| Markup: How much? [message #19818] Fri, 29 October 2010 03:17 UTC |
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So I've been wondering about how people decide on their markups. I wrote me a little Greasemonkey script that computes and shows me the volume and markup of Shapeways items as I look at the item's page, so I have been sort of browsing the markup field. And I've seen them ranging from nothing (or next to nothing) all the way up to pretty hefty figures. Sometimes I've been surprised at how little it was on something I expected to have more markup. Sometimes I've been surprised at how high it was.
I'm not going "out" anyone here as a gouger or a sucker, but I'm just wondering what kinds of criteria do people use for coming up with a markup. The poll above is only one way to look at it, and it's deliberately vague (I'm treating dollars and euros as equal even though they aren't; more a matter of "whichever currency you think in, what kind of numbers do you think?"), so I included the option of "your options don't make sense to me." Do you prefer to compute the markup based on some sort of percentage of the base price? Do you base it on how much effort the design was? I presume people would want to set different markups for different materials, because the prices vary so much between materials (adding $20 to a $200 base price is a different matter than adding it to a $20 base price); do you have a "default" material/price in mind?
I'll start the sharing: I like to keep markup to around $2-$4 or so, sometimes less, sometimes more. More for "sets" of things, since it's the equivalent of several items separately. But sometimes even that guideline is thrown out, if something else "feels" better. Then again, this isn't a main business for me; it might be so for others here.
Just sort of opening the discussion, wondering what kinds of business models people use.
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| Re: Markup: How much? [message #19821 is a reply to message #19818 ] Fri, 29 October 2010 05:10 UTC |
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If you're trying to compute markups from prices, bear in mind that some materials (e.g. WSF, I believe) are now priced differently based on size or density.
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| Re: Markup: How much? [message #19823 is a reply to message #19818 ] Fri, 29 October 2010 06:14 UTC |
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If the option were available for markup per material, then for me the actual $ markup value would be different for each material as I would aim for a % of the price per material. As it is now though, I base the markup value on the material I buy the item in (mostly SS) with a figure in mind that takes into account both my design time effort and affordability of the item.
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| Re: Markup: How much? [message #19842 is a reply to message #19818 ] Fri, 29 October 2010 13:45 UTC |
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It depends on a few factors. Most items I haven't tested, under a buck. Standard models between 1and2 bucks. More complex (longer modeling time) 2-3. Co-Creators 4-5.
The Mad Moder
michael@shapeways.com
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| Re: Markup: How much? [message #19860 is a reply to message #19842 ] Fri, 29 October 2010 15:33 UTC |
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I used to add a mark-up of about 10% - 30% of the price of the preferred material (usually wsf or steel)
10% for untested, 30% for well researched and tested models
20% for single test printed.
Later I started experimenting with markup based on the design time/ expected sales.
(which could easily lead to mark-ups of 100% or higher)
But lately I tend to go more towards retail prices and rounder numbers.
Sometimes the mark-up can be quite big, but the final price still very reasonable. Other models have only little mark-up to keep the price down.
I try to balance it out throughout my shop as to gain a fair wages for all the work I put in.
One has gotta eat, and I can't afford sit around playing and being a hobbyist all the time 
Recent contact with many potential customers led me to believe many shop-owners are too hesitant about larger mark-ups.
Don't feel greedy, just award your self fair wages 
There is no need to sell at bottom price from the first day, you can always lower prices later..
Also, lower prices do not necessarily increase sales, and higher prices have not decreased sales for me either.
Funnily enough, I feel a little violated by people using script to find out my mark-ups
But it had to happen sooner or later, so I do hope Shapeways will implement percentage wise or separate material mark-up soon.
Cheers
- Artist / Engineer / Designer / Shopowner / Volunteer / Moderator -
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| Re: Markup: How much? [message #19864 is a reply to message #19860 ] Fri, 29 October 2010 15:43 UTC |
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| virtox wrote on Fri, 29 October 2010 15:33 |
Funnily enough, I feel a little violated by people using script to find out my mark-ups
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Yeah, I wondered about the feeling regarding that too. I had been calculating it by hand, but why not practice my minuscule Javascript skills? Either way, it's no more than the information you're telling everyone already.
It actually occurred recently that I discovered an item whose volume was calculated to an *insane* value. We're talking about a something with *far* more volume of chargeable material than is contained in the object's bounding box! It was a co-creator item, and so I figured out that the vendor had accidentally entered much too high a value in the "maximum value" field. I was even feeling a little hesitant to inform the designer. On the one hand, overcharging your customers would have been one thing, but this is overcharging then and the money doesn't even go to you, but to shapeways! On the other hand, might it not feel a little creepy to have someone PM you out of nowhere knowing what your markup is? That latter fear doesn't actually make much sense, so I did in fact PM the designer and it was a Good Thing, as it was a mistake, etc.
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| Re: Markup: How much? [message #19875 is a reply to message #19864 ] Fri, 29 October 2010 23:08 UTC |
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i know how to compute profit but I don't out of respect for the other designers.
I admit that my markups are not always the cheapest. But I do try to keep the final price reasonably low at the same time trying to at least recup my costs. If I can test a model on my 3D printer at home I do. However a lot of the money I have spent at shapeways was finding out what they really can do and many cool models I came up with just would not work because there printer fused it together.
I do wounder what shapeways markup is. If I can print it at home it costs me about 1% of the cost to print there but I have no where near the accuracy or as large a build area and I only have ABS plastic as an option.
Follow me on twitter http://twitter.com/mctrivia or my blog at http://4ddice.blogspot.com/
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| Re: Markup: How much? [message #22307 is a reply to message #19818 ] Fri, 07 January 2011 23:50 UTC |
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Whatever method is chosen I want to have greater control. Using a dollar value for markup is ridiculous. If an item costs $10 in WSF but $58 in s/steel what sense does it make to put a $5 markup on each?
Glenn
Glenn ------ My Website Third Dimension Jewellery
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| Re: Markup: How much? [message #22310 is a reply to message #22307 ] Sat, 08 January 2011 00:09 UTC |
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What kind of sales #s are some of you guys seeing? What type of products are selling best in your opinion? Just curious.
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| Re: Markup: How much? [message #25388 is a reply to message #19818 ] Mon, 28 March 2011 21:56 UTC |
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Here is my simple-minded "capitalism 101" philosophy: charge the amount that will bring you the highest profit.
Of course, that's easier said than done. To calculate it, you must know (or guess) what your sales volume will be at different price levels. Way high price -> 0 sales -> 0 profit. Price below cost -> loss. Between those extremes is (theoretically) an optimum point.
So, if the optimum mark-up is high, does that make it immoral? Heavens no! Nobody is forced to buy. They do because they are getting something they value more than the money they part with. Their well-being increases with each transaction. Kudos to you for your exceptional design prowess, and ability to enrich the lives of others!
On the other hand, if you can't sell your wares for enough to make a profit, the market is telling you to improve them.
All of this assumes basic honesty - that transactions are not induced by fraud or trickery.
I am grateful that free market forces have the ability to channel greed to create real, measureable wealth. Would that they were allowed to operate more widely.
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