Job Pricing

[RJSakowski]

Be careful when pricing. If your initial bid is too low, it will be difficult to raise the price down the road. It is easy to overlook the hidden costs and have them come back to bite you. Items like tool wear and breakage, machine depreciation, taxes, etc.

Competitve pricing can be difficult for a small shop with manual machines. You are competing with the job shop with with CNC and bar feed capabilities. Your advantage is in comparatively low overhead and that you can run efficiently smaller batches. The most cost effective path for your neighbor would be to run a large batch once a year or or so. This would be more attractive to a job shop as they can utilize down time on their machine more effectively and they would be able to quote a better price. But your neighbor may not want to stock a large inventory, which works to your advantage.

 

[RaisedByWolves]

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.....

You can easily fit into the price the fact that you are also giving him a higher quality part.

 

[Fasturn]

Be careful when pricing. If your initial bid is too low, it will be difficult to raise the price down the road. It is easy to overlook the hidden costs and have them come back to bite you. Items like tool wear and breakage, machine depreciation, taxes, etc.

Competitve pricing can be difficult for a small shop with manual machines. You are competing with the job shop with with CNC and bar feed capabilities. Your advantage is in comparatively low overhead and that you can run efficiently smaller batches. The most cost effective path for your neighbor would be to run a large batch once a year or or so. This would be more attractive to a job shop as they can utilize down time on their machine more effectively and they would be able to quote a better price. But your neighbor may not want to stock a large inventory, which works to your advantage.

This is well said, you are bidding against a cnc / bar feeder. However, they have a lot of overhead and you done ? Seen many cnc shops that hate small quantities. Might be why he is interested in your service. Your call if you want to be a bargain @ $50 hour. I think $70 hour is fair. Just because the shop down the street has a Masak lathe doesn't mean you work for peanuts. After the first order you could change the price up / or down depending on best effort. Most here have had a Carrot thrown our way with a job like this. Most of the time it's a PITA.

Good Luck !