[photomankc]

First up I'm not a Tormach owner but I thought I would ask here because I know some of you guys do some prototype/custom work. I've been in the local metal-by-the-foot store a few times when there have been buyers asking if a bolt circle can be drilled or could they 'notch' this ect. The store doesn't do that, they cut metal to length and that's all. I've been tempted to say that I could do what they are asking but I always hesitate because I have no idea what to ask for money-wise to do various jobs. These guys aren't going to pay $75 to drill some holes, and it's not worth it to me to do it for $5, or $10 so I never speak up. I'm considering advertising some service though at that store and maybe online as well.

I do not want to make this hobby a job, but I wouldn't mind the occasional onsie twosie kind of job that most other big outfits are not real interested in doing. I was curious if the folks that do some business with their machines would mind discussing how they price out their work. I think of myself before the days of having metalworking tools and I know that I would have quickly turned away if someone wanted a high labor hourly rate to drill holes but now I also know that it's going to take some time to setup and measure, find an initial starting point, program up the job, and run it. So even drilling a few holes is going to take some time to do.

I guess I'm just interested to hear how guys that are making some coin with this figure up the charges?

[GLCarlson]

NYCCNC has a pricing video, take a look. He runs a small shop for profit. And this topic has been addressed several times; use the search feature.

Other than that, seems to me you've defined your range, but way too early. You THINK the customer won't do 75 bucks, and you know you won't do it for 10. Next time this happens, speak up and get some real market data. Maybe the customer WILL pay 75 bucks (if the alternative is 200, or not getting it done); maybe 25 or 35 is enough for you.

Print up a batch of cards, offer to do small jobs, and see what the market will bear. Then you'll know what the market rate is, and you can decide whether that's worth the bother for you. The only downside is somebody thinks you're too expensive. So what?

[photomankc]

True this is a question that gets asked a lot but the answers I have read so far seem along the lines of:

"Price it at what it's worth"

What I'm looking for is what people who have had time in the game are looking at to determine the "what it's worth" angle. I have a little experience now so I have some basic modifiers like if they want 1" deep pockets, I know that those suck. If there are 20 holes to tap.... that sucks. If it needs to be machined on 4 faces, that sucks. So my thought is maybe look at setting a basic rate at $30/hr and adjust up from there for suck modifiers? I take it that if a customer comes to you with a napkin drawing and you need to CAD/CAM it up they gotta pay for that right?

I do know that people seem to prefer "it costs $XX.XX", instead of "my rate is XX.XX per hr". I guess I'm just trying to get a sense of where to start at or rates that have been successful for others in a similar situation.

I'll check out the NYCNC video. He's got some good stuff on his channel for sure. Thanks.

[MichaelHenry]

I've priced the few outside jobs I've done so far based on the hourly rate I wanted for myself and an estimate of the machine run time that SprutCAM generates plus an estimate of stock prep and clean up time for the machine parts. In many cases I should have doubled the estimated cost for the requested services. It's surprising how much time you will spend on stock prep for very short run jobs where it might not make sense to to automate things like machining the raw stock to size, so watch out for that. I do a few small jobs at home as part of my work responsibility and it is not unusual to spend more time on manual prep than on the CNC machining. CAD and CAM time should also be considered. Don't forget the cost of tooling, supplies and after-the-job shop cleanup, as well as the amortized cost of the Tormach mill or lathe as well. While you may not be depreciating it, you will have to bear the cost of repairs. Also remember that Uncle Same and possibly your state want their share of your machining income as well. On the plus side you can deduct some of those expenses.

[kstrauss]

...So my thought is maybe look at setting a basic rate at $30/hr and adjust up from there for suck modifiers?...

That seems counter intuitive. If you charge $30/hour then the "suck modifiers" probably mean that the job takes longer so the job automatically costs more. If your concern is that the "suck modifiers" mean broken tooling then changing your hourly rate to cover that aspect doesn't sound right and will create confusion if the same customer returns for a non-suck job and you've lowered your hourly rate. If someone tells me that he charges $30/hour and he bills me $300 it seems dishonest (and possibly illegal?) unless the job actually took 10 hours to complete. If I were in your potential customer's position I would be loath to agree to purchasing a service without knowing that it would take 3 hours and hence $90 to do it. To honestly include your suck factor, induce a new customer and cover your expenses I think that quoting a fixed job price would be preferable. That way you could discourage jobs that you dislike, cover tool costs and totally eliminate any discussions regarding how long the job actually took. Plus, if you purchase a specialized tool or improve your technique, you could increase income without having to vary your hourly rate.

I'm probably coming at the pricing question from a somewhat different angle. I'm retired so I only work as an excuse to learn new skills or to help people. I usually work on photography/astronomy related projects, fabrication of experimental prosthesis or similar stuff. On that basis my work is either free because it advances a personal interest, free to help a friend, free because of the learning opportunity or I don't do the work.

[photomankc]

That's actually what I was thinking. I use the rate to come to a part price and that is what is presented. If you have a bunch of close tolerance holes to bore then I up the base rate because that's a lot more work and setup than a simple interpolated bore. So that part costs more than a plate with some holes drilled and simple pockets. If that makes sense.


Sent from my iPhone using Tapatalk

[John Sasinowski]

Also keep in mind that you need not, and likely should not, communicate your pricing algorithm to your potential customers. You may choose to reveal some aspects, like surcharges for rush jobs.

So determine a pricing model you like, quote some jobs, and tweak the model as you see fit. If you find you undercharged for a job, chalk it up to the cost of learning. And if you overestimated, your customer won't complain about a discounted bill :-)

Disclaimer: I'm a software engineer who has done a little contract programming in the past and who has taken up machining as a hobby. Your mileage may vary.

[Steve Seebold]

True this is a question that gets asked a lot but the answers I have read so far seem along the lines of:

"Price it at what it's worth"

What I'm looking for is what people who have had time in the game are looking at to determine the "what it's worth" angle. I have a little experience now so I have some basic modifiers like if they want 1" deep pockets, I know that those suck. If there are 20 holes to tap.... that sucks. If it needs to be machined on 4 faces, that sucks. So my thought is maybe look at setting a basic rate at $30/hr and adjust up from there for suck modifiers? I take it that if a customer comes to you with a napkin drawing and you need to CAD/CAM it up they gotta pay for that right?

I do know that people seem to prefer "it costs $XX.XX", instead of "my rate is XX.XX per hr". I guess I'm just trying to get a sense of where to start at or rates that have been successful for others in a similar situation.

I'll check out the NYCNC video. He's got some good stuff on his channel for sure. Thanks.

Photomankc is right. If you don't ask, you don't get. People don't take your investment into consideration. You have your set up time, load and set the tools, do your cad work and run the part. All that takes time, snd someone has to pay for that time. I used to run a yellow pages ad that advertised "NO JOB EVER TOO BIG OR TOO SMALL". I would get people coming in with busted BBQ grills to be rewelded, or a baby stroller with a busted part, to a kids bicycle that had a busted screw. Most of the walk in stuff like that would come in on Saturday, and it was a good way to make some beer money. I had one guy bring in a blade off his fork lift. He wanted to drill a hole on the end of it to put a trailer hitch ball in it so he could move his boat around. I charged him $75.00 plus the cost of the drill. He was happy and I had beer money for the month.

I race remote control model boats as a hobby. One day one of my boat racing friends came in with a part and asked if I could do it. I think I quoted him about $500.00 plus the cost of the cutter (about another $200.00). He said, "hey, how about a good buddy discount" and I told him bring your model boat in and we can talk about a discount, but this was business and he was going to make money on that part. He reluctantly agreed.

[photomankc]

Wow, that NYCCNC video was great. That really helped me out as far as seeing a way to price things out. It seems that's what most people here are doing too. They present a cost to purchaser without itemizing the labor out. I'm thinking that my strategy may be this:

Line 1: Material cost if applicable.
Line 2: Additional services (CAD design or modification, additional finish work ect.
Line 3: Production cost (figure obtained from calculations) including special tools required to complete this job.

This way I avoid haggling over what part of my time counts and the variables that make it more or less desirable to me are not disclosed but the customer can always chose to pay if it's important enough to them to get it done. Obviously my niche can not be production so reasonably priced small/prototype runs would be my goal as well. I like his notion of providing some hand-holding to people that know what they want to do but may not know just how to get it done. Although it's like the nearly legally blind leading the blind for me right now. But I do see people wanting to make things they 3D printed in serious structural material but the design is one that's near impossible to make in subtractive processes.

Thanks everyone for the tips and input. This has been really helpful!

[MikeC8]

I have yet to see a shop send out a invoice that breaks down the cost of any machined part. Keep that info for your own records, but the client only needs to see the final cost per part.

You can also set a minimum job fee, to keep from getting $15 jobs.

[photomankc]

Really, not even cost of materials? I was thinking services like CAD at a flat rate that works for me. So someone sends me a paper drawing and I need to convert to DXF to feed to CAM. Not going to design your aircraft wing or anything so I should be able to do that up fairly quickly. But you're saying just flat out:

Part x 10: $194.55

and that is it.

[mountaindew]

pasted from other thread

A method to estimate and quote costs to a owner would be the setup and run method.
You can detail a cost estimate for the setup and quote based on that.
Example:

Setup cost
design widget 100$
cam widget 100$
tooling for widget 100$
fixtures for widget 100$
material per widget 100$
make 1 widget 100$

Total cost for setup $600.00 and 1 widget complete.

All widgets after that can be quoted at cost of time and material only, no setup. or 200$ as example details.
Of course this is one time and if the customer needs more at later date. You would revise proposal and deduct design and cam cost for that run of widgets.
And included all other setup costs to start that run.
Then the cost per each widget can be quoted like before.

Another estimating method to consider I can write books on this subject!

Also a couple notes from a professional estimator with a lifetime of experience!

The detailed and professional proposal / quote always gets considered. "might not get job but they will read and consider not skip or trash it"
Never be afraid to detail your costs, A company in business has same costs as you do!
From my life time of experience we always looked for professional work that is done correctly and on time "not always low bidder"
Over time a business wants relationships with builders, designers, fabricators ............ that they can count on to do it and do it right and on time.
If all they want is low bid, most the time its best to move on to other work or clients!
just my opinion!

md

[inov8r]

I used to locksmith. As I was getting out of the business I would still get a call once in a while. I finally started asking "what's it worth to you?" I was surprised, people usually offered to pay more than I would normally charge. Anyway it might work in your situation. It's easy to say "how about this much" if they are close or "no, I can't do it for that"

[northernmach]

Our shop has a $68 dollar an hour rate and what we find as a Job Shop taking in jobs from local individuals is that you just need to try and be up front and give them a price estimate many times with a high and low, and let them choose from there if it is going to work for them before taking a job doing it and hitting them with a price later that shocks them because they don't understand setup time in many cases. They will only bad mouth you if your not upfront first, and they are disgusted with price.

Also a good way of easing your mind when thinking your pricing a job high, and feeling for the customer if you were in their shoes.

Chad

[Steve Seebold]

I have a $350.00 shop minimum, or $70.00 per hour. I figured by the time I cut material, make a program, set the tools and the X Y zeros, and run the part, I've shot a half a day.

I had a customer a few years ago who would order 200 pieces each of two different part numbers. After I ran the parts, they would always call and order 10 more. Two hundred of each part was $12.00 each, but 10 pieces was $350.00 minimum charge. After the second time they did that, I made 250 pieces of each part. Then when they would call, I would tell them to give me 5 days and I would deliver them. Then I would go pull 10 pieces off the shelf and deliver them. After I made the parts 8 or 9 times, I had enough parts on the shelf to complete an order without even turning on the machine.

When I bid a job for someone, I don't tell them your parts will be $70.00 per hour, I'll tell them your part price is $XX.XX EACH, delivery will be in XX weeks.

I have a customer now who will call me at 3:00 in the afternoon and have a new prototype project that they need at 7:00 AM tomorrow. They understand that if I have to tear down a set up to do their job, they are going to have to pay for the time it takes for me to tear it down and set it up again. That's usually a 2 hour minimum.

[photomankc]

Awesome feedback everyone! Thanks a ton!

[mountaindew]

pasted from other thread

A method to estimate and quote costs to a owner would be the setup and run method.
You can detail a cost estimate for the setup and quote based on that.
Example:

Setup cost
design widget 100$
cam widget 100$
tooling for widget 100$
fixtures for widget 100$
material per widget 100$
make 1 widget 100$

Total cost for setup $600.00 and 1 widget complete.

All widgets after that can be quoted at cost of time and material only, no setup. or 200$ as example details.
Of course this is one time and if the customer needs more at later date. You would revise proposal and deduct design and cam cost for that run of widgets.
And included all other setup costs to start that run.
Then the cost per each widget can be quoted like before.

Another estimating method to consider I can write books on this subject!

Also a couple notes from a professional estimator with a lifetime of experience!

The detailed and professional proposal / quote always gets considered. "might not get job but they will read and consider not skip or trash it"
Never be afraid to detail your costs, A company in business has same costs as you do!
From my life time of experience we always looked for professional work that is done correctly and on time "not always low bidder"
Over time a business wants relationships with builders, designers, fabricators ............ that they can count on to do it and do it right and on time.
If all they want is low bid, most the time its best to move on to other work or clients!
just my opinion!

md

To be more clear about above note. A detailed proposal or quote defines what your doing and what it takes to do it. Stating actual line item costs "like labor" for a new customer or in competition with other bidders is NOT a good idea. This allows a new customer the ability to shop your bid to your competition and or nit pick it apart and negotiate it based on some inflated line item number. Experience will show that the customer will pick apart any line item they think is out of line. If you are in this situation it is best to state the bid and breakdown are only good as a whole. I have found that things like OWNER PROVIDED costs you more then if you provided it yourself. The key is now your production is based on them providing something on time and with the quality your use to work with. In short it is rare that it works out. Only government and franchise contracts where they source something that can not be acquired except from them does this even have a chance to work well, even then the above problems will need to be considered and included in your cost. I must admit these notes apply more to multimillion dollar contracts then to limited runs of a few parts. Still the process is the same for small or large quotes and the idea is look at the big picture. There are a number of good books and resources to teach estimating that will pay for themselves a thousand times over. I have a great deal of experience at this and I admit some of my mistakes cost anywhere from 500$ to $300,000. Also all of our proposals required insurance that if we did not honor the proposal and enter a contract the owner or client would collect on a 5% to 10% bond and go to next bidder. Then the insurance company comes after you . Barbarians at the gates is a movie that more or less captures this concept very well. This note goes into a little more then a hourly rate proposal but who knows who reads this stuff and how big there business is or will be!
md

[cadguy247]

MD and Steve are pretty much dead on. I work in the injection molding/mold making industry and this is exactly how things are priced out. people have to understand all that goes into making what they think is a simple part. Yes the part might only cost $5 if it's a production part but once they make the slightest change to make it a one off, there's literally a half a day gone before you even start to cut the part. when I'm getting a mold built that is a whole different way of pricing, but when getting engineering changes made or repairs companies charge about $65-75 an hour and a half day is pretty much the minimum. It drives me up a wall when a program manager freaks out when they see the quotes I obtain for what they think is a simple change, and I have to explain to them the whole process each time , program, setup, EDM, inspect, grind, stone and polish, etc.

And when a company asks that I get them a design overnight or over the weekend, my cost doubles and they know that. Your time is just a valuable as theirs, so most certainly don't under sell yourself

I have a excel spread sheet somewhere that is used for quoting, based on materials and their costs per pound, labor per process and other variables such as purchased components including cutters. this is a good way to price out your services