Job Pricing

vocatexas

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I've got a neighbor who manufactures a product and sells it world-wide. He discovered I have machine tools and approached me about making a part for his product. It's a simple part and I believe I can do all the work using my flex collets. How do I go about pricing these so I can make a bit of profit, but not price myself out of a job. He's supposed to let me have some of his stock tomorrow so I can try making a small run of parts. I had figured on taking an hourly rate and dividing it by the number of parts I can knock out in an hour for the per unit cost. Am I in the ballpark there? Oh, and this isn't a one-time offer. He needs about 150 of these parts per month, year 'round.
 
Well, make sure you account for tooling, and consumables. Also is he always providing material. For non 3d parts with average material removal I have seen a lot of guys multiply material cost x3 and add tooling and come out ok most of the time if its repeat business and you can make fixtures/repeatable set up so your not fiddling with it every time.

A friend of my with a prototyping shop in his pole shed won't touch a job unless he can profit 50 dollars and hour as there are a lot of hidden cost such as shop supplies, maintenance and electricity.
 
I've got a neighbor who manufactures a product and sells it world-wide. He discovered I have machine tools and approached me about making a part for his product. It's a simple part and I believe I can do all the work using my flex collets. How do I go about pricing these so I can make a bit of profit, but not price myself out of a job. He's supposed to let me have some of his stock tomorrow so I can try making a small run of parts. I had figured on taking an hourly rate and dividing it by the number of parts I can knock out in an hour for the per unit cost. Am I in the ballpark there? Oh, and this isn't a one-time offer. He needs about 150 of these parts per month, year 'round.
how long does it take you to make each pc? Then you have to figure how many can you make in an hour. 1/3 of your total will be cost of materials and what all. You are charging not only for labor, but machine rental too.. like i have a lawncare biz.. my rate in my area is 75.00 and hour, i base each job upon how long it will take me to do that job.

What are the local shop rates in your area? You can go by that too.. underbid it cuz you don't have to travel and do any shipping.. that will help hold the cost down..
 
In this sort of situation, there's no reason to go into it blind. I would ask him how much you can have them for. If he won't tell you, no harm done. If he does, it's pretty easy to tell if somebody else is already giving it away. Once you have run a batch, it gets much easier. "Quoting" is just a fancy word for "guessing", especially with manual work.
 
The part in question is simply a piece of thick wall .500 stainless tubing cut to length (slightly less than a half inch) and chamfered inside and out. He supplies the raw material. A couple of weeks ago he gave me a very short piece (I could only get two parts from it) to try out. I put a single flute chamfering tool into my tailstock. I used it to chamfer the inside diameter of the exposed end after facing. Break the outside edge with a file, groove with a parting tool, touch both sides with a file, and finish parting. I can then insert the individual pieces into the collet to finish the inside of the opposite end. Right now he has a hired hand cutting these with a band saw and finishing with a file and belt sander.

We've only got one shop withing fifty miles that does machining, and he's gotten where he doesn't like to take in machining jobs, just welding. He's been here for over thirty years. He quotes $100 an hour for machining.

I'll give it a try tomorrow or the next day and see how many I can knock out in an hour, or how long it takes me to use up a four foot piece of stock, which ever is first. I don't want to work for free, but I know it will have to be cost effective for him as well. I'll check back.....
 
I’m a photographer and not a machinist, but the process of quoting is similar. For an item like this, I would be quoting by batch and not item since there is a considerable amount of time in set up, delivery, etc that you should be paid for that would be the same if you ran 1 part, or 100. Many people lose money on a job by not accounting for all the support activities to accomplish the job. As an example, I shot two hockey games today, an hour each game shooting time. I have a couple hours prior in sales and preparation activities, and several hours of editing and delivering the photos afterwards that needs to be paid for. The actual time the client is paying for performing the task needs to pay for that time too.

I create a spreadsheet and list all the expenses for a job to come up with a cost, in your case it would be an hourly rate for your machine time, your hourly pay rate, electricity, tooling costs (how long will each tool last on this job), misc supplies, and just as important, business and income taxes. Whether you have a business or not, you are operating as a business, he is going to want to write off his costs of buying these from you, so you need to claim it as income.
 
I would add to all suggestions above, 15 minutes rest every 2 hours, and add a failure rate. Repeat work both reduce error due to set up but also increase error due to fatigue. Repeat work increase heart problem dramatically due to stress. Maybe indicate future quote can be adjusted later once you get a better idea.
 
There is another side of the coin.
How boring (no pun) is this job going to be, how long before you get sick of churning out the same part over and over again.
One of my hobbies was gem cutting and silversmithing.
One Christmas I took so many orders I had no time for anything else.
I finished them all but havnt done any gem cutting since.
 
Buy yourself a nice little Hardinge second op lathe and pop those things out . Tell him a price , pay the lathe off and then lower the price if neccesary . Production work on a manual / toolroom lathe is boring . ( No pun either Sav ! ) :grin:
 
Buy yourself a nice little Hardinge second op lathe and pop those things out . Tell him a price , pay the lathe off and then lower the price if neccesary . Production work on a manual / toolroom lathe is boring . ( No pun either Sav ! ) :grin:
This. And you can usually get solid bar stock significantly cheaper than the tubing, so you might be able to save some costs by boring a solid bar instead of using tubing. A drilling cycle on a small turret lathe adds very little time to the process, so might work for this part.

Another thing that might work is making a facing tool with a chamfer built into it and clean up the ends and chamfer in the same operation. I would also check with him and see if the inside chamfer needs to be a certain depth, or would using a Noga deburring tool work right after doing the facing cut. That way you would not need to use a chamfering tool in your tailstock and could clean them up real quick.
 
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