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  1. #21
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    Unfortunately...If you don't offer discounted pricing for higher qty's...Your competition will.

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    There's a lot of variables to this question.

    I give better shop rates to customers who put over a certain amount of money through my shop each year. I have customers who order stuff once every two years, every year, down to every couple weeks. I give tier pricing there, I like to reward loyalty. Good long term relationships that work for both parties go a long way.

    I also discount for larger quantities. It's not a must you are charging less/per hour, but larger quantities justify putting more time in the front end of the job in the name of tooling, fixturing, programming, etc. I invest more time making programs/fixturing more efficient on orders in larger quantities. If i'm making 1-5 pieces,i'm way more likely to let some air get cut then if i'm making thousands of pieces.

    If I can set up a machine once to run for the next two months without much human interaction, yes there is some discount. As opposed to setting it up every few days? There's time savings there, and i'm willing to move a little on pricing. Buying more material, I will get a discount there as well. Etc. It can be made up on larger quantity orders.

    I have a target number I try to reach on each machine per week. It doesn't always happen, and sometimes I do better. One thing I never do though, is let the customer dictate/influence pricing. That is a big no-no imo. I quote what the job is worth for my shop and it's capabilities, and it's take it or leave it.

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  4. #23
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    My rough guide is 20% per doubling. And the reverse for halving. Seems to work pretty good. At the top end of quantities I start shaving 10% but it's more to my limitations of machines and process. x0.8 or divide by 0.8 per doubling/halving.

    Most of this is machine costing.

    $100 per piece for 10 pcs turns into $80 for 20. $125 each for 5, $156 for 3. 100 pcs would be about $50 each. When doing many thousands it's not what I do, and would involve multiple shifts and special setup and tools to increase efficiencies and would still likely decrease by 20%. But like I said I discount 10% at the top end per doubling just to make me somewhat competitive.

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  6. #24
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    Quote Originally Posted by Finegrain View Post
    Runtime is runtime, whether it's 5 parts or 5,000. The machine doesn't care one way or the other. Why would you bill the machine out differently for 1,000 parts than for 100? It's still going to wear out and need replacement parts and consumables at the the same rate.

    Now, you might have a different machining strategy for 100 parts than for 1,000, like higher-density fixtures for the 1,000. Still, I would be billing the machine runtime out at the same rate.

    Regards.

    Mike

    I'll give you a better rate for 1000.

    Or is it a worster rate for 100?


    Sure, the machine doesn't care, but as said - you are likely better (more appropriantely?) tooled for the 1000, but more the issue is that now the machine can run for quite a while w/o "set-up man" intervention.


    There are some parts that I don't discount much after a bit tho.
    Like there was some big round work parts that I quoted a while back.
    Seems like 200 and 500 qtys, and the parts were maybe 15" D x ???
    I offered no diff between the two qtys.



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  8. #25
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    There are at least three good reasons why quantity purchases get a lower price per part, if not lower hourly rates.

    First is that you have a significant number of up front costs regardless if the quantity is 1 or 1000. These include reviewing the prints, ordering and receiving material, customer communication, setup time, billing, and the hopefully rare goof (can't meet specs etc. -- or slow or non-paying customer). Still, goofs can cost more in quantity.

    Second is a variation on the first. Because so few companies do a good job of tracking overheads (all the above, plus the time spent prospecting for and selling to customers, they instinctively know they need to lower prices to bring in a nice, large, hopefully profitable job. Per part overhead on a big job you win is usually way lower than on a small job you lose.

    Third is that a significantly larger quantity can justify investing in far more productive processes (or see the job move to a place that already has those). If you see a good customer moving from prototypes to initial production to large quantities, sometimes it makes sense to keep up with them.

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  10. #26
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    Quote Originally Posted by Dualkit View Post
    This thread will get a lot of lying sacks of crap posting, I cannot wait. No one ever admits to lowering their shop rate for longer run jobs, yet I have admitted to having a variable shop rate and lowering it for long run jobs that don't require a lot of attention. With that in mind I still don't get high quantity simple jobs, so someone in here is a lying sack of crap.
    Yeah... I agree with you. So much bullshit in this thread lol.

    If I have to make 1 pc on my 5 axis cell I charge XXX per hour. If I get an order of 200 pcs and the machine will run without sitting idle waiting for the next job I will run it at XX.XX per hour no worries. I'd rather make $100 an hour 24/7 a week than run 5-8 hours a day at $150 and sit idle the rest of the time because of change overs.
    So many shops are concerned with making XXX per hour and then only have spindle optimization of 50% or less.

    There are so many factors involved in quoting and as you grow your shop where you have more equipment than qualified people then you start factoring in other things like.... "How long will this run without me having to A. Setup a new job. B. Make an offset C. Worry about an employee running out of something to do.
    OX knows what I'm talking about

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  12. #27
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    On re-reading this thread, it looks like my post #2 implied that my per-part cost is the same for 100 or 1000. Far from it. What I was trying to say was that the actual machine “spindle time” is the same, and should be billed at the same rate. Of course, everything else has a vastly different impact on per-part cost. “Business stuff” like pursuing and processing the PO, material, programming, setup, tooling, cleanup, packaging, etc. have impact on per-part cost but some of them get spread out over the entire batch and others are relatively fixed per-part.

    Clearly 1,000 costs way less per-part than 100.

    HTH, and regards.

    Mike

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    When you get a new job, there is up front work that has to be done. Fixturing, programming, studying the drawings, procurement and what else. The first order should account for these. On subsequent orders or large orders, you could discount because the initial work has already been done or spread over more pieces. On really only runs, you also need to account for tool and fixture replacement/repair. Machine time is machine time. It doesn't change.

    Tom

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    Thanks for all the good feedback folks. I think I’m not too far off from where I need to be, but I need to put together better numbers for my spindle time cost and labor cost and start breaking those out separately. Time to make a new spreadsheet!

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    Quote Originally Posted by implmex View Post
    Hi All:
    Here's my take on it:
    The first question to ask yourself (the one I always ask myself) is;
    Do I really want the job and the customer?

    Obviously I want the job if it will make me a decent profit.
    If it's a great customer I want to keep them loyal too.

    Second question: If I take the job and piss off another great customer because I can no longer meet my commitment to them reliably, is it worth it?
    Not just for the short term profit (the plus), but also for the reputational hit with the screwed over customer, I'll take for reneging on my prior commitment.(the minus)


    ...
    Implant Mechanix • Design & Innovation > HOME
    Vancouver Wire EDM -- Wire EDM Machining
    Quote Originally Posted by adama View Post
    IMHO you need to have a solid grasp on the true spindle on time cost, thats not shop rate, thats what it costs you.

    You then need to lose the idea of selling time and realize your selling parts. its none of your customers business how long it takes you. Your job is to charge - price at the point thats as high as the market will bare.

    ...
    Where's the triple-like button?

    So many good answers above, but these two in particular:

    From Marcus: Don't forget the opportunity costs (his second question, highlighted in red above)

    From Adama: Production is a different mindset than one-off. You are selling parts, not time!

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    Quote Originally Posted by awake View Post
    Where's the triple-like button?

    So many good answers above, but these two in particular:

    From Marcus: Don't forget the opportunity costs (his second question, highlighted in red above)

    From Adama: Production is a different mindset than one-off. You are selling parts, not time!
    Be aware that your competitors are not dumb. They can/will reverse engineer your production method and if your are trying to gouge they will under cut you. Maximize your profit but don't be greedy.

    Tom

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  21. #32
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    They are surprised that your 1000 price is not lower than your 500 price, but is your 1000 price OK?

    That is the important question.

    They are grinding you, because they think it is their job.

    If you are not close, then they would not be bothering.

    1000 parts, but what are the deliveries? 100 a month or 1000 at once?

    Big difference

    1000 parts now, 1000 parts every month going forward?

    Big difference

    Your gut is correct.

    You are probably cheaper than established places because you are hungry and do not yet value your time as you should.

    If I was running a one time 500 part job or 1000 part job that was a 1 minute run time, I might run it 4 vises.

    4 vises mean I have lets say a 30 second button to button time every 4 minutes. 37 minutes possible gain compared to opening the one time[IOW if I had 500 parts on the table] total 7 percent possible theoretical gain without fundamentally changing process, meaning tooling or other fundamental ways you are machining it

    The other variable is tool changes. I have a 'slow' toolchanger so every part I get on the table not only saves me door open cycles but tool changes.

    so if you have 3, 5 second tool changes on a one minute cycle the cycle time saved from 1 to 4 parts is huge, but diminishing to zero as you go up. If you have a 'Brother' toolchange time, you are not saving that much time, and door cycles will dominate

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    Quote Originally Posted by TDegenhart View Post
    Be aware that your competitors are not dumb. They can/will reverse engineer your production method and if your are trying to gouge they will under cut you. Maximize your profit but don't be greedy.

    Tom
    Yeah, i had someone tell me that recently, all they had to do was work out how to shape the tube into the profile i was doing then bend the part and they will be competing with me, there jaw kinda hit the floor when i wished em luck. Some reason they got super pissy when they asked me about my machinery and were they could buy one - how much it cost and i told them i had a whopping £350 in laser cut profiles and bearings. Bit of machining and bing bang bosh i can make the bits :-)

    Most of what i make is not hard, just a complex assortment of processes on my own home sprung machinery, to tool up commercially it would cost them more than you could ever make selling the products, gotta love that approach to unlocking a market place. Anyone buying machinery to compete with me is already more negative than i am positive in a couple of years, ergo competition is non existent!

    I very much make my living off the back of the tooling i make with a lathe and mill, not selling the machinery services directly as it were, hence to compete with me especially in the low qty pond scum like neiche i have carved is incredibly unprofitable for any sane person that wants to buy tooling in to do the work!

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    Quote Originally Posted by adama View Post
    Yeah, i had someone tell me that recently, all they had to do was work out how to shape the tube into the profile i was doing then bend the part and they will be competing with me, there jaw kinda hit the floor when i wished em luck. Some reason they got super pissy when they asked me about my machinery and were they could buy one - how much it cost and i told them i had a whopping £350 in laser cut profiles and bearings. Bit of machining and bing bang bosh i can make the bits :-)

    Most of what i make is not hard, just a complex assortment of processes on my own home sprung machinery, to tool up commercially it would cost them more than you could ever make selling the products, gotta love that approach to unlocking a market place. Anyone buying machinery to compete with me is already more negative than i am positive in a couple of years, ergo competition is non existent!

    I very much make my living off the back of the tooling i make with a lathe and mill, not selling the machinery services directly as it were, hence to compete with me especially in the low qty pond scum like neiche i have carved is incredibly unprofitable for any sane person that wants to buy tooling in to do the work!
    And that is the problem in a nutshell. The big man says "let's get the experts in, do some blue sky thinking and throw lots of money at it. There,I have sorted that, Smith, bring me the end result within 3 months,job jobbed.
    The one man band makes a brew (sorry US,a cup of TEA) gets his pencil out and starts doodling,job properly jobbed, production starts after one more brew.

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    ^^You are going off on a tangent. The question was how to quote production with quantity breaks. If there is enough volume and price, your approach will not work.

    Tom

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    Quote Originally Posted by adama View Post
    Yeah, i had someone tell me that recently, all they had to do was work out how to shape the tube into the profile i was doing then bend the part and they will be competing with me, there jaw kinda hit the floor when i wished em luck. Some reason they got super pissy when they asked me about my machinery and were they could buy one - how much it cost and i told them i had a whopping £350 in laser cut profiles and bearings. Bit of machining and bing bang bosh i can make the bits :-)

    Most of what i make is not hard, just a complex assortment of processes on my own home sprung machinery, to tool up commercially it would cost them more than you could ever make selling the products, gotta love that approach to unlocking a market place. Anyone buying machinery to compete with me is already more negative than i am positive in a couple of years, ergo competition is non existent!

    I very much make my living off the back of the tooling i make with a lathe and mill, not selling the machinery services directly as it were, hence to compete with me especially in the low qty pond scum like neiche i have carved is incredibly unprofitable for any sane person that wants to buy tooling in to do the work!
    I do the same thing. I provide a service that is not readily serviced by others. I charge a reasonable amount but I don't kill the goose.

    Tom
    Last edited by TDegenhart; 04-01-2019 at 06:12 PM.

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    Maybe this doesn't belong in this thread, but what about machines (like wire edm) that don't really share the same ...(can't think of it!) ...same type of consideration for consumables? For example, your mill might use a combination of $10 spot drills, $3-100 drills (plain HSS up to coolant thru maybe?), $20-xxx endmills, not to mention inexpensive sidelocks, expensive hydraulics, shrink fit, etc. Where a wire typically uses the same xx/lb wire (unless you do enough different things to justify coated hard brass for no/minimal tapers, half hard brass for bigger tapers, stratified(?), etc etc), same xx run time of dei bottles, filters (unless aluminum! ), etc etc.

    Do you quote different for quantity on them? What about set-up/programming vs run time? What I am getting at is they (wire edm, maybe sinkers too?) usually just run and run once the setup and prove out is done, no tools wearing, no coolant issues, chips management, etc.

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    There was a writ about a highly automated wire shop. He had EROWA fixtures, and robots.
    Not sure, but it may have been a sinker shop - and if so - the trodes were changed routinely by the robots as well.

    Pretty sure he had a lower shop rate to land all that werk....


    Point being - anything in higher volume can be done cheaper by someone else.


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    Quote Originally Posted by Ox View Post
    There was a writ about a highly automated wire shop. He had EROWA fixtures, and robots.
    Not sure, but it may have been a sinker shop - and if so - the trodes were changed routinely by the robots as well.

    Pretty sure he had a lower shop rate to land all that werk....


    Point being - anything in higher volume can be done cheaper by someone else.


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    I worked one shop that had a robot and all that jazz for their one wire edm. I was talking more about job shop wire stuff. If a job is quoted for 10 hours @50/hr, but the setup and programming is only 2 hours of that, the machine runs 8 hours more or less unattended (pull the slug, restart, 10 minutes maybe).... machine run time figured at $20/hr for consumables and what not...

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    Quote Originally Posted by StirlingMachine View Post
    Yeah, that makes sense. For some reason I'd taken it for granted that there was a rate discount for quantity, I'm not sure where I got that idea. I think really what I need to be doing is breaking out handling time better in my quoting process.
    I don't know as how I'd say "Take for granted" but off hand I can't think of anything I'd make 10 off instead of 1 (to give a simple example) that'd take me 10 times as long to make as the time to make just 1.

    I'm sure just about every PM member with a shop knows that giving a quote involves much more than "just" time. It's necessary to know your costs and by that I mean those that have nothing to do with what you intend making. Premises and machines. When you know those then add on the cost of material and the time everything will take.

    After that the only thing to consider is how much profit do you want.


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