Engraving various materials to produce beautiful gifts or customize personal belongings, is an ancient art. Previously, people used sharp objects to induce grooves on the material’s surface.
Another way to engrave different materials is to use a laser engraving machine. The machine comes with a powerful laser module that vaporizes the outermost layer of the material to induce permanent markings.
Initially, these laser engraving machines cost a fortune because the fiber laser module was the only possible solution at that time. However, modern technology has introduced two other types of lasers, CO2 and diode, that you can use to engrave soft objects.
The new less-powerful lasers paved the way for home-friendly DIY laser machines. These machines cost a lot less than any fiber laser marking system. This article will discuss everything that you should know before buying a laser engraving machine.
Determining Your Input Costs:
The low-cost laser engravers allow both hobbyists and small businesses to include a laser engraver in their workshops. However, there is much more to laser engraving cost than just the price of the machine. For instance, you need to consider the price of the material, the price of setup, and the total laser engraving cost per minute before finalizing your rate list.
The laser engraving cost is only a concern for the business owners as home DIYers will only be making stuff for friends and family. In this regard, every business must know its share in the total generated revenue before even starting the business. This way, you will always remain on top of things and also can make timely decisions.
For example, extending your business even after suffering a loss seems unwise. However, the laser engraving business includes much more complex calculations than retail businesses. It is because, in the retail business, you just trade finished goods and clean take-home profit.
On the other hand, laser engraving comes in the manufacturing sector. It yields greater profit margins but requires a great amount of work on your end. For instance, you have to prepare everything from scratch, from buying raw material to processing and turning it into a work of art.
So, you have to keep track of all these expenditures to maximize your profit and evaluate the time spent on each product. Following are the major input costs of laser engraving:
Obviously, you need a powerful laser engraver to set up a manufacturing unit, so I do not include that part of the cost. My main focus is to help you determine the laser engraving cost per minute per unit. It all starts with the raw material that you use for the product. The cost of material for laser engraving varies from material to material and the brand.
For instance, some brands produce engraving material with an improvised topmost layer to ensure easy engraving even with a less powerful laser. So, you have to consider which material you will be using for the project and add its cost accordingly. Some examples of the engraving material are:
- Wood sheet (5.9×3.9×0.07 inch) = $6.50
- Leather = $10-12
- Aluminum (24 x 36 inch) = $35
- Granite = $10-50
You can use several materials for laser engraving, depending on the project. The cost price for each material is a variable cost. So, it would be best to evaluate each line of products before putting them out on display.
The production stage starts as soon as you buy the material. It includes everything from material preparation to artwork design and laser engraving.
Similarly, some customers provide the design and only want you to engrave on a suitable material. Similarly, the time for engraving depends on the laser intensity, design complexity, and material type.
In short, the production time fee depends on the project, and it’s on your judgment, i.e., how much you charge for the job.
- Material preparation = $2-4
- Designing = $10-30
- Laser engraving = $2 per minute
Laser engraving is a durable technique to imprint useful information and art on the material. In most cases, the engraving lasts as long as the material is not damaged.
However, every engraved material requires special treatment to preserve your hard work and increase the art’s total lifespan by several years. Furthermore, you need to apply enamel paint on the engraving to fill the grooves and make the design easily visible.
Secondly, if you are mass-producing engraved artworks, you need to apply special packaging like lamination and branding. So, it would be best to consider all these aspects to determine the total manufacturing cost of the product.
- Enamel paint = $1-1.50
- Lamination = $2
- Branding and packaging = $1.70
Once you determine all these costs for the production, the rest of the calculation is a simple addition. For instance, if the manufacturing price of the engraved artwork is $20, you can charge an additional $5 as your profit.
Moreover, you will also save some money when purchasing the raw material in bulk. So, your gross profit per product may range anywhere between $10-15, which is more than enough for any manufacturing business.
Know your Customer & Competition:
The second stage to start any new business is to conduct a market survey. This stage is mostly researched-based, and you can acquire useful data about your niche and the customers.
In this regard, you can visit online stores like Amazon and look for similar products. The product with the most positive reviews determines how much the customers are willing to pay for your services and their expectations.
For example, if the majority of customers are complaining about the delivery time, you can get the upper hand over competitors by improving your delivery services.
Similarly, you can provide special products for each category of customers to meet their expectations and make the most of your business. Usually, there are three types of customers in the market:
- Convenience sensitive
- Status sensitive
- Budget sensitive.
The convenience-sensitive customers look for the best product that doesn’t require waiting. So, you can manufacture such laser engravings for them that sit ready to ship from your stocks.
Similarly, status-sensitive customers are willing to pay no matter how much it takes to get a limited-edition product for their homes or offices. In this regard, the advertisement campaign plays a vital role in determining your business’s success.
Finally, budget-sensitive customers look for the best deal at an affordable price. So, you can encourage such customers by providing sales and some percentage of discount on your slow products.
Calculate your Margins:
A high-profit margin is a motivation behind every business. So, you have to understand the market’s worth and potential before even buying a laser engraving machine.
As a result, you don’t have to face a forced operation with minimum profits just to tackle the losses. One way to calculate your margin is to keep a profit percentage in your mind, say 25%. So, when you calculate the total input costs for your products, you don’t have to reconsider everything.
Secondly, it would be best to keep in mind that the cost price and the profit margin are variable for different products. For instance, some products give less profit, but they sell at a faster rate than others; such products should be set as a top priority. Similarly, products that yield a greater profit margin but sit for several weeks on the shelf are less preferable in the long run.
Once you get the total cost price for each product, it is time to calculate your profit margins. For this, simply use the following formula:
Profit margin = profit% / 100 x total cost price
Similarly, you can get the retail price for your products by adding the three values:
Retail price = Profit margin + cost price + taxes
The next step in determining your product’s worth is to compare it with competitors. If the total value is considerably less than competitors, it means that there is still some room for further optimization. You don’t want to sell at a price way lower than the market, or else customers will judge your products as low quality.
Similarly, if your price is higher than the competitor’s, you can adjust it by reducing your profit percentage accordingly. A rule of thumb is that your product should always cost a little less than the competitors to generate higher sales.
Cost Comparison Between CO2 Laser and Fiber Laser:
You can find two types of laser engravers in the market, i.e., CO2 laser and fiber laser. Both the products are highly powerful and have their own pros and cons. So, you have to consider which product best suits your business needs before opting out for any of them. In this regard, some factors play a vital role in determining the unit’s cost.
The market is full of laser engravers from both large and unknown brands. Some of the less-known products provide more efficiency than the high-end ones. It is up to your judgment whether you choose a product with maximum customer reviews or the newly listed one. In any case, it is best to evaluate your needs before selecting a laser engraver for your business.
CO2 Laser Engravers:
CO2 laser engravers are commonly used in most small laser engravers in the market. The laser is powerful enough to cut and engrave non-metals and some soft metals like aluminum and copper. If your main focus is to engrave wood, stone, and common materials, it is best to choose a CO2 laser engraver.
Usually, any professional CO2 laser engraver costs between $200 to $500. The price may increase or decrease depending on factors like special features, optional upgrades, and the country of manufacture.
Fiber Laser Engraver:
Fiber laser is probably the most powerful laser engraver in the world. The laser knows no limits and can exceed the user expectations by several Watts.
As a result, fiber lasers are widely used in the industrial sector like automobiles, computer hardware, and steel manufacturers. The main advantage of fiber laser is that it can cut and engrave metallic materials, including stainless steel, copper, and several other metals.
However, it is unwise to use a fiber laser on soft non-metals as it will completely penetrate and damage the internal components. Usually, fiber laser marking machine prices range between $2000 to $5000.
Moreover, the price may further increase depending on the brand and features that you want in the machine.
Cost of Running a Laser Engraving and Cutting Machine:
Even managing a small startup business can be a very complex task. It is because you have to consider the economic impact of every factor and compare it with your profit margin.
For instance, the cost of running a laser engraving machine is far less than any cutting machine. Several factors contribute towards the increase or decrease in the total value of running, and you must attend to all of them for the best work quality possible.
In the case of a laser engraving machine, the running cost includes labor cost, professional assembly cost, electricity cost, and routine cleaning cost. Secondly, you also have to consider any consumable or recurring costs during the process.
The labor cost is based on the number of helpers or workers that you hire and their wages. Some specialists charge higher than the untrained labor force.
Similarly, the electricity cost of a CO2 laser engraver is half that of the cutter machine. According to a report, running a CO2 laser engraver costs $0.25 per hour. So, if it takes one hour to manufacture the product, you have to include $0.25 in the production cost. Similarly, the routine cleaning procedure doesn’t cost more than $0.05 per day, including the consumable cleaning agents.
Similarly, running a cutting machine is far more complex and expensive than any laser CO2 machine. For instance, it includes professional labor, special training, safety hazards, electricity, routine cleaning, and machine maintenance costs.
Firstly, the cutting machine draws power equivalent to $0.50 per hour of operation, which is double than CO2 laser engraver. Secondly, you need specially trained staff to operate the cutting machine to ensure desired results every time.
However, you may hire inexperienced staff and provide them with special training to increase the work efficiency of your business. Similarly, the cutting machine produces a lot of chipping and material dust due to constant cutting and etching.
So, you need to regularly clean the work area and the rest of the machine with special cleaning agents to ensure the optimum working condition of your setup. Secondly, the drill bits are consumed over time, and you need to replace them with new ones after every 4-6 months to keep the setup operational.
Effective Ways to Market Your Laser Engraving Business:
The market is already crowded with quality laser engraving businesses with laser engraving service prices. So, starting a business in this field requires a lot of homework on your end to ensure that the customers notice your emerging brand.
One such way to tackle the anonymity issue is through proper marketing. However, the marketing campaign can add a lot to your total business cost, so it is best to keep that in mind before starting the business.
- Brainstorming: The first step before starting your marketing campaign is to brainstorm the nature of your business. It generally includes the type of materials that you will use, the targeted customers, and the potential competition in the market.
- Strategy: Now comes the fun part; you can use multiple sources to fire your advertisement campaign in no time. In this regard, internet websites and social media platforms like Facebook and Instagram will be your most effective weapons. You can create a few laser engraved samples, take high-quality pictures and hire a social media marketing team to boost your sales.
Frequently Asked Questions:
Laser engraving service is an emerging field with great business potential. People like to laser engrave their personal belongings or buy engraved artwork for decoration.
Moreover, you can start a new laser engraving business for under $1000, and the product yields a considerable profit margin. This article discusses the factors that you need to consider when evaluating the laser engraving cost for your business.