[jon0]

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.

[Tormachmaster]

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.

[Boots]

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.

[Dualkit]

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.

[Dualkit]

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.

[machinechick]

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!

[diyengineer]

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.

[Dualkit]

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.

[Runner4404spd]

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.

[skullworks]

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.

[stuby]

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:

[txtooldie]

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!

To answer the thread on this you are correct with the $60-$80 for production time. Prototype is typically dependent upon the quality of the machinist. We would charge $100-$125 depending on which machinist we put on the job.

And to your communist comment. If you prefer that way of life i'm sure that Puten or Jiabao would love another slave.

[universalfab]

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

[Dualkit]

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.

[magma-joe]

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.

[Dualkit]

Magma Joe, sorry you wasted your time crunching those numbers to tell me how broke I am. $40 an hour shop rate is per machine. I have 4 CNCs they never all run at the same time, but quite often 2 or 3 are going at once. I also charge for deburring even if I am doing it while a machine is running, so rarely am I just billing out $40 an hour while working.

[Cam^2cam]

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

I liked this so much I had to share most of it on my facebook wall. Unfortunately I had to cut out the chinese part as we have a family that are chiinese. All in all I couldnt agree with you more. i grew up fed by the hand of an mechanical engineer that wouldnt buy a single product unless it was american made. And let me tell you, it ran strong. We need more of this thinking in our country. I cant even watch news anymore without wanting to shed a tear over the fact I know that this country is going nowhere. All I can do is plug along and make myself believe Im making a difference.

[universalfab]

$40.00 an hour, that's sad but the reallity. I remember our shop was doing well for itself some years ago, back when the dollar still was worth something. We were bringing in roughly $80.00-$100.00 an hour and like I said that was back when the dollar was worth something. There was no competition locally that could compete and everything required us to go to the factory/plant to check the repair/modification/build, so that cut out the 3rd world. Then those plants shut down 1 by 1, leaving us with a few big companies that we've been doing business with for 35+ years. Taxes and power were cheaper, value of the dollar was higher and we were making nearly double of what we make now. Then you have your insurance, which I'm sure most shops on here don't have to worry about. But we were forced awhile back into getting insurance because of some of the operations we do and that is one healthy chunk of money. Especially when work is slow, it's a real pain. No doubt about it things have gone from bad to horrible for the majority of business's.

[Smrtman5]

I am curious, out of the $xx per hour a company charges, what the percentage breakdown is that goes to paying things like:
wages, taxes, electricity, rent, tooling, maintenance, the other 100 things im forgetting.

Also, if youre charging $xx for labor, how much are you marking up the material?

[Dualkit]

My expenses average 30% of what the job grosses less material costs. Tooling, electricity, machinery repairs, and all perishables add up to 30% average. No rent my shop is paid off. No machine payments either. So if a job nets $1,000 after material, that is $700 added on to my taxable income, then income taxes come out of that. I averaged out quite a few jobs so the 30% expense costs is a good number to use.