Hourly rate for Machining?

I have generated couple of leads but don’t know what to quote for what they want. I wanted to know how most of you, who are into business, decide what to quote. Do you only go by the machining time and then have some mark-up or you just go by the size? Is one preferred over the other? Comments? Any and every input will be helpful. Thanks!

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I only do paid jobs occasionally and even then I’m not looking to make a profit, but i suggest looking at a couple of key factors like any job shop would:

  • Materials - How much do they cost, and how hard is it to re-stock? Unless you’re unusual, don’t expect to be able to get everything you need from your cutoff collection. Since this will probably be your largest hard cost, it probably has the biggest impact on the final cost. Don’t forget packaging materials.
  • Overhead - Electricity for the LM, the lights, heater, etc. This is often overlooked but is worth considering, especially for long jobs in a cold dark garage. When you’re looking at a $50 item with $25 profit, $1 for utilities is 4%.
  • Machine wear and tear. Consider all the things that are very gradually wearing out as you use your LM - cutters, belts, guide wheels, anti-backlash blocks, etc. This is a hard number to come up with when you’re just starting, but assume your cutter will stay sharp for 25 hrs, and the machine consumables will last 250 hrs, prorate these costs, and adjust as you go. You now have a number for how much it costs to run your machine per hour.
  • Your time - This is the one that most new jobbers underestimate. Think of the time you’ll spend ordering materials, designing the job, discussing with the client, setting up, cleaning up, packaging, shipping, etc. For me, it’s the biggest factor - My time is valuable to me. Don’t underestimate its value to you. Putting a number on your time’s cost/hr is unique to you.

When you get a handle on these costs, add them all up, and decide how you are going to price your parts. One-time special order projects are obviously more costly because you may not be able to re-use any of the design time. Things you’re going to make by the hundred can have lower unit costs because you don’t have to re-design each time.

I have friends with wood shops and machine shops. The wood guys sort of agree that for one-offs they charge 4-6 times the cost total, and go higher for rushes and odd materials. One guy has no problem charging, and getting, 10x. You may want to stay lower to lure customers back. Repeat customers are the best customers.

I’m sure you’ll get better advice from the LongMillers out there who are actually trying to make money. Hope this helps at least helping you consider some of the costs involved.

Have fun. Stay safe.

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Thank you so much for such detailed response! I will surely try to put a number to everything.