How to charge for laser engraving: a pricing method
Work out a price for laser engraving from your own costs: materials, machine time, your time, set-up, overheads and fees, with a worked example to check.
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A price for laser engraving is the sum of what the job costs you, plus the profit you want, plus whatever the place you sell through takes. The costs are materials, machine time, your own time, a share of the set-up, and a share of your overheads. This guide gives the formula and a worked example whose arithmetic you can follow line by line.
It gives a method, not market rates. What engravers charge varies by place, by product and by year, and this guide found no reliable public source for it, so no going rate is quoted here. Work out your own floor with the method, then look at what similar things sell for where you sell.
The formula
Cost per piece = materials + machine time + labour + set-up share + overhead share
Price per piece = cost per piece × (1 + markup) ÷ (1 − selling fee)
Markup is the profit you add on top of cost, as a fraction: 0.40 for 40%. As xTool’s pricing guide puts it, “a 100% markup translates to the cost price times two”. The selling fee is the fraction of the price that a marketplace or card processor keeps. Dividing by (1 − fee) raises the price so that the fee comes out of the customer’s money and not out of your profit.
The five costs
1. Materials. The blank, the packaging, and anything used up on the piece, such as masking tape or marking spray. Add an allowance for pieces that go wrong. If one in twenty is spoiled, multiply the cost of the blank by 1.05.
2. Machine time. The minutes the laser runs, multiplied by what an hour of running costs you. An hour of running costs:
- the price of the machine divided by the hours you expect it to engrave before it is replaced, plus
- parts and upkeep per hour, such as lenses, filters, a tube or a module, plus
- electricity: the machine’s draw in kilowatts times your price per kilowatt hour.
For the minutes, use your software’s estimate and then time a real run. LightBurn’s Preview window shows a “Total estimated time”, and its documentation notes that settings in Device Settings make the estimate more accurate.
3. Labour. Your time on each piece, at an hourly rate you set for yourself: loading, masking, cleaning, checking, packing. Include the time the machine is running. A laser must not be left running alone (LightBurn’s fire safety page: “Never run your laser unsupervised”), so unless you are doing other paid work beside it, those minutes are yours as well as the machine’s.
4. Set-up. Work done once per order, however many pieces are in it: preparing the artwork, sending a proof, making a jig, burning a test piece. Cost it as time at your hourly rate plus any test material, and divide by the number of pieces in the order.
5. Overheads. Costs that belong to no single job: software, insurance, a share of rent and heating, the website, accountancy. xTool’s guide describes them as expenses “that do not directly relate to the production” of an item. Add up a month of them, divide by the hours a month you spend on paid work, and charge each job that hourly figure for the hours it takes.
A worked example
The figures below are invented to show the arithmetic. Replace every one with your own.
The job: 20 slate coasters engraved with a customer’s logo, sold through a marketplace that keeps 10% of the price.
| Input | Figure |
|---|---|
| Coaster blank | $2.00 |
| Spoilage allowance | 5% |
| Packaging per coaster | $0.40 |
| Machine price | $1,200 |
| Expected engraving life | 1,500 hours |
| Parts and upkeep | $0.35 an hour |
| Electricity | 0.25 kW at $0.20 per kWh |
| Your hourly rate | $24 |
| Engraving time per coaster | 6 minutes |
| Handling time per coaster | 3 minutes |
| Set-up for the order | 30 minutes, and one test coaster at $2.00 |
| Overheads | $144 a month over 60 paid hours |
| Markup | 40% |
| Selling fee | 10% |
Materials. $2.00 × 1.05 = $2.10, plus $0.40 packaging = $2.50.
Machine rate. $1,200 ÷ 1,500 hours = $0.80 an hour. Electricity is 0.25 × $0.20 = $0.05 an hour. With $0.35 for parts, the machine costs $0.80 + $0.35 + $0.05 = $1.20 an hour.
Machine time. 6 minutes is 0.1 hour. 0.1 × $1.20 = $0.12.
Labour. 6 minutes watching plus 3 minutes handling is 9 minutes, or 0.15 hour. 0.15 × $24 = $3.60.
Set-up. 0.5 hour × $24 = $12.00, plus the $2.00 test coaster = $14.00 for the order. $14.00 ÷ 20 = $0.70 a coaster.
Overheads. $144 ÷ 60 hours = $2.40 an hour. Each coaster takes 0.15 hour plus its share of the set-up, 0.5 ÷ 20 = 0.025 hour, which is 0.175 hour. 0.175 × $2.40 = $0.42.
Cost per coaster. $2.50 + $0.12 + $3.60 + $0.70 + $0.42 = $7.34.
Price. $7.34 × 1.40 = $10.276. Divided by 0.90 for the fee, that is $11.42. Round it up to $11.50.
Check. 20 coasters at $11.50 is $230.00. The marketplace keeps $23.00, leaving $207.00. The cost was 20 × $7.34 = $146.80. Profit is $207.00 − $146.80 = $60.20, which is 41% on cost: the 40% asked for, plus the rounding.
Notice where the money went. The machine, at 12 cents, is the smallest line. Your time is about half the cost. With figures like these, a price based only on six minutes of laser time loses money.
What quantity does
The set-up is the same $14.00 whether the order is one coaster or a hundred. Running the same sums for other quantities:
| Quantity | Set-up share | Cost per coaster | Price before rounding |
|---|---|---|---|
| 1 | $14.00 | $21.78 | $33.88 |
| 5 | $2.80 | $9.62 | $14.96 |
| 20 | $0.70 | $7.34 | $11.42 |
| 100 | $0.14 | $6.73 | $10.47 |
A single custom coaster costs about three times as much to make as one of twenty. That is the honest reason for a minimum order charge or a separate set-up fee. Two common ways to charge it:
- A set-up fee plus a unit price. Here, a $20 set-up fee and a lower price per coaster. Customers see why one piece is dear.
- Quantity breaks. A price for 1 to 4, for 5 to 19, for 20 to 99, each worked out at the smallest quantity in the band.
If the customer supplies artwork that is ready to engrave, the set-up is shorter and you can say so in the price. If they send a phone photo of a sketch, it is longer.
Building a price list
A price list is this calculation done in advance for the things you make most.
- List your standard products and sizes.
- Time each one once, from loading to packed.
- Work out the cost at each quantity break.
- Apply your markup and fee, and round to tidy prices.
- Add the terms: a set-up fee or minimum charge, what counts as ready artwork, the charge for a proof, and how long the prices hold.
Keep the workings in a spreadsheet with one row per product and one column per input. That spreadsheet is your price calculator, and when the price of blanks or electricity changes you change one cell.
Pricing by area
Some engravers quote by the square inch or square centimetre. It works because the time to engrave a filled area grows with the area. A laser engraves a filled shape in rows, so:
Time ≈ (height ÷ line interval) × (width ÷ speed), plus the time to turn round at the end of each row.
A square 100 mm by 100 mm at a line interval of 0.1 mm is 1,000 rows. At 100 mm a second each row takes 1 second, so the engraving takes about 1,000 seconds, a little under 17 minutes, before turn-rounds. Close the interval to 0.08 mm and it is 1,250 rows and about 21 minutes. Your software’s preview gives the true figure for your machine.
To get an area rate, engrave a measured test square at your usual settings, time it, and multiply the minutes per unit of area by your cost per minute (machine plus labour). Use it only for the engraving part of the price. The blank, the set-up and the handling do not shrink with the design.
Checks before you quote
- Compare with the market. Look at what similar finished pieces sell for. Epilog suggests comparing a supplier’s price for blanks with its suggested retail price for the engraved product. If your figure is far above the market, the product may not suit your costs; if it is far below, you have room.
- Customer’s own item. If you engrave something the customer owns, a mistake costs you its replacement. Allow for that risk in the price, or decline items you cannot test.
- Tax. Sales tax or VAT, and tax on your profit, depend on where you are and how much you sell. Check your own country’s rules; they are outside this guide.
- Artwork rights. Check that you or your customer has the right to use a logo, character or photo before you sell engravings of it. The rules depend on where you are and are outside this guide.
Questions
Should I charge by the minute of laser time? Only if the rate per minute includes your labour and overheads. In the example, the machine itself cost 2 cents a minute, and the full cost of a coaster worked out at $7.34 for 6 minutes of engraving, about $1.22 a minute.
What hourly rate should I pay myself? That is your decision. One way to choose is to ask what you would have to pay someone else to do the work.
How do I price a photo engraving? The same way. Photos take longer to prepare and usually need a test piece, so the set-up is larger. Dithering for laser engraving and the photo converter shorten the preparation.
Is there a calculator I can use? The formula above in a spreadsheet is one. Online calculators differ in what they include, so check that any you use counts labour, set-up and overheads as well as machine time.
Sources
- xTool, How to price handmade items: the cost headings, overheads and the definition of markup
- LightBurn documentation (2.1), Preview: the job time estimate; Fire Safety: supervision; Image Mode: line interval
- Epilog Laser, Can I make money with a laser?