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View Poll Results: Machine shop rates

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  • -$40

    19 7.22%
  • $40 - $60

    69 26.24%
  • $60 -$80

    94 35.74%
  • $80 - $100

    50 19.01%
  • $100 - $150

    22 8.37%
  • $150 +

    14 5.32%
Multiple Choice Poll.
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  1. #1
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    machine shop rates.

    Hello

    I've just been reading the 'What is the average hourly pay for cnc operators in your state' thread. I was wondering what the average machine shop rates are in your area, if you're able to pay your employees over $40 an hour you must have a fairly high rate. From a customers side, I recently sent out for quotes on some work which differed by almost 600%, so I'm just curious.

  2. #2
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    It really depends on the type of shop you want to make your parts a good one will never be under $65 per hour and that would be super cheap and for prototypes much , much higher.

  3. #3
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    jon0,

    One of the reasons you are getting such a varance in quotes could be because of the different equipment in each shop varies greatly. If I give you a quote for cutting a 1 1/2 in. keyway it will be higher than the guy that has a Broach because he can do it much faster. That's just an example of what can happen with quotes. Get quotes with the shops that have the equipment to do what you want then you might see less of a spread on the figures.
    We all live in Tents! Some live in content others live in discontent.

  4. #4
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    You need another column, I know for a fact some people are charging $30 an hour and less. You can get away with that if you have machines that an operator can run 2 or more of. I have adjusted my rates to fit the economy, right now it is $40 an hour per machine. Depending on what is on them, I can run up to 3 at a time. In 2005 before my business took a complete dump, I was charging $75-$100 an hour depending on complexity of the work. $75 an hour for the feed 12 foot bars, check the part once a day jobs, $100 an hour for the ones that required attention. I used to sell to the limousine industry, that sector has disappeared. I ran a similar poll on hourly profit and it ran way lower than this one, which I find odd. I think a lot of people do not bill all hours worked.

  5. #5
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    Quote Originally Posted by Boots View Post
    jon0,

    One of the reasons you are getting such a varance in quotes could be because of the different equipment in each shop varies greatly. If I give you a quote for cutting a 1 1/2 in. keyway it will be higher than the guy that has a Broach because he can do it much faster. That's just an example of what can happen with quotes. Get quotes with the shops that have the equipment to do what you want then you might see less of a spread on the figures.
    So true! I think the quote variation comes more from cycle times than rates. I have seen others quote 3 minutes a part for ones I drop in 45 seconds.

  6. #6
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    Thumbs up been the same 4ever

    Seems the rates have been the same ($60-$80 per hour) for the past 10 15 years (midwest). The wages for the people that do the actual machining haven't improved much either, and they sure didn't anywhere keep up with inflation.
    Frankly, I don't see how people can stay in business. Out of about 6 shops I worked in only two are still in business and they are very small outfits; the big places that had heavy duty contracts or made their own products are LONG gone! The excuses for the low pay/rates first was the Japanese and Koreans, then Mexico, now it's ALL in China. Kinda funny how the Communists (who protect their economy) turned out to be the only large scale manufacturers left.
    Oh well, c'est la vie, guess I should have been a CEO or something. Never really could figure out what those people that live in those 'burb mansions did for money, (not machining/manufacturing) there sure seems to be an awful lot of them though!

  7. #7
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    There will always be a niche industry that needs a product. Innovation and filling a need will always put money in the bank. Instead of doing "jobs" or random work, one could always start a online business and fill a "need" as well. Let the monster tycoons produce what they like where they like. Start thinking about yourself, your machines and what you can produce for the world (even if you have 1 knee mill and a single car garage). Just look what it did for William Boeing or Henry Ford. Times have changed evolve, or go extinct.

  8. #8
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    Quote Originally Posted by diyengineer View Post
    There will always be a niche industry that needs a product. Innovation and filling a need will always put money in the bank. Instead of doing "jobs" or random work, one could always start a online business and fill a "need" as well. Let the monster tycoons produce what they like where they like. Start thinking about yourself, your machines and what you can produce for the world (even if you have 1 knee mill and a single car garage). Just look what it did for William Boeing or Henry Ford. Times have changed evolve, or go extinct.
    That worked good for me for a short time, the niche industry I served "Limousine Manufacturers" managed to almost evaporate overnight once I grabbed market share and refined the manufacturing of the products to create $100-$200 an hour profits. I went from 23 steady customers in 2006 to 1 in 2010, most of them went out of business, now I am just doing random job shop work I found through open bidding, at least the customers are coming back direct with out going through the open bidding process. I does take a long time to build a customer base this way. I have excellent quality
    and pricing by being able to cycle parts faster than most, but I am horrible as a salesman.

  9. #9
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    the real problem is alot of shops are used to doing gravy work for ridiculous prices. alot of shops did aluminum, brass, even mild steel parts. all these can be done cheaper and fast in china as their wages are low and they keep machines running 24/7. in reality, shops need to evolve away from gravy work and take on more challenging things. we had a bunch of shops jump in and try and bid on government work and were really low balling the heck out of it not understanding that they had a ton of requirements and piles of paperwork to justify it. luckily our government doesn't always choose the lowest bidders but its been touch and go even for those contracts. one day you got them and next they are gone or cut back or whatever. i agree that you need to find a product line and make something yourself. then you control your destiny as long as there is a need for your parts or until the copies come out.

    also i don't know of any shops paying their employees $40/hr unless its the owners. and even that for an owners salary is very low once you count all the aggrevation that goes into owning a business.

  10. #10
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    I run a dual tiered pricing structure that is available only if it is requested up front. ( First question I ask is: "Is job this time sensitive?" and if they say it is I usually won't offer the option.)

    I have my normal shop rate and delivery schedule and the "standby" rate which is about 30% less. "Standby" jobs are put up between normal work when I am waiting on tooling or materials for normal work. If business is slow I will do all scheduled maintenance and in house jobs before running "standby" work.

    At the initial quote time you can request it quoted both ways. Generally speaking once the price has been given I won't go back and quote it for "standby".

    To get "standby" rates you have 10 days to accept the quote and pay ALL material costs up front. The only way this works is if we have everything on hand ready to go should a schedule opening occur. If the job consists of a package of different parts we will deliver and invoice each group of parts as they are completed. If the job becomes time critical and needs to be moved to the active schedule then normal shop rates will be used.

  11. #11
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    Angry same old song

    You know it really gets tiring hearing the same old Adam Smith bullroar about wages/productivity being the cause of lost work. Perhaps this was a valid concept back in the day when we were really competing against other companies that were trying to make a profit, and basically all things were equal. The growth in American productivity never stopped the bleeding of jobs. The degradation of our work conditions (eg. lack of so called gravy work, gee wouldn't want anything to ever be nice and easy; I'd rather run three machines with three differnet jobs at the same time and work extra hours for no overtime:tired didn't stop the hemorrhaging of jobs. Everytime I buy anything from China (don't have much choice anymore) I don't know who's the bigger fool, us for letting the stuff in the country or them for selling it at a loss just to try and destroy us (seems to be working huh?) You tell me with a straight face that the raw material in most anything you buy from China doesn't cost more than the item itself!! If not please let me know where you get your stock so I can get in on the deal! Are we all going to end up living in Party provided apartments and eat in communal dining halls the same meal three times a day? (thats who your wanting to "compete" with). Almost every other nation has an industrial policy to protect their national interests, ours was to give tax breaks if you outsourced to falsely bouy up the corporate balance sheets and give the muckity mucks "compensation bonuses", guess someone has to live nice and easy huh? Whats really going on?

  12. #12
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    Quote Originally Posted by Runner4404spd View Post
    the real problem is alot of shops are used to doing gravy work for ridiculous prices. alot of shops did aluminum, brass, even mild steel parts. all these can be done cheaper and fast in china as their wages are low and they keep machines running 24/7. in reality, shops need to evolve away from gravy work and take on more challenging things. .
    Alot of the stuff we have been doing for the last year is all crazy stuff ,turning tungsten shafts in a lathe,grinding synthetic saphire,or milling 60 to 70 Rc parts th only thing keeping us alive lately is the cazy jobs no one else will take on.I think your exactly right about the gravy work,.. its all washed up and gone!!:rainfro:

  13. #13
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    Stuby,

    we had to redifine ourselves and take on different work, but we are doing the crazy stuff no one wants as well, on the other hand we are busy and have a fair back log of jobs right now. our biggest hurdle right now is diversifying the work we do and bringing a product to the market.

  14. #14
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    If you don't do something that nobody else does, you're going to be very hard pressed to make a profit. In desperate times, "gravy work" is the last thing you want to bet your business on because there's too many starving for any kind of work they can get. I love skullworks idea of the dual tiered approach. That's the way to take down gravy work in a can't lose sort of way rather than a "bet your business" way. But you still need a main line where you have the edge over others.

    Instead of gravy, make a product that nobody else makes, or run a job shop that has some advantage the others in your area don't have. Maybe you've got a machine with a larger capacity than any shop nearby. Maybe you can turn around a job faster than it can be sent to China and the jobs change so often they never get sent. I know a guy doing both. He lives in a port city and gets a lot of business because he can do rush jobs on machines that are bigger than the competition. If you need 60" of travel to get something fixed before your ship has to sail, you're gonna talk to my friend.

    There are basically 3 profitable business strategies:

    - Your product is the best. Great. Peeps still buy Mori Seikis or Mitutoyo or name your favorite "best" product. There will always be a market for it.

    - Your product is the cheapest. This is a tough spot against the Chinese, but not impossible. You better be super highly automated and able to do things they just can't do and do them a lot cheaper and faster too though. Think Japanese car factory. Robots out the wazoo. If you're here, you've probably got a special talent with fixturing and you just know things the other machinists don't about how to get it done faster.

    - Your product serves a special niche better than the best or cheapest can. For example, that port city is located in Hawaii far from competitors. Or, you're building a product for a small market that just isn't worth the Chinese trouble to knock it off.

    It can be done, Yankee ingenuity is alive and well. But it takes a lot more than being just another guy with a couple Haas CNC machines.

    Best,

    BW
    Try G-Wizard Machinist's Calculator for free:
    http://www.cnccookbook.com/CCGWizard.html

  15. #15
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    Chinese

    Quote Originally Posted by BobWarfield View Post
    If you don't do something that nobody else does, you're going to be very hard pressed to make a profit. In desperate times, "gravy work" is the last thing you want to bet your business on because there's too many starving for any kind of work they can get. I love skullworks idea of the dual tiered approach. That's the way to take down gravy work in a can't lose sort of way rather than a "bet your business" way. But you still need a main line where you have the edge over others.

    Instead of gravy, make a product that nobody else makes, or run a job shop that has some advantage the others in your area don't have. Maybe you've got a machine with a larger capacity than any shop nearby. Maybe you can turn around a job faster than it can be sent to China and the jobs change so often they never get sent. I know a guy doing both. He lives in a port city and gets a lot of business because he can do rush jobs on machines that are bigger than the competition. If you need 60" of travel to get something fixed before your ship has to sail, you're gonna talk to my friend.

    There are basically 3 profitable business strategies:

    - Your product is the best. Great. Peeps still buy Mori Seikis or Mitutoyo or name your favorite "best" product. There will always be a market for it.

    - Your product is the cheapest. This is a tough spot against the Chinese, but not impossible. You better be super highly automated and able to do things they just can't do and do them a lot cheaper and faster too though. Think Japanese car factory. Robots out the wazoo. If you're here, you've probably got a special talent with fixturing and you just know things the other machinists don't about how to get it done faster.

    - Your product serves a special niche better than the best or cheapest can. For example, that port city is located in Hawaii far from competitors. Or, you're building a product for a small market that just isn't worth the Chinese trouble to knock it off.

    It can be done, Yankee ingenuity is alive and well. But it takes a lot more than being just another guy with a couple Haas CNC machines.

    Best,

    BW
    You know I hear alot of comparison of chinese shops to our shops here. I dont know where people get a comparison their work is crap even huge lot's done are crap you just can not compare for prices if you want to do that then it is very clear you are looking for crap work. Realy how many products can you say are chinese made that have no flaws to them. I have not seen any if you have then start posting the shop names there that made the product and a picture to prove you argument to me otherwise except the fact you cannot copare machine shop work to chinese work. They are not tool makers and I dout they even have machinists either.(nuts)

  16. #16
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    Quote Originally Posted by Tormachmaster View Post
    They are not tool makers and I dout they even have machinists either.(nuts)
    Torchmaster, it is short sighted of you to assume that the Chinese (or any other country) can't produce the same quality parts we can. Yes there are many very bad Chinese products, but there are plenty of really good ones. It all comes down to how much you want to pay.

    There are certainly machinists and tool makers in China. For many years it has been the trend to outsource tool and die making to China (still the case in the automotive industry). Now we just outsource the entire product. We even outsource the product designs.

    In many ways Asia has the advantage by arriving at the party late. Where America has thousands of factories with outdated machines and less than efficient methods, China is building new factories and can invest in newer, faster equipment, properly laid out from the get-go. Cheap labor helps too.

    It would be great if we had some secret that would give us some huge advantage. Unfortunately, the world is flat these days. We just need to stay out front by being innovative.

    -Wes

  17. #17
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    who cares

    I could really care the least wether or not someone can find a good quality ChiCom product or not. It's really no longer relevant, as ChiCom made are pretty much the only products available anyhow. Even countries with low wages like India, who have a semi capitalist economic model with low pay are having a heck of a time 'competing' against the ChiCom.

    ChiCom have a state (government controlled) controlled and subsidized economy. We have a state that sucks the life out of any business so they can 'redistrubute the wealth' to themselves and their supporters.

    The only businesses that still exist to any great extent still in the USA are the state subsidized and supported ones (eg. Boeing, United Technologies, etc.) that do governement military contract work. That should just go to show you that the ChiCom have the right idea. (thank G-d McCain didn't get a chance to offer the ChiCom open bids on those contracts in the 'spirit of competition')

    Guess we have (had, might be a better word) a choice, follow the ChiCom model and everyone gets told what to do and gets subsidized supplies or just sink further and further into the 3rd world. (We still could put up tarrifs and even the playing field to dimminsh the role of ChiCom subsidies, but Wall Street, Mr. 'compensation package' CEO, and their paid cronies in the government wouldn't find that too appealing). (hey here's the 'level playing field' secret, by the way!)

    As for the quality issue, everyplace I worked we could never make a mistake, I'd like to know why everyone cuts the ChiCom soooo much slack

  18. #18
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    Chinese are thieves, end of story. They got what they got from us, the U.S.A. Before are big business bent our country over and sold us out they were nothing. Thanks to some commie with the dream of destroying this capitalist country world power U.S.A. and leveling the world to worldwide communist russia or china. Then the some few can set high up on their horses with a large wad of cash and the huge majority will lye in their sqauller and poverty. Then we'll all be 3rd world countries. The chinese wanted be just like us and some scum bag american's gave it to them, why would we want to be like them? The U.S.A. the greatest country still no matter how you look at it, we are the LEADERS in INGINUITY. You all should be looking at how to turn this country "U.S.A." back into what the founding fathers intended it to be. If it weren't for the U.S.A. the world would be a descilant place, we donate more money to undeserving 3rd world countries by millions times what any other country does and that's individual private donations. Not including the money that is stollen right out of your taxes that are supposed to be for OUR COUNTRY that is squandered away to some 3rd world heathen. Take care of your own, this is GOD's land. The rest of the world should not be your concern, always put YOUR PRIORITIES "which should always be your own country" FIRST. Think of all the money that could be invested into to U.S.A. private business's if people didn't donate all that money to the 3rd world, TRILLIONS OF DOLLARS, let alone all the money stollen from you and I out of our taxes squandered on 3rd world countries. 3rd world does nothing for any American, none, all they do is take, take, and take some more. They take just as much from us as they hate us. You think they would do anything for you if you were sick and hungry, hah, you'd die, they'd rather you die anyway. So whys it so hard for us to do the same, I guess there's just to many big commie pu$$ies over here in the U.S.A. People better pull their heads deep out of their butts because their sky will fall right down on their face. Put God first and then this great country will rise back up to what it once was I believe.

    If ye love wealth better than Liberty, the tranquillity of servitude than the animated contest of Freedom, go from us in Peace. We ask not your counsel or Arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen. --Samuel Adams

  19. #19
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    Most people that answered this poll are either full of crap or not billing all hours worked. If this poll was accurate I would get well over 50% of the jobs I bid at $40 an hour, I come nowhere near that. I am talking jobs that I know no one can run any faster than me. At that $40 I bill every hour, program, set-up, run, deburr, clean and pack time all count. Get real people.

  20. #20
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    I have to wonder how any one man shop can charge $40.00 per hour and still pay for overhead like ,insurance, utilities, taxes, machine repair and replacement costs, SS Fica taxes, permit fees, advertising costs, phone and so on.

    In the financial investment world they have an easy way of comparing investments. What does the safest investment pay verus the riskiest.

    If you add up the cost of every tool, machine, software, and other related items a shop has to operate it is easy to compare to other "investments".

    Say a shop has $150,000.00 invested in their operation. If you look around your shop and add up the cost every item required to be in business, you soon realize $150,000 is not alot.

    A bank CD paying 2% on $150,000 would return $3000 per year. An 8% return in the stock market would return $12,000 per year. These returns require absolutly no effort on the part of the owner of the $150,000.

    As most people already know shop owners spend half their time bidding jobs, dealing with customers and other problems. If they are lucky they can spend the other half the time working to make money. That $40.00 per hour becomes $20.00 in an 8 hr day. Now that $40 per hour is generating $160.00 per day before paying overhead costs.

    The average work year at 8 hrs a day 40 hours per week is 2020 hours. Cut that in half to 1010 money making hours times your $40.00 and you end up with $40,400.00. Then you can deduct your overhead costs, taxes etc. A small shop could easily have overhead costs of $1200 per month or $14,400 per year. Your $40,400 just became $26,000. Now you can look foward to paying self employment tax to uncle sam. Probably around 38% or more.

    Some one who truly charges $40.00 per hour is wearing out their tools and machines and working for free. Machines don't last for ever and must be replaced. Cad Cam programs that cost several thousand must be upgraded or become obsolete. Computers become obsolete and must be upgraded. Tech support for CNC machines is $100.00 an hour.

    Charging $40.00 an hour is a slow death. Machining is a labor of love not profit.

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