I cover everything. No sense in acting like a bank and "exchanging" money with people. I am here to make $$, not trade it.

 

[MJDallas]

I am trying to see if my material cost seems right The OP never said they were figuring a selling price, just asking if they were correctly figuring the cost of the materials in a job like this.

Thanks, Bill!

 

[KaranGrewal]

The one thing nobody ever seems to include in the calculation is a pro-rating of the purchase cost of the printer and an average of 1-2 service/repair charges and a printhead a year or two, and the overhead cost of having a building and the people you pay and the insurance you buy....

calculating overhead costs are easy to calculate , but so hard to factor that cost in everything you sell.

 

[equippaint]

Pricing is simple in theory and much has been brought up on how to properly calculate overhead. To me, it is still one of the hardest things to do and I have a firm grip on my costs. Problem is that you have to control your costs in order to be competitive and not just throw your hands in the air and say it is what it is. It's the variables, competition, cash flow requirements and straight up dollars produced. 50%-100% margins are great but relative. Cash flow is the elephant in the room.
We were discussing one of our customers today that's average job is $5500 and the faucet is on with all we can produce but at very slim margins. The big debate is that a good chunk of our overhead is absorbed by them when we do their work but what do we do if we decide were going to reject anything under say 30%? You have to do a bunch of $500 jobs to crack that nut every month. Jobs can still be very profitable but the business as a whole isn't. There is the balance and to me the main reason people keep asking for pricing help.

 

[Zendavor Signs]

Pricing is simple in theory and much has been brought up on how to properly calculate overhead. To me, it is still one of the hardest things to do and I have a firm grip on my costs. Problem is that you have to control your costs in order to be competitive and not just throw your hands in the air and say it is what it is. It's the variables, competition, cash flow requirements and straight up dollars produced. 50%-100% margins are great but relative. Cash flow is the elephant in the room.
We were discussing one of our customers today that's average job is $5500 and the faucet is on with all we can produce but at very slim margins. The big debate is that a good chunk of our overhead is absorbed by them when we do their work but what do we do if we decide were going to reject anything under say 30%? You have to do a bunch of $500 jobs to crack that nut every month. Jobs can still be very profitable but the business as a whole isn't. There is the balance and to me the main reason people keep asking for pricing help.

+1
Pricing is an art. There are many variables for adjusting your margins. Being able to read people is very important.

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[mark galoob]

you would be better off pricing per sq foot and figuring how many decals you can print cut weed and process in a sq foot. if you have a sq ft price, then its fairly simple process to figure your price per sq inch.