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Hi, I have a small shop with a cnc plasma. More and more I have customers wanting me to cut parts for them using there own material. I was wondering what some of you guys with shops do for this situation. Charge by the inch? Charge by the hr.? Just wanted to get a better feel of what your guys are doing...Thanks...John
The only fair way that I see is to establish your operating costs and charge by the hour.
With that being said there is only so many hours in the day so you are limited to how much you can make.
A lot depends on market conditions, does the customer recognize the quality over other methods? Are they supplying the drawings or do you have screen time to bill for?
That can be hard to put a price on.
Always more questions!
Good luck, Steve
Yeah it is a tough call sometimes.I generally do not charge an art/cad fee on really simple shapes,circles and squares etc.I charge about $40 dollars for an art/cad fee.If it is something real complicated or time consuming it goes up from there.I have lost quite a few jobs cause the customer was like $60 dollars just for those 2 small parts,but they do not realize the time you have to put in to make a drawing file.They think you just put a piece of metal on the table and press go and presto it is done.When I get artsy stuff to do or quantity pieces generally I never have a problem with price.
I feel my art/cad fee is probably on the cheap end to in price.I have heard of machine shops charging $120 an hour cad fee.Where I am at $40.As far as the cutting charge tough call.Some guys charge by the square foot.Some by the job.Obviously the thicker the metal the longer it is going to take so you have to charge more and obviously the material costs more.I do not have anything set in stone as far as what I charge for cutting I just try to be fair.
X amount for set-up and $.$$ per minute, plus CAD time on anything complicated. I was just told about a water-jet shop that will scan and program existing parts or gaskets for free and charges $2/minute for cut time.
Not a bad idea, I would tell the locals you cut "John Doe Jobs" on Friday's for instance. Once the word is out, you'll probably get a lot of business out of it. And you can charge decent because they would have to pay shipping and wait a lot longer if they RFQ'd the internet, which a lot of weekend racers and home shop fabricators won't do.
After commercial cutting for 5+ years I just use a square foot charge. I found when I tried to make it complex with art fees and stuff they just walked out the door. I have a price per sq ft (nearest sq ft increment) for unfinished (like it comes off the table), customer provides the material, and for paint ready (de-slagged and mill scale removed). Our base price is for 11 ga and goes up with thicker material (unless customer furnishes the piece). I don't encourage the one-bracket-cut-while-you-wait business. It's real hard to make money doing that kind of work.
The problem with charging by the hour is the customer does not relate a job to time and they want an instant bid. If you have to take time and do a quote only to have them say "I'll get back with you later" then it's just wasted time.
If you can do the bid in your head based on size and material you can find out real fast if they are tire-kickers or real customers.
TOM CAUDLE
www.CandCNC.com
Originally Posted by Torchhead
Very true, quoting out of your head is a good thing on little one off jobs, sometimes taking 1/2 hour or 20 minutes to quote a job that you don't get adds up to a lot of wasted time, but quoting my the square foot? For instance, if I asked you to make me a bunch of 1/2" round spacers and could fit "X" amount in a square foot, that would cost the same as a 12" X 12" square that was plasma cut?
Yes, basically. biggest component in those jobs is the layout and machine setup/material handling. The actual cut time won't vary more than a few minutes. The customer will pay too much for a 12" square and you get porked on cutting 100 tiny round spacers. What that indicates is that neither of those are good candidates for the CNC plasma process.
The ability to make money on a job depends on how fast you can get it from your head to the table. Skill on the artwork and CAM end pays off in quick turns.
The sq ft model breaks down on the extremes BUT you can always "adjust" it to compensate. If you have a base system, then mentally adding or subtracting for variations is pretty easy. If the customer shows up with their own material you know how much material costs per sq ft....just take that off the sq ft price. If the design is a custom logo with lots of artwork tack a few more dollars per sqr foot. If it gets painted and finished tack on more per sq ft. Powder coating is priced per sq ft.
Decorative cutting and personalization (custom) is where the most profit exists. If you have the right drawing and CAM tools that process can be made to be even more profitable. It's a lot easier to cut 12" squares with a shear than with CNC plasma.
Sometimes we all fall into the old "If all you have is a hammer everything looks like a nail" syndrome. I plead guilty myself. In building new kitchen cabinets I REALLY wanted to use my big router table. I finally realized that using a router table and table saw for the raised panel doors was a lot better method! I still get to carve the designs on the panels (:-)
TOM CAUDLE
www.CandCNC.com
www.FourHillsDesigns.com
the price per square ft, screws you on cosumables thats for sure, there is a fine balance that you need to figure out, but like torchead says part that you make the money on is how fast you can get the cam done.
comertial guys in the area charge $125/h and tripple markup on steel.
I charge $90/h and double my steel. You have to figure out costs, if people bring thier own steel that cuts into your profit.
I would charge more per/h and make sure you or your machine are not working for free. I like to give the cust. a good deal but I have to make $
You need to know the cost per square inch of each piece of material you have in stock.....and you need to know approximately how much it costs per inch of cut (when plasma cutting)
As an example....if I have a piece of 4' x 8' x 3/16" hot rolled steel....and someone wants an 11" disc with 4 -1/2" holes...here is how I would proceed:
1. 4 x 8 sheet of 3/16 cost me $160. So, $160 divided by 4608 (square inches) = 3.5 cents per square inch cost. You need to add your acceptable mark-up to this....so if you double this then your selling price for 3/16" steel is 7 cents per square inch.
2. Cutting costs...I find with my Hypertherm air plasma (decent consumable life) that I can profitably cut steel with a cost per inch price that is 75% of my per square inch selling price for a particular piece of metal. So my plasma cutting charge per inch of cut on the above 3/16" steel is .75 x 7 (cents)...or 5.25 cents per linear inch of cut.
3. Material usage and scrap. If someone wants to buy an 11" disc cut from a fresh sheet of 3/16 steel....figure material usage in rectangular terms...and this will help account for the scrap that you likely cannot use for other jobs. When you nest parts there also is a scrap spacing between them...so I add about 1/4" around the part. In the case of material for an 11" disc I would charge the customer for an 11-1/2" square piece of material...so 11.5 x 11.5 = 132.25 square inches x .07 (7 cents per square inch selling price listed above) = $9.25 for material.
4. Some cutting software will calculate the linear inches per part for a particular cut path....my PlasmaCam software easily does this. Or you can do the math and figure out linear inches...for this part we have 4 1/2" holes...so 1/2 x 3.14 = 1.57 inches per hole, and the outside cut of the disk is 11 x 3.14 = 34.54 linear inches. 1.57 x 4 = 6.28 (total for 4 holes) + 34.54 (inches cut for outside of disk) = 40.82 linear inches. Now multiply the linear inches cut x the cut cost per inch listed above.. 40.82 x .0528 = $2.16 cutting cost.
5. Add your selling price per part from 3 above to your cutting cost per part from 4....$9.25 + $2.16 = $11.41
So, under the conditions above I have come up with a selling price of $11.41 for an 11" disc with 4 - 1/2" diameter holes. The profit is built in....if you work faster or more efficiently you make more money under this method.
These prices and built in profitability have to be customized to work with your shop....just know your costs!
Jim Colt
A guy started up his own business and after a few months noticed he was losing money so he hired a accountant to check things out, when the accountant asked him what kind of business he had the fellow replied " I own a truck and i buy bags of potatoes on the East coast, truck them across the country and resell them on the West coast". Ok said the accountant, how much do you pay for a bag of potatoes, the owner replied... 5 dollars a bag!
And how much do you resell a bag for... 3 dollars a bag the owner replied...!
The accountant said " leave it with me and i'll get back to you "
A few weeks later the accountant calls up the owner and tells him he has a the solution... great says the owner, what is it.... the accountant replies "you need a bigger truck"!!!
As silly as it sounds, like with any business ( or life style ) if you have more month left over at the end of the money you are either working hard and not charging enough money, or sitting idle because you charge to much. Each area has its own economy and depending on how many businesses of a certain type feed a specific need or product will determine the price. If i were the only business serving 10,000 clients then i could charge what i want, if there were 1000 businesses like mine serving 10,000 clients then its a cut throat situation. If my work shop is in my back yard under a tarp, can i charge the same as a guy with a 50,000 sq ft shop? Who knows? I am just starting out and am at that stage of learning pricing and selling. I read on here awhile back that making something is easy, finding someone to buy it is the hard part.
Just my 2 cents...
EDD
It has always seemed to me . . . It has always seemed to me, with a small one man business . . .you spend a 1/3 of your time looking for business, 1/3 producing the product or service & another 1/3 trying of your time to collect your money . . . .
With that said charge enough for a 1/3 of the time you are willing to devote to the business . . to yield the income you want . . .
We all know the world won't let us have 8 hours worth of earnings all the time for 2 hours worth of work . . . .
So I figure that about 12 to 16 hours of your day will be absorbed to earn what you feel you should in 8 . . . .
Just my 2 cents . . . based on experiences, not all good ones . . .
Steve
Oh yea, one more thing . . . . do not establish accounts, do just like the doctor does, he treats you pay . . . that my friend gives you more time to sell and work . . .
Last edited by CNCCajun; 04-13-2009 at 10:09 PM.
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