Page 1 of 3 123 LastLast
Results 1 to 20 of 45
Like Tree18Likes

Thread: Locked into an industry....how to break free?

  1. #1
    rockfish's Avatar
    rockfish is online now Titanium
    Join Date
    Aug 2006
    Location
    Munith, Michigan
    Posts
    2,020

    Default Locked into an industry....how to break free?

    From the time I started my shop, I have basically been locked into the machine tool industry because of the contacts I had made over the years working for a machine tool builder. When I first opened my shop, because of a contact I had through my uncle, I got into a place that made refrigeration fittings.........and we began making them. It was good, stable work....but unfortunately, the customer went out of business. So......there went my only "production" customer. Since then, with the exception of one prototype customer that usually orders parts in quantities of 30 or less, I seem to be locked into onesey-twosey type of work and I need to get out of this. Small quantity work like this is good work, and usually pays well, but it takes a lot of work to keep things going.......and there are too many ups and downs. Right now, most of my customers are in between orders, so they aren't ordering parts, making things ultra lean at my place.

    I guess my question is, without contacts, how do you land production type work ??? Most larger customers won't even talk to me. I don't have the quality certification needed to get into most businesses, and because of the size of my shop, most won't even take me seriously.
    What should I do???

    If I can't figure out a way to land some production customers...........my shop will never go anywhere.






    Frank



    Home

  2. #2
    alkometal is online now Aluminum
    Join Date
    Dec 2007
    Location
    schoten belgium
    Posts
    194

    Post

    i am in the same position somehow but i like the one and twosie stuff. i cant focus myself to make the same parts over and over again i get bored pretty quick unless its running automated.
    its very hard to organize all the one and twozie stuff because some parts can only be made on a specific machine i also cant run multiple machines at once because cycle times varys from 45sec to 15min max.

    the only way i see to make some decent money is to automate with pallet pools
    the only disadvantage isq you have to spent nearly 500k to start making some money

    the only way i know to get into production work would be advertizing in magazines or something.

    but you also need some serious equipment to meet the prices for production work atleast thats how it works here.

  3. #3
    JimGlass is offline Stainless
    Join Date
    Jan 2003
    Location
    Genoa, Illinois
    Posts
    1,420

    Default

    Frank;

    The way I see it we need to be able to do whatever comes along. Doing a wide spectrum of work keeps the phone ringing. Special tooling, one offs, jigs, fixtures and special machines. Even some automation.

    My claim to fame was Tool & Die Maker but in 1994 I went back to school to learn Programmable controllers and electronics. After that I learned CNC then CAD.

    I'm proficient at both manual and CNC machining. Now I have wire EDM and expect to make money at that.

    Good at just one thing just does not work anymore.

    Jim
    smallshop, advt001 and Laurentian like this.

  4. #4
    CBlair is offline Diamond
    Join Date
    Sep 2002
    Location
    Lawrenceville GA USA
    Posts
    5,081

    Default

    I know what you mean, I havent even been asked to quote a production job all year. Lots of new customers this year but only the small orders, actually the small orders are keeping me so busy I dont have time to seek new customers. Kind of a like a reverse chicken or egg problem.

    I do think that many people are just lucky and before they start their shop or some time soon after they start it they get that one good customer who keeps them busy. For the rest of us it is just keep making good contacts and asking around. I dont know any other way.

    Locally there was a guy who started an industrial networking group. Great idea, get customers, purchaser's and vendors together at one time once a month. However three years of monthly meetings and I still havent gotten any real work out of it. The companies with money just dont take the time to show up at those kind of things. Just lots of vendors looking to sell insurance or bolts and lots of engineers out of work looking for contacts. The engineers have gotten me some work but only the small stuff.

    When you figure out the secret, write a book and sell it to the rest of us, make yourself a fortune.

    Charles

  5. #5
    adammil1 is offline Titanium
    Join Date
    Mar 2001
    Location
    New Haven, CT
    Posts
    3,171

    Default

    Quote Originally Posted by rockfish View Post
    I got into a place that made refrigeration fittings.........and we began making them. It was good, stable work....but unfortunately, the customer went out of business. So......there went my only "production" customer.
    What about the defunct product line of the customer that went out of buisness? Just because their product line may not have brought in enough money and buisness to support their line of work is there still enough profit to allow one guy to come in there and revive the product line? Sounds like you already know how to make the parts, do you know the buisness? I don't know how big of a company they were but maybe you have a contact there who knows the buisness that too would be looking for work. If still something left of it maybe you could partner, you make the stuff he designs/sells it?

  6. #6
    SND
    SND is offline Diamond
    Join Date
    Jan 2003
    Location
    Canada
    Posts
    9,250

    Default

    Production of the easy stuff in high quantity has deadly low margins even for the shops that are best at it.
    Production of high cost items that are more demanding, takes a shop with millions in equipment, more certifications, lots of good employees, and balls made out of diamonds, and even then there is plenty of competition and the chance to lose the contract any day.

    I got lucky a few times before with quantities of a few thousands either doing modifications, or small parts in the couple dollar range, knowing fully well a screw machine shop would do them for 2 cents, thankfully there was none in the area, but that work is gone. There can be decent money in doing 1 or 2 of if you price it right and time things well. Turns out there's also good money in repair, if its the right type of repair and you bill properly.

    Either way, all you can do is try to find new customers, maybe eventually one bites and has work you like more and that pays ok, and maybe they don't. I've tried a bit now to get work for my new cnc and none of it turned into anything, and that's even with 5-7yr customers.

    Lets not forget things are still pretty dead in the industry, lots of customers just trying to stay afloat and I don't see that changing anytime soon.
    Machinery_E likes this.

  7. #7
    rockfish's Avatar
    rockfish is online now Titanium
    Join Date
    Aug 2006
    Location
    Munith, Michigan
    Posts
    2,020

    Default

    I should clarify that I'm not necessarily looking for work in quantities of thousands, as I realize it takes a VERY sharp pencil to make any money at that, and I absolutely would lose my ass on that type of work. I consider any run over 50 pieces to be light production work. I would LOVE to find a customer that released work in the 50 to 500 piece quantity. Unfortunately, I'm stuck doing a bushing here, a tubing spacer there, a bearing cap, a locating block, blah, blah, blah.

    It takes a lot of work like that to keep going.






    Frank

  8. #8
    Bobw's Avatar
    Bobw is offline Diamond
    Join Date
    Feb 2005
    Location
    Hatch, NM Chile capital of the WORLD
    Posts
    5,504

    Default

    Hey Frank,

    I think the only real good way to a steady income is with your own products.

    We've got a few small stupid little things that we make over here, and they have really helped make it through the lean times. When times are good(and the PO's are rolling in), keep the stuff at a fair price, and then when times are lean, we have a fire sale, and generate a couple of dollars.

    It doesn't even have to be a good idea, there was a guy on e-bay selling aluminum boxes with a magnetic cover. You could make custom engraved billet kazoo's.

    How to break out of the 'industry' you serve? I think you're stuck with who you know and whats around you. I'm pretty well stuck in a single industry also, that's pretty much all that is around here. We did break into some other stuff, but they've all packed it up and headed out of town.

  9. #9
    hemmjo is offline Plastic
    Join Date
    Sep 2011
    Location
    USA, Ohio, Central
    Posts
    2

    Default

    JimGlass wrote this:

    "Good at just one thing just does not work anymore."

    Funny how the grass is always greener on the other side of the fence. I was just thinking the other day, "If only I was just really good at one thing", it would be so much easier.

    As it is I am always changing the set up in my truck. Am I going to be a finish carpenter today, or rough carpenter, painter, or dry-waller, mechanic, plumber or electrician. Or do I stay home and fabricate parts for this old 1948 tractor?

    I find myself working as a home handyman. I have been taking any work that comes along. Mower repair, flooring, light fixture installation, drywall repair, fix leaking pipes, door replacement, washer/dryer repair, fabrication and repair on old farm and lawn/garden equipment. People are trying to save what they have these days and keep it running.

    Just last week, a lady from church asked me if I would look at her washer. Turns out the bearings on the tub were bad. New tub was $500.00, plus labor to install it. You cant pay 500 PLUS labor to fix a 5 year old washer, so she is looking at 800-1000 for a new washer. I was able to get bearings from the local bearing distributor, for under 50.00, and fix her washer for 200.00. Shes happy, I am happy, life is good. People need help, good work, fair price you will always have work.

    There are many Yahoo user lists where people have old out of production items, tractors etc, that often need parts made that are no longer available.

    Good Luck,

    John

  10. #10
    metlmunchr is offline Diamond
    Join Date
    Jul 2004
    Location
    Asheville NC USA
    Posts
    8,329

    Default

    Quote Originally Posted by Bobw View Post
    I think the only real good way to a steady income is with your own products.
    Agreed. Friend of mine owns 2 separate businesses in separate locations. One is a very modern and well equipped job shop and the other is a shop where he manufactures a series of products (same item in several different sizes) as the sole supplier for a large manufacturer. Not really his own product per se, but it might as well be since the typical job shop would lose their ass trying to make the same stuff at twice the price.

    Job shop has around 30 employees and he's very good at keeping a good work backlog. The dedicated shop runs with 5 or 6 people, and takes up 15% of his total worktime at the most. He's got single machines in the job shop that are worth twice the total value of every piece of equipment in the dedicated shop.

    But, at the end of the year, the dedicated shop makes 2 to 3 times the net as compared to the job shop. If someone quits, there's not a job in the dedicated shop that can't be learned in half a day or less by someone who's never seen the inside of any sort of manufacturing operation before.

    He's one of those people who thrives on the challenges of running a job shop and keeping enough profitable work to keep everyone busy. If he was one of those types who cares about nothing but the money, he could liquidate the job shop tomorrow, bank the money since everything there is debt free, and have a strong 6 figure income off nothing but the dedicated shop and maybe one day of work per week at the most.

    We've got a few small stupid little things that we make over here, and they have really helped make it through the lean times. When times are good(and the PO's are rolling in), keep the stuff at a fair price, and then when times are lean, we have a fire sale, and generate a couple of dollars.
    Agreed again, and the more stupid simple the better. You'd be surprised at the sorts of hourly rates you can generate making your own crap, and you don't have to have half a $million in whiz bang blinding fast machines to do it. IMO you do have to have CNC milling and turning, else someone who does have those capabilities will copy your stuff and eat you alive price wise. Gotta get that Mazak online, Frank

    Ebay, more than any other single factor, gives guys like us access to "test marketing" that would otherwise present a barrier to entry that most small shops just wouldn't be willing to gamble on. If you think something might sell, make a few and throw one on Ebay. You'll find out real fast, for near zero investment, not only whether it'll sell but also whether it'll sell profitably. I've tried things that I was sure would sell like hotcakes, only to find I couldn't net minimum wage at what they'd bring. Another item brings in about $8K/yr and I'd have sworn it would be lucky to gross a hundred bucks a month. Made it originally for a friend with no intention of trying to market it. He convinced me to try it because he really thought there was some market for it. It's been consistent for the last 8 yrs. You just don't know until you give it a try.

    You make good money off your own stuff by tweaking the process, and you have to learn to resist the invariable requests from folks who will want to know if you can "make me one just like that, but with these modifications". That puts you right back in the job shop scenario of ones and twos, and unless you charge a premium they won't be willing to pay, you'll lose money on every order you take that involves modifications. I've wasted enough time and money on customer requested modifications to know this for a fact. Make what you make, and sell it to those who want it as is. If you sufficiently refine the process, you can make good money and still be at a price level that doesn't encourage other shops to compete with you. Get greedy because you happen to be the only guy on the block who makes the item, and you'll attract competitors like flies to honey.
    Bobw likes this.

  11. #11
    kpotter's Avatar
    kpotter is offline Diamond
    Join Date
    Apr 2001
    Location
    tucson arizona usa
    Posts
    4,379

    Default

    My shop is set up to make my products, everyday is the same as the one before and the one after. I run old machines slowly and I am able to make a living. I dont even try to bid jobs I get people every now and then that want something done and all I can think of is I will have to change my set up, hell no go somewhere else. There are so many simple things that are no longer made in the US people are willing to pay a little more if it is made here. I would look for a product that costs less than 20 bucks retail and costs you only a couple of bucks to make. Set up to make it and sell them yourself. I have my horizontal mills set up to do one tool and I never change them, I would go buy more of them if I come up with something else.
    Bobw and Joe Miranda like this.

  12. #12
    demoj21 is offline Hot Rolled
    Join Date
    Jan 2006
    Location
    IL.
    Posts
    831

    Default

    These guys are on to something with there own products. Once you find a good product to make, the money is in refining the process. I have 3 products i am selling in the refining stages in the manufacturing side and they are becoming more profitable then my job shop work, other shops shake there heads at me and can not see how i am making money on these products but i am.Stupid part is they could be making the same products as me, but only want to make them as ordered and only what is ordered, i am willing to make and stock batches of all sizes of the parts, so i get quantity pricing on steel and set-up time.Sometimes you have to be able to take a risk,others are not willing to take to get ahead.

    Reason i have started making products is because the size of shop i have (2 guys) it is hard to get any of the big production, or large tooling jobs so all that is left is small jobs that you are competing against part timers in there garages and we all know they can work cheaper then a full time shop,and also because in a job shop all it takes is a new guy in a position having a friend he wants to send his work to or company closing, moving work to China, or customer changing his assembly process and screwing his product up cost you the work you did for them. All of these happened in the last year to us, we had a good 2010 and 2011 has sucked because of the changes noted above, so we decided to make products of our own.All i can say it's starting to look up for us, i have 3 more products in prototype testing stage now and 2 more higher production lower margin products i am thinking about making. So instead of looking for new contacts come up with a product and make you own production work. Just a thought.Later Jason.
    Bobw likes this.

  13. #13
    Bobw's Avatar
    Bobw is offline Diamond
    Join Date
    Feb 2005
    Location
    Hatch, NM Chile capital of the WORLD
    Posts
    5,504

    Default

    Like these guys said, and I said.

    Frank, make something.... Anything.. Give it a shot.

    This may sound a bit fruity, but honestly putting my own ideas and my own products out for sale for the first time, a bit tense, a bit insecure. I'm not Rubber Maid, I'm not Snap-On, I'm not Edelbrock. Why would somebody want to buy my crap. Guess what, they do want to buy your crap.

    Our first test auction ended horribly, we lost our ass, but we grabbed a few watchers. Went to a buy it now of twice the price, and our product is seasonal. It snowballed. Sort of. Selling 1-3 a month, as it warmed up 5-8, when we got a bit tight, sold off our scrap, (visually flawed but functional) we sold 8 of them in 36 hours and still made money. If we let our listings lapse, we get e-mails from watchers. People want the crap I make, thats cool as hell.

    Frank, people want the crap you make too, it may be just run of the mill everyday super simple stuff for you, but for the masses, its not, its special hand made, high quality stuff.

    I know you're a turning guy... how about a stupid super simple nail set(like I made in 9th grade), made out of 17-4 at an H950. It'll never rust unless left in salt water for years, and stronger than any damn thing you can buy at lowes or home of pot. Turn that crap out in about 2 minutes on your Mazak, almost nothing in material. and sell them for $15. I think I paid $10 for an absolute POS a few months ago. Custom engrave the damn thing for $30. "stolen from Frank".

    Doesn't need to be your bread and butter, just something to get you through the dips. 90% of your ideas are probably going to be mostly crap, but 10% might make you some money, and if you are lucky, you might stumble upon one that will be your bread and butter. I'm still looking for that one.

  14. #14
    SND
    SND is offline Diamond
    Join Date
    Jan 2003
    Location
    Canada
    Posts
    9,250

    Default

    I think the recent O-ring stretcher thread confirms that people will buy absolutely anything.
    It might also sort of confirm that everything has been invented


    To get into the low quantity parts, 5-100, you need customers with their own product lines, or your own line, no doubt there. People who need to "fix" 100 of the same thing are rare. Unfortunately a lot of the customer that had the 100pc runs, now do 5-10pc runs.

  15. #15
    SBAER is offline Cast Iron
    Join Date
    Aug 2006
    Location
    Kitchener, on canada
    Posts
    484

    Default

    A lathe product that I think would sell on ebay is a set of blind bearing pullers, just the ends not the slide hammer bit. There is not much material in them, light to ship, make them out of good steel and harden them right and you have nothing but made in China as competition. Since the slide hammer is easy to make maybe you could sell that as well.

  16. #16
    Hot Bob is offline Cast Iron
    Join Date
    May 2008
    Location
    Sanger, Texas
    Posts
    315

    Default

    I absolutely agree with others on having your own products. I am a custom bike builder. There is no money in building the customs. The money is in developing, producing and selling your own products. The larger the demographic that can use your product, the more you'll sell. Also make sure it is easy to ship. I love the USPS flat rate boxes. Many of my products are heavy but, they still fit in a flat rate box. Big savings for my customers makes it easier for me to sell product.

    Bob

  17. #17
    Join Date
    May 2010
    Location
    Kolding Denmark
    Posts
    10,641

    Default

    Quote Originally Posted by CBlair View Post
    When you figure out the secret, write a book and sell it to the rest of us, make yourself a fortune.
    Charles
    Frank, I know this isn't being helpful but I have to agree with Charles.

    The way things are at present (world wide) the only way I can think of to be successful is to make your own product. You'll still be back to square one though getting whatever you come up with known.

    Judging by what you make from your website you should be able to come up with something but if you do then keep it to yourself as long as possible.

    As long as you have orders coming in and aren't losing money then start thinking hard about what you could make and sell as your own. At least then "only" being a supplier won't be your only source of income.

    I see things world wide getting a little worse before they start getting better.

    Good luck,

    Gordon

  18. #18
    KIMFAB's Avatar
    KIMFAB is offline Stainless
    Join Date
    Jun 2008
    Location
    Logandale,Nv
    Posts
    1,084

    Default

    I'm in the middle of a rush production run right now. They always seem to come at an awkward time but it pays the bills.

    The other thing with production is keeping the customer happy - I just finished a wild goose chase starting late Friday looking for a die to be made.
    Come Monday I find out they they only needed 200 parts.

    Electronics has been my main game thru the years and the most steady. I have a few products but it is sporadic.

    Can no longer do it because of broken body parts but fabricating (gates, railings etc.) is lucrative.

    Now that I'm supposedly retired (again) I only have one rental left but over the years I found that being a slumlord paid very well.

    The moral of this story is to look elsewhere for extra income, not just variations of machine work.
    demoj21 likes this.

  19. #19
    jcnorris is offline Plastic
    Join Date
    Feb 2008
    Location
    Evansville, In
    Posts
    3

    Default

    For two years I have been considering buying another shop to get their equipment, product line, and customer base just for this purpose. The purchase would roughly double my headcount which would be valuable in itself since experienced machinists are hard to find around here.

  20. #20
    SamH is offline Hot Rolled
    Join Date
    Dec 2006
    Location
    Atlanta, GA
    Posts
    709

    Default

    I had a friend who essentially had a job shop with one big contract. He went from a 5000sqft shop to a 30,000sqft shop had at least 1 million in machines and tooling, pumping out this one thing. I remember him trying to help me out getting started, saying he would send work my way, etc. But he said the best thing for me to do is get a product and sell that product. They lost that contract and all their stuff went to auction. I have a product that provides me decent money, and I spend more time thinking about other products, or how to save time or money on the existing one.

    He should have followed his own advice.

Page 1 of 3 123 LastLast

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •