How Much Do I Charge to Make Parts 

Seems like a low ball price to me but I'm in NYC area. I would like to see how you estimate the price you give the customer before you fabricate. Are all the tools/machines fully paid for in your shop? Do you figure in the price of overhead in your shop before you even give an estimate? What about those days when you have no work? Your landlord (or bank) still wants his rent/mortgage payment during your shop's idle time. How many competitors in your area are you bidding for this same job? did the customer want a "rush job" did you have to pause a bigger job to do this one? What would charge for that? These are questions others might want or need. If you could address them I'm sure your viewers would love to hear your experience in these matters. I know I would. Great video you've made I was very impressed. Keep up the great work!

@@denniswhite166 you're REALLY overthinking how to bid. The customer doesn't care about any of that, your bid shouldn't either (except the rush bit). Your overhead is accounted for in your hourly rate, as is your down time, cleaning, machine payments, etc. The unknown is how long it will take to make (experience tells you that) and material costs/how you handle mark ups.

@@42Fab OK I see your point but where I am your price would still be low but that might be because over head where I am is very high. Still, your methods are very sound. From the comments I see many who would like to see a video on "How to Estimate a Job" as would I. Thanks for your reply.

Awesome thank you so much I really enjoyed your video . Very helpful very useful info

Awesome would love to see the estimating video. I have an electrical business and seriously need to charge WAY MORE!!!

Quoting is pretty much the same way. Figure materials and time unless your new to fab most people have an idea of how long things take. Just remember that you always need to make $$.

Agree

Interested

@@robertnorman3181 That's easier said than done, but that is the jist of it. If there was a science behind it, I would love to know. Essentially, it still comes down to guessing if you price before hand.

Yeah me too

I don't break my fees down this far. My labour charge is from the time I start the job until the time I finish the job. If it's not completed in one day, I add time segments together. I'm selling my time. It covers things like walking between machines, changing gas bottles, expendables, switching wire spools, office fees etc. A job in the $50-$300 range isn't worth that much billing detail. On a big job, there might be more detail, but it's of coarser data. That's just how I do it. It's been working 🤷‍♂️ I see myself as a hamster on a wheel, running 6 days a week. Someone comes along and buys up some of the 10 hours available for that day, and I just keep running on the wheel. lol

So charge $100 an hour, and the markup should pay all the OH cost.... seems a little to high

@@FixNewsPlease It's not how you charge the client, it's how you do your internal cost calc breakdown to understand your numbers and business

@@AcePhotoSverige Staying market-compliant and competitive is key. Find the balance between internal cost, offered value to client and amount to charge that will keep you in business

@@MHTutorials3D I spend my time making money, not filing data. To each his own.

it's to set the zero point... i have a cnc too but this is so awesome!!!

maybe he playing halo too

Back in 2009 I used an Xbox 360 controller on my CNC-machine to set the zero point. I used the controller to play "Halo" and "Crackdown" while the CNC-machine was doing its job after the initial setup. :)

I thought I was dreaming when I saw that

Yep I do a lot of work for farmers and they are terrible for this. One wanted a large pair of gates made for a cattle yard (25m long each) but wanted to use scrap metal from around the farm. Knowing the business very well I am certain there wasn't enough materials laying around the property and he wasn't very understanding that the labour cost would quadruple and outweigh the cost of materials with a much poorer end product.

great point... what was that particular business type?

@@ACoustaDC Basically everything relating to electrical and increasingly electronics , I tried not to turn down any paying jobs.

What part of the country was this, out of curiosity?

@@timothyandrewnielsen Point dexter ferry Oklahoma

Pablo is correct that the time charge for welding didn't account for consumables, service time for changing gas bottles and sharpening tungstens, plus the time to go and swap the bottles and purchase more consumables. There was no accounting for the capital cost of the welder or the welding table and fixtures. Shop overheads, the work vehicle, the worker, worker benefits like holiday pay, sick pay, long service leave, superannuation, and professional development. The list seems almost endless.

@@markfryer9880 my thoughts exactly

@@ccox7198 In theory, a lower quality drafter would charge a lower rate and it would all come out in the wash. In practice, you gotta pick your shop well.

You guys are correct. You need to your true costs before you can get to a quoted sell price. Also different work Centers will have different costs. Take the plasma cutter, after working out all the costs(power,nozzles,gas etc) you need need to add a replacement cost amount or percentage for the machine, so you can purchase a new one when needed. And each work center needs a setup time as well. Because that material will not always be right next to the shears. There is no point charging $100 hr because the guy around the corner is charging that, when your labour cost could be $100. Sell price will always be reflective of the current market price for similar work. Know your cost is key, you then add maximum profit percentage to reach market price. Some products you might be able to add 50% others 10%. With info over time you will also know what type of jobs you make more profit on, these are the types you then concentrate on. Another thing to consider is your win/loss ratio. Keeping this at 50% ( this % will change depending on setup) will help you work out the local markets rates for you items and you will know if you a too expensive or to cheap. Sorry for the long reply

@@ccox7198 Sometimes jobs are so large that a flat drafting fee won't work. Say someone needs the bracket in question drawn up but the cardboard template is not provided and the drafter must design the part from what it bolts to? Would the flat fee for the part in the vid be the same as a full roll cage?

It's pretty common to see "Shop Minimum" small job price of $150 or more. One thing to consider is the "in between" time associated with a job: the material didn't move itself from stock rack to each machine and the sheet didn't restock itself. And there's incidental consumables to consider, which were not mentioned--these need to be a line item, as does overhead. There are a lot of "associated" costs that are hard to tack onto small jobs. Maybe they just get lumped onto larger jobs that can more feasibly absorb them? This is the art of small business management! Best, Andrew @BranchAndFoundry

@@drewt3210 Everyone runs their setup differently but in my experience this gets charged as part your markup. In my world we refer to all the "in between" as "overhead" time. Additional costs also are things like calling in the material delivery, interaction with the client, shipping and handling (if needed), keeping YOUR records like time charged, etc. So part of that markup is your profit-margin and then part of that is overhead. Overhead is hard to quantify as a per-job basis (because some require more than others) but like you're alluding to, you also just can't eat your overhead. This doesn't work or scale well for all industries so your mileage may vary depending on application but that's the general idea.

Alibaba put out a rfq and got 50 aluminum 100x100 faceplates cut for 86 bucks

My old boss used to complain because i would make a pattern for a part before i would make it in aluminum or steel. Guess he just didn't understand

@@drewt3210 I think you are correct. I just go with a minimum of 1/2 hour. The justification being there’s no job that takes less than a half hour, once you factor in all the incidentals.

and still the audio is not in sync

Richard of 42Fab is another good guy who gives real world job cost/pricing breakdowns. Both Justin & Richard are rock solid dudes who go the extra mile for all of us! Adam Heffner of Maker Table is another one on a mission to help the little guy. Best, Andrew @BranchAndFoundry

Thats on the high-end of double what mechanics charge/hr in most areas

@@alabastardmasterson here in nj , that's the going rate

@@Emilthehun I think in any metropolitan area that sounds about right

Sometimes they dont even show picture

That is where experience comes in, often hard won with jobs that were done for very little money or no profit at all, profit is what you earn !! after all the costs have been dealt with, and the customer still thinks you charged more than enough.

$175 for first hour onsite $100 every additional hour onsite...9yrs mobile TIG welding...85% repeated customer business and yearly growth..

@@michpatriot9097 this is what you earn today as an experienced person, and you appear to have done rather well, all credit to you, but this is nine years down the line, how many jobs in your first year didn't pay as well as you would have liked?. As a complete unknown with little experience it is very difficult to set realistic rates and expect custom, this is the situation many find themselves in starting out hence the desire for a video on quoting, the only advice I would give after twenty five years would be to sit down and look at ALL the costs that are there plus a wage you could get by on (not one you would like), and that should give a good start for an hourly rate, after that it is down to experience as to how long it would take. I started with gas welding before going to stick and mig, now looking to try tig for aluminum, any hints on what to buy or look out for?, this is for my own use as I do not weld commercially.

My guess would be that he factors that into the flat fee portion

@@zackrogers9334 I think he said the $50 flat fee was for drafting.

I noticed that as well. There is also quite a bit of time not being charged such as set up, material gathering, estimating, invoicing etc. On a small job like this it wouldn't be much but on a larger job. Especially if accuracy is important.

Consumables should be changed separately to actual labour to avoid accounting and tax problems.

In another vid he goes through how to work out your hourly rate and this is basically what it costs to run the business Inc rent etc and profit margin. Pretty sure consumables were covered in that $100/he but also the material market would be 10 fold the consumable costs

Yes and no and there are lots of ways of handling this. His 100 per hour covers a whole multitude of costs which get shared with other jobs. This covers insurance, rent, advertising, electric, and a ton of other stuff. It can also include an average amount for mistakes time, or he could add this as a fixed time charge based upon how risky the job is. He did spend 3 minutes cleaning up, but I can guarantee he spent way more time than that handling the client enquiry, dealing with payment etc. I also think he short-changed himself in materials, because if he can't use that offcut of aluminium then that is a further cost, and those welding rods aren't free either.

@@stuartgreenshields5591 doesnt matter even people around me know their mistake is their fix they would eat the 3 mins

I had an idea i posted above i was hoping for ideas/ feedback from anyone

Austin Brown . . . You'll always be learning and paying to learn. I was a month short of age 41 when I started my business in 1979. I had always thought that I needed to learn more so I took accounting class, sales, business law, etc. and then took the big leap. Then I discovered that we pay to learn, by our mistakes, lack of experience, etc. I closed my business in 2001 but continued brokering jobs for a handful of customers and just this month I closed my sales tax reimbursement account with the state. I'm 82 and I figured I needed to reduce responsibilities eventually and now seemed to be a good time. I miss the customers, being helpful to them. I strongly agree with the fabricator in the video: it is important to understand your costs. Every business has a cost even when you're not doing any business. The meter is always running. The prices you charge depend largely on the value to the customer. Some people may quibble over any price. Others will gladly pay any price they can afford if you can have their job ready tomorrow morning so THEY can use it to make their living. Good luck. It's a great adventure.

@@nemo227 You will pay! You will enjoy paying! and you will enjoy paying again! You will make money! You will enjoy making money! and you will enjoy making money again! Little paradigm you reminded me about "You'll always be learning and paying to learn"

@@weldslikebutterfabrication483 You are absolutely 100% correct. After about year 15 I told my wife that I had enough confidence to parachute into any city in the USA and I'd have a new business up and running within a couple of months. Reality, of course, can be quite different but I had the confidence. The history of all of the successful people (business, entertainment, etc. ) that I've read about has a common thread: perseverance. If you're in business or working on some other project, good luck to you.

If you estimate on the high side, you always look better when the cost comes in lower.

@@frankdeon6539 - thanks

If you quote on the high side and do it faster that's a bonus. You can either keep the extra, or tell the customer you did it cheaper than quoted and charge him less. That helps make repeat customers.

@@jonarmstrong6214 - cheers, makes sense 👍

@@jonarmstrong6214,perfect sense! I have repeat customers because of this advice

Lol

Not to mention mistakes made during cutting and fabrication. Shop soiling or damage to materials.

Pretty sure the dude makes his money via RU-vid, not fab work.

You don't. That's another thing.

This is where your labor rate is determined. You need to know how much the overhead costs are plus what you want for take home pay and divide by the hours you want to work. Say rent, repairs, budgeting for new tooling, etc is $2000/mo and you want to take home $3000/mo while working 40hrs/wk would be $5000/160hrs= $31.25/hr

Less

Quotes are difficult and people should be told at the beginning that they aren't a final price, and the price could go up. It comes with experience, but also calling someone at the first oppurtunity that something comes up that would change the price. Don't do anything else until they agree. If you spent less than 30 minutes on it, dependign on your local market, best to give it back if they say no without charge, above that, charge for only labour

The guy seems satisfied to do work like this but he did miss one critical component. He forgot to pay the business. Paying the business is important for ambition and expanding. Essentially he forgot to markup his labor. One set of labor to be paid to an employee and the markup is to be paid to the business.

@@Imaboss8ball The $100/hr would include business markup on labour.

Simple. Dude didnt pay for the robot slicy-dicey gizmo. He doesn't consider wire as material nor sanding discs, shop supplies. He lives in a fantasy world behind a microphone doing half the math. Why didn't you ask him why he decided, in his creative license, to make the piece 30% heavier than the customers template and why he removed material along the welded corner?

That's what the hourly rate usually contains, so it is factored in to every job done. But on the other hand, buying expensive machines/systems usually makes the jobs go easy & faster, which translates to less time spent on a job/part, so buying machines to make your life easy might very well translate to cheaper parts, and thus more sales volume as you get to be more competitive. Delicate balance, but knowing your numbers and where they come from helps a lot with decision making.

@@JaakkoF depends how much business your doing and how big your company is.For a one man band it must be a big investment and work 24 hours a day maybe.

I deal with the same BS. I ask customers to draw a picture, and text me a photoand sometimes they act like I am really putting them out. They don't seem to understand that a technical drawing described over the phone, is just asking for trouble. Then when you fabricate something from their description and it's not correct, and they expect you to fabricate it again for free.

@@gavinbarham542 Or when they think call outs for quotation is going to be free 😂

If you got the skills and hardware... then it makes no sense for you to go to someone. Your comment is really voided. If you don't have the skills or the hardware... then you go hire someone that does. If it's too expensive you shop around or you go fuck yourself.