How I Make Money Laser Cutting: A Beginner's Overview

hey everyone my name is Rob and today I want to share with you my experience using a laser cutter to make money in the previous episodes we've focused on how to build a DIY laser cutter and the hybrid side of things so I thought it might be a good idea to look at what you can do once it's built in terms of a small side business or just making the laser cutter pay for itself now this is obviously a pretty massive topic with a lot of variables but I just want to share with you the things that have worked for me and a few of the things that haven't so I'm going to break this topic down into two different approaches how to get started with them some real-life examples with workflow and pricing and some pros and cons but before we type into this let me just tell you a bit about my background that's somewhat just some random guy on the internet so I studied industrial design at Victoria University here in New Zealand I think we're into working in the film industry at a place called with a workshop making props and building stairs for a bunch of different movies and TV shows now one of my specialist skills from my industrial design background is using a laser cutter for rapid fabrication a really good example of this was the work myself and a small team did for played around a 2049 where we designed and built a miniature cityscape using laser cutter to create the dystopian buildings as well as that I've also spent quite a bit of time running a small site business with an online store selling products wholesale and doing custom work using my home-built laser cutter that you've seen in the previous videos so while I haven't been doing this for decades I do feel like I've seen enough that I can help those of you just getting into this now to make this topic easier to consume let's break the laser cutting business down into two categories or approaches providing a service and selling a product let me just define those so that we're all on the same page by providing a service I'm referring to customers coming to you to create something specific for them using your laser cutter this involves you communicating and collaborating with the customers to provide them with exactly what they need selling a product on the other hand is basically the reverse of that you create the items using your laser cutter and then sell them to the customers whether that's through wholesale online platforms or craft fairs the point is you've already created the thing and now you're trying to get it to the customer there is of course a gray area between to where say if you're providing a product that has a custom element to it say like a wooden box with someone's name engraved on it but let's talk about that case separately in a bit I guess just bear that in mind now how to get started providing a laser cutting service it's probably the easiest way to get off the ground in terms of getting your first few dollars through the door and a tents that also happened relatively naturally once you start making things for me I'd bought a Chinese k40 machine which many of you will be familiar with and had just been playing around and sharing my results with family and friends as word got out that I had access to a laser cutter friends of friends were starting to request items for their business and personal use and things just kind of grew from there if you want to go down that route just start making things share your projects on social media it's an awesome way to spread the word without actually doing any advertising and you'll hopefully start getting a few requests which will get you on your way if you want a more solid answer I'd strongly recommend you start by creating a professional website with a high quality portfolio of work if you want customers to approach you cold you'll need to be able to show them at least something similar to what they might be looking for so having a wide range of pieces and projects on display is a good idea and that might literally mean you scrolling through Pinterest and just picking a bunch of popular things to make just so that you have something to show and trust me spending that time at making things now will pay for itself when it comes to knowing how long certain things take to make and how to price your services correctly you'll also need to get your business in front of eyeballs social media is great at that but it doesn't always target the correct audience better option would be spinning a little bit of money to advertise yourself where other similar businesses are found whether that's a local community page or online business hub so let's go through a service-based example we'll begin with a common one custom gifts specifically we'll use an engraved cutting board that's going to be a wedding gift classic obviously this will start with the initial enquiry where the customer asks you for a quote now this is where the time you spent mucking around making things for fun is gonna pay off because you need to have an accurate idea of what's involved and how long it's going to take you so let me take you through what I try to cover when I'm quoting at more than likely they'll know what they want to have engraved but you need to spend a little bit of time finalizing the sizing placement and possibly even the font what I like to do is use Photoshop and give them a preview of what it's going to look like so they can sign off on the design before going any further so let's say I spend half an hour on this and the email correspondence this is where the cost of owning and operating the laser cutter should be covered so things like s it costs and depreciation consumables like the laser tube the mirrors the lenses electricity and anything else the easiest way I found to do this is to take the design information imported into our D works or light burn and get an idea of the run time then use a dollars per minute ratio to quote it this is the cost of you turning on the machine and getting the material aligned and ready to cut this will be higher for more complex jobs especially if you need to create any templates or specialty jigs to hold the things if you're doing multiple items you need to also include the time it takes for you to switch out material between runs I would suggest if possible that you supply the material or object for them the reason being that if you screw something up you can just do it again on a new piece in the case of the cutting board if you mess up the engraving you can just pop down to the store grab another one and no one has to know also make sure there's a bit of a markup on there to cover your cost and actually going in getting the material now this is where you'd add things like pre or post processing masking sanding applying finish that kind of thing for the cutting board I didn't really do anything it was just tiny bit of masking so I didn't charge anything for it if the job is a bigger one you'll need to add the cost of extra things you need to use like tape gloves sandpaper paint just whatever as you can see the cost get pretty steep pretty fast and you'll need to be aware of the market value of what the customer is wanting essentially all those numbers mean nothing if no one is willing to pay the price I mean this is where business viability comes in you'll most likely need a compromise and balance those numbers to something that works for you in your specific situation okay that felt like a lot of things but it's important because quoting correctly is literally how you make a profit with your laser cutter so what are some pros and cons are from running a service-based business because you never know what a customer will request there's always jobs coming in that will challenge and expand your alizarin repertoire getting repeat business and building strong client relationships is awesome and it can mean that you can get regular work ticking over by actually only having a few different clients chances are you're going to be dealing with customers who are trying to organize something for a big event your work will directly play a part and how well their thing is received by others whether it's a simple wedding gift trophies for a sports team or a sign outside a local business and it's definitely a sense of satisfaction in that okay so the first one's no surprise quoting sucks it's time-consuming and there's no guarantee you'll get the job either but you will get better at it and it just comes with the territory customers making to me design changes or just general indecisiveness can really be a time suck if you don't manage it understanding what a customer needs is the primary goal before you can quote and if that takes five back-and-forth emails that's a whole bunch of time you need to try and make up sometimes it's just not possible to match a customer's budget with your service small jobs are especially difficult because they have less perceived value but you still need to cover your fixed overheads don't trying to undercut yourself sometimes it's better to just move on which is a great way to introduce our other approach selling a product now selling a product in theory is very simple but it's much more difficult to do in practice get started selling a product you're obviously going to need a product design to sell now product development is a huge topic and I can happily do a separate video on that but for now let's just keep it simple if you have an idea for a laser-cut product awesome just run with that if you don't you can jump online and just make a variation of what other people are selling it's bent I'm really getting a product perfect and thinking about its viability basically take all the operational costs I went over in the service example and apply it to your product if you come out of the negative adjust and try again now this process can take anywhere from a couple of days to several months to get right before you're ready to release to market if you'd like a head start I've got a couple of successful product designs that you can download over on my website and I'm happy for you to use them to sell locally or online which leads us to where to sell as I mentioned before there's kind of three main categories that I can think of wholesale online and locally wholesale as where you sell a product usually in bulk to a retail store and they then sell on to the customer this takes a lot of the legwork out of things and also leverages stuff like their own brand identity and the marketing but it does come at a steep cost to your profit margin usually the retailer will need at least 50% of the retail price to make it worthwhile for them so if your product costs you two hours to make per unit and then you add a profit margin of say another $4 per unit then you sell wholesale at the $6 per unit they then need to be able to sell your product for at least $12 per unit if it's not worth that you need to get back to the drawing board this is also why you deal with bulk orders and wholesale because it's easier to keep your cost down per unit selling directly online can be slightly less stressful and a bit more flexible as you can change the pricing and add and remove items whenever you need to adjust something I recommend platforms like Etsy and local listing sites now the benefit of them is that they already have a customer base searching for items and that they have integrated management systems to help you deal with the orders now the downside is that they're gonna take a percent cut from your sales and you'll have a lot of competition between similar products the alternative is to host your own online store if you like marketing and have good branding presence this can be a great way to differentiate yourself and grow while maximizing your profits of course you will have a website hosting fees and advertising costs to contend with there as well local selling at pop-up stores and craft fairs can be a great way to avoid ongoing overheads you can spend a few weeks making products and then hopefully sell them all off in one go it can also be a great way to get instant feedback on design and pricing from customers rather than just clicking refresh on your website and wondering why thinks that sell craft fairs and the like will normally charge a seller's fee to set up a stall per day and you probably need a factor in your own hourly rate spent standing behind that store as well so let's go through a product example I'm going to use my Nespresso holder being sold on Etsy and you can download the plans for that over on my website okay so product viability including material cost manufacturing and packaging these cost me about $4 50 per unit if I was making them in bulk now based off research of similar products at the time I decided on a retail price of $17.48 it C would then take a listing and transaction fee of around $2 leaving me with about a $6 50 profit this was okay for a little bit of money in my pocket especially seeing as it didn't take up too much my time but the real killer for me and ultimately why I stopped doing it was that super high shipping cost because I live in New Zealand which has a tiny population the vast majority of my customers were international if you live in the US or a large country your shipping costs shouldn't be as high and you'll be able to run a higher profit margin with the viability and math sorted all that's left to do is create an account and add product listings with some high quality photos now selling your first few items will be tough because no one wants to buy from a seller that hasn't sold a new thing so just get your family and friends to buy a couple of items and leave reviews just just to break that initial ice and then you should be on your way remember that gray area I talked about earlier while providing a customizable element to your product can be a good way to add value to it however keep in mind that it will mean that you can't batch out finish products as easily and for me the extra costs in my time and breaking up my workflow weren't worth the added value so I ended up steering clear of customizable things and I feel in most cases it's better to do fully custom things and standardized products rather than trying to blend the two in a single product so what are some pros and cons that I've experienced from running a product based business you can start with just a couple of small products in as yourselves and confidence grows adding new products and branching out into other sales avenues is super easy you can bet you out all of your products over the weekend and then just handle any of your shipping that comes through during the week this makes it really flexible for also working a day job products can really be done from anywhere in the world selling online especially means that you're not restricted to your local area and you can easily run it all from the comfort of your own home not only is shipping in edit cost but there's always a risk involved if a package goes missing even though it's not your fault you need to be prepared to respond quickly and sort it out right away getting good reviews is awesome beginning bad ones will destroy you early on so don't hesitate to refund or rescind an order it's just part of the business facing a business on undercutting other products will lead to a downward spiral where nobody wins instead focus on making a product better and having good customer service okay wow that was that was a lot of talking I do hope some of that was helpful now remember I only split up the two approaches so that I could explain things easier I actually think the best course of action would be to do a little bit of both so provide a custom service while having a couple of standardized products taking over but whichever path you want to take I think the best recipe for success is to have a foundation of genuine customer service and from there getting creative coming up with new ideas and processes so you can stand out in the market and reach even more customers alright I think that's that's all I've got on me for now I know I certainly haven't touched on every possibility out there I just did the ones I was familiar with and we've only really scraped the surface so hmm if you've had success with other ideas feel free to share them below or if you have any questions I will do my best to answer them but yeah thanks for watching and I'll see you next time

Channel: Further Fabrication

Views: 429,730

Keywords: laser, laser cutter, laser engraver, laser cutting, diy laser, co2 laser, homemade, laser engraving, diy, cnc, how to make a laser, laser engraving machine, arduino, homemade laser, cnc laser cutter, best laser cutter projects, chinese laser cutter, diy 40w laser cutter, diy laser cutter machine kit, cheap, glowforge, buildlog, What is a laser, how does a laser work, laser cutting 101, begininer, basics, what is a laser cutter, how lasers work, make money, money, Business, selling

Id: cf7nFXIm0kQ

Length: 14min 36sec (876 seconds)

Published: Thu Apr 02 2020