Friday's - How The Heck Did They Make This Part - Episode #1

[mountaindew]

Really it all depends on what the contract says.

In my main field (architecture) the CAD files are the instrument, not the final product. They are paying for your machining services and the final product.

If you are concerned about loosing business because of setup fees, you can either eat them, or offer a discount on future orders of that particular product.

That said, a good contract should be high priority. This way you are covered

I also come out of the general contractor field as mentioned above most architects guard the rights to their drawings and details mostly because they don't want others to copy paste and use their pre designed details or structural elements. I did it more for professional liability then for any other reason. Someone could use your details to build something and if it fails you could be on the hook.

I would 100% ++ agree a fair but very precise contract or proposal is required, My focus was on commercial estimating and when millions of dollars are on the line to complete just 1 project or part it pays to be clear on what your going to do. Exactly when it will be done and what you expect to be paid. Other then that I could detail about a half dozen acceptable methods for estimating the cost of a part, assembly, product. There are very good books that explain this very subjective art

The most strait forward method is the hard cost method. "very simple example for 1 part"

1 time cost with all rights to cam and cad files reserved until x number of parts purchased!
This cost can very a great deal depending on office and management.

Design labor and cad workstation 30$
Cam labor and cam workstation 30$
Fixture design- build for 1 - 10 parts 10$
Proposal and contract write up 5$
Total............................................. .....75$ for 1 part

Fixed cost per part (first rule of thumb never under estimate the easy stuff like material and tooling)

material including waste 5$
shop time per part 3$ (this cost can vary widely depending on what cost you include ie- power, tools, machines, rent, labor,(pays to understand this cost)
inspection and packaging 1$
Total............................................. ........9$ for 1 part

Total to deliver 1st part 84$

Orders for 10 parts delivered 90$

Orders of 100 parts will cost 800$ This number can be prorated depending on more efficient methods for large orders based on volume discounts for material, tooling, shipping and larger numbers produced per shop hour,............................................. ......!.

Note: I always offer to provide a detailed cost breakdown if the client wishes to negotiate the cost in good faith. This helps develop a partnership to make the product or part they need at a acceptable price point and not just be the lowest bidder. Demonstrating your working in good faith by not over charging or undercharging and providing a stable competitive product or service they can count on is important. In the general contracting business this was extremely important when building complex construction projects like a "precision airport landing system" example You just dont buy this stuff at Home Depot . And many contractors would price themselves out of the job for good reason so they dont go out of business.

[jeffrey001]

These are cast parts, you can see it if you zoom at the image on their website. Probably $3.00 per part if bought in China.

BCMGUNFIGHTER MCMR-SM Quick Detachable Sling Mount M-LOK Compatible)

Jeff

[CadRhino]

BCM pays 1/2 of what they re-sell that part for. The Asian supplier’s cost for making/shipping that part is 1/2 of what they sell that par to BCM for.
It’s just standard part markup with BCM committing to minimums by the supplier.

Unfortunately it is really expensive to make low-end products in the USA.
When that miracle happens there are usually so many ‘Made in the USA’ slogans that’s hard to even see the product.

QUOTE=jeffrey001;2117676]These are cast parts, you can see it if you zoom at the image on their website. Probably $3.00 per part if bought in China.

BCMGUNFIGHTER MCMR-SM Quick Detachable Sling Mount M-LOK Compatible)

Jeff[/QUOTE]

[GLCarlson]

Personally, I would price 10 of them at full price with everything, CAD/CAM fixturing etc. because you don't know whether job is coming back.

Then I would create quote for 500 pieces and credit difference between price for first 10 parts at 500 quantity price and initial price paid. Say 10 pieces where at $100 each so first bill was $1000. 500 pieces are say priced at $20 each so 10 pieces at $20 is $200. Credit of $1000-$200=$800 against total price for 500 pieces 500x$20=$10,000-$800 credit. Make sense?

That way everyone is happy and you don't get screwed if they take job elsewhere. Prototyping is not cheap...

There's an old rule in the job shop world that says never do work for an inventor without getting paid in full. Never do work in anticipation of a future reward, unless you are willing to bet your own money on the idea. This seems to be a good way to handle the problem. Pay in full for the prototype. IF the work comes back as production, get a rebate. Take the production elsewhere, or nowhere, and the shop owner isn't stuck being an investor in a failed business. I would bet that the average inventor will turn this deal down. If one is trying to make a profit as a small shop, that's probably a very good thing indeed.