Why I charge $55 for this 3D printed part (how to price)

I charge $55 for this 3D printed part which uses $4.90 of material how did I come to this price and why in this video I'll share with you my formula for calculating the price of my 3D printed products by showing you three actual product examples there's a lot more that goes into this than just multiplying the cost of the filament and I can almost promise you're not factoring in at least one very important expense most people have super simplified calculations for what a 3D printed part should cost and I'm all for Simplicity when possible believe me there's no reason to over complicate things just for fun but if you're not careful you could severely undercharge for 3D printed products or parts that you produce as a service which means you're running a charity not a business the trick is to figure out what the fully landed cost of the part actually is and in this video I'll show you how I do just that any manufacturer that makes a thing is very familiar with this Landing cost it's the basis for how they establish pricing so they know their actual margins as 3D printing entrepreneurs we have to take the same level of precision to figure out the land cost of our parts now luckily we don't have complex Supply chains and Manufacturing processes so it's actually pretty straightforward to calculate here's how I do it the main components of our 3D printed part Landing cost are materials both raw and purchased labor packaging and shipping and machine cost that whole first group is actually referred to as the cost of goods sold that last item is the component that I see most people leaving out I'll go more into that in a bit now as should go without saying I'm not an accountant these formulas and terms may not align with best accounting practices but they do work for the sake of what we're trying to accomplish here and in fact is the exact method I've been using for my 3D printing business for years now so I went Ahad and saved you a ton of time and note-taking by making all of this information available for free as both a cost worksheet and Excel file that you're welcome to use I'll have a link to those down below okay so let's dive into each of these cost components before we look at these three real world examples from my own 3D printing business material is pretty straightforward the raw material in the case of a 3D printer is filament powder pellets or resin depending on the technology you're using and this is typically calculated for you in your slicing software as the material used just keep in mind that you should use the total used number rather than just the part used for example if there's a purge Tower needed for your part absolutely factor that into the cost there is a contingency that I like to add to this though and that's what I call the efficiency Factor basically your slicing software output assumes that the print goes perfect and over the course of many parts every gram of material on your spool is all gobbled up if you've printed for any length of time you know this isn't realistic things happen like print failures part defects nozzle jams material Runs Out Etc to account for this I like to take the material and multiply a factor of 1.1 this gives a 10% buffer which I found to be a reasonable estimate for losses over time of course feel free to adjust accordingly the purchase materials are things like Hardware threaded inserts or any third-party component that you must purchase that either goes into the final product or is used in creating the final product next is packaging and shipping this includes the the box or the mailer the tape any internal packaging like bubble wrap or foam and even the packing slip and shipping label yes those have a cost too now if you do or plan to offer free shipping with your products which I would generally recommend especially for local customers the shipping charge should be estimated as an average you don't need to overthink this if you haven't been selling and have no earthly idea get a couple rates for the size box you plan on using to a couple areas around the US for my business the average label cost is $5.50 now if you're passing along the shipping charge to your customers then of course the postage isn't factored into the landing cost calculation the final output of your cost to good sold is labor if you're just getting started you may think you have zero labor cost because you're the one doing it all wrong your time is worth something whether you like it or not and better yet if you scale this thing at some point you'll have help which is a cost this is another area that does not need to be over complicated simply estimate the total time needed to start the print remove the print clean up the part and do any post-processing like adding hardware and how long it takes to package it up that total time will then be multiplied by an hourly rate you set the rate based on your situation but if you need a starting point use $20 an hour this would be a realistic cost of hiring an employee to do the work that doesn't mean they'll be making $20 an hour that's just roughly the cost to you the employer okay so all of those make up the cost of goods sold the final component is machine cost the way that I think about 3D printers in a print Farm is that they're all slowly dying making parts for you and at some point it will be dead and you'll need to replace it or at the very least fix it what I suggest you do is calculate a general cost per hour to run the printers until its inevitable death for round numbers let's say you purchase a 3D printer for $1,000 now normally the expected life of that printer is around 5 years but running continuously in a print Farm is probably more realistically closer to three in those three years of life we have to estimate how many hours it's running now there are technically 8,760 hours in a year but realistically your printer will not run anywhere close to that an extremely busy machine will run half of that so let's assume 4,380 hours per year or 13,140 hours over the projected lifespan now during the course of those 3 years you will need to maintain and repair that 3D printer we can use some basic rules of thumb here and assume around 5 to 10% of the printer's cost per year in maintenance and repairs now I'm assuming you're not running garbage machines in that case the percentage would probably be a lot higher this means that you'll spend an additional $150 to $300 during the life of that printer so we spend $1,000 on the printer add call it $250 in maintenance and repair for a total investment of $1,250 now if we divide that number by the total projected like Span in hours we get 0.095 or 9.2 cents per hour but we're not quite done yet now as you know your printer consumes electricity to run so let's use some basic assumptions to add those costs into our final number again for Simplicity sake let's assume the average our printer poles is 150 watts of power during use the average cost of 1 kilowatt hour or 1,000 wat hours in the US is around 14 cents or 2 cents per 150 W hours so combining both of the numbers we found we get 92 cents plus 2 cents we get around 12 cents an hour of total cost to run your printers from that I like to add another buffer and multiply it by around 1.3 which means our final number is 15 cents per hour and I've personally found this to be a really good Baseline to use and I know what you're thinking it sounds like a lot of work to figure out a small amount of money but when you start multiplying that across many printers and many hours it really starts to add up for example in my farm this could mean an unaccounted for cost of up to $180 per day okay so we have all of our cost components figured out now let's use it to calculate the cost of three real product examples from my own business and then we'll finish up by arriving at a price to sell them the first product are reveal spacers which come in handy when building cabinets and drawers I previously sold these in a pack of 16 made up of various shapes and sizes now there's no real post-processing besides cleaning up a couple of boogers so they're basically ready to go right after printing the total material used was 38 G or 42 G after multiplying by 1.1 the cost of filament at the time was $33 per kilogram this means the raw material cost is $1.39 and for this example there's no additional purchase materials the packaging for these parts is one small box one foam pouch some branding inserts one packing slip one shipping label and the shipping charge that total cost was $576 the estimated labor for these simple Parts was around 5 minutes at $30 an hour or $2.50 these parts took 2 hours to print which means our machine cost component is 30 this brings our total landed part cost to $84 5 next up are these hangers for your DeWalt batteries they let you keep your DeWalt batteries organized in your shop and kind of keep them up and out of the way for this example I used a six-pack which is a fairly common configuration now again with these there was no real postprocessing like the shims besides cleaning up the random strings or boogers the total material used was 163 G or 179 G after multiplying by 1.1 the cost of filament at the time was the same at $33 a kg this means the raw material cost is $5.98 and just like before there's no purchased additional materials that went with this the packaging was also the same as before at $576 the estimated labor for these parts was even shorter than before at only 2 minutes at $30 an hour which means $1 and these parts took 5.1 hours to print which means our machine cost component is 77 this brings our total landed part cost to $13.50 now for number three I chose a fairly manually intensive example mostly to show the impact of Labor and other material costs this is a stop blog jig for using with a miter saw now there's a fair amount of post-processing on these which includes installing a total of six heat set inserts four screws one aluminum plate a t-bolt washer and an op the total material used was 65 G or 712 G after multiplying by 1.1 the cost of the filament was consistent again at $33 a kg and this means the raw material cost is $238 the price of the purchase materials however racked up a total of $563 the packaging for this part is again identical and that cost was $5.7 the estimated labor for this part was 12ish minutes at $30 an hour or $6 and these parts took 2 hours to print which means our machine cost component is 30 this brings our total landed part cost to $20.7 all right so we have our landed costs and hopefully you can see that the filament cost is actually not a very good indicator for what the total cost really is now how do we arrive at a price to sell them well there's a couple of schools of thought here the first is to set a desired reasonable profit margin and just just multiply your cost by that factor to establish the price in a lot of cases this works and at a minimum is a great gut check to start with for example if I wanted a 50% profit margin for the reveal spacers the selling price would be around $20 but another factor to consider is the current market are others out there selling similar hopefully not the same products that you are what's their pricing if their pricing is well below what you've calculated based on your margin Target you can either a position yourself as a superior product and charge a higher price or B decrease your margin to be competitive it's not an exact science but having a good understanding of your fully landed cost will help you make informed business decisions when it comes to pricing and even running sales for the battery hangers with a landed cost of $13.50 I could sell them for $27 or even move them up to $33.75 for a higher margin the stop lock has a higher landed cost of $20.7 so I'd be looking to charge at least $40 for this product another good rule of thumb is that you can generally seek higher margins for parts or products that that are hard to make like they need a lot of post-processing or require a bunch of third- party components like Hardware which is why I'm able to charge $55 for this product which has a landed cost of $24.9 I hope that at least gets you started and as a reminder you can get these calculations and worksheets for free via the link down below and if you're serious about starting or growing a 3D printing business consider joining the print form Academy course launching later this year do you do something different with your cost calculations I'd love to hear about it leave those down in the comments and hopefully we can all learn from each other see you

Channel: Print Farm Academy

Views: 292,637

Keywords: print farm academy, printfarmacademy, print farm, 3D printing, 3d print farm, 3d printing business, pricing 3d prints, selling 3d printed items, selling 3d prints, additive manufacturing, make money 3d printing, calculate price, product pricing

Id: 5koU93oZVC0

Length: 11min 6sec (666 seconds)

Published: Thu May 09 2024