ebay bidding for $20 per hour shop time

Whats up with this? Search ebay and you will find shops auctioning their shop rate as low as $20 an hr. I know times are tuff right now, but is slashing ones price per hr. the only way to compete? What happened to looking for another customer the old fashioned way? Or finding antoher niche to get into? This is almost like trying to compete on mfgquote.com with Chinese shops that can deliver parts for cheaper than I can buy material for. I hate cut-throat machine time. There have always been those fabled shops in Joplen, Ms. and such that make parts for 30-35 per hr. but this is getting rediculous. All I can forsee from this is purchasers who will not consider paying for good service at a fair price. Cut-throat business practices can and do hurt us all in the long run.

Maybe I don't have to deal with this guys overhead, or maybe he lost his best customer, or whatever... But cannot see how other shops who NEED to compete with this will be able to do so without dropping their rate to $19.50 an hr. Waht do you guys think. Am I all wet on this, or will this just continue to go until we are working for $.05 an hr.

Thanks for the heads up Doug. I'll have to check it out.

I have a competitor down the street who will run jobs for as low as 1/3 of my rate. He also pays his employees maybe 2/3's of what I pay mine.
He can have those jobs and those customers. I'm not going to even turn on the presses for a job where profit is measured in fractions of a penny or even a couple of cents per part.

Working cheap is a viscious nasty cycle to fall into. Once you have the cheap customers, you can't raise their price for any reason or they will squawk to no end.

I have as low an overhead as anybody else if not even lower. I charge a high hourly rate. I am not just here to trade dollars. I am not going to put wear and tear on my machines for a cheap job.

We may throw a customer a bone occasionally and give them a lower price. However, it isn't a cheap price.

Heck, maybe I'll auction my shop time on the bay. I'll start with a really really low price of maybe $60/hour.

Les

Doug,

Just out of curiosity, what do you search on ebay? I couldn't find them. Be interesting to see what kind of shop this is. Who knows, it may be a retired machinist in his basement type of deal. At my club, we have a machinist, who is recently retired. He charges $25 and hour, works ten to twenty hours a week for others in his home shop, and works more time for himself. Not too bad of a little extra cash retirement job either. Heck, if anyone wants, I'll charge $12-15hr, and you pay for materials. You'll get a beginners work, but I'll be able to quit working at the local grocery store for even less then that. Just keep in mind, not too much work, I'm still in school. But who knows, with out seeing what type of shop this, it may even be a voctec school. With states running into debt, I know that even my highschool's wood shop does some basic jobs for hire. Its a win win situation, the shop gets a little extra funding, and us students have a project. If this shop however is a professional shop, I'd love to know how they do this. The shop I'll be working for in the spring charges almost three times that and is still struggling.

Adam

Les, I agree about not wanting those type of customers...I try to, and usualy succeed in giving my customers a fair price for good service.

Adammil, try this "Item number: 2565873378"
I happened to be searching cnc lathes.
He...Hia Pham (Funny I have a purchaser at a major electronics company with the same name) does not look to be retired. His machines are in a somewhat nice building, and probably fairly new machines at that. Check out his email address, something like fareastcomponents blah blah blah.
well I just wanted to get the forum's read on this.

Why pay the outrageous amount of $20 per hour, The Chinese will work for $.50 per hour. When will we learn? When will we Quit buying goods made by slaves?
Don

We ship parts to Mexico. We had some parts that needed minor rework at the plant in Mexico, we couldn't decide to have the parts shipped back or send some one down there. Then we got an offer from the customer to do the work themselves but charge us for it, the decision became easier when we were told the rate for rework was 6.00 per hour.

Here's a couple of 'em:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=2576098560&category=25277

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=2575586281&category=25276

I work for the goverment by day in a maintenance shop and do government work for another branch (R&D stuff) at home. I do ok with that work and I also do train (live steam) work for around $12-$15 per hour plus material.

I agree, how can a company afford to go as low as $20 per hour doing commercial work? I have a friend with a cnc shop who pays the hourly wage but that's it. No health ins., no sick time. His wages are ok and his rates are low, but not that low. (I think about $50.00 per hour even then.)