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Thread: What to Charge for Plasma Cutting Services

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    Registered rescueweasel's Avatar
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    Default What to Charge for Plasma Cutting Services

    I recently added a cnc plasma system to my shop and wanted to see how others priced the services or how other people come up with a price for a particular job.

    Is there a formula people are using or is there a specific industry standard rate?

    Would love to hear what other are doing.

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    If I have time to look a job over and figure out how many inches need to be cut I will charge for material (figured @ 150% of purchase), 20 cents per pierce required and 15 cents per linear inch of cut.
    If I need an off the cuff quote I give it the old scientific wild ass guess method and generally that will get me pretty darn close really. When guessing you win some and lose some. As long as you win more than you lose you're ahead of the game.



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    Registered rescueweasel's Avatar
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    thank you,

    Since my cnc plasma system is new to me my off the cuff guess needs some help. I appreciate the info.



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    For a while I was charging 2.7 times the cost of the material. It had it's flaws. First, A36 is about half as much as AR500, but cuts (roughly) the same. It is way to much "over", more lost jobs than won. It does seem odd to pay 2k for a sheet of 500 and only make $800 dollars on it, it feels like you need to be in the steel sales rather than cutting. But it works OK ("paying" customers are a must).

    Second is that steel prices waver far more than my cut costs. It still costs $.xx per pierce no matter what the steel costs.

    I do like Bill's "formula", experience will let you work his latter method more often with better results.

    I would love to hear other ideas on this topic.....

    WSS

    I know I have posted this chart before, but just in case anyone can use it.

    Attached Thumbnails Attached Thumbnails -steel-wieghts-jpg  


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    A lot of my customers charge by the hour + material.



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    I use a real simple formula which allows me to achieve my shop hourly rates, and seems to deliver competitively priced plasma cut parts. This is for cut metal with no secondary operations such as tapping or welding or forming. It also assumes that the customer supplied a .dxf file with the part properly and accurately drawn, I eat the time for post processing (adding kerf, lead ins, nesting, etc)....but no additional part drawing.

    1. Do the math to determine your material cost per square inch. This number should include delivery cost. So if I buy a 4' x 8' piece of 3/16" steel for $130, and have to pay $20 delivery, then I take $150 and divide it by 4608 square inches, which comes out $.032 per square inch. Double that, so your selling price for 3/16" steel now is $.064 (6.4 cents ) per square inch.

    2. determine how many square inches of 3/16" steel you will use in the part you are cutting, add about 1/4" to accomodate scrap and kerf, if you are cutting something not rectangular, figure rectangular area around what you are cutting to cover your inevitable scrap loss. So, if you are making a round 11.5" dia circle, figure a 12" square for material. 12" x 12" is 144 square inches, so the material cost is 144 x $.064 or $9.22 rounded off.
    3. For cutting cost, use the same number generated in 1 above, but figure out you lineal inches cut. Most software can calculate the lineal inches in a part program, but on a 11.5 " dia circle there is 36.11 lineal inches of cut, round it to 37 inches, multiply by $.064, which comes to $2.37 cutting cost.

    4. Add your cutting cost to your material cost, $2.37 + $9.22 = $11.59. That is what I would sell an 11.5" 3/16" circle for.

    If I am nesting a bunch of parts efficiently, or using up a whole sheet of steel....I figure I am saving material handling time, and I will use my discretion discounting, but making sure that I can make my minimum hourly shop income. When my plasma machine or welder is running, I shoot for $100/hr in my one man shop. If it is just me grinding or doing other menial tasks, $60/hr.

    This works for me, while I only do it as a hobby....it has paid for my cnc machine as well as a whole shop full of tools.

    Jim



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    Quote Originally Posted by jimcolt View Post
    I use a real simple formula which allows me to achieve my shop hourly rates, and seems to deliver competitively priced plasma cut parts. This is for cut metal with no secondary operations such as tapping or welding or forming. It also assumes that the customer supplied a .dxf file with the part properly and accurately drawn, I eat the time for post processing (adding kerf, lead ins, nesting, etc)....but no additional part drawing.

    1. Do the math to determine your material cost per square inch. This number should include delivery cost. So if I buy a 4' x 8' piece of 3/16" steel for $130, and have to pay $20 delivery, then I take $150 and divide it by 4608 square inches, which comes out $.032 per square inch. Double that, so your selling price for 3/16" steel now is $.064 (6.4 cents ) per square inch.

    2. determine how many square inches of 3/16" steel you will use in the part you are cutting, add about 1/4" to accomodate scrap and kerf, if you are cutting something not rectangular, figure rectangular area around what you are cutting to cover your inevitable scrap loss. So, if you are making a round 11.5" dia circle, figure a 12" square for material. 12" x 12" is 144 square inches, so the material cost is 144 x $.064 or $9.22 rounded off.
    3. For cutting cost, use the same number generated in 1 above, but figure out you lineal inches cut. Most software can calculate the lineal inches in a part program, but on a 11.5 " dia circle there is 36.11 lineal inches of cut, round it to 37 inches, multiply by $.064, which comes to $2.37 cutting cost.

    4. Add your cutting cost to your material cost, $2.37 + $9.22 = $11.59. That is what I would sell an 11.5" 3/16" circle for.

    If I am nesting a bunch of parts efficiently, or using up a whole sheet of steel....I figure I am saving material handling time, and I will use my discretion discounting, but making sure that I can make my minimum hourly shop income. When my plasma machine or welder is running, I shoot for $100/hr in my one man shop. If it is just me grinding or doing other menial tasks, $60/hr.

    This works for me, while I only do it as a hobby....it has paid for my cnc machine as well as a whole shop full of tools.

    Jim
    Sounds very fair and reasonable... I wish you were close.. Thats reasonable for hobby items I would like to have from time to time..



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    Flat rate parcel post is cheap.....I ship quite a bit of steel that way.

    Jim



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    Don't know if this will help because I run Ox/Fuel & mostly cut 3/8" through 1 1/2" steel plate.

    I calculate material as Jim does on the square inch of material allowing for scrap. Most of my customers are other industrial shops. I can't mark steel up like you can for retail business. When I do 1 offs or a walk in I do mark material up x 1.43 That allows for 35% gross profit on material.

    I charge for drafting time on custom work, repeat work I do not.

    I use Mach3 so I do a simulated run to calculate time, add time for preheat & pierce (Oxy/Fuel) & on the heavier stuff I do (3/8" plate & thicker) I add an extra 20 minutes of time to load & clean off the table, carry scrap to the dumpster etc.


    I'll leave it up to you on how much per minute to charge as rates vary greatly from geographic area to area. In my area I average about $400.00 per 8 hour shift for the table alone, not including material mark up etc.

    I find myself in direct competition with the larger steel suppliers that run multiple head torches & tables as large as 8' X 40' I run about the same price per part as the big guys but my customers claim I maintain much better consistency to size & cut quality than they get from the big guys.

    If it works.....Don't fix it!


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    Jim-

    Great Info, I like the way you calculate the price. I use sheetcam and Mach3 do they have the option you spoke about for calculating the linear distance of the cut?

    Thanks,



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    rescueweasel,

    I am not familiar with SheetCam and Mach3....so I cannot answer your question about determining linear cut length measurements. I use the PlasmaCam software, and simply use the measure function...it accurately measures cut length.

    Jim



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    I have a very in depth and very user friendly excel spreadsheet I made up to calculate pricing.

    One sheet has all my tooling info on it. Feed rates and amps for different types & materials cut, duty cycle at the given amps etc… also used as a backup for if SheetCam ever goes down.

    The next sheet has all my pricing info on it.
    -Nozzle Cost & cut inches it will last
    -Electrode cost & cut inches it will last
    -Swirl Ring cost & cut inches it will last
    -General Labor $/hour
    -CNC operator $/hour
    -Table usage $/hour
    -Drafting $/hour

    The next sheet is where you enter all your part information. (can enter up to 25 unique parts)
    -Material
    -Quantity to be cut
    -Thickness
    -Part Area
    -Cut inches

    The information it calculates for you is-
    -Part Weight
    -Sheet to nest the part on
    -Cut time for the part
    -Possibility to overheat at the given amps to cut that thickness


    On that same sheet below the part information is where you enter your material information. (There are 5 different plates you can enter)
    -Material type (Carbon, Stainless, Aluminum, Diamond plate)
    -Material Thickness
    -Size (in inches)
    -Cost per plate
    -Quantity of each plate

    The information this calculates for you (for each plate used) is-
    -Material Price/Lb
    -Optimization of the plate (% of the plate used)
    -Scrap Percentage of the plate
    -Cost lost from scrap
    -Feedrate for the plate
    -Amps for the plate


    Under all that is where you enter your time-
    -Drafting/programming
    -Deslag/Blasting
    -Painting
    -Packaging

    And some misc. things you enter is-
    -Material Markup
    -Misc. Material cost (paint, etc…)
    -Shipping Cost
    -Job Markup
    -% Discount (if any)
    -% Commission (if any)


    This will calculate a price for the WHOLE job and give you the estimate of hours.


    I know this seams like a ton of information you need to complete an estimate on a couple burnouts, but once you have all your tool info, it can be done in a couple minutes.


    But keep in mind, I’m just a small 1 man shop that doesn’t have to pay for other employee labor so I have a lot of freedom to modify the numbers ($) as I see fit to please the customer with a decent price while still paying for equipment, my labor, & putting some in the bank. I just make sure I have enough money in there to cover my expenses + extra to bank.

    Attached Thumbnails Attached Thumbnails -1-jpg   -2-jpg   -3-jpg   -4-jpg  

    -5-jpg  
    Last edited by CPierce18; 10-06-2010 at 04:15 PM.
    C. Pierce


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