MoldMaking Technology

NOV 2018

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moldmakingtechnology.com 27 CONTRIBUTOR Charles Daniels is the chief financial officer of Wepco Plastics Inc. errors. Experience is a plus when it comes to formulating how much to charge. However, you should not base prices on state- ments like "this should take two months." Instead, you should use data to review historical times for similar projects and pro- cesses. This provides support for, or potentially tests, the theory of the hunch and facilitates greater con•idence in the price. The prices that other mold builders are charging is a very important consideration. Only using industry standards or mar- ket pricing without understanding internal costs and value could lead to poor pricing. The comparison must be apples to apples. For example, consider lead time and quality. If these two factors are not the same, then the price must reflect the difference. Discounting can be a very valuable tool when you use it properly. Offering discounts is a part of marketing, similar to social media or print advertising. It is an expense, which on its own, reduces pro•it. You must measure the return on investment on the discounts that you offer to win new busi- ness. Discounts can also be an important part of negotiations. However, you must match price decreases to service decreases or differences. If a customer needs a speci•ic dollar amount, you must work with the customer to see what changes to design, volume purchasing, lead time, material or tolerances can be made to save money. Strictly reducing price is rarely the right thing to do, especially if you determined the origi- nal price using these other steps. The •inal step in pricing is to evaluate the relationship of forecasted costs to actual costs through and after the mold- building process. If actual costs diverged from estimated costs, then research is required to identify the reason and to take corrective action. You can then use the information that you have acquired for future pricing. Increasing revenue and reducing costs are two ways to improve pro•it. A robust pricing strategy can help with increas- ing revenue by growing incremental income per mold or by stimulating the sale of more molds. It is vital not to lose focus on reducing costs wherever possible. Often, raising the price is not the right answer. Eliminating waste and improving the process is. FOR MORE INFORMATION Wepco Plastics Inc. / 860-349-3407 / charles@wepcoplastics.com / wepcoplastics.com Shaping the future of EDM Made in U.S.A. It's Time to Make the Switch to Top Performing DS4 Ultra-Fine EDM Graphite Now, you've really got a choice in EDM graphite for your most challenging machining operations. Mersen's DS4, featuring the DarkStar ultra-fine carbon particle, is a proven winner that delivers unmatched EDM performance. It's time to start saving money in EDM… ask your EDM distributor for DS4! "Our detailed engraving of molds and stamping dies demands an EDM electrode that provides excellent durability and delivers sharp corners and fine quality. We switched from the leading ultra-fine EDM graphite to Mersen's DS4 and it really performs… and saved us money." – Bob Held Wisconsin Engraving edm.mersen.com

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