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 Post subject: Economics of Faceting
PostPosted: Sun Dec 28, 2014 5:09 pm 
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I said this a few times before, that I don't think the cost of good equipment really matters in the big picture. To me, it makes no sense to skimp on the faceting machine and laps.

If you went out and bought a top quality machine, and proper laps, not toppers, a few polishing laps from Gearloose, your investment would be around $6000. While this sounds like a lot of money, is it when you look at the big picture? It is really the cost of rough where all the expense is.

Look at 3 different scenarios, each one assumes the person is cutting 3 stones per week.

Image

Now this first one, cutting inexpensive rough after 5 years has spend almost 3 times as much on rough as the equipment. $20 rough stones are going to be mainly quartz, some garnet and off color tourmaline. This type of material is a bit hard to sell and make much more than minimum wage on.

The Mid Range is where the equipment cost starts seem rather minimal compared to the rough. Cutting this level rough one can make some money per hour.

The last range is where the more sellable material comes in, and now after 5 years, the equipment is just 1/39 of the total cost. Certainly at this level it makes no sense to skimp on equipment, struggle with old worn out machines that are not repeatable, of laps that are not flat.

Now if you intent is to cut marbles, some CZ and maybe some broken glass, then this analysis is not too valid.

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 Post subject: Re: Economics of Faceting
PostPosted: Sun Dec 28, 2014 7:05 pm 
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Fantastic post, all relevant to both the hobby cutter and those aspiring to be more!
If you think of it in stones, then it is just a few fantastic stones to pay for all you need on the high end. Stone rich and cash poor, that is another lesson you will learn cutting.

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 Post subject: Re: Economics of Faceting
PostPosted: Sun Dec 28, 2014 9:41 pm 
You need a good machine that's adaptable to cutting conditions and has higher speeds and fast reacting cheaters. It also helps to cut more processes without a lap change. Time saving makes cutting cheaper rough more viable. That's why Ive spent most of my cutting career trying to make the ultimate lap. If I cut a stone in an hour and can cut five stones per day to correct angles with a 100K finish and good meets, then Im in the ball park for earning 100k a year. I did a bit of a demo one year at Tucson but not in ideal conditions and on a strange machine. Some thought it was good, others were not so kind.The key is to cut stones in sellable cuts and shapes. Keep in mind that it needs to be easy to set without chipping risk by the setter. I only cut boring old ovals and rectangles etc.

Regards Anthony


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 Post subject: Re: Economics of Faceting
PostPosted: Sun Dec 28, 2014 10:08 pm 
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While I am sympathetic to your basic premise, I think your accounting analogy is not accurate. It assumes that there is no return on the sales of your stones. If you sell the stones and then use the funds from your sales to buy new rough you won't be out of pocket the sums you have projected at the end of the year. You would be re- circulating the same initially invested funds. If done expertly at the end of the first year you would be out of pocket the $6k for equipment but nothing for your cost of rough.


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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 1:06 am 
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Or you would be out of pocket for the rough and nothing for the machine.

The intent was not to show how much you could or could not make, or what your cash flow would be, but rather that the cost of the machine is minor compared to the rough. I see so many posts about trying tomeither make a machine or referbish some old junk to save money. The real cost of this activity is the rough.

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 10:43 am 
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This was a needed perspective. The machine, and many laps are one-time purchases that promptly pay for themselves and are thereafter profit generators.
A sintered or copper or BATT lap are all one-time purchases. Last year someone had posted about inheriting their grandfather's copper lap. With reasonable care, we know the BATT lasts fifteen years. One person who had his lap resurfaced many times glued it to a backing plate and continued on, determined to reach the back surface eventually.
The only ongoing expenses are rough, polishes, and electricity.

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 10:54 am 
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These numbers are depressing even if you facet the quality rough. You not going to get rich even if you make 100% profit, if you can tolerate mind-numbing repetitive labor, and if Daddy owns a jewelry store in the high-rent district. Truck drivers make more.


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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 11:18 am 
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That's not a fair comparison, because truck drivers are often Teamsters Union members.
There was an article published a couple of years ago, that, analyzing internship, residency, insurance, college loans, and hours worked, showed that a UPS driver makes more after expenses than a doctor.
I gleefully printed it out for my UPS driver, who put in on the bulletin board of his coffee break room.

We needa UNION.

There are also non-monetary gains from gemcutting, a different dimension from the financial.
There is aesthetic satisfaction.
There is also a thing in Nature.

Why do some species of birds collect and bring home bright sparkly objects?
Because long ago, a bird tried it. And thereafter, for whatever reason, this bird had more hatchlings than usual.
This produced generations of tired but happy birds.

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 11:37 am 
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What makes things worse is when buying rough, you often seem to end up with little crap that you never end up cutting, but paid for.

I buy the best new equipment I can find, use when ever practice a dual charged lap, either a Batt or Dominatrix, and work as fast as you can. If you are trying to make some money, its not possible to spend 6 to 12 hours or more on a stone and get every meet just perfect. In reality, this makes no difference and can't be seen anyway. These USFG competitions have no place for making money.

The cutting is also just a part of the business, there is time needed to buy the rough, travel, maybe a website, photography, accounting, shipping, dealing with customers....etc.

Keep driving that truck!

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:16 pm 
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It was demonstrated long ago that it is more profitable to sell pickaxes (BATT), shovels (Matrix), and blue jeans (Darkside) to miners rather than be a miner (faceter).


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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:22 pm 
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I do not believe this. This just came in the mail.

Referring to lap longevity, this 6" lap was made in or before 1997, the 37th BATT ever made. After many resurfacings, the owner found a new use for it.

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Image

What was his annual cost for this lap?

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:26 pm 
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It is possible to make money cutting and selling stones. But I think it works best if you keep the day time job too.

This is the the Precision Gem company car, bought completly by stones.

Image

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:30 pm 
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Quote:
It was demonstrated long ago that it is more profitable to sell pickaxes (BATT), shovels (Matrix), and blue jeans (Darkside) to miners rather than be a miner (faceter).


..And I know a welder who opened a welding supply business, and an artist who opened a frame shop..

I don't see any of us listed on the NYSE yet, though.

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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:38 pm 
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Quote:
This is the the Precision Gem company car, bought completly by stones
.

There's the proof that debunks that old saw right there.
Some of us are willing to suffer for Art.
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 Post subject: Re: Economics of Faceting
PostPosted: Mon Dec 29, 2014 12:38 pm 
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And those are beautiful mountains you have in PA too.


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