The two formulas
Everything reduces to two equations. Let I = the total investment and B = the annual net benefit (both defined below):
Payback period (years) = I ÷ B
(multiply by 12 for months)
Annual ROI (%) = (B ÷ I) × 100
The two are mirror images: ROI is just the inverse of the payback period expressed as a percentage. The whole exercise is therefore about getting I and B right for your own shop — the formulas do the rest.
Step 1 — Build the total investment (I)
Use the full landed-and-ready cost, not the sticker price. Add up:
| Investment input | What it covers |
|---|
| Machine price | The line or machine itself, as an FOB price (freight is the next row) |
| Freight | Sea or road freight to your door |
| Duties & taxes | Import duty and any applicable taxes |
| Installation & commissioning | Rigging, positioning, set-up and run-test |
| Operator training | Getting your team productive on the machine |
| Site preparation | Three-phase electrical supply and floor works (see power & electrical requirements) |
| Initial spares & tooling | Wear parts and consumables to hold stock of |
Sum these to get I.
Step 2 — Estimate the annual net benefit (B)
Add the yearly benefits, then subtract the yearly running cost:
| Benefit input (per year) | How to estimate it |
|---|
| + Labour saved | Fabricators no longer needed on that work × loaded hourly rate × hours |
| + Throughput / revenue gain | Extra finished duct per shift × margin (or the outsourcing cost it replaces) |
| + Outsourcing avoided | Duct you currently buy in, now made in-house, at the bought-in price |
| + Waste & rework reduction | Material and labour no longer lost to scrap and re-do |
| − Annual running cost | Power, consumables and maintenance for the machine |
The total is B, the annual net benefit.
Step 3 — Calculate and sense-check
Divide: I ÷ B gives the payback period; (B ÷ I) × 100 gives the annual ROI. Then pressure-test it:
1. Use conservative benefit figures. If the payback still works on cautious labour and throughput numbers, the case is robust. If it only works on optimistic ones, it is fragile.
2. Compare to the alternative. The real question is not "is the payback good" in the abstract, but "is it better than continuing to fabricate manually or to outsource". Put the status-quo annual cost beside the machine case.
3. Compare to your hurdle. Measure the payback period or ROI against the return your business expects from any capital it ties up.
Run your own numbers
Payback & ROI calculator
Enter your figures — nothing is pre-filled or assumed. The calculator only applies the two formulas above to the numbers you type. Currency-agnostic: use whatever unit you quote in.
Total investment (I)—
Annual net benefit (B)—
Payback period—
Annual ROI—
More free Taokron tools: Machine selector · Gauge ↔ mm converter · Duct weight estimator
What this method deliberately leaves out
This is a cash-payback model, kept simple on purpose. For a formal investment case your accountant may also fold in depreciation and tax treatment, the time value of money (discounting future benefits to a net present value), and financing cost if the machine is funded. Those refine the answer but do not change the inputs above — they still start from your I and B. The figures throughout are yours to supply; Taokron does not publish a single "typical payback", because it depends entirely on your labour rates, volumes and what you currently outsource.
Get a machine quote to plug into your payback model →
FAQ
How do you calculate the payback period of a duct machine?
Payback period (years) = total investment ÷ annual net benefit. Total investment = machine price + freight + duties + installation + training + site prep + spares. Annual net benefit = labour saved + throughput value + outsourcing avoided + waste/rework reduction − running cost. Multiply by 12 for months. Use your own figures.
How do you calculate the ROI of a duct fabrication machine?
Annual ROI (%) = (annual net benefit / total investment) × 100. It is the inverse of the payback period expressed as a percentage. Use the same investment and net-benefit figures you built for the payback calculation, so the two answers are always consistent.
What costs should I include besides the machine price?
The full landed-and-running cost, not just the sticker price: sea or road freight, import duties and taxes, installation and commissioning, operator training, site preparation (a three-phase electrical supply and adequate floor loading), initial spares and tooling, and the ongoing power, consumables and maintenance. Leaving these out understates the payback period.
What savings justify an automatic duct line?
Four benefit streams, the same four rows as Step 2: labour saved (an integrated line replaces several manual fabrication steps), throughput or revenue gain (more finished duct per shift), outsourcing avoided (duct you now buy in, made in-house) and reduced material waste and rework. Shorter lead times are a real advantage too, but they usually show up inside the throughput and outsourcing figures. Quantify each per year for your shop, then offset the machine's running cost to get the annual net benefit.
