APMM Community Forum : Other Business Issues
Welcome Guest   
 
 Subject : Re:How to calculate price of models.. 09/20/2021 10:36:57 AM 
JILL KENIK
Posts: 20
Location
You might consider making an introduction to APMM's Ambassador for India! Here's Sharad's email address:

[email protected]

This appointment is only a few weeks old--we'll get Sharad listed on the website shortly, but he is willing to be a point of contact for the growing model making industry in India.
Last Edited On: 09/20/2021 10:38:19 AM By JILL KENIK
 Subject : Re:Re:How to calculate price of models.. 09/16/2021 04:43:20 PM 
Charles Overy
Posts: 11
Location
Pricing is tough!

There are three ideas that help

What it costs you to make it
What it would cost your customer to make it
What others would pay for this

1. This is Jenny's suggestion. Just make sure when you calculate your hourly rate you include all your overhead like space, power, some allocation for the cost of tools, software, subscriptions, insurance, cost of vacations and holidays, billing etc. Then add some margin.
I would also think about if there are going to be work in progress changes or scope creep and also how competitive this bid is and are you selling high service, cheap etc. For a FEW of our clients we KNOW there is going to be a lot of work in progress changes and we also know that they are probably not bidding this out too competitively, they are looking for SERVICE. So we quote high work fast, communicate a lot and don't come back with a bunch of change order billing that we and they then have to justify. Other times it is the exact opposite of this situation.

2. What it would cost them to make it.
If your client can make the product in house (or think they can!) you can try to estimate or your can ask, what it would cost them to build in house. We actually do work for some other big company shops because we can actually do it cheaper or faster than they can. In tight labor markets, like now, there may be product opportunities because your customers cant staff

3. What is it worth.
This can be a tricky one or an easy one depending on if there is a subjective or objective comparison. Look for similar products already on the market and decide are they a real substitute. An example of this is that sometimes we find, particularly when people ask us to make a lower cost award or gift that we cant make something for what the perceived value is.

Just other ways to look at the problem

Charles
 Subject : Re:Re:How to calculate price of models.. 09/16/2021 04:37:15 PM 
Charles Overy
Posts: 11
Location
Pricing is tough!

There are three ideas that help

What it costs you to make it
What it would cost your customer to make it
What others would pay for this

1. This is Jenny's suggestion. Just make sure when you calculate your hourly rate you include all your overhead like space, power, some allocation for the cost of tools, software, subscriptions, insurance, cost of vacations and holidays, billing etc. Then add some margin.
I would also think about if there are going to be work in progress changes or scope creep and also how competitive this bid is and are you selling high service, cheap etc. For a FEW of our clients we KNOW there is going to be a lot of work in progress changes and we also know that they are probably not bidding this out too competitively, they are looking for SERVICE. So we quote high work fast, communicate a lot and don't come back with a bunch of change order billing that we and they then have to justify. Other times it is the exact opposite of this situation.

2. What it would cost them to make it.
If your client can make the product in house (or think they can!) you can try to estimate or your can ask, what it would cost them to build in house. We actually do work for some other big company shops because we can actually do it cheaper or faster than they can. In tight labor markets, like now, there may be product opportunities because your customers cant staff

3. What is it worth.
This can be a tricky one or an easy one depending on if there is a subjective or objective comparison. Look for similar products already on the market and decide are they a real substitute. An example of this is that sometimes we find, particularly when people ask us to make a lower cost award or gift that we cant make something for what the perceived value is.

Just other ways to look at the problem

Charles
 Subject : Re:How to calculate price of models.. 09/16/2021 09:00:40 AM 
Jenny Tommos
Posts: 10
Location
Time + material, then add 10%. Add more if the client doesn't have their act together/bad drawings.
 Subject : How to calculate price of models.. 09/16/2021 08:33:44 AM 
Yudit
Posts: 2
Location
Hi everyone!

This is Yudit (a.k.a. Rufus ;) )! I am back alive after final submission of my MA study!
Thank you so much for all the support, it enabled me to go through my study :)

I got a question from Yogesh Suryawanshi, modelmaker in India, asking if there are any standard methods to define the price of models or prototypes. If not, how do you normally calculate the price of model?

I realized that I do not know about this well enough!!
I would love to learn from members of APMM and share this with Yogesh!

I hope you are all having a great day and thank you so much again,

Yudit
 
# of Topics per Page