Guide to Laser Marking: Don't Let Low-Price Orders Slow Down Your Return on Investment

The price of laser engraving directly affects the period before the equipment pays for itself, and blindly choosing a low-cost supplier can result in equipment damage and quality disputes.We'll help you avoid low-price traps by analyzing reasonable pricing standards and combining factors such as processing costs, material losses, and order stability to scientifically plan a return on investment and achieve long-term profitability.

Why is it that low-priced single units are so difficult to recoup costs?

Many new entrants are attracted by the low prices, thinking that they can make up the difference in volume.But in reality, low-cost orders often come with hidden risks. For example, customers may demand the use of cheap materials that wear out equipment quickly, or may repeatedly ask for revisions to blueprints, increasing communication costs.Worse still, if they encounter a client who tries to withhold the final payment, they may not even be able to recoup their initial costs.

The three hidden costs of low-price orders.

1. Double the equipment wear and tear: In order to compress costs, the low power is used for a long time, and the life of the laser is directly shortened.

2. Post-sale problems: Cheap customers are not tolerant of defects, and reworking can eat up more than 30 % of profits.

3. Fragmented time: The energy required to handle ten low-price small orders is sufficient to handle three high-quality medium-sized orders. While the turnover on the books may be high, the actual net profit is lower.

How to come up with a reasonable price?

It's not a simple matter of "materials plus labor." You have to know your own minimum costs.Let's say that the cost of materials is NT $ 8 per plate, depreciation of equipment is NT $ 2 per plate, and labor and management costs are NT $ 3 per plate. In this case, to quote a price of less than NT $ 15 is to sell at a loss.

The three steps of precise cost calculation.

- Record gas consumption when cutting different materials, rather than estimating based on theoretical values.

Time traps: Includes hidden work time such as document processing and focus adjustment.

* Risk reserve fund: 5-8 % of the budget is set aside in case the customer suddenly changes their requirements.

The skill of choosing quality orders.

Rather than compete for the lowest prices, we should focus on those customers who are willing to pay for quality.When a company receives an inquiry, it should look at two points: Does the client provide detailed specifications? Does the client accept a reasonable production cycle? Clients of this type usually have a stable demand and can develop into long-term partners.

This is a signal to judge quickly the quality of the client.

--Ask about the equipment model and its range of precision.

- Be willing to accept a sample before agreeing to a price.

- Clear description of technical details (for example, requirements for oxidation treatment).

How do you calculate the payback period?

If you assume an investment of NT $ 200,000, then a return on investment of NT $ 15,000 per month would mean breaking even in 14 months.But if you cut the profit to NT $ 8,000 a month to boost sales, it would seem that you can recoup your investment in 25 months. But in fact, you will probably need to repair the equipment within two years, and you may well end up losing money.Remember: getting your money back is not the end; making a profit is the goal.