pricing

[john teichman]

I am interested in getting what would be fair pricing for the sign posted i will try to get 2 pics on here thanks all.

[john teichman]

The Gillian sign has been redone with proper pitch cutter posted wrong pic. both are 5/4 select red cedar. just don't know the value i have to start charging for some of this work if its good enough?? size about 11x36.

[Geordiepom]

The Gillian sign has been redone with proper pitch cutter posted wrong pic. both are 5/4 select red cedar. just don't know the value i have to start charging for some of this work if its good enough?? size about 11x36.

Gillian or Gillen? I would check before showing the client!

Seriously though John, it's not easy to answer your question but I hope this helps: You need to first of all decide how much per hour your time is worth; including time taken to visit clients pick up tools & materials etc., look at how much your equipment cost and within how many years you hope to pay that off. What are your overheads? Electricity, router bits etc. How much of your home/workshop does your gear take up? What's that costing you? Once you've done that divide it into an hourly rate for running your CNC machine. If it comes to say $100 per hour then when you're offered a job you can just say to yourself "Well that would take me an hour and a half so I'll quote $150 plus materials & delivery".

Sounds a bit daunting I know, but hey - you'll only have to do it once.

Cheers
Dave

[john teichman]

thanks for ans. so quick the spelling is gillen on sign that is correct. should i look at ebay signs or internet signs for prices or don't look some are awful cheap ??

[tejaswood]

Even though I am new to CNCing and my formula will probably change, I have come up with my own formula based on my companies standard product production.

Design, drawing, etc... $50.00
Material.... X dollars or X cents (depending on my costs) per square inch
Machine time.... $1.00 per min.

An average sign 12 x 24 from maple and 15 min. of machine time would be;

$50.00 setup
$15.00 machining
$14.40 material cost

Total: $79.40

I have to qualify my numbers however. I am a production shop that sells wholesale and in minimum quantaties. Our orders can range from min. of 10 units to several hunderd. You might want to adjust your machine time to $2.00 per min. or adjust your setup time and of course your material. We buy most of ours at wholesale so we can sell it much cheaper.

I'm sure I am just repeating what others have said, but guess I needed to put my .2c worth in.

[TReischl]

The real temptation is to sell your work too cheaply. It has been a problem in all woodworking for years.

I have looked at EBay, sure enough, there is a guy there selling routed house signs for like $25 bucks. Of course that scares all of us a bit. How does he do it so cheap? The answer to that is easy, he is not making very much money per sign, he is hoping for volume. Or he does not think his time is worth anything. He may not be there next year.

But the reality is, there are "shops" that spring up constantly with low prices, they typically do not last, but what they do is keep prices WAY down, someone is always willing to say "well, I know this shop that does it for less than HALF of what you charge!"

If you talk to the vinyl sign shops, they have the same problem, someone buys a vinyl cutter and starts working for 5 bucks an hour, they are not in business long, but boy, do they hurt everyone else while they are doing it.

Since most anyone can go out and buy or build a cnc machine and learn to program it, this problem is not going away anytime soon.

The solution to this is obvious. Do quality work, cheap shops very quickly start cutting corners, build relationships with customers. As they say, the lack of quality remains long after the low price is forgotten.

[CRFultz]

The real temptation is to sell your work too cheaply. It has been a problem in all woodworking for years.

I have looked at EBay, sure enough, there is a guy there selling routed house signs for like $25 bucks. Of course that scares all of us a bit. How does he do it so cheap? The answer to that is easy, he is not making very much money per sign, he is hoping for volume. Or he does not think his time is worth anything. He may not be there next year.

But the reality is, there are "shops" that spring up constantly with low prices, they typically do not last, but what they do is keep prices WAY down, someone is always willing to say "well, I know this shop that does it for less than HALF of what you charge!"

If you talk to the vinyl sign shops, they have the same problem, someone buys a vinyl cutter and starts working for 5 bucks an hour, they are not in business long, but boy, do they hurt everyone else while they are doing it.

Since most anyone can go out and buy or build a cnc machine and learn to program it, this problem is not going away anytime soon.

The solution to this is obvious. Do quality work, cheap shops very quickly start cutting corners, build relationships with customers. As they say, the lack of quality remains long after the low price is forgotten.

I guess I'm one of those guys

I sell small signs for about 30 bucks. I make a nice profit, which in turn allows me to buy more tools.

BUT,...this is a hobby for me, I have a job and I sure don't want another

I have always went buy the saying .....what the market will bare..... if I tried to sell a sign for 60 bucks i would never sell one and therefore my hobby would not be self sustaining.

If I was to do this for a living there would be no loss of income from my work and therefore I would charge more but still a little less then the other guy down the street.

my $.02 worth

Chuck

[TReischl]

Chuck, selling a few signs around is no big deal, but when a guy runs a business and he underprices, he hurts himself and everyone else. Frankly, I don't think 30 bucks for a small sign is a low ball price, especially if it is just vcarved, a few coats of finish or paint slapped on and that is that. You are right, it is what the market will bear.

I have some other problems with pricing schemes I run across on the internet. I am trying to figure out where these guys come up with $100+ per hour of machine time. Having worked in industrial lasers, which are WAY more expensive to operate, consumable cutting gas, electricity for cooling towers, laser itself and a $400,000+ price tag, I know that most laser shops (CO2 sheet metal cutters) are charging between $100 and $150 per hour. It is quite competitive. Where someone running a router thinks they should charge $100/hour is beyond me. Let's do some math here:

100 per hour X 2000 hours (8 hour shift 5 days per week) = $200,000 per year.
Electricity: 12 X $150 (and I think that is fair) = $1800 year
Router Bits: Not even worth calculating = $2000 per year

So, we have roughly $196,000 per year. ( I rounded things off)

As we can all see, it would be GREAT if $100 per hour could be achieved.

I know, I know, what about time marketing, programming, painting, sanding. . .etc. OK, so you can only run the machine half of the 2000 hours. . . . that leaves $98,000 per year.

How about this calculation:

The machine cost $10,000 with software. I know the machine will run 5 years without a major overhaul.

5 X 2000 = 10,000 hours of run time. To pay for the machine, I need to charge $1 per hour, double that to buy tooling and do any repairs. That means I charge $2 bucks an hour for machine time.

So what it really comes down to is this: How much is YOUR time worth to operate the machine, program it, do marketing, painting, sanding, etc? Whatever that is, add $2 per hour for machine costs and you have your number.

Small house number signs I have made usually take about 3 hours of my time when all is said and done. Designing, routing, sanding, painting. If I sell the sign for $30 bucks, I might as well go work at McDonalds and get a free double cheeseburger too. Like you Chuck, I do sell some signs for that price, they go to neighbors and I know they are getting the deal of the century. Heck, for really good neighbors (the ones that occasionally feed me a free beer) I make them for free!

I guess what I am trying to say here is that tryng to price work based on machine run time is a bit dangerous. Notice TejasWood's calculation, MOST of the price is in design, not machine time. Something to be learned from that.

[tgm]

OK, here we go with the ' ...why do you charge so much scenario's'. As a business owner who makes his living with equipment including CNC's let me be the first to say that just the cost of machine alone cannot be considered in justifying a profitable shop rate. Add in the electrical cost and the tooling and your still not even close.

The machine needs an operator.....
The machine needs maintainance, software and hardware updates...
Tool holders and collets have limited life spans.....
Overhead and profit costs....
Insurance and workers comp costs....
...and the list goes on.

Trying to justify a machine rate by saying the machine will be running full shifts each day of the week is ludicrous at best. I have never been in a shop yet, woodworking or machine, where the machine uptime efficiency has even approached 75% let alone 100% of a work week. It takes more time to load, unload, re-fixture etc than it ever takes to run most jobs, unless you get that occasional production run type job.

As far a tooling goes, it plays a great part in determining a true rate that will work for each shop. I have had simple jobs using 3/4" particle board with plastic laminate on both sides just eat up a $80 compression cutter. This cost has to go in the mix somewhere.

Each shop has to calculate what is best for his situation and his market. A fully burdened CNC operator who also uses some time to design and program will cost me $35/hr alone. Add to that the non productive setup time etc and his cost goes up and I haven't even figured in the cost of the machine, tooling, material, finishing etc.

I know of sign shops in CA that charge $150/hr for CNC time and in the grand scheme of the jobs they are doing, it's peanuts.

Let the job and the market guide you to determine your rate. Why should you work for nothing or try to compete against someone doing it as a hobby. If you make your living at it you need to charge a fair and equitable rate that will allow you grow as a business.

Enough of this non-sense now....

back to work,

Tom in PA

[TReischl]

Just a side note TGM.

There is a type of cnc machine cell that does approach unbelievable efficiencies. Mitsubishi manufactures a laser processing system call the River. Basically it is a number of laser cutters being fed by towers of materials. Full sheets are prepositioned on shuttle tables, material load time is incredibly low, the machines run 24/7. Programming does not interfere with running jobs, etc, etc. It is incredible to watch a system like that. There is a shop in Chino CA that uses an early version of this system, just amazing.

I have to agree with what you said in your post. I might add, it is like the old song "You got to know when to hold em, know when to fold em, know when to walk away" When it comes to competing with a hobbyist, walking away is probably the best bet.

[tgm]

TR,

Coming from a high speed automation backgound, I can agree with you completely. But after being in the architectural woodworking arena for more than 20 years, all of those type of examples do not apply. This is a unique environment we work in where the scales of economy and high production do not exist for the most part.

You and the previous poster were correct. Most of the time is spent in design rather than actual production with finishing running a close second. Most times we have projects where it costs more to finish and pack than anything.

All that said, we still have to charge a shop rate that will allow us to maintain our business at a comfortable level and allow our employees to make a good living. If that means turning down jobs that at a very low price point, so be it.

Interestingly enough to illustrate the point, I just got an inquiry in this morning for a 10K part production run in baltic birch plywood. The file came in with all the parts nested, one next to the other, with no cutter allowance, edge selvage etc. The customer then proceeded to dictate what price she was going to pay for the parts. Well, this type of inquiry just gets tossed out as they are looking for someone to jump at the price, based on the qty. These type of jobs never work for us.

To each his as they say. One old timer once told me "....if you are going to work on a job for nothing, take the day off and go fishing."

Good Luck and Keep Busy,

Tom in PA

[john teichman]

Hi this is great dialog i love it, to be honest i have been self employed in n.y. state for 30-35 yrs. in plumbing sewer&drain cleaning w/ payroll employee's so i feel as i have been a survivor of the wars however i have had a cnc machine for approx. 10 months or so i am retirement age and want to keep busy and make a little, anyway thanks to every one this is great lets keep it going John. by the way my machine is posted in the gallery a few weeks ago.

[Ernie]

John,

we are also in NY state (the land of taxes) and we started out about the same, making wood signs then wondering how to sell them.
We were a little ahead of the curve having built our first router in 1994. All my friends thought we should sell at craft fairs.

Well, we sold a few house signs for $99 and learned that was too cheap. At this point we won't even turn on the router for less than $350. Most of our signs are 3-4X that amount.

You can see some of our signs at www.balchsigns.com

ernie

[john teichman]

OK you guys i just put this black cat sign up in Lake Placid n.y. on sat. lets put a price on it for me?? the coffe bean & lake view was quite a bit early in the spring. 16x48x1.5 select red cedar

[Ernie]

John,

If we had done the signs, the Black cat would have been $400 and the Coffee Bean would have been $550, the customer would have to pull the permits and install them.

We have found that clear finish on wood does not last outdoors in the sun so we would have used painted signfoam. The steel hardware will rust and stain the sign (guess how we learned?) so we wrap it in black vinyl.

Nice mounting on the brick wall, vertical text is always hard to deal with, we try to talk people out of it.

I like the lake view oval rider especially the trees.

ernie