Machine rental pricing?? Charging comeone else to use your machine.

[tkovacs]

I like Randall's thoughts and here is another example. I just rented a cement mixer at $42/day.
The mixer purchase price is ~$700 so 42/700 = .06 or 6% of the purchase cost per day. Further assuming that one rental day = about 8 hrs of machine time then doing the same for a $20K shopbot:

$20000*.06/8 = $150/hr

Which seems to me a lot more appropriate.

[jhicks]

Terry, I understand your calculation but rarely is a piece of capital equipment depreciated over 12 months. So dont forget to divide by number of years to get a realistic number

[tkovacs]

Jerry,
I'm not pretending to be an accountant but I would think that if one were to factor in the deprecation cost one would need to do it on the mixer rental example too and it would factor out in the final result.

In any case I think a significant issue is that this is not a long term lease agreement or a cost of equipment calculation but an hourly rental cost and they are very different.

Here is another take:
How many hours would it take a skilled worker to to what the bot can do in one hour? If we assume $30/man-hour then the $150/bot-hour would translate to 5 man-hours/bot-hour. I would guess that in most all application that a factor of 5 is conservativly low.

[jamess]

http://www.sawdustshop.com/CNC_ShopBot.asp Go look here this might help!

[tkovacs]

James - Interesting numbers. They do come with some conditions though:

Restrictions:
The ShopBot CNC Router is intended for non-commercial use. This basically means we don’t want you using it to mass produce items that you then sell, or use it to start your on side business as a sign maker or cabinet shop.

[jamess]

Terry, this is true I was just putting it out there to show what others where doing...

[tkovacs]

James - I did not mean to imply that the numbers are not useful. Actually after re-reading the original post and considering that Tony runs this machine routinely I would say that the $45/hour is quite relevant.

[odulfst]

Thanks James,
This looks like it says they are willing to rent the machine at $45/hr for short term use. I'm not sure what they mean by 10-hr/30-day member I guess that applies to the whole shop time usage, and then you tack on $15/25/45 for shopbot time. I guess you have to tack on some extra since I'm pulling a profit, but something in the %50-100 range is looking reasonable.

Jerry, Thank you for the supportive words! I like lots of those ideas, especially a customer appreciation plaque

[myxpykalix]

You know i've been reading all these calculations and estimates and they all have their own merit but Tony hasn't told us and no one has asked what he is making on the bot.

It only stands to reason that if you have a product that takes one hour to produce, and you sell it for $25.00 you would be crazy to pay $50.00/hr for time on the bot.

So my first questions would be:

How long does it take to produce this part?

How much profit (deducting material cost only) do I make on each piece?

You now have a subtotal of your profit margin.

Take your profit margin and deduct whatever percentage you think is fair where you make a reasonable profit for your work. I would calculate 10-20% for the use.

[odulfst]

The reason I haven't talked about exactly what it is I intend to make is that I have future plans for making different thinks and I don't know how representative this run will be.

I suppose a good place to start would be profit/hour, and then go from there. I'm haven't quoted this job yet, so I'm sure on profit/hour....but I'll figure that soon.