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Thread: Shop hourly rates?
08-20-2005, 10:16 AM #1
What is a fair hourly rate for a machine shop? I use several machine shops in my area and the rates vary quite a bit. My experience is that the smaller shops are not necessarily the cheapest and the larger shops don't necessarily do the best work. It ‘s not always practical to get a job estimate when you have equipment down so we bite the bullet and authorize the overtime. I guess I am looking for an average hourly rate from different parts of the country.
08-20-2005, 10:34 AM #2
Don't look so much at the hourly rate, as at the per part price.
A shop with the right guy and the right tools may charge 50 and hour and have it done in 2 hours. 100$.
A shop with unskilled people, wrong tools, may charge 25$ and hour, and take 10 hours. 250$.
Personaly my hourly rate varies with the work. I have a base rate. Then If its something I know is going to take longer because I may not have the right tool for it, and have to reset up, its a bit less. If its something I really don't want to do, and expect problems, its more.
I prefer to charge per part, or for a total quantity. " do you want to pay this $ for this part?, if yes, then good, if no, byebye "
I don't care much about competing for the lowest price. I prefer to compete for quality, at a reasonable price that makes me happy. I could hack things up and make it cheap, but then I wouldn't be proud of my work.
Most places have their reputations. Look for a place that is fairly clean and that has equipment that is well maintained. Not necessarily the newest most expensive equipment. It can be old equipment, but well maintained. If they care about their equipment, they should care about what they make with it.
08-20-2005, 10:59 AM #3
Back in the early '60s I worked in a shop during my apprentiship. This shop made parts for the Army during The War of German Agression, Phase II.
Anyway, one day I was cleaning in the office when the owner opened a RFQ for some replacement spare parts for tanks. They wanted 40 of these very large things. The assnt. boss decided that bidding on them would interfere with current production so he advised the owner to pass.
At which point the owner said something along these lines: "We don't want the job, but we do want the government to know we still want work. So figure out a cost, double it, and submit that. We won't get the job but we will stay in the game."
And if I misremember right, the estimate was about $42,000 so in goes a bid for $84,000 and, of course, no one else bid so my shop got the work anyway.
And do you think they reduced the cost to the government? Naaa... but the shop did go out a buy four new Bridgeports, two Reed surface grinders, and leased one big-assed lathe to do the work.
Ain't life weird?
08-20-2005, 12:47 PM #4
Per hour In this area.
Hardwood floor instaler, entire floor $100, small repair $250
Independent auto mech $85
Dealership auto mech $100
Diesel mech $125
Dentist $$$$$ Emergency 3X$$$$
Average MACHINE SHOP $35-50
08-20-2005, 12:56 PM #5
one shop around here charges hourly each machine has a different rate.
vert mill might be 35 hr
big lathe 65hr
but he uses a time card system employees punch in for the job and punch out when done. I used to work there buissness got real slow so he fired or laid off most of his workers. It was a
part time deal anyway.
materials and shop supplies were written on the cards that was extra
08-20-2005, 01:12 PM #6
Like SND says, I don't know how machine shops can charge by tyhe hour. There are so many variables that your price per piece can be way off from shop to shop.
That would be like my foundry quoting a price of $50 an hour to make a casting for you. Its laughable because there are so many different ways that we make molds and pour them. Do I count melting time in the hourly rate? Do I grind the casting myself which would take 15 minutes or give it to one of the flunkies who normally do the grinding and charge for an hour? We charge by the pound or by the piece depending upon what we think it will cost to make it plus a bit more for profit margin. Then we add the cost of patterns and heat treating if neccesary.
So tell me how a machine shop can charge by the hour? It has to be a per piece rate or there can be no apples to apples comparison.
08-20-2005, 01:21 PM #7
Around here it gone up some to $55-$60 for repairs & job shop work it was $48-$49 back in 1995.
A dollar a minute makes it easy to figure out the bill.
08-20-2005, 02:22 PM #8
What I have done in the past is tell them what a new part would cost me if I ordered it from my suppliers. I don’t show all of my cards by telling them that it may take me six weeks to get this part. Lost production would kill me if I had to wait that long. Most instances they will machine the part in a fraction of the time for the factory cost or sometimes less if I don’t rush them too much. Some shops will check the availability and price of the part and then I loose the upper hand. Overall these shops do excellent work, but once in a while they fail. Last week I had a compressor rod built for a gas compressor. This kid machines these every day of his life and missed a cheek cut on the backside of the piston. This cut is critical ,because you cannot space the piston properly and the unit will knock like a hammer mill. We lost two days production because of this , but those things happen to us humans. The kid felt really bad about this and it’s funny that we always remember the one screw up , while the other 350 rods that he built for me worked perfectly. Sometimes I have to count to 10 and remember just how good a job this kid has done in the past.
08-20-2005, 03:11 PM #9
Yes hourly rates are very hard to work with. I do almost everything by the job. There is a shol here though that is posted at $75.00 an hour. When I think what all I can do in an hour, thats a bargain.
I also so excavaing work for swimming pools. Every one is by the job, not by the hour.
People try to ask my hourly rate, then they would try to get me down on the price if it would be less time. Some people tell me that the average rate for excavating is $50.00 an hour, it only took you 3 hours why is it $295.00? I tell them I work 4 times as fast as everyone else, because I am not trying to drag it out. I say if you want, I will work by the hour. But this job will take 10 hours.
Hourly rates mean nothing. It all depends on the quality of the work and the price at the end. Find a shop you know and like, and stick with them.
08-20-2005, 04:36 PM #10
This is one of the better threads in a long time.......SND, Access, Mebfab, you all had me ROFLMAO
As many have said, the price per hour indicates nothing. Twice this last week customers brought in jobs that they needed NOW. My rate for NOW work is $112.50. Here's the math:
Base rate, 8-5, two week delivery, $50/hr
Base rate, 8-5, one week delivery, $60/hr
Base rate, 8-5, NOW delivery, $75/hr
After 5 p.m. or Saturday, add 50%
Plus tooling and materials.
Both customers groaned, looked pitiful (which really tore at my heartstrings) and authorized the job. Job one took 5.25 hours, including delivering the parts to his factory, 25 miles away. Job two took 4.0 hours.
Both jobs were started after 5 p.m., when I'd rather be surfing eBay or riding the Harley. I would have been just as happy to have done neither one, but when the customer pays 2.25X base rate, what do you do?
Gotta keep the customer in business if you want to stay in business. Even if it means doing a job you don't want to do at an inconvenient time.
08-20-2005, 05:11 PM #11
That's a tough one, I would say I bid at
$50 an hour as a rough starting point, but I
never disclose that to the customer. I always
quote by the job and quanity, like 5 are $45.00
a piece , 20 are $37.50 each, blah,blah,.....
I have seen $75 an hour shops run CNC Lathe
parts at 3 minutes each that I run in 1 minute
each, so I could be a $25 hour shop. One the other hand I bid something at 3 minutes at $50
an hour and when I got the job set-up and running
I lowered it to 1 minute with a 1/2 hour of tweaking and it was a 20 hour run, so I guess
I was a $150 an hour shop then. So I guess we
should call it "bid rate" instead of "shop rate",
will that work?
08-20-2005, 06:21 PM #12
I am seeing a pretty good spread in pricing, as I am experiencing with the local shops. I suppose the larger shops have more overhead than the smaller shops, but my experience is that the quality comes from the guy standing in front of the lathe. I like Barry’s prices since they say “ Rush me and you pay for it” and that is a given.
A while back I saw a sign above the counter at a motorcycle shop that stated their prices. It read Labor is $50 per hour, if you watch its $75 and if you help its $100 per hour. I visit a machine shop for one reason and it’s has nothing to do with the cost. In the past I have sent work to a shop as a rush job and the manager tells me that it is no problem and we will work on it tonight. What I find too often is that the crew was up the previous night until three am on another rush job. These guys look like zombies, but the work in most cases is excellent. I am not uncaring and had I known this, I would have sent the job to another shop. Is this a common practice for the machine shop business? Personally, I would rather a shop turn down a job, rather than overwork it’s employees to the point of exhaustion and possible injury. Would you turn down a job in the same situation?
08-20-2005, 07:26 PM #13
I have a part that I run every couple of months or so. It weighs about 1/4 oz. and is carbide. I have to run it on a $600,000 machine. I bid the part at $600 and I think I am losing money. I always bid by the job, not the hourly rate.
My dentist charges $145. now for just teeth cleaning. Most elaborate tool used? .. a dental pick, a small vac to suck up saliva and a small dremel type of thing that smears on the abrasive cleaning paste. This whole affair takes 20 min. ($435/hour) yeow...
08-20-2005, 07:35 PM #14
Had a root cannal done approx one year ago.
Had to pay up front for the first visit
$65.00 for 10-15 minutes for him to look over the tooth and tell me what he was going to do.
As I was leaving the girl on the front marble desk gave me a sheet with the min price for the next visit $500.00
Went back next week,45 minute it was done and in total $565.00 for one hour!!
ps Charge as much as possible!!
08-20-2005, 07:39 PM #15
Depending on which customer we deal with decides what rate we can charge per hour.One of our customers we have to quote as low as 40/45 per hour just to be competitive.Usually, we take a small loss doing their work but it keeps cash flowing through the bank.Another customer we quote 90+ per hour & it is because of them that we are in business.But for the most part we try to get 65 per hour from everyone inbetween.
One little trick I have learned: If I see a job & know I can do that job in let's say 6 hours.Take 6 x $65 = $390 Then I'll either round up or down to the nearest 50/00.In this case I would quote $400.If it was 7 hours then I would take the $455 and round to $450.My customer has never questioned the price once,because when he does the math he assumes I am quoting $50 an hour.So he's happy thinking he's getting a great rate & I'm happy knowing we are getting $65 an hour.
08-20-2005, 09:46 PM #16
Most of the better, larger shops around here pay an experienced person $18 - $20 per hour. On average they charge an hourly rate of $68 per hour. Neither the machinist or the owner gets rich at that rate.
As Motorworks said "ps Charge as much as possible!!"
08-21-2005, 08:16 AM #17
who cares what someone charges per hour? I have seen different shops with the same rate that vary wildly on total cost for the same job. I had one weld shop we used to use that varied wildly on the same part at different times, all with the same time constraints. What matters to me is what they can get done in that hour which is the actual part price. Having some one do the job on time and material is a blank check purchase order.. No thanks on that one.
08-21-2005, 10:16 AM #18Would you turn down a job in the same situation?
08-22-2005, 12:52 AM #19
Most of the time I work for Time + Material with a shop rate of $35/hr for automation work. I'll charge $40 or $45/hr (still cheap) when I retire from my regular job and work my shop full-time.
08-22-2005, 01:55 AM #20
I've heard the dollar a minute figure thrown around, and been told "more or less" after it, as a "ballpark" figure, when i was thinking about having something done.
the one shop I am familiar with, theres a bunch of guys of various reputations, and soem of them come and go, and some stay. This ONE guy, I think he's top dog. Now that I am learning basic terminology, I see the other guys "rough it", and if it needs precision hands, he does the critical finishing or what not, and no one is allowed to touch (literally...lol) "HIS" new machine.
the "+/-" specs can affect the price significantly too. The "top dog" guy said the tighter the specs on the funny papers, the price goes up accordingly.
I think management figures that if its run of the mill stuff, to runof the mill specs, any opf the guys can handle it, but if you want it to insane tolerances for that special "one off", youre tying up his "top dog" so it naturally goes up if TD spends all night making youre part.
In that shop, TD has a big red "S" on his shirt, lol, and he seems rather indispensable there. If I had the money, I'd buy him a couple new machines and rent him a space and let him make me money. I'd be willing to bet he would bring happy clients with him.