Thread: What's your $shop rate$ these days?

None of anyone's business. Just let me quote the job. Don't like the price? Go somewhere else. I won't participate in a race to the bottom....

Originally Posted by cg285

if you have to order, pay for, unload material i don't see why all of it isn't marked up.
how do you calculate 20%? material cost * 1.2? better way is material cost /0.8

There is so much gray area in quoting. Honestly, I feel quoting is 100% an educated guess.
I feel some things should just be figured in to the shop rate as overhead. Especially for a small shop like me. Two men.
Propane, the 5 minutes it takes to unload the truck, and possibly some hydraulic fluid, and a hose or two every 10 years?
Are no different than buying a drum of coolant, and the associated hardware/equip. to mix it. And, the five minutes it takes to mix and dump a couple buckets.

I feel in my situation marking material up is one of two things: A good way to slit my own throat. Or, an advantage for me over the next guy.
You have no idea how many jobs I have been awarded, or customers been won, because I told somebody I don't mark material up.
Then was willing to follow through with the invoice clearly stating the actual material cost. Make no mistake, I made my money. It just wasn't in the form of a mark-up.

You just have to be in touch with your shop, and operating costs. To be honest, I am way too low, and plan to increase rates for 2020.

If I was not home based, I would have folded in about Feb./March of this year.

I am shocked I haven't got kicked in the nuts yet for bidding simple work at $40 an hour. I will wait. The strange thing is I often don't get those jobs and I know for a fact no one can run them faster than me. Many shops are bidding way less than $40 an hour per machine and not admitting to it, and we are talking USA shops, not China.

Originally Posted by Dualkit

I know for a fact no one can run them faster than me.

You sure about that? I'm pretty damn quick, but there is always somebody faster.

Originally Posted by Pariel

Why would you tell your customer your shop rate at all? I certainly don't think disclosing that your rates are going up is required, either. I've never asked a vendor what their shop rate is or given it to a customer, and I would politely decline the opportunity to do so if asked. I'm not a lawyer, I'm not billing them based on hours, I'm billing them based on delivering the product.

Sometimes you have too. If it's a T&M job then the customer is going to want to know your $ rate. and depending on the entity you could be subject to audit if there's any question as to the $ rate your billing for T&M work.

Of course you could decline to tell them your rate, then you won't get the T&M work. entirely up to you.

Originally Posted by Pariel

Why would you tell your customer your shop rate at all? I certainly don't think disclosing that your rates are going up is required, either. I've never asked a vendor what their shop rate is or given it to a customer, and I would politely decline the opportunity to do so if asked. I'm not a lawyer, I'm not billing them based on hours, I'm billing them based on delivering the product.

I don't think I ever have told a customer or had one ask. Maybe a tire kicker or two did years ago. Usually if they ask, they can't afford it.

Originally Posted by WA-CNC

Sometimes you have too. If it's a T&M job then the customer is going to want to know your $ rate. and depending on the entity you could be subject to audit if there's any question as to the $ rate your billing for T&M work.

Of course you could decline to tell them your rate, then you won't get the T&M work. entirely up to you.

Are you telling me that you've changed the rates for a T&M job without telling the customer? Either you're in for a bad time at some point, or there's fraud. I've never had a customer offer T&M for machining work (although I've seen it for repair work -- and let me tell you I've never seen it work out for any customer, ever).

Depending on the job, customer, and kind of work, it fluctuates anywhere from $60 up to $175 per hour. I have a few old customers that I have still on $60 because we know their parts well and can still make money at $60. Most all work is priced at $75 now. If I have to get the guys to stay late or work any OT on your job due to your planning not mine, I bump up to $120/hr. If I need to take anything mobile outside the shop, we charge $175/HR for 2 guys and a mobile welding kit.

We do primarily welding and fab work, repair and manual machining, as well as pipefitting and sheet metal work.

Brown and Sharpe Cam automatics.

$36/hr (penny/sec) for free machining metals
$40-$45/hr for medium carbon steels
$45-$50/hr for stainless

Rates and overhead have not changed in 25 years.

I am busier than ever.

Originally Posted by Pariel

Are you telling me that you've changed the rates for a T&M job without telling the customer? Either you're in for a bad time at some point, or there's fraud. I've never had a customer offer T&M for machining work (although I've seen it for repair work -- and let me tell you I've never seen it work out for any customer, ever).

No I'm not telling you that. Not sure how you assumed that.

T&M work is $65/hour + mat'l.

I get a lot of T&M work because my prices are fair, I deliver on time, and am invariably cheaper than my competitors.

You don't get offered T&M work probably because they don't trust you.

Originally Posted by WA-CNC

No I'm not telling you that. Not sure how you assumed that.

Your example of when you tell your customers your rate is that it's T&M work -- I didn't assume anything.

You don't get offered T&M work probably because they don't trust you.

I'm gonna take that one and laugh all the way to the bank. OK dude.

For my own products I price spindle time at $100/hr for slow selling stuff and $50/hr for the high volume more competitive stuff.

I don't really do any kind of production for others, but get a lot of repair work that is both manual and one off CNC. I tell customers $100/hr if they ask.

Profitable

I've never had a customer offer T&M for machining work (although I've seen it for repair work -- and let me tell you I've never seen it work out for any customer, ever).

Man, When I was running shops stateside T&M was more than half my business. Customers would bring parts in that had to be reverse engineered then a new one made was almost always T&M. GM Saturn was the absolute worst with worn out assembly line parts. Then the fab department was almost always T&M.

Originally Posted by wheelieking71

There is so much gray area in quoting. Honestly, I feel quoting is 100% an educated guess.
I feel some things should just be figured in to the shop rate as overhead. Especially for a small shop like me. Two men.
Propane, the 5 minutes it takes to unload the truck, and possibly some hydraulic fluid, and a hose or two every 10 years?
Are no different than buying a drum of coolant, and the associated hardware/equip. to mix it. And, the five minutes it takes to mix and dump a couple buckets.

I feel in my situation marking material up is one of two things: A good way to slit my own throat. Or, an advantage for me over the next guy.
You have no idea how many jobs I have been awarded, or customers been won, because I told somebody I don't mark material up.
Then was willing to follow through with the invoice clearly stating the actual material cost. Make no mistake, I made my money. It just wasn't in the form of a mark-up.

You just have to be in touch with your shop, and operating costs. To be honest, I am way too low, and plan to increase rates for 2020.

If I was not home based, I would have folded in about Feb./March of this year.

Agree with you on the material markup. We get that markup elsewhere like "engineering" costs. Planning the material, ordering it, verifying it, handling material certs, etc

Originally Posted by as9100d

Agree with you on the material markup. We get that markup elsewhere like "engineering" costs. Planning the material, ordering it, verifying it, handling material certs, etc

Yea, pretty much same here. I have an "engineering" box in my spreadsheet.
If it is a simple part, easy to source material? Normal tools on hand? I put in 15 minutes.
If it is a multi part# quote from a bunch of different, maybe hard to source materials? Special tooling? I have put up to four hours in there.

$100/hr for quoted jobs and $80/hr for time and matl ( or just time ). I dont mark up matl, anything over 3" dia or so I buy already sawed to length. Sawing, unloading etc is built into the shop rate.

To me, marking up material, unless you are recovering cost, ( saw time, saw kerf, waste etc ) just doesnt seem right. Of course, in end, the final cost is all that really matters. My shop rate may be on the higher side, but we run lean and efficient. I have been told repeatedly that I am low on price.

( yeah, sometimes I screw upand really do quote too low.... )

Originally Posted by wheelieking71

Yea, pretty much same here. I have an "engineering" box in my spreadsheet.
If it is a simple part, easy to source material? Normal tools on hand? I put in 15 minutes.
If it is a multi part# quote from a bunch of different, maybe hard to source materials? Special tooling? I have put up to four hours in there.

I know you're fairly small time but man have you checked out the new shoptech erp software? I'm glad we made that switch. Quoting jobs has never been easier or faster esp with RFQ to other vendors.

Mark up on material, for us at least, is 10% -15% which is the time it takes for unloading, paper work/certs input, bringing material to blaster, bringing material to machines, and unloading scrap bins, ect. Sometimes it seems excessive - like 1 1/4 pipe bundles which have cassette storage next to saw; right now we are doing w 24 x 250 beams, which it is not even approaching enough (dual cranes and safety... so slow), and the drops you can not just throw into the scrap bin - you have crane stack them in short stacks for the small lifts. In the end you just hope you bid enough winners to overcome the losers.
bidding is 50-50, you either get job or do not, you either make money or don't.

I try to quote around $65,a bit more for worse material that eat a lot of tooling. But if I average it all out at the end of the year, I just don't even wanna know anymore.
I know a couple recent jobs were in the $15hr range by the time they were done, real bad quoting eff up, did it for the experience I guess.