Pricing Feedback for cutting only

[nick]

Hey Guys, Just wanted to get some feedback on my pricing structure. I've been doing alot of fluted moldings for local builders. I've priced 5/8" flutes @ .25 per lin ft, which comes out to be $1 a min cutting time on customer supplied material. How does this rate? I've been also doing alot of sign blanks. Just did 1000 pieces of 3/16" gatorfoam which I cut 12" disks for $.69 each on customer supplied material. Cutting time was 28 seconds. How do I rate?

[john_l]

If we are gonna use it, we like to see at least about $800 a work day as a result of our investment in the "blue guy" (Shopbot). About $100/hr machine time. Computer work is billed and estimated at $65/hr. Paint and finishing the same.

[myxpykalix]

As far as pricing is concerned if you ask 100 guys you will get 100 different answers.

I have averaged cutting things that pay me as little as $10.00/hr and as much as $100.00/hr or more.
My attitude is price your work to where you feel like you are not getting taken advantage of. Lots of guys won't turn their bot on for less than (X) dollars an hour and i feel like if you could use that job to pay your rent, you do what you have to do to feed your family if that includes eating a slice of humble pie, well so be it.

[dakers]

i had a friend who grew up in orphanage in the depression. he told me it is not what you make that gives you financial independence it is what you save and what you do not spend money on.
i did not agree and now i have a very high burden rate. i thought it was what i made but maybe i am half right but the part where i am half wrong is not helping. i think burden rate, how many hours you want to work, add in non productive time, vacations, hospitalization, etc is key thing to watch for pricing. some can survive on $40. per hour. At $70.00 per hour (actual production hours) i would not be making enough. there is a formula that fits you and you can find it but find it as fast as you can and adjust it as you go. Spend some time each week meditating on the burden rate pricing ,efficiency, economy of movement, sales, marketing, family, health, etc.
my brain hurts.

[cabnet636]

well said !

jim

[john_l]

I also like to consider; how would this job be done if I didnt have the cnc to do this so accurately and quickly; if I didnt have a fairly good grasp of the software it takes to control this cnc; if I didnt have the ability to stroll to the other side of the shop and grab another dedicated tool that it takes to complete this, etc etc etc.

In other words, I dont always reduce it to me competing with another cnc shop down the street. Sometimes its me being competitive (by a large margin, sometimes) against the customer's other choices to do the project.

Most important, if you are in business, please don't give it away.

[navigator7]

The market place is a rewarding and fickle thing.
I owned a concrete pumping biz.
I set up shop in an area I loved but it was sparsely populated but no real competition.
I was real conscious I could charge triple my normal rates but sooner or later I would invite unwanted competition.
I could also charge way less for my service and be my own stiffest competitor. Even if I worked for peanuts.....it wouldn't change my utility.

Only the man doing the work can control what he is worth.
Sometime I chose not to work cheaper and didn't work at all.
Running a machine for free when you owe money is not wise.
Working at a reduce rate, however, is called "advertising and promotion". Reducing your tax burden can be helpful is you are making money.

Life was good and so was biz. In a few months my market, my customers, my world got flipped inside out. The trees the rocks and the dirt is still the same...there just isn't as many humans plying the roads in the morning going to work. Dick talks about burden. I was burdened as I didn't own the equipment outright.

Still...I'd do it all over again. This is still America.

[Gary Campbell]

Nick...

We have been paying attention to this lately as we are contract cutting for other shops. This is a nice supplement to our existing work, which is less then desired.

Most of our sheet cutting prices average either side of $30 per sheet. In some cases we have a premium for certain parts, but $30 is a good average. We are able to average between 3 and 4 sheets per hour. This is a CYCLE time not cutting time. Time to load, unload and clean table must be considered when doing multiples.

Since we done a good number of this type job over the last couple months, I was able to enter our billing times, as decimal hours in for every operation into an Excel spreadsheet. These decimal operations multiply by an hourly rate which can represent differences between customers or wholesale/retail. All components, hardware and their assiciated labor have a unit charge. This allows us to bid most any job, once designed in eCabs, in under 5 minutes as all input info comes off the eCabs Cut List.

So along with cabinet cutting, we offer slab & 5 piece doors, dovetail & lap joint drawers, edgebanding, hardware mounting, and cabinet assembly to our neigboring shops. It appears both sides of the equation are happy.

Good unit or product cutting prices come from good records. Take the total cycle time for your cut products and divide by the hourly rate you desire to charge. This will give you a unit price.
Gary

[JR959]

Gary, this JR. New to shop bot but trying to determine is shop bot would be a good alternative to to the higher cost thermwood machine i want. I plan to use the ecabs link and will be trying to use the machine turn key for all cutting, drilling etc. sounds like you are running a good bit through your machine. Which machine are you running? My expected volume is about 1-3 kitchens a month (hopefully) and each kitchen typically burns up about 30-40 sheets and about 10-15 sheets of 1/4" for backs.

[garyc]

JR...
I have since sold the shop and have taken a position at ShopBot. Part of my work with the Production Support Program is to help shops like yours make that decision and provide support should you implement a ShopBot into a production environment. I also do a lot of the eCabs and ShopBot Link tech support.

I will be in the office tomorrow, give me a call and I can answer sny questions that you may have.

888-680-4466