Setting Up Machine Rates in shopVOX: A Comprehensive Guide
Updated
by Tyler MacDonald
In the shopVOX pricing engine, three major components form the backbone of accurate and effective pricing: Materials, Machine Rates, and Labor Rates. This article will focus on guiding you through the process of setting up a Machine Rate, using a straightforward example for clarity.
Understanding Machine Rates with an Example
Imagine you have a high-performing Digital Printer in your workshop. For simplicity, let's say you charge your customer $100 per hour for using this printer, and it operates at a speed of 100 square feet per hour. These specific figures are chosen to illustrate the concept clearly; in practice, your rates and production speeds will vary.
How to Determine Machine Rates
- Determine the Hourly Rate: First, identify the hourly machine rate you wish to charge. In this example, it's $100 per hour. This rate should cover the operational costs, including maintenance, depreciation, and any other associated expenses, plus a profit margin.
- Estimate Productivity: Next, estimate how much work the machine can complete in an hour. Here, it's 100 square feet per hour. Accurate productivity estimates ensure that you’re not undercharging or overcharging your customers.
- Calculate the Machine Rate Per Square Foot: To find out how much to charge per square foot of output, divide the hourly rate by the productivity rate. In this example, $100 per hour divided by 100 square feet per hour equals $1 per square foot.
Applying These Principles
Once you understand these basic principles, you can adapt them to any machine within your shopVOX system. Whether it’s a digital printer, a cutter, or any other equipment, the key is to accurately calculate both your hourly machine rates and productivity rates.
Real-World Application
In real-world scenarios, your numbers will differ. The machine might work faster or slower, and your hourly rates might be higher or lower based on various factors such as location, machine efficiency, and market demand. The beauty of shopVOX’s flexible system is that it allows you to customize these rates to fit your specific needs and circumstances.
Why Simple Examples Matter
Starting with simple, mathematically straightforward examples is a best practice to avoid confusion. By using easy-to-follow numbers, you can focus on learning the mechanics of setting up machine rates without getting bogged down by complex calculations.
Step-by-Step Guide
To set up an example machine rate.
- Go to settings.
- From the sidebar locate Pricing and choose "Machine Rates"
- Choose "+ Add New Machine Rate"
- Fill in the relevant information for the Digital Printer Example
- Name: The name associated with this machine rate: For this example "Digital Print Example"
- Cost: The expense incurred by the business to operate the machine per unit time or unit production. This includes maintenance, depreciation, and any other operational costs. Example: $50/hour.
- Price: The amount charged to the customer for the use of the machine. This is usually calculated based on the cost with an added profit margin. Example: $100/hour.
- Markup: The percentage increase from the cost to the price. It represents the profit margin on the machine's operation. Example: 100% markup means if the cost is $50, the price will be $100.
- Units: The measurement used to define the machine's production output. Example: Hours, Minutes, Units
- Setup Charge: A one-time fee associated with preparing the machine for a particular job. This covers the time and resources needed to set up the machine. Example: $0 per job.
- Labor Charge: The cost associated with the human labor required to operate the machine. This can be a separate charge from the machine's operational cost. Example: $0/hour.
- Other Charge: Any additional charges that may apply, such as consumables, special handling fees, or environmental fees. Example: $0 for special materials.
- Formula: The mathematical equation used to calculate the total cost or price based on various inputs like time, material usage, and production rate. Example: Total Cost = (Cost per Hour * Production Time) + Setup Charge + Other Charges.
- Production Rate: The speed at which the machine can produce the desired output. This is typically measured in units per hour. Example: 100 square feet per hour.
- Units: The units defined by your Production Rate. Example: Square Feet
- Per: The basis for the rate, typically per hour or per unit produced. Example: Per hour, per piece.
- When complete select "Add New Machine Rate"
By following these steps, you can accurately set up and utilize machine rates within shopVOX. As you become more comfortable with the process, feel free to adjust the rates and speeds to match the specific requirements of your equipment and business operations.
Utilizing the "Digital Printer Example" Machine rate in a Product
Lets setup a very basic product, to see how our new machine rate performs.
- Got to Settings
- From the side bar select "Products"
- Lets click "+Add New Product"
- Select "Create a custom Product"
- Fill in the details. I am using example information, feel free to use your own
- Turn on "Add Product template"
- Under Modifiers select "+ Add Modifier"
- Add in the Width Modifier
- Add in the Height Modifier
- Under Default items lets select "+ Add Default Item"
- For Item Type: Choose "Machine"
- For Machine Rate: Choose "Digital Printer Example"
- Fill in all other details and click "Add New Default Item"
- Go to Check Pricing at the top of your screen
- Enter in some example data. I will enter in 120"w x 120"h for easy to read numbers
- Select the "Pricing Breakdown" to view the Bill of Materials. Here, you will see the "Digital Printer Example" listed as 1 hour. This is because the production rate is 100 square feet per hour, and we have specified 100 square feet for the area measurements.
In this article, we've explored the key components of the shopVOX pricing engine, focusing on how to set up Machine Rates. Using a simple example of a Digital Printer operating at $100 per hour with a production rate of 100 square feet per hour, we demonstrated the step-by-step process to accurately configure your machine rates.
Starting with straightforward examples helps avoid confusion, allowing you to master the mechanics of setting up machine rates before tackling more complex configurations. By following the detailed guide provided, you can confidently set up machine rates and apply them to products within shopVOX.
Remember, as you become more familiar with the process, you can adjust rates and speeds to meet the specific needs of your equipment and business operations, ensuring accurate and profitable pricing for your services.
