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Old 09-05-2010, 07:26 PM
TubeTek TubeTek is offline
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Originally Posted by MARTINSR
You know, I never thought for a second in this thread that we were not simply talking about how much to charge an hour. Your "hourly rate" is merely that, what you charge per hour. It doesn't mean that every job is an open check and how ever many hours you work on it you will be paid. I too feel sorry for the poor dolt who would turn over a project to someone without so much as an estimate as to how much it will cost.

However, this doesn't change the fact that you need SOME KIND of idea what your "hourly rate" is before you give that "fixed price".

Very true Brian. My point being we don't have enough information from the OP to even begin to guess where his shop rate needs to be.

Pic below is a pair of parts I make and sell. For size reference, the largest diameter is about 2 1/4". The two parts sell as a pair for $45, and represent $3 worth of material and a total of 9 minutes of time on a cnc lathe.

The same parts can be made on a manual lathe in about an hour apiece, using the same $3 worth of material, but they're still only worth $45.

My theoretical shop rate on these parts would work out to $280/hr, while the shop rate for doing the same thing on a manual lathe is $21/hr. In reality, I can gross between $200 and $225/hr on these because there's always something here or there that eats up time. Because there's 2 dimensions on each part with a +/-.0003" tolerance, they'd likely have an actual gross more in the range of $15/hr on a manual lathe due to increased scrap rates.

The price of admission to make the jump from $15 to $200+ is $100,000 worth of machine and tooling. The real question becomes how much CAN I charge rather than how much SHOULD I charge. The answer in this case is $45/pr because I own about 90% of the worldwide market for this relatively low volume part. Doesn't matter if someone else spends 6 hours making the same thing, because your competition sets your price, and I'm the competition for this item regardless of where you're located. The OP is faced with the same problem of prices set by the competition, so he really has to look at what the competition charges for various jobs and work backward from there to see what his rate would have to be to make himself competitive based on his own skill level and available equipment. For any of us to make even a halfway guess at a competitive rate, we'd need to know more about his skill level, equipment, and the type of work he plans to seek out. Unfortunately, there's no flat rate manual for what I do or what he's planning to do.
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