Pricing...

[geneb]

I was contacted by someone via 100kgarages to do a short part run. When asked about pricing, I quoted the guy $35 for the toolpath work and $1/minute for the machine time.

I explained that for baltic birch, I would be cutting at 1.7in/sec (2 cutting passes @ .25 & .23 and a remove-the-oilskin finish pass).

I haven't heard from the gent since and it's been a few weeks. Is my pricing too high?

tnx.

g.

[cabnet636]

most people i quote have no clue as to how much time it will take and cannot comprehend the cost, it could have sounded like an uncontrolled number to the client even if it was a resonable number. i like to have them come in and run a small test then quote so they can get a feel for the cost of the actual run.

very few if any can comprehend cost in seconds!

[geneb]

Well since I'm a hobbyist with the 'bot, having him just drop by for a test run really wasn't practical...But I understand your point.

g.

[bleeth]

No. Some people just don't get it!! More of those type of customers don't follow through than do. For cutting up a 4 x 8 full of parts I usually estimate 1/2 hr to 1 hr per sheet including cleanup, etc., shrink wrapping parts, etc. depending on the number of parts from the sheet.

[gundog]

One of the products I make are rigging & fillet tables designed for boats. I have a standard line of tables in 3 sizes and I advertise custom tables. Very few people I quote for custom one off stuff follow through. It is funny if they ask how much usually I don't hear back the ones that don't ask how much are always happy with the end product and price.

I find it really hard to make money on custom one off stuff if I charge for my design time toolpathing and material, profit & overhead the price is too high. I make things from plastic and the average person equates plastic to something cheap from China. The tables I make are from Seaboard @ $200 a sheet much more than say oak or birch but if it were made from wood as in furniture they would see why it cost so much when in reality the material is much more expensive. Some people get it and some don't.

If it were me I would price the particular part or parts out by the sheet and let them know the more parts the cheaper the per part number will be that you can spread out the drawing and fixture or tool path time (if needed) will be spread between more than one set of parts. I some time give them a deal if I will use their part for another customer in the future. For example I had a boat company ask me for a quote on some hatches so I designed and made one for a sample they never bought one from me but I have sold probably 30 to other people off that sample and design that I would have never made otherwise.

Mike

[signtist]

I find that you can't explain this to any customer. Don't even try.
You need to simply listen to what they want and throw a price at em!
With some experience, you can guess pretty close.
I seem to do a lot of small jobs for the local shops.......$60 min.
It takes so much time to .......
Get the file
Set up Toolpath
Set up the Shopbot
Run the job
Wright up billing
Chit Chat with customer when they pick it up..........eats up a 1 hour min.
John www.signgraphics1.com (http://www.signgraphics1.com)

[magic]

4 out of 5 inquires are inquiries.

I do the math then give the price, as an estimate which may change based on whether the customer changes the initial design.

[geneb]

So I guess the unspoken consensus is that $1/min machine time is reasonable?

tnx!

g.

[myxpykalix]

I generally don't do outside work but mostly stuff for myself. However i have been contacted and will do things for people.

I don't try to explain a lot of details. I will say "This will take me 4 hours to do (or whatever, and i pad a few hours) and this is the cost...so they know what it will cost.

If you say I charge $1.00/min, my thought goes to "this is an open ended deal and who knows how much it will cost?!"

I have taken a cab on occassion and no matter how hard I stare at the meter I can't make it slow down and i'm sure people envision a meter running in the shop.

Give them a set price basd on (X) hours of work, and pad it a bit and if they are not interested let them go elsewhere.:eek:

[ken_rychlik]

I charge 40/hr for machine time. 25hr for design time or working up files if they are not ready to cut.

My day job is cabinets, but mostly I cut for a local sign shop at that rate.

Whatever you are comfortable doing the work for is fine.

Usually just a quick quote/guess will let them know if they can afford you. The dollar a minute will probably scare them off.

60 dollars to cut a sign, may make them pull out their pocket book, when it's only 30 minutes cutting time. Ya never know.

I did pick up one job from 100k garages that went through ok.

[dlcw]

$1 per minute for one-off retail work. $.75 per minute for repetitive work that doesn't quite fill the bill of repeatable wholesale work. $.50 per minute for repeating wholesale work. $.50 per minute for charitable organization work. $.75 per hour for local volunteer fire department and county government. $47 per hour (no discount) for design time, stock prep time, cleanup time. Disposal fee charged to get rid of the scrap left over (depends on weight leftover and the amount of handling needed to dispose of it).

So far I haven't had to many people puke to badly on these prices.

[gerryv]

Perhaps express your price as a % of what your local car dealerships, plumbers, lawyers, etc. charge and show them a video of how much faster your machine works (along with you at no extra charge) compared to all of the above ;)

[tgm]

We have been charging $1.50 per minute of machine time for commercial work. Bear in mind that covers tooling, material handling (two people at times), scrap disposal, packaging to ship or transport. We go down to $1/ for repeat commercial customers with any type of qty.

To keep it in perspective my appliance repair man charges $50 just to show up and then $50/hr after that.

The plumber charges $50-75 just for the few minutes it takes to unclog a drain and then $75/ after that.

And then there is my local auto dealership that charges $75 just to hook up the car to the diagnostic equipment and anywhere from $65-105/ after that and he is not out of line with the other dealers.

With all that being said there is no way I am going down in rate just because people think we just punch a button and the machine does all the work. You price it where you have to be and that's it.

It makes no business sense when you have to start taping dollar bills to the items you make and ship out.

Tom in PA

[michael_schwartz]

The answer to this question can be quite complicated.

Even if this is a hobby you still have overhead, and you need to charge for it.

Figure what you spend on utilities, rent/mortgage, insurance, building maintenance, tool maintenance, marketing, office supplies, accounting, computer upgrades/software, and whatever other buisness expenses you can think of. Get quick books, and start keeping track of EVERY business expense.

Divide that number by the number if weeks you work, and then by the amount of hours per week you would like to bill out.

Then decide what you consider to be a fair wage for yourself and add some profit for the buisness to pay for new tools, and or upgrades to existing machinery.

If I were to charge $15.00 per hour I cold not pay myself a legal wage.

[chiloquinruss]

I to have a hobby machine, however I do some commercial and charitable work on the side. When I do an outside job I charge $75 an hour for commercial work. When I do charitable work I also charge/donate out at $75 per hour for my tax credit. I have been able to pretty well guesstimate what the final job will be and quote the total final price to new customers. Old customers go by the hourly rate, but i also give them a guesstimate of the maount of time I think the job will take. I just did a very simple job of 80 routed signs. I charged out $8.75 per sign for machine time and $1.25 for materials. They got 80 routed signs for $10 each, or $800 for the whole job. They were very happy with the price and the job and I made my $75 per hour for machine time. Russ

[geneb]

Thanks for the comments guys, it's been a big help!

g.

[widgetworks_unlimited]

The owner of a local machine shop here in my town (30 yrs in business) told me that about 1 in 15 potential customers that come in off the street turn into actual paying jobs.

If you research internet sales, (commercial website, ebay, Amazon, etc...) you'll find that converting 1% of visitors to paid sales is considered above average selling (for most categories of retail goods.)

There's lots of good advise about pricing on this forum, but I haven't heard much about "conversion percentages". Understanding the percentages above helped me. Until you can generate significant traffic/volume of sales leads, your number of completed sales will be limited. Having a great sales pitch, the perfect product, or the lowest price isn't enough by itself.