Do we need a policy for members using laser for manufacturing consumer product

Two or three examples below of members using the laser for commercial purposes. We want to support our maker entrepreneurs. And we need a policy that makes that support clear.

From Charles (feb 2015)
Hi Xanthe,

So glad to be a new member of the Generator!

Re: funding:

I would like to use the IG workshop including the laser cutter and welders to develop and produce some products for sale in the local community. As one example, Laurence and I made a product prototype on the laser cutter this afternoon for Bramble Community Herbalism in Press Bay Alley. They’re really happy with the prototype and it seems like they’ll be wanted to sell some of the product through their store after we finalize the design. Ideally I would like to replicate this model with many other retailers in the area.

Here’s where funding comes in: Because none of this would be possible without the IG workshop, I’m thinking maybe a portion of the proceeds from any sales could go towards IG?

What do others think about this idea?

Of course we’d have to work out the specifics such as what percentage of sales goes to IG etc

an earlier post of xanthe’s from fall 2014:

I just got some data from Laura (new member) about her use of the laser for low batch production of her dog show note books. I made it clear to her that as an early adopter, we want to support what she is doing. But in exchange for that openess we hope that she’d share some data for us so we can think on how to move forward with future folks that approach us.

Here’s the data. At present she is doing a batch of 45 notebooks. I think that’s about 7 hours standing at the laser. She’s not charging much for each notebook - $7.50 each.

I know Dirk was doing some production work too. At least I think he was.

Anyways, something to discuss this Thursday. How do we support low batch manufacturing in a way that benefits the makerspace and our entrepreneurs.

I like percentage of sales for things that we collaborate on and help sell.

For people who are just making and selling what about just adding to the membership info something like:

If you plan to produce commercial products with our tools, please join at a membership level that will help us continue to provide access to those tools. Standard or extra memberships are most appropriate for people planning to do commercial production.

Or something? The whole percentage of sales things just sounds like a mess but maybe I’m wrong.

I like an hourly rate for use of the laser, as I’ve said before. An affordable one. Something like: “If you are using the laser for more than an hour a week (?) for commercial use, then please pay x an hour.”

that sounds good too

So, for Laura’s situation above, at $20 an hour for 6 hours she’d pay $120 and would then work that cost into her pricing. We’d have to figure out what that hourly is. @Dirk_Swart and @vicatcu would probably have a good sense of what that number might be…

Yes, I think an hourly rate is the most sensible.

We will have to determine a rate that is both fair to IG but not so high as to discourage potential commercial users from participating.

Presumably the purpose of an hourly rate for “commercial” use of the laser cutter would be to offset wear-and-tear on the machine.

The more I think about this, though, the more it starts to seem like it would function as a “tax” on commercial use. (And therefore a disincentive for commercial participation.)

After all, if an hour of “non-commerical” use results in the same wear-and-tear on the machine as an hour of “commercial” use, then why should one be free and the other have an additional fee associated with it?

Obviously, it would be nice if commercial members of IG could contribute in some way to the funding issue. In my mind, however, Jenn’s initial suggestion of encouraging commercial members to join at the “Extra” level of membership or above might make more sense than an hourly fee. Open to hearing what other’s evolving thoughts are.

Great feedback. The value in the hourly rate, for me, is a macro issue. How do we price low batch desktop manufactured goods? No clear solution but a few good ideas to test…

I think we need to grow our paying member base. My concern about charging hourly usage is that it will in fact discourage a lot of use and therefore potential paying members. Although I don’t think it has yet been a problem, we also need to prevent a few people from hogging the machine.

Perhaps a higher tier membership for commercial use is appropriate, with theoretical limits if usage becomes excessive. This would generate a bit more money without discouraging someone from experimenting.

We need numbers.

option 1 - super membership for commercial use = $75/month, $900/year

option 2 - hourly rate. $900 / $20 an hour = 45 hours a year, 3.75 hours a month

option 3 - some percentage of sales? I can’t wrap my head around that one

option 4 - your idea here!

I second sean’s comments above. Top priority should be to not discourage use, with the provision that a single member should not be occupying the machine 24/7.

Though it was initially my suggestion, I now feel that percentage of sales is definitely not the right direction to go.

As a “commercially”-oriented member myself, I feel that encouraging broader membership at the higher membership levels makes the most sense.

I am a $75/month member myself and feel that is quite fair to the generator, without being prohibitive to my activities. Let’s remember, commercial members of the IG are not likely to have lots of extra cash floating around; anyone who can afford lots of extra fees probably has a “real start-up” and will just buy a machine for themselves.

Right. The top priority should be to have a clear policy. I have inquiries about commerical use monthly and just want to have a solid answer for folks. It’s time.

Would you say most of those that inquire about commercial use are interested in short-term use or ongoing use of the laser cutter?

It seems to me that many individuals may be interested in using the machine briefly (say for a week or two) to run off some item they want to sell, but are not necessarily interested in an ongoing yearly commitment. (This does not apply to me, but I do think others may fall into this camp.)

Would you say that is accurate based on inquiries you receive?

If so, is it the intention of the IG to accommodate users with those intentions and offer “contract” runs of particular items?

Or should people like that be encouraged to join on a yearly basis?

Great questions. The inquiries are split 50/50. I think, in general, the board leans toward encouraging membership. We invest time in people with the hope that they stick around and help us carry out our mission - to provide public access to tools and technologies through affordable programming.

fyi, @Charles_Stern, up until recently, membership has subsidized this mission. We are currently shifting our biz model…

good to know, xanthe! just let me know how i can contribute to the ongoing discussion.

you’re doing great. very helpful to have your perspective

Well, I do think that encouraging $75 membership is the way to go for now. We want to support entrepreneurs. The more success stories we have about them, the more it will help us grow as an organization…