Hourly Rate to charge for 4-Axis Machining

[AMCTony]

How much is a fair amount to charge a customer for 4 axis machining of aluminum parts. The cycle time is 5 minutes per part and they are made of 6061 aluminum. The parts are ordered in batches of 1000 to 2500 pieces. Material is supplied for the job. We currently do 3-axis work for customers in several different materials from tool steels to plastic but never any 4-axis yet. Any help in this would be greatly apreciated.

[mxtras]

What is your overhead?

How busy is the 4 axis machine?

Scott

[AMCTony]

We are considering buying a 4th axis for the 3-axis mill. The machine is a Haas TM-1 and the cost for tooling, electricity, ect. should be about the same as for the 3 axis parts. Our Rent is $1350 per month and other utilities total around another $500 to $600. The 4th axis drive wiring, indexer/table, tailstock and fixture to do the parts is going to cost around $15,000. they run about 5000 pcs. per year. We can use the 4th axis for other things but I really dont want to shoot myself in the foot.

[miljnor]

whenever I look at a part that someone wants to make with a 4th axis you have to ask yourself "could this be made without the 4th axis? and if so how hard would it be?"

If the answer is no it cant be made without the 4th axis then your customer is going to have to pay more. Most shops don't have a 4th and the ones that do probably only can do programing as an indexer. So If you can program for full 4th and the part realy needs it I usually double the price I would for my time if the part was =<3 axis.

All that being said. It actually comes down to what mstras said if your dead slow or the 4th isn't getting any work then the price can and should go down. But hey thats only if you actually want the work.

[AMCTony]

Actually, I am looking for a good excuse to buy the 4th axis. As far as having enough work, our machine is fully loaded up and we usually bid at around $100/hr. give or take depending on the type of work. Having a 4th axis would allow me to do some of our parts in less setups and speed up the operation. The parts that this customer wants done need full 4th axis and that is not the problem. I think this guy is trying to low ball me and is claiming that he is getting them for $5.00 each with no setup charge. I think he is full of it but this is certainly not the first time that I have heard this from a customer or potential customer. I usually just bid the job at my rate even if it was 10 times higher and found out weather or not they are full of it.

[mxtras]

Yup - make it worth it for yourself. If you feel generous, mark up your normal fee by 25% and tell the guy that you reserve the right to adjust the price after the first xxx number of parts. If its a PITA, then bump it up a bit more.

You may want to propose that he pay programming separate - a one time fee in the front of the project - to keep the part cost down. May not be a popular option, but it does build trust with the customer. And it kind of keeps them on the hook for future runs, or at least it makes them feel like they should go back to you since you have "their" program.

I am sure others in the Zone can speak on this topic with greater accuracy and expertice. I am just offering my first thoughts.

Scott

[miljnor]

I don't know what your material cost is but excluding that, I use to get about a 1.00 a minute for parts plus material and I was making realy good money and was swamped all the time. I was considered low priced for the work. Now I make my own product and don't realy have to worry about the piece price just the product price (whole different ballgame )

You could give the part to some customers for free and they would still say that they are getting it cheaper somewhere else. I don't know how many times I've heard that BS. Just quote the price and Ignore the comments from the penut gallery. If they don't like it they will go elsewhere and your busy anyway!

I've found that most customers that use this tact are just trying to chew on you abit.

[AMCTony]

These certainly are PITA Parts. Looks at first glance like one of those deals where you curse and swear at the first 20 or so and then they go smooth from there. Also, Aparrently, this customer wants to own the fixture itself so he can shop around from time to time so I was considering making him sign an annual contract for the full 5000 part usage at a set price instead of 1000 at a time. This way he dont pull a stunt like having me make a fixture and 1000 parts and then buying his own machine. Then you know what happens next.

[mxtras]

Unless you are starving, I would strongly suggest not playing too many games with your price on the spot. It is what it is and lowering your price on the spot leaves a bad impression with the customer - he probably won't truley trust you in the future. - - Kind of like the furniture stores that advertise 75% off regular prices - you mean they make at least 85% regularly? I'll buy my crap somewhere else.

Scott

[AMCTony]

miljnor, What Product do you make? Just Curious.

Tony

[miljnor]

http://www.american-suspension.com/

TRY to ignore the girl!

[AMCTony]

In the past, when I was just starting, I lost jobs by bidding to low and never knew why. Years later I have found that running at a Higher rate makes most customers feel confident in your companies abilities and more likely to send an order. They also expect much more quality in the end, especially the corporate guys, but we have never had any problems in that aera.