How to set laser cutting prices that are both competitive and profitable
25 Mar 2024
Metal fabrication and laser cutting job shop owners have all asked themselves at one point, “how should I set my prices?”.
It’s a delicate balance. Set your prices too high and customers may walk away to the competition, but set your prices too low, and you may be working too hard for little or no profitable return.
Setting a baseline
“The first thing to do is understand all of the costs that are associated with running your laser machine. Once you have a complete overview, best practice is to apply a full absorption costing method to your business,” advises Bruce Thomas, Product Executive at Tempus Tools. Bruce has decades of experience in the laser cutting industry. His experience is complemented by the Tempus Tools team, which are highly knowledgeable in the laser cutting industry, with practical, hands-on experience on the shop floor, through to management.
“Full absorption costing means that you’re absorbing overhead costs into the hourly rate. In laser cutting job shops, this could be direct costs, like labour, as well as indirect costs like rent, insurance, power, and maintenance. But each case is different, so we can provide guidance on how to perform this type of calculation,” he says.
Bruce explains that once you have calculated all the costs within a job shop and created an annual figure, you can set an accurate yearly revenue target, which can be broken down into monthly and daily objectives. This breakdown is an effective way to focus on revenue goals for the job shop.
“This data should give you an idea of what prices need to be set in order to be profitable, but you won’t know if they are exactly right until you get market feedback, so be prepared to adjust these initial prices,” says Bruce.
A word on assumptions
Full absorption costing is a great starting point, but Bruce points out that this calculation does require some assumptions, such as the number of hours the shop will be operational for, and the percentage of those hours the machine will be cutting (known as the utilisation rate).
“Varying the utilisation rate can have a big impact on how costs are distributed. If your machine isn’t running for as many hours per day as you predicted (actual cutting time), then you find yourself in a situation where you’ve priced your cutting service too low,” he says.
“In other situations, you might increase the number of shifts per day, or add shifts on weekends, which can increase efficiency without changing fixed overheads, resulting in a more competitive hourly rate.
Getting ahead and staying competitive
“Of course, once you’ve come up with a price, it’s crucial to see if it’s competitive with the market, and one of the best ways to do this is to use software to monitor your win/loss ratio,” he says.
“A typical win/loss ratio is about 30-40%. This means, for every 100 jobs you quote for, you win 30-40 of them. Lower than 30 means the pricing is too expensive and you’re losing work to competitors, and above 40 means the pricing is too cheap, meaning you are doing a lot of work for a lower profit margin.”
“It’s important to monitor pricing over time, and see how it changes in reaction to trends, too. For example, material price fluctuations or changes in demand from different industries will have an impact on pricing.”
“Similarly, technology changes will have an impact. Cheaper and more powerful machines, and more automation will allow more advanced laser cutting tasks to be done with lower costs.”
“It’s important to know your customer, but it’s equally important to know your competitor and what they are offering, and for how much.”
Hourly rates only go so far
Much of the metal fabrication and laser cutting industry uses hourly rates to calculate a price, which is then quoted to customers, but this only works up to a point, says Bruce.
“To remain competitive, you need to keep monitoring prices. Each quote – regardless of who prepares it – needs to be consistent and accurate. One of the best ways to do this is to use laser cutting quoting software, so that any changes are implemented within the software, rather than on a per-quote basis,” he explains.
There are a range of factors that can affect a quote, and it can often mean one job shop will quote at a different rate to another. Bruce explains that this can be for reasons such as:
- The speed and size of the machine. A 6kW laser cutting machine can vary from approximately $180,000 to $1,200,000, which is a huge difference. Each machine will perform at different speeds, and allow different levels of sophistication.
- Whether the machine is paid off or not. If it’s still not paid off, this might have to be factored into the hourly rates.
- Cutting thickness, with thicker cuts demanding higher costs.
- Cut quality – all machines will be able to produce an acceptable quality, but some customers may demand an additional level of precision and finish, and if this takes additional time, it will need to be considered in the costs.
“With all that being said, your customer is buying on a per-part basis. They are comparing your part priced at $10 with the competitor’s part priced at $8. So, you need to adjust for this difference using software and data, rather than relying solely on a ‘gut feeling’. Knowing your bottom line gives you the confidence to accept or reject the work,” he says.
Added value wins more jobs
Once you’ve figured out a price, to really stand out from the competition, it’s all about the added value you can deliver, says Bruce.
“Consider your delivery times, customer service, expectations management, and understanding a customer’s unique needs. Do they need all their parts individually packed and labelled, for example? If you can meet their needs, you’re more likely to win the job,” he says.
“Adding value is always better than discounting price. In a race to the bottom on price, nobody wins.”
Tempus Tools helps win more jobs
To help deliver added value, monitor win/loss ratios, and provide faster, more accurate, and more consistent quotes, Tempus Tools created Tempus Tools. Tempus Tools is multi-functional laser cutting quoting software that is calculation-based and runs on a Software as a Service (SaaS) model. It can be set up with information on material price, cutting time, labour, and other relevant information, to generate quotes quickly and accurately.
“Tempus Tools can give job shop owners more accurate estimates of time, which leads to greater consistency,” says Bruce.
“Additionally, Tempus Tools can generate printable part labels, and produce work orders with times listed on each task. Tempus Tools provides consistent and accurate data on folding, cutting, and secondary processes, so that quotes to customers are exactly right.”
“We’ve helped a huge variety of different job shops with full absorption costing, win/loss ratios, setting up pricing, and then generating fast and accurate quotes – so if you’re looking to optimise your job shop’s operations, we’re here to help,” he concludes.
See how Tempus Tools helps fabricators quote faster and smarter.
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New integration: Tempus Tools + ECI M1 – from quote to order to ERP, seamlessly
At Tempus Tools, we know that speed and accuracy are everything in a laser cutting job shop, and today we’re announcing a new integration that makes both even easier.
We’re now fully integrated with ECI Software’s M1 ERP system.
What does that mean for your job shop?
It means you can now send quotes, order details, and production-ready drawings directly from Tempus Tools into your M1 ERP — no more double handling, no more data entry errors, no more jumping between systems.
This integration eliminates any “dead zone” between quoting and production. You get the specialist laser quoting power of Tempus Tools (like lightning-fast nesting, material cost accuracy, and margin control) combined with the operational backbone of M1.
It’s quoting that talks to your shop floor.
We’ve talked about how integrations like Google Drive can supercharge job shop workflows, and this M1 integration is another great example.
Want to learn more or set it up? If you want to avoid the limitations in the generic quoting functions in ERP/MRP software, but still use the rich planning and production features in ERP/MRP software, then get in touch today.
Book a demo or email us at support@tempustools.com and we’ll help you get connected.
Tempus Tools + M1 = quoting to production, finally in sync.
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Tempus Tools’ Google Drive integration: 6 ways to supercharge your job shop efficiency
Tempus Tools’ new Google Drive integration automatically saves your quote data and part files to Drive, opening the door to faster, smarter workflows. In this post, we highlight six clever ways job shops are already using it to boost efficiency.
Last month Tempus Tools released a powerful new feature: seamless integration with Google Drive.
Since then, we’ve heard from lots of customers about the innovative ways they have implemented this integration in their job shops, and we wanted to share the best six with you to inspire you to use the feature in your shop.
First, a quick recap: with the Google Drive integration, all your quote data (in CSV format) and production-ready part files can be automatically saved to your chosen Google Drive folder. From here, they can be exported to any number of programs or that data can be manipulated for many use cases, opening up a world of automation, reporting and connectivity for your job shop. We’ve also put together a quick video to show the integration in action.
1. Automate quote data collection for reporting
With every quote automatically saved, you can easily compile and analyse your quote performance over time. Use Google Sheets or your favourite analytics tool to track:
- win/loss rates
- performance across material types
- average order size
- breakdown of secondary processes contributions
This data-driven approach helps you identify trends, optimise pricing and improve customer response times.
2. Connect with ERP/MRP and other business systems
Some apps have native integration with Google Drive, which makes taking in quote data and parts easy, but many need a formal API. Luckily, Google Drive comes with its own API.
Some users have used the Google Drive API to build automations that push quote data directly into ERP, MRP or order management systems. This can streamline order processing, reduce manual data entry and ensure your production schedule is always up to date.
3. Organise your orders by material type
Use the exported quote data to create a parts planner that groups jobs by common material type. This enables you to:
- batch similar jobs for more efficient material usage
- reduce changeover times on machines
- optimise purchasing and inventory management
A simple Google Sheets script or integration with a dashboard tool can make this process nearly automatic.
4. Integrate with project management tools
Connect your quote data with popular tools like ClickUp, Monday.com or Airtable. Build custom dashboards and planners for your factory, visualise job statuses and assign tasks to your team-all based on real-time quoting data. These tools don’t require coding or a developer and anyone can work wonders. These types of projects boost collaboration on the shop floor and keep everyone aligned on priorities.
5. Create a scheduling calendar from time calculations
Use the time estimates in your quote data to automatically populate a production calendar. With a Google Calendar integration, you can:
- visualise machine and operator workloads
- identify bottlenecks before they happen
- easily adjust schedules as new jobs come in
This proactive scheduling helps you deliver on time, every time.
6. Enable automated notifications and workflows
Set up Google Drive triggers (using tools like Zapier or Google Apps Script) to notify your team when new quotes are confirmed as orders, or to kick off downstream processes-like updating CRM records or ordering materials.
Getting started is easy
- Go to Settings > Organisation settings > Integrations in your Tempus Tools Tempus Tools account
- Connect your Google Drive and select your preferred folder
- Choose the quote statuses that will trigger automatic file saving
- Start building automations and workflows that fit your shop’s needs
This integration is designed to be flexible-whether you want to automate reporting, connect with business systems, or simply keep your files organised, Tempus Tools and Google Drive make it possible.
Ready to enhance your job shop efficiency? Try the new Google Drive integration today.
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Is expensive, non-dedicated software holding you back from effortless laser cutting quoting?
Many laser cutting job shops still rely on generic or overly complex software, slowing down RFQ response times and creating bottlenecks that hurt profitability. Tempus Tools offers a fast, intuitive, and purpose-built quoting solution—with powerful features, simple setup, and transparent pricing—to help shops quote accurately, streamline production, and stay competitive.
Laser cutting is a precise task, requiring machinery tailored to specific requirements. Profitability is significantly boosted by the ability to be able to respond quickly to customer requests for quotes (RFQs), and efficiently deliver the product.
“With the time and energy often spent on selecting the right laser cutting machine, it’s amazing how often software is overlooked as a driver of productivity,” says Tempus Tools Head of Global Sales, Mark Washington.
“Sometimes laser cutting companies are stuck using software that wasn’t specifically designed for job shops, but it’s all that their team is used to using. Other times, expensive software is implemented, but only a small fraction of the features are actually used,” he says.
“And in many cases, it becomes so complex that a specialist is hired to manage quoting via the software – but what happens if they leave the company?”
Tempus Tools is the creator of dedicated quoting software, Tempus Tools, which can provide fast, accurate, and consistent laser cutting quotes that are professionally presented, ready to send back to the customer.
“Using software that isn’t specifically designed for laser cutting is like using a cricket bat to play tennis. It might get the job done, but it would be far more efficient and accurate with the tools designed for the job!” says Mark (pictured, right).
“In addition to providing quotes in minutes, Tempus Tools can also produce production documents with the click of a button, to add further efficiency to running a job shop floor,” he adds.
A shift in the industry
With customers demanding faster service, the industry is shifting to tailored laser cutting quoting solutions, to enhance their RFQ response times, and Mark sees this as part of a larger global trend.
“It’s evident across a number of industries – smarter players want to utilise technologies specifically targeted to their industry to out-pace competitors. And laser cutting job shops are enthusiastically getting on board with this trend,” he says.
“Tempus Tools has been specifically designed for laser cutting job shops. It’s quick to set up, intuitive, and user-friendly, so the entire team can use it with minimal training, instead of relying on one specialist.”
Tempus Tools cloud-based laser cutting quoting software can be set up with information on material price, cutting time, labour, and other relevant information, to generate quotes quickly and accurately, with repeatability.
“The Tempus Tools team has decades of experience in the laser cutting industry, from the shop floor, through to management, and running their own laser cutting enterprises, so we know the industry inside out – and we can support through setup and every step of the journey, for no additional charges,” adds Mark.
“A major inhibitor of laser cutting quoting software has often been cost, with powerful software that can do it all costing thousands per month. But if you only need dedicated laser cutting quoting software, our plans start from US$100 per month, and are packed full of features you will actually use,” he says.
Switching software – overcoming challenges
Even with the knowledge of the benefits of dedicated laser cutting quoting software, job shops can be hesitant about the time involved in switching, says Mark. He notes some of the main concerns:
- Time – often job shops have tried other software implementations and it’s taken months, and they just cannot afford to spend that time again. But Tempus Tools isn’t like other software. For a job shop with one laser, press brake, and standard secondary processes, set up takes less than 90 minutes.
- Staff training – job shops often believe their staff don’t have the time or capacity to learn a whole new software. But again, Tempus Tools is different. It’s designed to be user-friendly, easy to learn, and staff end up doing their jobs more efficiently, and enjoying the features right away.
- Hidden costs – this is a big factor for any software, and job shops are highly alert to cheap upfront costs, followed by lots of add-ons. No one likes to be “nickel and dimed”. For Tempus Tools, it’s a monthly or yearly subscription, and that’s all. No extra charges for support, upgrades, or training. Features all have a set pricing that’s clear from the outset.
- Too many programs – some job shops have two, three, or more different software programs – why add more, especially if they don’t talk to each other? That’s a totally valid concern. Tempus Tools outputs a CSV as standard with all the quote data, making integration seamless and easy.
“The Tempus Tools leadership team has decades of experience working from the shop floor to the top floor, so they understand the pain of changing software, and have designed Tempus Tools to be effortless and simple,” says Mark.
Tempus Tools features
Tempus Tools features that have been specifically designed for laser cutting job shops include:
- 3D model extractor. Identify, extract and unfold sheet-metal parts directly from 3D assemblies without a 3D software package.
- PDF to CAD convertor. Convert a vector PDF into a CAD file instantly. No tracing, no CAD package, just click on a part and extract it into your quote.
- Tube quoting. Easily drag and drop rectangular, square or round hollow sections into the tube module. It quickly calculates highly accurate cutting time and material consumption for pricing.
- Web Store. Let your customers get instant pricing and place orders from your website 24/7 with an online quoting portal.
- Secondary processes. Get accurate and consistent folding prices quickly using the built-in folding algorithm developed by specialists with decades of experience using brake presses.
- Drawing Doctor®. Upon upload of a 2D DXF or DWG file, Drawing Doctor® automatically corrects for double lines, dimensions, and small end points that are hidden in some drawings.
- Part Library. Part Library allows you to save parts that you’ve produced for a customer for re-use. Saves time on repeat orders and quotes, by dropping an existing part straight into the quote, ready to calculate, based on the latest pricing.
“These are just a few of our most popular features, but there are lots more within Tempus Tools, and our development team is constantly listening for customer feedback to determine what new features can be added,” says Mark.
“So for effortless laser cutting quoting, don’t let software hold you back, let it be the catalyst that drives business growth. We offer an obligation-free trial of Tempus Tools so that laser cutting job shops can see the difference for themselves.”
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