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Thread: What kinds of shops stay in business

  1. #21
    rj newbould's Avatar
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    Quote Originally Posted by dkmc View Post
    How about hollow rivets?
    I made 16000 3/8 OD 1018 rivets a couple years ago for $.33 each
    Now they are buying 60,000 from china for .08 each and throwing out
    all but the 16000 good ones in the lot.....do the math.
    How good is your info that they are actually throwing out the excess, and not just storing them for future?

  2. #22
    SND
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    We used to get parts(sort of a small assembly) from china and reworked most of them, what couldn't be saved got trashed. I forget the %, I know the majority needed rework though. Wasn't worth it one second and thankfully its made in canada now and price didn't change much at all if you add the wasted time fixing that junk and have it still look like junk.. oddly some customers ask for that crap.
    Worth saying this was actually a chinese companies specialty product, not some oddball thing they'd never seen, its what they did and it was always wrong. Parts right out of the box you could toss in the garbage by eye, twisted, holes, etc.

  3. #23
    Pattnmaker is offline Hot Rolled
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    Quote Originally Posted by SND View Post
    Interestingly I've made a fair few washers in SS, +/-.005 od/id, usually only .001 thickness, and has to be flat within half that, not too fancy overall... $10each(only 10-20qty) goes in the final product, sold as spares at $100-140 each.

    See you can spend a day or 2 working on 1 little fancy part that doesn't weigh an ounce, but everyone's gonna think $100 is crazy expensive for, let alone the $1000 it should really be.
    OR you can spend 2 days making a bucket full of simple parts, say $1500 for those 2 days, and wow what a deal we got a bucket full of them. Quantity vs price matters a lot more in a persons mind and perception of value, than what it really is to the real world(if no people were in it..)
    I used to disagree with the guy I used to work for when we quote small complicated patterns. These would often have multiple cores, weird parting and because they were smaller tighter tolerances. He would say but it's too small to charge that much.

  4. #24
    dkmc is online now Diamond
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    Quote Originally Posted by rj newbould View Post
    How good is your info that they are actually throwing out the excess, and not just storing them for future?
    I saw them in the dumpster......
    The steel apparently was not 'exactly' 1018 either, they were cracking when they cold formed them.

  5. #25
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    Quote Originally Posted by dkmc View Post
    I saw them in the dumpster......
    The steel apparently was not 'exactly' 1018 either, they were cracking when they cold formed them.
    That's good first-hand info..

    You have to wonder what kind of idiot would make a purchase like that..

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    Quote Originally Posted by kpotter View Post
    I have been thinking about this for a while. I have been to tons of auctions and one thing that has stood out is the shops that are up for auction because of bankruptcy are usually the supper nice ones. The dumpy rat infested holes are never bankrupt they are up for auction because the owner died or is in the process of dying. The last few auctions that I have been to this year have been in beautiful shops with top of the line machines and great buildings. These places cost millions to put together and now they are being torn apart by the vultures. Have any of you noticed the same thing.
    I think the other question is how many auctioneers are chasing down bankrupt "dumpy rat infested holes". I would guess you would advertise the nice ones a little better than the dumps. I think just as many dumps go out of business just no one flocking to what appears to be mistreated equipment auctioned off. I mean do you think a two man shop in a garage with old manual equipment is going to get a national advertising campaign from the auctioneer.

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    bankrupt "dumpy rat infested holes".
    I think I've gotten some of my best 'smokin deals' at and -after- some of those auctions....

  8. #28
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    If you are just talking about job shops, then I would say the well run ones stay in business.
    The ones that make stuff that people want, and are willing to pay for.
    I have seen job shops with lots of equipment go broke, and job shops with ancient rundown relics go broke too.
    And I have seen job shops make money every year even though they have payments on new machines.
    It has a lot more to do with how smart the guys are that run the shop, and what kind of work, and marketing, they do.

    If you are talking about manufacturing, I would say the same thing.

    How about this one-

    South Bend Lathe had a big shop, completely paid for, full of 100 year old tools. The product line had all the bugs worked out of it, the jigs were all paid for, no loans on million dollar horizontals.
    They went broke.
    Nobody would buy their lathes.

    Haas has a 1 million square foot brand new factory in one of the most expensive counties in the country, row after row of million dollar machining centers- and they are one of the top 2 or 3 machine tool manufacturers in the world, and sell something like 100 machines a month to the Chinese.
    There is a waiting list to buy their lathes.

    Kinda disproves the prevailing wisdom of this thread, if you ask me.

  9. #29
    snowman is online now Diamond
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    The shops that I consistently see go down are ones that you can tell were not diversified. They had one big customer, or a couple big customers...and when one went away or elsewhere, all of a sudden A/R is less than monthly bills.

    I also see a continuous desire to cheapen the process. I am noticing a lot of harbor freight tools along side quality iron. Meaning to me that they started out doing well, and when things got tough, they didn't get creative, they got cheap. There are some things at Harbor Freight that make sense, there are a lot that dont.

    Finally, a lot of shops where it's obvious not a single damn person took any pride in their job, and that includes the managers. No organization, nothing cleaned in years, no system.

    The most consistent thing though, a front office decorated with fake plants covered in greasy fuzz and 50 year old nicotene stained paint on the walls. They also have uncomfortable guest chairs that look like they are stolen from the local Denny's and artwork that looks to be stolen from a by the hour motel.

  10. #30
    Steve's Hobby is offline Aluminum
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    Quote Originally Posted by snowman View Post
    The shops that I consistently see go down are ones that you can tell were not diversified. They had one big customer, or a couple big customers...and when one went away or elsewhere, all of a sudden A/R is less than monthly bills.

    I also see a continuous desire to cheapen the process. I am noticing a lot of harbor freight tools along side quality iron. Meaning to me that they started out doing well, and when things got tough, they didn't get creative, they got cheap. There are some things at Harbor Freight that make sense, there are a lot that dont.

    Finally, a lot of shops where it's obvious not a single damn person took any pride in their job, and that includes the managers. No organization, nothing cleaned in years, no system.

    The most consistent thing though, a front office decorated with fake plants covered in greasy fuzz and 50 year old nicotene stained paint on the walls. They also have uncomfortable guest chairs that look like they are stolen from the local Denny's and artwork that looks to be stolen from a by the hour motel.
    I get a kick out of seeing the front office ladies with all their pictures posted everywhere, their kids, their grandkids, their friends, etc. Then you go in the back, a big total mess, out of shape machine operator in shorts with the heavy metal tee shirt on, pushing a CNC machine, look around, yea no pride. What I did learn and I am learning about auctions is that a lot of times the auction company will bring in more machines, paint them etc and sell them as part of the auction. Generally, you can not operate them so its a crap shoot. Also, I think the owner or others cherry pick out the best to start again etc.

    I bought a new CNC last year and have four more years to go on paying for it.
    My experience is that the new sellers really don't give a ....%# about you and just want to move machines. I learned and am learning to use it myself by reading, taking a Master task on line class, (very helpful). etc. My thought right now is to buy my next machine but 1-4 years old, cash. I see some pretty nice machines, a year or two old for sale, heck even if I can save 20 grand, I see that as the way to go.

    My biggest mistake in business is to take on every job and not charge enough to make a profit... I would advise anyone to create a list of your top, loyal customers ... give those, loyal, profitable customers, the top priority in everything.... and assume and hope that most of the rest go away and stay away.
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    Default Great question we will all ask ourselves

    My first post, so I apologize for any mistakes.
    I have had similar experiences, go to an auction, look at all this great stuff and ponder the question what could have gone so wrong? I have been in business since 1997 in my own building. Prior to that I used a buddy's shop for years swapping my labor for his projects and using his machines for my stuff. I have come to the conclusion the balancing act is very delicate. Invest where the shop will show a return but will not cripple you if the job goes belly up. I find the smaller investment in used machines a little at a time works best. The name of the game is sustained profitable income, low stress, and keep the customer satisfied beyond their expectations. Build a relationship with your customer and make sure they are aware of your capabilities. Most long term shops take a cut in the profitability per job and make up for it with consistency from their largest customers. This is a game of math, personalities, creativity, art a little bs to make a great product. Stay with as little debt as possible, buy used and invest in small increments.
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  12. #32
    KyleH is offline Plastic
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    I saw a quip in here about a public tech school that kinda irked me. I went to Mid Florida Tech which is owned by orange County Public School. Tuition when I went was only $2500 for year but it was free for me since I was in high school and then got a scholarship to continue. I went in knowing fuck all about machining. I didn't know what a lathe was outside of a brake lathe. In 3 semesters I could setup CNC mills and do some CAM programming. This got me a job making $12/hr as an engineering intern where previously I was making $10 doing an entirely different thing. That job and the tech school lead to a job that paid $20/hr part time at an Engineering R&D place. I'd probably just now be making $15/hr as a 3rd year engineering intern at a large company without that public school because if it was $5000 per year, I wouldn't have done it.

    EDIT: Umm I have no idea when I registered this username I completely forgot about it and registered later as TurboFabSupply. I guess my browser saved my login from another site. Weird.

  13. #33
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    Kinda disproves the prevailing wisdom of this thread, if you ask me.

    Well, it definitely shows there is more to survival than just debt load. South Bend was making machines that were also being cloned overseas just as nicely and much cheaper.

    Haas is building machines that are reasonably cheap without having to whip up your "buy american" principle to justify the purchase.

    I shopped a 10" southbend about 8yrs ago and felt that it was not enough lathe for the $$.

    All that being said, you will survive hard times better if you have everything paid off. I had two of the best years I ever had 2010-2011. paid off my shop and house, bought two more (used) CNC machines cash and have enough to pay taxes and put a little in the bank. I nearly crashed and burned 5 yrs ago and have learned to HATE debt.

    I think the road looks bumpy ahead and want to be as lean as possible so that you guys aren't buying my machines from some rapidfire auctioneer for pennies on the dollar.......
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  14. #34
    Modelman is online now Stainless
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    Most disquieting thing I heard at an auction (injection molding plant)...

    "I see they cleaned the carpet in the office... "

    "Why?"

    "...They say the company president came in here, sat down at his desk, and blew his brains out"

    Not everybody gets to just take the money and run.

    Dennis

  15. #35
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    Quote Originally Posted by KyleH View Post
    I saw a quip in here about a public tech school that kinda irked me. I went to Mid Florida Tech which is owned by orange County Public School. Tuition when I went was only $2500 for year but it was free for me since I was in high school and then got a scholarship to continue. I went in knowing fuck all about machining. I didn't know what a lathe was outside of a brake lathe. In 3 semesters I could setup CNC mills and do some CAM programming. This got me a job making $12/hr as an engineering intern where previously I was making $10 doing an entirely different thing. That job and the tech school lead to a job that paid $20/hr part time at an Engineering R&D place. I'd probably just now be making $15/hr as a 3rd year engineering intern at a large company without that public school because if it was $5000 per year, I wouldn't have done it.

    EDIT: Umm I have no idea when I registered this username I completely forgot about it and registered later as TurboFabSupply. I guess my browser saved my login from another site. Weird.

    Was this s'posed to be in the skewl thread maybe?


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  16. #36
    TurboFabSupply is offline Hot Rolled
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    Quote Originally Posted by Ox View Post
    Was this s'posed to be in the skewl thread maybe?
    No, it was a reply to this:

    Quote Originally Posted by FlatBeltBob View Post
    Hey OX , thanks for the link to TMW.
    I miss the hard copies , so Just signed up for the EMail list .
    I liked the article about a for profit CNC training school .
    $5,000 to learn solid , marketable skills makes a lot of sense.
    Maybe some of those public tech school teachers should enroll too !
    FBBob

  17. #37
    dkmc is online now Diamond
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    Quote Originally Posted by Modelman View Post
    Most disquieting thing I heard at an auction (injection molding plant)...

    "I see they cleaned the carpet in the office... "

    "Why?"

    "...They say the company president came in here, sat down at his desk, and blew his brains out"

    Not everybody gets to just take the money and run.

    Dennis

    I'd say that too........at an auction....if it was really nice carpet, and I didn't want you to bid me up on it....
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  18. #38
    TurboFabSupply is offline Hot Rolled
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    I know you'll stay in business because youre so thrifty you buy used carpet!

  19. #39
    Modelman is online now Stainless
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    Carpet? We ain't got no stinkin' carpet here... We used to have some scraps that I used for 'prayer rugs' that I'd spread in front of various electrical cabinets when I needed to kneel and pray to bring them back to life, but I wore those out.

    Now I just swipe a handful of flat cardboard cartons from the shipping dept.

  20. #40
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    I can't really say they stay in business, but the "bribe and kick back" shops do well for a while.
    It hurts the ones like me that just do work, and charge a fair price.

    There are a few of my owner/operator customers that have been around machining and know close to what something takes.

    I go to pick up a cylinder rod and they will say "Jack, what is that about a 3 hr job & your shop rate is $50 an hour?"

    They know on some things. Or, if it is something they don't know, I'll add " Probably more like 5 hours. It had buttress threads and is metric on the other end"

    You have the big shops with 16 people in the office and 4 workers on the shop floor. They quote $900 to drill & tap a 1/4" -20 hole in aluminum.

    But, they get the job. It is because I don't have a cabin at an Aspen Colorado ski resort, for the customers to use for free.

    Or buy bass boats, fishing rods, & ATV's for customers.

    My customers are plain Jane people, and that is what I like.

    Recently, a superintendent over a large medical business got caught taking kick-backs. His secretary found out and told on them.
    The manufacturer that was giving the kick-backs said "If she would have just asked, we would have paid her, too".

    JAckal

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