Nowadays, personalization and customization are essential. Uncommon and original gifts, signs or trophies with a customized dedication are becoming more and more popular. An engraver's field of application is very diverse and can best be supported with laser technology.
Additionally, lasers are a tool for multiple applications in the advertising material industry. With high quality laser engravings, giveaways and simple promotional items (usually available from almost any supplier) can be sold at a higher profit margin.
End customers are usually willing to pay a higher price for personalized products. The price for these items, customized with a laser engraving, is thus typically determined from the price per product that's achievable in the market. It is common for consumers to pay 5 to 10 times the base price for customization.
Example: Laser-engraved ballpoint pen with surcharge for laser engraving
For instance, high quality ballpoint pens with an engraving are sold for $24. The pens can be bought for as little as $2.50/unit depending on the purchased quantity. In the laser industry, "laser costs" are typically calculated at $1.50 per minute to cover for laser time. Different images and the time taken to engrave can quickly be quantified into costs. With the example of the ballpoint pen, the laser cost is 38 cents per unit in laser costs for an engraving time of 15 seconds. Even when allowing for labour costs, it is simple to see that laser engraving can make good profits.
|Laser engraving ballpoint pen: 1 unit|
|Purchase price of a ballpoint pen:||$2.50|
|Engraving duration for 1 unit:||15 seconds|
|Engraving costs ($1.50/min):||$0.38|
|Labor costs ($62/hour):||$0.26|
|Retail price with engraving per order at 1 unit:||$24|
|Profit per unit:||$20.86/unit|
|Laser engraving ballpoint pen: 150 units|
|Purchase price of 150 ballpoint pens:||$375|
|Engraving duration for 150 units:||15 min|
|Engraving costs for 150 units ($1.50/min):||$22.50|
|Labor costs ($62/hour)||$15.50|
|Retail price with engraving per order at 150 units:||$3600|
|Profit per order at 150 units:||$3187/order at 150 units|
Trotec offers the right machine for every situation thanks to our wide range of flatbed lasers. The Speedy laser engraving and cutting systems are the ideal choice for both first-time and established laser users. All platform sizes, from 24 × 12 inches to 39.4 × 24 inches, can be obtained with either a CO2 laser, a fiber laser or even both in a single system. The patented flexx™ technology allows for infinite applications.
Oftentimes, promotional items are mass produced. However, there are many suppliers and retailers of promotional items who carry a wide variety of products. These are usually imported from Asia in high quantities. For retailers, the challenge is in reselling these promotional items, ideally in large amounts. Often, the company's marked name or logo is the only additional value. This unfortunately means that profit margins are quite low. Successful suppliers of promotional items stand out from the rest by specializing in innovative processing technologies. With a high quality laser engraving, gifts and promotional items (typically available from almost every supplier) can profitably be sold with a higher margin. There are two approaches that allow you to realize these margins in your pricing.
1. Surcharge for the laser engraving (high-quality finish)
The "usual" approach to getting higher margins is by adding a surcharge for the laser engraving. Using this method, the base price of the promotional item is low and comparable to other suppliers, but an extra surcharge is added for the engraving. Depending on the size and quantity, surcharges of around $1.50 per laser engraving are viable. This would mean that with orders giving 100 items a week, the purchase of a laser system (using the average value, depending on the size and equipment) is already economically feasible. Keeping in mind that significantly larger order volumes are realistic in the promotional items field and that there are no fixed costs with laser processing, promotional items retailers can raise their company's profitability with laser engravings and markings.
2. Higher prices of mass-produced items by laser engraving
Some promotional items suppliers will provide laser engraved markings for almost no extra charge (only a few cents per unit). The idea behind this is that profit is already made through the base product's price and the engraving add-on allows customers to feel like they are getting a high quality engraving for next to nothing. As laser processing does not have any variable costs (no consumables are necessary, excluding labour costs) and that promotional items are never really purchased without branding, the fixed costs can be included within the price of the unmarked product. Because of higher quantities, like with giveaways, retailers can create more sales and revenue with very low acquisition costs, increasing profitability.
In conjuction with patented Speedy flexx™ laser engravers, which give incomparable flexibility and the capability to begin marking both metals and plastics with the two laser sources in the single machine, Trotec also provides galvo laser workstations for high quantity orders. Depending on the usage and the product, promotional items suppliers can work roughly 10 to 50 times faster with a galvo laser than a flatbed laser. Suppliers can quickly and economically actualize even large quantities with a high speed galvo laser.
More about galvo lasers