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What would you have charged ?

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Re: What would you have charged ?

Post by vmax549 » Sat Jan 02, 2016 2:22 pm

IF anyone in that region has a spare SCOPE you could spare he could use one. I am almost exactly on the other side of the planet from him and cannot be of much help that way. He has a family to support and is operating outside of his formal training ( electronic controls)to earn a living. Helping to get him back in line with his formal training will help everyone here to some extent.

Just a thought, (;-)

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Re: What would you have charged ?

Post by beefy » Sat Jan 02, 2016 3:49 pm

Thanks so much Terry, Shane, Sean and everyone else for your input. It's great seeing the differences in thinking and logic.

Was I happy with making $1000 for this job, I guess I was BUT if the market can allow me to get more and (most importantly) still keep customers coming back, that's the price I'm looking for. My biggest fear would be getting a great price for the first job then never getting any repeat work after that. Long term repeat income is what has always kept me alive.

At the end of the day this job was easier and much more profitable than my crap excavation business. Not a higher income but more profitable because I don't have the same costs so I keep more of what I make. Less risk, less capital investment, less running cost, no travelling in peak hour traffic, not as tiring, it was quite refreshing. If I could get a full weeks work at this income rate I could gross over 3k once things were made efficient to speed up the process. I never get that in my excavation game with its much higher overheads, stress, and risk (I'll shoot anyone who thinks you just sit in a machine and pull handles :D ). Not operating to others schedules was great too.

Of course the big question is could that pricing support me in a small commercial space where I'm paying rent 52 weeks of the year, plus whatever other fixed overheads I'll have.

Terry, I've came across your experience of what you typed just vanishing (quite a few times). On this forum it seems if you do not submit a post within a certain time period, you get logged out and when you go to submit the post, it just vanishes. I've done some rather nasty cursing when that's happened :lol: I'll sometimes write the post in a word processor then copy and paste it to the forum, or copy if from the forum to the word processor as a backup.

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Re: What would you have charged ?

Post by hsolve » Sat Jan 02, 2016 7:50 pm

Good morning gentlemen. There seem to be some confusion with my last post, so to clarify here goes.

SeanP The simulation in sheetcam once run with the post processor that you are using will give you a total run time for the part in seconds. Once you know your operating costs in $/hr just appropriate the run time of the job. In the example of beefy if the run time was 13 min to cut a sheet the cost would be (220/60)*13. this equals about $48 per sheet. Which is pretty close to what beefy charged.

Thor You might have overlooked a critical factor. It is not the $220/hr total time being used for the cost calculation, 8hr day gives $1760 Au per day. It is the run time of the process, as have explained by the costing above for SeanP. On larger jobs there can be some process to make the operation more efficient. Whilst the machine is cutting preciously cut parts are being stacked, cleaned and more material being prepared. There is much more time being consumed than just cut time.

Vmax. Yes you are absolutely correct, and yes beefy did learn from this job, each operator has his own costs of operating. I have to consider I have my own premises which I have to account for. I own all my equipment so my operating costs should be low. The one thing to consider is the cost of equipment recovery, things will eventually require replacement and where dose the fund for that come from. If I wasn't competative in my pricing I would have been told. I did make an error on one part I had quoted a customer and he informed me so. He asked me to check the pricing on that part as all the other parts were very similar to other companies. It has also been a learning experience for me. As how do you know if you are charging the correct amount, yes you want the job, but also want to get the correct money for it. This question has been round for a millenium :D

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Re: What would you have charged ?

Post by SeanP » Sun Jan 03, 2016 5:24 am

Thanks for pointing that out hsolve on the simulation, don't know how many times I have used that and not really noticed it was giving that info.

I originally set off with a spreadsheet based on job report 'cut times' but ended up drifting towards an hourly rate for the whole job, it's when you get a large volume job it would be useful to have something more accurate to quote with.

I was just working on a spreadsheet based on cut lengths now, you have me thinking now!

Sheetcam is accurate at the times if all goes well, but most of my jobs seem to take a good bit longer :) so guess that's the need for a higher rate.

Many thanks there are some good tips on here, but I still don't think US and AU rates are equal to what I am likely to get here in Kerry.
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Re: What would you have charged ?

Post by _Ogre » Sun Jan 03, 2016 3:53 pm

I'm wondering how much stainless is worth as scrap value too.
stainless is the only metal worth recycling, we barely make gas money on a truck load of steel scrap
stainless is where all the cash is, save every small scrap of it :mrgreen:
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Re: What would you have charged ?

Post by muzza » Sun Jan 03, 2016 7:21 pm

Current scrap prices at Southern Cross Metal Recyclers for high quality scrap, Aluminium $1.10/ kg, Copper $4.50/ kg, Mild Steel 0.80/ kg (minimum of 1 tonne), Stainless Steel $1.00/ kg

My local scrap guy will only pay half price for any steel scrap if it has stainless in it so we throw it in a separate pile and he takes it away for the same price as steel with it separated. Maybe there's not as much market for it here in Oz.

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Re: What would you have charged ?

Post by motoguy » Thu Nov 24, 2016 12:47 am

Shane Warnick wrote:
beefy wrote:
Shane Warnick wrote:I need to know what a sheet of that steel would cost you before I can tell you what I would charge in your market.

This job was cutting only Shane. The customer dropped off the steel at my place and they will be picking up the cut parts.

I initially got a price on the steel and the first quote was $7200. I didn't look any further and told the customer I'll price for cutting only, they deliver and pickup.
EDIT-- I did not convert from AUD to USD when I did these figures, I will make another post below with the new numbers. Same principal, just less money in USD.

I needed to know material cost to figure cutting cost, as I use that to figure risk exposure and build that into the charge, so if I have to eat some material (that I screwed up) I don't get hosed on the whole deal.

I would be at $106.80 PER SHEET just for the cutting, then I would be at shop labor rates ($60 / hr) for unloading the steel off the delivery truck, loading it onto the table, unloading the skeleton, and reloading the scrap / skeleton / drops if they were taking that along with them. I would also charge the shop rate for removing the laser shield, as you found out it is quite a pain in the ass. FWIW, you can cut with the plastic on, but taking it off after cutting is 10x worse than before. However, depending on what they are using the parts for, they may not care.

I figure 15 minutes to unload with my tractor, 15 minutes per sheet for loading on the table / unloading (10 going on and 5 coming off), and 5 minutes per sheet for the laser guard removal (the plastic junk). So total shop labor would be in the neighborhood of $475, cutting would be $2456.40, so all in I would be around $2931.40. That's at $0.15 per cut inch, same price for each pierce, at 705" of cut per sheet. As I stated above, I would be at $60 / hr for all other operations, excluding grinding on stainless. If they wanted me to clean then, then that would be the same labor rate, plus abrasives marked up at 200% cost. If I was to supply the material, I would have marked it up 25-35% over cost, however all the other operations would be included in that price, so I would have marked it up 25% if no grinding required, prob 35% if they wanted clean parts. So, if I provided the material, it would have been $9000 for the material, then $2456.40 for cutting, so all in $11456.40.

I would say I could do this job in 10 hrs working straight through, maybe, MAYBE 12 hours if I was working slow, the phone was ringing, etc. If I used $50 worth of consumables, and $50 of electricity, I am still only in for $100 if they provide the material. Even at 12 hrs labor, I am still making over $200 / hr for profit. If I provide the material, I increase that about $110 / hr, if it takes 12 hrs.

Back to the risk exposure, I use the cost of material (and my subsequent risk exposure) to figure cutting cost. You will notice, that based just on the cutting charge alone, if I eat 30% of the material, I still don't lose money. I may work for next to nothing / free, but sometimes that's the price you pay for experience. Better to not make money, than to lose money. Long as your customer gets their parts, and you came out smooth, if you learned something, you are still ahead.

One last thing, the laser guard / plastic peels off easier if it's hot. Either leave it in the sun, of hit it with a propane weed burner or handheld torch (on the side opposite the plastic) just enough to bring it up to 125-130 degrees, and the plastic will just peel right off. Below about 95 degrees, it gets harder to peel, below 65 degrees, it sucks, and ends up tearing apart more than peeling off. That is frustrating as hell, ask me how I know.

I have a customer wanting some 1/2" parts cut, they supply material. He's actually a far larger fabrication shop (no CNC equipment, though), and can get metal for less than I can, so it makes sense that he wants to supply it. However, this means I'm now trying to figure pricing on a "cut only" job. I'm trying to work backwards, given the supplied information, to see how Shane arrives at his "cut only" pricing. I consider Shane to be my "pricing guru"...the guy seems to use formulas, and that's my style. I don't like "off the cuff" pricing. :)

We're told 23 sheets of 90.5" x 48"material. Quoted price was $7200 for all the material. So, $313.04/sheet, or $0.072/sq inch. Doubling that gives us $0.144 per sq inch, selling price.

We're told 705" of cut, and 7 pierces. With per pierce cost = cut inch cost, let's just say 712". Shane says he's at $106.80 per sheet for cutting, so $0.15 per cut inch (or pierce). I'm assuming that's just the $0.144 rounded up (because...why round down selling price? lol)

When cutting customer supplied materials, it sounds like you use the regular pricing formula (based on whatever the sheet would have cost you), and simply charge hourly labor for all handling of the material, services (grinding, etc), or any other "non-cutting" work (which would have been included in/covered by the material markup, otherwise). Is this correct?
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Re: What would you have charged ?

Post by Shane Warnick » Thu Nov 24, 2016 7:20 pm

That is correct, but you have to remember YOU have the risk exposure, especially when the customer supplies the material. Make sure you are making enough on the job to cover extra material if you mess some up. Better to work for experience and break even than to get experience and have the job be cash flow negative.

You are correct that I charge based on my material cost for the cutting, and then everything else is by the hour. If I am making money on the material, loading and unloading is built in the price, as is basic clean up (dross removal only). All other secondary operations are extra, such as bundling, sand blasting, paint or powder, delivery, etc.

If a customer supplies material then as soon as I get up to unload their steel, the clock starts. Same with taking skeletons or drops and cut parts off the table. If there are drops you want reloaded, I figure what I think it will take to reload them, then I add a little, and include it in the invoice.

Customer supplied material, on large jobs, is one of the few times I don't require a deposit on the job. I figure if they are dropping that much material off they have enough skin in the game to come back.

The only real price break I give is on sheet level quantities, since it gets loaded on the table once, and there is no drop to keep up with, skeleton goes in scrap pile, then I usually cut them a break on my markup on material. These are always good customers that buy set quantities of parts every so many weeks, and come back over and over, so I keep them happy.

I will do a small break on large quantities of items, but if there is lots of small parts, the break is I don't charge extra to clean them all (tumbler does it well enough). Multiples of larger items, usually thicker plate, I will knock 10-15% off material charge for the job, cutting stays same.


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Re: What would you have charged ?

Post by motoguy » Thu Feb 09, 2017 12:01 am

Once again, reviewing Shane's pricing wisdom. One of my metal suppliers wants me to cut some decorative work for them (large butterflies...6 to a 4x8 sheet). When he first mentioned this (I was there picking up some 1/4" AL), they just wanted patterns out of 1/8" steel (~$80/sheet)..

I'm not good with off-the-cuff quotes yet. When he was hitting me up, I just said "let me take one of your patterns, and I'll get you a solid quote". His response, "OK. I just wasn't going to waste your time if it's $100 each, or something like that." Noted.

Quote was $25 per part, $15/$30 per unique design for digitizing (depending on if the drawings could be quickly auto-traced, or hand traced), $15 per sheet setup charge (6 parts per sheet), they supply and deliver material.

I must have been too cheap, as they called back today, asking if I could cut the finished part from 1/4" AL, vs just the metal templates for them to use. Rerunning for 1/4" AL ($320 for 4x8 sheet), the per part cost jumps from $25 to ~$78 (plus digitizing, plus setup...only wants 2 sheets worth).

I'm curious if, based on his previous comment, that will kill the deal. I came here to review Shane's info AGAIN, to see if I was being unreasonable. Looks like I'm not...the extra $50/part is due to the risk exposure from 1/8" steel ($80-ish per sheet) to 1/4" AL ($320 per sheet).

They do hand plasma cutting (that's why they wanted the steel templates), so I can already hear the "it doesn't take any more to cut the AL than the steel" comment. They also own a business, and I mentioned that the AL price would be higher due to consumable wear and price exposure for material.

I guess I'll find out tomorrow. As long as I'm being fair and reasonable, I'm comfortable with the bid.
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