Flat cut letter pricing: what your CNC is actually worth

Is a flat cut letter priced by the inch, by the square foot, by the sheet, or by machine hour? I've heard working shops argue for every one of those.

Dan Sawatzky has too. He runs Sawatzky's Imagination Corporation in Chilliwack, BC, doing dimensional work only, and back in 2010 he wrote up a Q&A for SignCraft that started with a peer asking him whether router work gets priced by how long the router runs. The peer had heard $60 an hour. Sawatzky said no. Then he said no to square-foot pricing, before naming his own floor at $200 a square foot.

That's four units in play before anyone has cut a letter: per inch, per square foot, per sheet, per machine hour. Each one is somebody's working answer. None of them agree.

Which unit holds up when you push on it, and what changes about a real letter set the moment you stop pricing by inch.

#The machine-hour trap

Sawatzky's reason for not pricing by machine hour comes down to arithmetic. The CNC, properly used, does in one hour what hand-cutting took roughly five. So a $60-an-hour machine rate, applied to a job that used to be a five-hour skill exercise, is the same as paying yourself $12 an hour for the work the CNC just replaced. He doesn't think that's defensible.

Most of the trade charges machine time anyway. $50 to $100 an hour shows up as the working range across Signs101 threads. One shop sets theirs at $90 as a floor that accounts for bit replacement, electricity, and machine replacement over its life. Another runs a layered structure: $100 an hour shop rate plus $185 an hour for flat cut on top, plus $350 an hour for 3D carving, on the reasoning that 3D wears the moving parts harder.

The hidden costs are the part shops skip. The router takes up shop floor that used to hold a workbench. The spindle pulls power. Bits dull and snap; a good spiral upcut bit is a consumable, not a tool. Collets wear out. Calibration eats time. None of this shows up cleanly anywhere unless you're tracking it, which most shops aren't.

Take a 12-letter exterior set, 6 inches tall, 1/4-inch white acrylic, plain back stud mount. The machine cuts it in roughly 90 minutes including setup. At $60 an hour that's $90 of router time. At $100 it's $150. At $185, the rate the layered shop charges for flat cut, it's $278.

Now do Sawatzky's reframe. The same job hand-cut would have taken roughly 7.5 hours of skilled work. At $60 an hour, $450. The CNC version at $60 an hour, $90. The gap, $360, is what machine-hour pricing concedes for nothing.

#The square-foot ladder

The unit Sawatzky lands on is per square foot, even though he insists he never actually quotes that way. His shop starts at $200 a square foot, and his reasoning is that the CNC investment dwarfs what the old sandblast era required, so the per-sqft floor should be higher than the rates the trade got used to, not lower. Sawatzky's $200/sqft floor applies to his dimensional carved work, not flat cut; your flat cut floor will be lower, but the per-sqft logic holds.

Other shops publish the ladder more concretely. One Signs101 poster lays out a working table: $74 a square foot minimum for one-inch letters under a square foot of total set area, plus $12 a square foot for anything over, double the price for letters under half an inch, and "charge whatever you want" for ornate or scripted work. The reply from another shop, almost immediately: figure out your own overhead, what someone in Hoboken charges has no bearing on what keeps your doors open in your market.

Per-square-foot pricing has one structural advantage over per-inch pricing, and it's the one that breaks per-inch. A 24-inch capital I in a block font occupies a letter area of about 0.88 square feet; a 24-inch capital W occupies 5.62 square feet. Same letter height, 6.4 times the material, 6.4 times the cut path, 6.4 times the finishing area. Per-inch pricing charges the same for both. Per-square-foot pricing charges six times as much for the W, which tracks reality.

The blind spots are still there. Per-square-foot doesn't see whether the material is 1/8-inch acrylic or 3/4-inch aluminum. It doesn't see flame-polished edges or painted finishes. It doesn't see whether the order is ten letters or two hundred. The Signs101 poster's ladder flags some of this with the half-inch and ornate adders, but a rate-card-on-the-wall is built for the walk-in counter, and the dimensional sign job lives somewhere else.

#The wholesale ceiling

The ceiling on per-square-foot pricing is the wholesale catalog, not another shop's forum-posted rate. Gemini is the name most shops cite for plastics and standard metal, Steel Art for jewelry-grade metal letters, and there are regional cutters in most markets too. Gemini's published prices are the concrete benchmark:

Those are starting prices for small letters in basic finishes with plain mounts, and they include the installation pattern. The shop's choice on any flat cut job is to order from a wholesaler and mark up, or to cut in-house and price the work per-square-foot.

The same 12-letter exterior set we've been running, 6 inches tall in 1/4-inch acrylic, plain back stud, occupies roughly 2 square feet of bounding-box area. At Sawatzky's $200-a-square-foot floor, in-house pricing produces $400. At a $30-a-square-foot shop rate, it produces $60, which sits below what a wholesaler would have charged the shop for the same letters.

The answer for most shops on most flat cut jobs lives somewhere between, and where it lands depends on what the in-house cut adds that the wholesale cut doesn't: a non-stock font, a thickness the catalog doesn't list, a 48-hour turnaround, an edge finish a wholesaler won't run.

#What this looks like Monday

The next flat cut letter quote you write, take fifteen minutes before you send it. Pull the bounding-box square footage of the letter set, multiply by the per-sqft rate that actually pays for the bits and your time, and look up what a wholesaler like Gemini would charge the shop for the same letters on the same mount. The two numbers are your in-house quote and your floor.

If the in-house number sits within shouting distance of the wholesale price, order from a wholesaler and mark up to the customer. The shop makes the same money for less risk and less machine wear. If the in-house number sits well above wholesale, write down what justifies the spread before the customer asks: the font, the thickness, the finish, the turnaround. If you can't write the justification, the in-house cut isn't worth it.

Originally written March 2010. Prices reflect what working shops were charging at the time. They've crept up since, but the maths still works the same way.