Markup policy

Hi all,

I begin an interesting conversation with Dizingof here.
Basically, I begin by saying his design was clever because not a lot of material was used so it could be affordable and Dizingof answered affordability did not enter into consideration when he designed model (sorry I did not want to offend here). We end up speaking about the markups, how high of or low they could be.
This is I think a very interesting topic, that deserves its own thread.

To begin, I would say there are at least different kinds of designers here:
1) those who are doing things for themselves (generally they do not have a shop)
2) those having a shop more as a hobby, or an opportunistic way to make money from their passion
3) those who offer their services to design thing for others
4) those who really want to make a business and if possible live from this business

Probably combinations of those do exist also.

I am more in the second category. I do this for fun. I do not really need the money earned from Shapeways but as I spend a lot buying my own design, my goal is to earn more than I spend (goal not reached yet )
In fact, I am an engineer, not very gift for DIY stuff, and 3D printing is a way for me to transform my ideas in actual objects (before I was doing shapes with paper and glue).

So let's come back to markups.

Markups for me are rewarding. When I earn money I know that what I created had an interest for someone else, enough interest form him to pay for it. And I like that. Let's face it: Shapeways is an addiction, and I am addicted.

But I think it is complex to set up a correct markup on an object. I began some years ago with very low markups, now they are higher. As Dizingof said, a couple of dollars for a one-of-a-king design is ridiculous: you spend hours to create one design, and probably your time deserves more value.

Another issue I am facing is that on models that are functional (not only decorative) you need to order several prototypes and in this case there is nearly no chance you ever break even with only one or two sales.

But if you set a high markup on a model, you could also never sell it. So is it better getting $1 from a design or taking the risk of getting nothing?

Offer and demand.

What I was proposing was offering, for a limited amount of time, the models that never sold with a $1 markup (and keeping them with a higher markup if they sell during this discount period or else removing them).

But this raises a new question: is it fair (from a competition point of view) to offer low markups when other designers (category number 4) want to earn their life by selling their own design (remember all those designers whose entire life has been thrown away because of the $5 startup fee on FUD)?

The discussion is open!

what does that suppose to mean?

Oh, I had the feeling that I made a mistake by complimenting your design saying it was a good way to save material while you were actually experimenting a new program, not trying to save money: that's all what I meant. Sorry for adding even more confusion

[EDIT] I am re-reading my sentence I should have write "there" not "here" in the parenthesis, but let's forgot it

Magic, when i design something i dont start by thinking hey the cost to print it is too high... if it's a beautiful design i upload it no matter what shapeways cost is.. - this kind of thinking will restrict you from exploring new paths of designing (but i do understand why you might think this way you're an engineer ! )

When i started designing this Spiral Vase




(one wire frame of an egg shaped ball) - i didn't say hey its too expensive to print ... i thought it's a great design and i uploaded it and set my "ridiculous markup" ... shapeways cost is $91.43

Sold few copies. Yippee shapeways..



So that's all to it.. get inspired, design , check for the best way to cut printing cost (i.e: hollowing out) , add your markup and let visitors appreciate your work or.. not.

10% is not a ridiculous markup. 200% on a die is what some would call ridiculous. Though you are right it is not high compared to the number you would sell. I would however disagree with it being ridiculously low(your words). 200% even if only $10 will never be ridiculousness low.

Dice are a bit of a different category. People are use to paying only $1 or so for a die. On shapeways are prices range from $5 to $10,000(don't think anyone has bought the latter but I may be wrong). So unless you can design something really cool like the thorn dice odds are you will only sell 1 to 3 of each design and only so long as the big collectors think that the price is worth it. The most I have ever sold of a single design is 5 of my Grid Dice.

Admittedly I am also a category 2 shop owner. I don't mind making $1 to $3 profit from a few hours work. I make my real money at my day job. I like experimenting here and finding cool new ways to do stuff.

And you mentioned once that people think it is lucrative. I never did. Hourly I make a lot more on the 2 cryptex I have sold. But dice are fun so $1 an hour(average) is except able to me. At least it is not in the negatives.

@Dizingof: your example of vase is precisely a wire-shape design. So even if we do not take into account the quantity of material when we design the fact is that the less expensive a design is, to more likely it will sale.

@Mctrivia: you are right. Dice are perhaps more difficult to sell because people are used to buy them mass-produced (and thus cheap). I have seen a lot of forums where people complain that one particular game forces them to buy a paticular set of new dice for $10 (whereas $10 is generally the price of one single 3D printed die).

Something I forgot also to mention are the pictures and the materials.
I am conviced models sell better if you show actual pictures of them instead of rendering.
And it is very rare that buyers take pictures of the models they receive and publish them even if it occasionally happens (thanks Kevin, Justin and Gumball ).
So I order nearly all my models to take pictures.

Generally, I order them in dyed strong and flexible or in alumide. But, I decided to order my Truncated Sphere Dice Set in metal, because I estimate that this is the best material to showcase dice.
Here is the picture:
/openfile/238493/photos/photo40224.jpg
and the video.

But it cost me a lot.
And the "return of investment" was quite low: I sold just one set, very recently
The problem is that I need to sold at least 6 or 7 times more to break even.
This is because, in this case, my markup is nearly the same whatever the material is (except I try to round the prices).
The sold dice set was in plastic anyways, so even with a markup calculated as a percentage of the material cost (which was not the case), if I buy in metal and I sold in plastic the problem remains the same.

So this make it even more difficult in this case to make a model profitable...

The topic title is misleading because Shapeways does not have any policy on markup. As a designer (and retailer) you have to decide what your market is. If it's just for you, then it's pointless to debate whether you even need a markup. If it's for the general public then you need to find the best price point for the demand. I've sold 90 of a design that I haven't even formally announced to the market, and I'm happy to make $1.50 per on them. But I have other designs where the market is probably 10-15 total lifetime sales. I need to make almost $10 each on them to recoup my time but I know that I will be able to sell them at that price because for those that need them, price is less of a consideration.
Dice are neat, but the market is flooded, and noone needs 50 copies of a D20.

Assuming you are doing this as a business you are thinking about this in completely the wrong way.

The "right" price for an item has no relationship to what the item costs to make. It is, instead, dependent on what the customer is prepared to pay for that item.

This was brought home to me when I first travelled abroad. On visiting the supermarkets noticed that certain cheap Chinese made tools were one fifth of the price they were in the supermarkets back home. Other things, like cheap clothes, probably also made in a far eastern sweat shop, were however several times what they were in my home market.

Now both countries were part of the EU, so import tariffs should have been similar and they were only a few hundred km's apart so transport costs could not account for this.

On returning home spoke to a friend who had been it business many more years than I. His comment - " It's not what something is worth, it's what you can screw out of the customer for it that matters" has remained with me ever since.

So how do you work out what a mark-up should be? Well most of us know our markets fairly well and we know what similar things cost and how big the potential market is.

So we can make an informed guess that if we sell something for X there is likely to be at least Y people who will buy it. So then you take the potential profit per item (X - the cost of the item AKA the mark-up) multiply that by Y and then divide that by the number of hours it took you to design and market the item. You then have to decide if that is a figure you are prepared to work for !

If it's not you then either repeat the process with a different value of X or you have to make the decision it's not worth producing this item.

This is a gross simplification of the real world and may not entirely match the way you work or sell but gives at least an idea of f a price is sensible.

Tom

@Johnnylingo: I was referring to shop owner's policy. Sorry if this was unclear. Only 3 of my designs sold more than 10 copies, none more than 20. Generally it is rather 3 copies or less. So in effect if I want my revenues to reflect the time I spent (or the money i spent by buying a copy for picture or prototype), the markup should be high. But in my case, I guess I won't sell anything at high prices.

@Tebee: yes you are probably right. The problem is that "similar things" are mass-produced (at least in case of dice). So the costs (excluding markup) do not compare... Perhaps the trick to to personalize each item: in this way your object is really unique (and 3D printing makes more sense). But this means even more time spent by copy.

Anyways, for the month of August I decided to sell with a $1-markup all my designs that have never sold any copy. And probably to delete them if they still do not sell during this period.
I will post a new message on this particular topic, but in the meantime you can have a look at my shop.

I looked through your selections and agree with your asessment that you need to really look at the type of features that only rapid prototyping can produce like spike dice and wire dice. Your shelled dice are a good start. If I were still gaming I'd also want a weighted D20, which could be done in RP and look legit.

Interesting thread, thought I'd resurrect it.

As a creative person, I literally know NOTHING about business/markups...this is my first tentative steps, for what I hope to one day become catergory 4.

Setting up my shop, initially I just thought "mark up everything by the same percentage" but then I thought, "hang on, why should I charge more for something that costs Shapeways more to print...but not me?...but then I thought "well If I'm selling the same designs OUTSIDE of Shapeways...wouldn't you need a different markup system based on what it costs you...and wouldn't that markup system have to be on par with the same model available on SW ?

Which brings us to designer markup, a brief and completely un-thorough bit of research suggests anywhere from 85% upwards...might work with some pieces but not with others? Either way this is well beyond SW suggested 10-20%

So it seems the options I am faced with is to either have:
a) flat rate per identical unit...no matter what the cost of production (eg $10- profit on WSF and $10 profit on the same model in Silver)
b) a flat rate of percentage of the production cost, which works on cheap stuff ...but spirals way out of reality for the more expensive materials.
c) Individual prices for each material, as Tee Bee suggests, based on what you think you could get

I can understand why many would play their markups close to their chest, which would explain the lack of discussion found on the subject, especially those who aim to perhaps one day make a living from this...or already do.So feel free to PM me if you don't want to put it out here on which markup method you use, especially for category 4...
...but I'd really like to know how some of you approach this subject because this is doing my head in!! :/
Thanks

> Setting up my shop, initially I just thought "mark up everything by the same percentage" but then I thought, "hang on, why should I charge more for
> something that costs Shapeways more to print...but not me?...but then I thought "well If I'm selling the same designs OUTSIDE of Shapeways...wouldn't you
> need a different markup system based on what it costs you...and wouldn't that markup system have to be on par with the same model available on SW ?

Yes, you would and it would.

I don't really have a system. I try not to overthink it: a couple bucks on plastic models, $10-30 on metal prints. Occasionally I have to put a weird markup because of a pricing anomaly between here and my own site. I try to not duplicate items between the two sites, but there are a few where I don't really have that option: people like them enough that it would be mean not to carry the design in both places. I'm trying to negotiate with my direct suppliers to see if their pricing can be more consistent, so this will be less of an issue. Because I don't like having to think about pricing.

Although I make my living by selling CAD/CAM sculpture, to me Shapeways is free money because I don't have to handle inventory or do customer service. My main business involves a great deal of work that is not fun and has nothing to do with art-making. It's really important to me, and I think it's been good for my work, to keep Shapeways low-stakes and low-stress. If a lot of people like a design, that doesn't make me think "let's charge more for this", but rather "let's sell more of this". Lower the price if I can, promote the item more.

Maybe I'd be a lot richer if I just asked for more money. But I made a decision a long time ago to put my energy into what I think is interesting, and pricing wasn't it.

interesting thread ...

I'm clearly type 2, but I've sold more then 6000 items now and sometimes I even have bought something completly different out of this money.

There are some major questions here:

1) Each thing buyable here has a price a customer is willing to pay. So if your markup is $1 or $1000, it doesn't care.
Often similar things can be bought also in a shop nearby and that's often the price limit. In many cases designs here bring something special, but dices can't be more expensive as other dices, 1/144 airplanes have to be in the price range, ...

2) I think if you reduce your markup to $1 it won't harm any other designer since the buyers are mainly attracted by the specificness of your item

3) Is there anything needed here on this platform to earn money or at least to have zero costs. Or what has to be done to allow shop owners to earn really money with their markups.

Some thoughts from my side:
a) easy setting of markups for shops or groups (as mentioned to have some periods of attractive prices)
b) successfull shop owners should have a chance to buy there test examples at very low prices (some bonus system for sold items).
Shapeways wants to earn money, they do that with the help of shop owners and attractive models.
So shop owners should be honoured for doing these tasks inclusive testing. As I have read above many shop owners spend their earned money in buying their own pieces. In my eyes that's not fair for shop owners (not dummies without succes) which generate business at shapeways.
c) easy grouping of items to reduce handling costs at shapeways' side and costs on buyer's side
Maybe that's only my problem, but handling fees make my models more expensive. Whereas these handling fees are acceptable when grouping more then 10 items together. Also markup can then be lower from shop owners side.
For me that would increase business ...
d) Colored smooth material would boost my shop (so having interesting materials would allow to create items with interesting markups)
e) Easy buying interface

So at the end we need a system where we:
- can sell more items
- bring materials which are compareable to materials of items bought in a shop in a similar price range (still having some markup)
- can handle our markups in an efficent way

Woody64

Good thinking about the not overthinking Bathsheba, so I am to correctly assume you loosely subscribe to the percentage of material cost markup, partially to protect your sales from other sources? ie: If your work was to sell in a gallery with 1000% markup (not that youd be seeing anywhere near this after commission) It is still determining what the value of that piece is worth, but would they pay that if they knew they could just buy it here for a fraction of the price?
Woodys points are valid too, although I get the feeling that designer/makers have a tougher choice by not having anything so standardised to gauge by...sure a ring is a ring, and what it costs to make is a starting point..but doesn't thought, originality, effort, your proficiency in CAD and ultimately the public's desirability factor into its asking price? Trying to judge this seems impossible at times.

There's also the fact that we live in a world where a well-presented toilet seat can sell for more than the most elaborate, filigree gold and diamond necklace, if presented in the right circles/galleries. So its not the material that is the deciding factor...its the concept. By mass producing your work and selling on shapeways, are you infact sabotaging potential profit for not only you, but all other 3d designers?

There I go overthinking, and yes I have seen some quality work on here that could easily be touted and championed in art circles, I am also aware that some of them do use this service and only sell exclusively to galleries and perhaps shun SW stores for these very reasons. But with the technology becoming so commonplace and not so-exclusive, how long can that last?

All that said, I'd prefer laid back, honest and un-complicated attitudes such as Bathsheba's...For someone whos work seems so...complicated

I'm sure every maker would love for someone to do all this side of it for them so they can concentrate on doing their actual work!

Loosely, yes. I do mainly direct sales, exactly because I'm not seeing a good way to deal with gallery markups. I don' t feel like charging keystone prices for my own sales, and I don't like to see my work selling for very different prices in different venues. That isn't nice to customers. This means I rarely show in galleries or with boutique retailers. I do work with a few retailers, larger online and catalog setups with high volume and low overhead, who can meet me halfway.

What I'm protecting is not so much my sales as the goodwill of my buyers. It's of the first importance to me that no one buys somewhere and then later feels ripped off when they see the same item cheaper. The person who googled my name and found that second venue is exactly the person who's sincerely interested, a likely repeat buyer, the person whose experience I want to protect.
It is an insoluble problem. How much should you get paid for how awesome you are, and the infinite misery you went through to get that way, and the amazing unique designs it's led to? ALL OF THE MONIES. I basically gave up on this and decided the amount of money I want to make on a sale is 'some'. If that's happening consistently and I can pay the tax bill, I'm done worrying.

I had a conversation about this with Peter Weijmarshausen, our noble CEO, a few years back, and he said he thought the best thing I could do for my business would be to not agonize about business and do a bunch more designs. I rather took that to heart.
Gosh, I hope not!
In the family I grew up in, everyone else is a writer. The thing about being a writer is that you have an agent and a publisher: you only have to sell a book once, and then someone else takes over a lot of the marketing. With the advent of Shapeways, I feel slightly less envious.

I'd like to provide a small bit of counterpoint to both philosophies above.

I work with Z-scale model trains (1:220 scale). I came to Shapeways because the number of options for "houses" available in this scale are very limited. Most buildings currently available in Z scale cost $30-$50, and I can craft similar buildings that generally cost $20-$30, so the price here at Shapeways is cheaper than the other currently available options. The same rule gnerally applies to rolling stock (items that go directly onto the rails).. I can produce it for 75% or so of the current retail prices.

But, I constantly have people asking me to upscale my items to the larger railroad scales. HO scale (a very common scale at 1:87) is roughly 3x the size of Zscale, but as you all well know.. increasing something by a factor of 3 means that it costs around eight times the cost. Very often, retail prices for HO scale are actually cheaper than the same item in Z scale. When one of the HO requesters gets a look at the prices, they run away scared, and rarely ever actually make a purchase.

===
As I said, I'm in this because I want specific items for MY railroad. This is a HOBBY for me. And, I get an intense amout of satisfaction just doing the drawings. I'm sortof like that guy that carries a sketchbook and charcoal around with him all the time, I'm going to spend time (on the computer) doing the sketchwork whether anyone ever sees the drawing or not.

Because of that, I commonly apply a very small percentage markup to my models. I would never, for any reason, apply a 1000% markup! I personally also don't try to bother with the "99 cent" rule trying to find 'teaser' price points. I just multiply by a fixed percentage, and I'm done. Likewise, if nobody buys some item.. no skin off my neck. It only "cost" me the time to do the drawing, and I have my reward already.. just doing the work of desiging the item is it's own reward for me.

Don't get me wrong. I am VERY appreciative of the markups that have been paid to me, and to all my customers, past and future. They have allowed me to buy the occasional locomotive, and to keep a stream of 3d printed things coming for MY layout.

===
It's also not a problem for me if someone buys items out of my shop, paints them and sells the items for whatever markup they think they can get. First, "Stony Can't Paint", so that is never going to happen, and second, I have zero risk.. I don't have to invest in "inventory" and re-shipping. I have no care if someone 'profits' off of my design for a finished product. I think of it as I'm just a guy making blank canvases.. what you do to finish up the model is your own revenue stream.

Having just opened a shop ("Retro Rocket Hip"), I've been thinking about this quite a bit.

I probably fall mostly on the hobbyist side of the tracks here, so I don't really expect to make money. Thus, I currently have no markups.

That being the case, I was thinking it would be handy if I could mark up products with Shapeways store credit. That way, I could market my profit as a "design and prototype capital."

My unproven hypothesis is that some customers might respond generously if they knew the markup was going to be reinvested directly into making newer, better, or just more product.

I've also been contemplating adding "tip jar" items...some small exclusive trinket with a ridiculous markup. If someone wants my products, they can buy it at "cost." If they really like it, they can come back and buy a tip jar item the next time they order something from Shapeways. My inspiration for this is the successes at online game sites like Humble Bundle, where users set their own prices.

Alternatively, I've thought about having two versions of everything in my store...one with and one without markup to see how people would react. Of course, I've only had one customer so far, other than myself, so I might be getting a little ahead of myself.

To be clear.. if you set the markup to ZERO, then you have no way to track any sales.
You need at least $0.01 on each model for sales of it to show up in the reports.

Additionally for the end user/buyer the markup is completely invisible.
Maybe he can recalculate it based on the volume, but I don't think that somebody does so.


Hmmmm, the tip jar is a nice idea, but wouldn't it nearly the same if you get a reward via paypal.

By the way (at Shapeways) maybe that would also be a nice idea in the buying process. Shop owners who sell at costs and get an additional reward via a 2nd paypal call.

So with the bill the buyer get's an additional Donate button ...

Woody64

There's really no simple answer to markups, I've found. It depends on what you're selling, what the base cost is, who will want to buy it... For example, I sell pendants here on Shapeways (along with a couple other things). I've found that adding $7 to the markup and rounding to the closest ".99" has worked well for me so far - but then you run into cases where that won't work. For example, just recently I designed a pendant that isn't public yet, but due to the way it's designed, it was impossible for me to keep it hollow and cheap enough for its price to be moderately in line with the others. So I face a dilemna: do I keep my ~$7 markup, or do I lower the markup to keep it somewhat cheap? In the end, I decided to lower the markup, because I have a feeling the pendant will be popular, so lots of sales will make up for low markup - and lower markup on this item will probably mean more sales, too.

(as you may have noticed, I'm trying to get my Shapeways shop up and running for real, not just as a hobby. A little bit of luck so far actually! Haven't nearly made back what I put into it ordering models to begin with, but I know there's interest in my work, and that makes me tear up.)