Awards & Engraving

November '19

Issue link:

Contents of this Issue


Page 12 of 68

10 • A&E NOVEMBER 2019 ance, utilities, etc. In fact, the only thing it doesn't include is the cost of the substrate and of course a sizable markup. So far, these numbers assume you are running your equipment non-stop all day long, but that will not be the case. With every job you have three phases: pre-production, true production, and post-production. Only the true produc- tion time generates revenue. The other two phases cost money by comparison but are a necessary evil. For example, say you have to produce 12 plaques, each taking about two minutes to print and press for a total production time of 24 minutes. However, you need to do some logo work, which takes another 15 minutes. And at the end of the production cycle, you need to wrap and box the plaques, something that will take about 15 minutes. The total job time is 42 minutes. At a per minute cost of $0.50, each plaque costs $2.50 to produce. An interesting point is that regardless of how many pieces are in a job, the pre- production and post-production times tend to remain pretty much the same (the money losers). True production on the other hand (the money maker) increases with more pieces. Using the same example as above, assume that the job had 24 plaques instead of 12. Pre-production is still 15 minutes, and post-production is still 15 minutes. True production increases to 48 minutes (24 pieces X two minutes each). Total production time is now 78 minutes, with the cost per piece dropping to $1.63 to produce (78 X $0.50). Though this is a simplistic example, it shows that when you produce larger quan- tities, the production cost per piece drops due to your increased efficiency. Thus, you can offer discounts when customers place larger orders. In many cases, you can also produce more than one piece during a single production cycle depending on the size of the item. For example, if you are sublimating coasters, you can usually print out five images on one sheet of 8 1/2-by-11-inch paper and press five coasters at once as With sublimation, what goes on the product usually has a greater impact on margin than what the product itself is. The most important aspect of generating decent margins is simply knowing the market. Understand the needs of your customers, then look for unique products that can fulfill those needs.

Articles in this issue

Links on this page

view archives of Awards & Engraving - November '19