Getting the price right for your work...

[Davek0974]

Scenario...

One-man band, large home workshop, making garden ironwork etc - small-scale metal fabrication work.

I am trying to figure out a pricing model that i can use when calculating the cost to charge for new products and for custom work. My work mostly consists of design, plasma-cutting, welding and then maybe powder-coat, galvanising or spray paint finish where applicable.

I do the design, cutting, welding, powder-coat and spray in-house, galvanising is sent out.

I am slowly building up the business from a hobby to a full job to replace my day-job hopefully one day. I have an idea of what i need to earn per hour to maintain the standard of living we have now(as an example) but need to factor in all the other costs too.

I do not try to compete with the garden-centre brackets etc as that is fruitless and soul-destroying - i cannot even get the raw steel for what they charge for a finished item!

I have written a little app that works out a cost for distance cut on the plasma CNC, the material cost per sq cm used, there are fields for design time in hours, paint/m2, powder/m2, weld distance, and a few others.

What i am unsure of is how many of these factors do you apply to a new job or do you simply apply everything that seems to be required - or does that run the risk of double-charging and giving an unrealistic price and losing the job or creating something that will never sell????

I know this is a bit of a "length-of-a-bit-string" question but was wondering if there was a regular model for fabrication work pricing out there????

Thanks

 

[AllUpHere]

Cost plus pricing is flawed. You should work out what the maximum price the market will accept is, and then work out how you can maximise your profit selling at that price.

As always, marketing first, and then do everything else in line with your marketing.

 

[Davek0974]

Hmm, I can't see how I would apply that, If I have a product that is not available anywhere else, I could theoretically put any price tag I wanted on it - at one end of the scale I would make a loss, at the other end I would get laughed at.

I also need to be able to calculate a price - if a customer is on the phone with a prospective order, I need a way to get a price up pretty fast, there is no time to go searching the 'net or other dealers for comparison.

I think some sort of cost-plus is the right way here, I'm just unsure of the framework.

 

[AllUpHere]

Hmm, I can't see how I would apply that, If I have a product that is not available anywhere else, I could theoretically put any price tag I wanted on it - at one end of the scale I would make a loss, at the other end I would get laughed at.

I also need to be able to calculate a price - if a customer is on the phone with a prospective order, I need a way to get a price up pretty fast, there is no time to go searching the 'net or other dealers for comparison.

I think some sort of cost-plus is the right way here, I'm just unsure of the framework.

That is exactly why you need to base your pricing on marketing research, and not a formula based on what it costs you to make it. If the only acceptable price for the market is one at which you make a loss, you have no business. However, it may be the case that you decide a price that's ok for you is only half what the market would be prepared to pay.

Cost plus is ok for a hobby, but if you want to make a business out of it you are going to be much better off doing it properly.

 

[Davek0974]

Ok, so for simple stuff its pretty much "charge what everyone else does"?

But what about unique stuff where there is no bench mark, you have to get a price somewhere - surely that price comes from cost-plus to start with?

 

[GraemeL]

Hello Dave. I agree with you, a cost plus model is the basis. For one off items assessing a market price a is finger in the air.

Suggest you make up a price based on 4 elements

Set up charge - this could be a fixed amount per job, regardless of size. Rather like the call out charge for a plumber. This is an important element to include.
Materials - direct cost
Time - calculated to pay the hours worked on this item only.
Worth - any addition you feel you can make as additional profit. (eg factors like the value to the customer, how busy you are at the time, the uniqueness of the job)

As its not a full time job, you don't have to try to cover all of your time. Take care though to keep a record of how much actual time you spend on this, including the time getting materials etc, to make sure that if it was full time the income would work for you.

 

[AllUpHere]

Ok, so for simple stuff its pretty much "charge what everyone else does"?

But what about unique stuff where there is no bench mark, you have to get a price somewhere - surely that price comes from cost-plus to start with?

No, it's completely the opposite of charge what everyone else does. The last thing you want is to treat your products as a commodity.

There is always a way of finding out what price the market will accept.

Anyway, you seem to have made your mind up, so I'll leave you to get advice based on your cost plus pricing formula.

 

[GraemeL]

There is always a way of finding out what price the market will accept. .

Agree - given sufficient time and resources and enquiries.

 

[AllUpHere]

Agree - given sufficient time and resources and enquiries.

It will take a little effort, I agree. But once it's done it will pay for itself in no time. If the Op spent a little time finding the most lucrative market for his products and the price it would accept, he would more than likely sell his products for 5 times what he would have (using his current process). Cost plus calculations are fine for some businesses, but not this one.

 

[Davek0974]

No, it's completely the opposite of charge what everyone else does. The last thing you want is to treat your products as a commodity.

There is always a way of finding out what price the market will accept.

Yes, I could tag it at any price, maybe it sells but then i have the doubt i did not charge enough, maybe no sales so did i charge too much or is it just not what the market wants?

This idea seems just too vague to me.

Anyway, you seem to have made your mind up, so I'll leave you to get advice based on your cost plus pricing formula.

No not at all, I just cant see how it would work for me that is all.

 

[The Byre]

I do not try to compete with the garden-centre brackets etc as that is fruitless and soul-destroying - i cannot even get the raw steel for what they charge for a finished item!

The very moment I read that, alarm bells, claxons and all kinds of other warning sounds went off in my head!

Mild profile steel costs about £1 a kilo wholesale. The specific weight of steel is eight, so a litre of steel should cost £8 plus VAT. All profile steel is supplied in 6m lengths, so a 10mm by 10mm rod should cost £6 bulk wholesale and maybe as much as £9 retail.

Let us now take a garden gate that is 1m by 1m and is made of 10mm by 10mm rods and 5mm by 20mm top and bottom. If the rods are spaced every 10cm, that is 13 1m lengths or 1.3 litres, i.e. 10.4 kilos at £10.40 wholesale or c.a. £15 retail cost for the mild steel.

Nowhere on Planet Earth is anybody selling a brand new garden gate in a super market or DIY store for under ten pounds!

Let me read between the lines here -

You are buying your steel in the wrong place at the wrong time and in the wrong lengths. Because you are working 9-5, you cannot deal with a wholesaler. You don't have a truck to pick up 10 or 20 tons of mixed profile rods and do not have the cash to pay £10,000 for a small load.

So ignore all the vapid management speak about USP and 'positioning' and market research - concentrate on the nuts and bolts of setting up a proper fabrication yard and finding a wholesaler in Sheffield, Scunthorpe or similar steel town. You need a truck, you need space to store all this stuff and machines that allow you to cold-bend and weld quickly and easily. A really, really, really powerful spot-welder will do wonders for your production!

Never mind playing with pretty little 'apps' - get the machines, so that you can bang together a simple garden gate in one hour and get a yard that allows a 40-ton artic to turn about and a tractor with a loader so that you can unload the thing. Tip - you will need at least 3 x 100 amp mains power supply, possibly more.

Cost that lot together and work out how to get from where you are today, to actually having a business that can support you and your family.

 

[Root 66 Woodshop]

Personally, I think if there is something unique out there to make, let's say a coffee table for instance and there's nothing like it anywhere in the world and some chap wants your table... I would price it up as Time + Materials x 3 = Sale Price

Why x3?

Gives you movement to have an open discussion about the product and explain your valuation - there's nothing out there on the market like it - also gives you a reasonable margin even if you drop to x 2 if he complains about the price when you say listen, as a one off special deal blah blah blah.

 

[KM-Tiger]

Not clear is your work all bespoke, or are you making products to sell?

 

[Deleted member 59730]

There were guidebooks for this sort of thing published by COSIRA years ago. From memory you should calculate working productively one third of the time. Another third is spent on sales while the final third is spent on Admin and R&D.

There is very little difference between the ratios of any one man band business be it pottery, joinery, photography or metal work.

 

[Davek0974]

The very moment I read that, alarm bells, claxons and all kinds of other warning sounds went off in my head!

Mild profile steel costs about £1 a kilo wholesale. The specific weight of steel is eight, so a litre of steel should cost £8 plus VAT. All profile steel is supplied in 6m lengths, so a 10mm by 10mm rod should cost £6 bulk wholesale and maybe as much as £9 retail.

Let us now take a garden gate that is 1m by 1m and is made of 10mm by 10mm rods and 5mm by 20mm top and bottom. If the rods are spaced every 10cm, that is 13 1m lengths or 1.3 litres, i.e. 10.4 kilos at £10.40 wholesale or c.a. £15 retail cost for the mild steel.

Nowhere on Planet Earth is anybody selling a brand new garden gate in a super market or DIY store for under ten pounds!

Let me read between the lines here -

You are buying your steel in the wrong place at the wrong time and in the wrong lengths. Because you are working 9-5, you cannot deal with a wholesaler. You don't have a truck to pick up 10 or 20 tons of mixed profile rods and do not have the cash to pay £10,000 for a small load.

So ignore all the vapid management speak about USP and 'positioning' and market research - concentrate on the nuts and bolts of setting up a proper fabrication yard and finding a wholesaler in Sheffield, Scunthorpe or similar steel town. You need a truck, you need space to store all this stuff and machines that allow you to cold-bend and weld quickly and easily. A really, really, really powerful spot-welder will do wonders for your production!

Never mind playing with pretty little 'apps' - get the machines, so that you can bang together a simple garden gate in one hour and get a yard that allows a 40-ton artic to turn about and a tractor with a loader so that you can unload the thing. Tip - you will need at least 3 x 100 amp mains power supply, possibly more.

Cost that lot together and work out how to get from where you are today, to actually having a business that can support you and your family.

Hmm, not sure about most of that
You have jumped from a hanging basket bracket to a garden gate - My example was a bracket, these are available for £2 and upwards, I know for a fact that I could not not get the steel, bend it, weld it, fettle it, powder coat it for that, this is why i used it - it is the worst item to try and compete with.

No one i know buys steel by the litre??? It is priced per ton, I DO use various wholesalers and steel stockholders, I DO keep steel in stock, and NO not ALL steel comes in 6m lengths, much of the small section stuff is anywhere from 3m to 7m in length.

Your model assumes I WANT a seriously large fabrication concern - that size of business is no one-man-band. I am steaming towards retirement at a frightening pace it seems, we have no children to support, no mortgage to pay, I want a small business model that can support two people and pay the way, I am 20 years too late to be setting up a large manufacturing concern.

I prefer to be fast to react, do the smaller jobs larger people turn away, focus on customer care and quality work - If i have my mega-business a simple bracket would go in the queue and may take a couple of weeks to produce due to workload, now i can usually ship next day!

Lets keep focused on small business and not multinational conglomerates

 

[Davek0974]

Not clear is your work all bespoke, or are you making products to sell?

Both

 

[Andrew Chambers]

If you're unsure keep it simple and use the Rockford formula "two hundred a day plus expenses".

 

[Deleted member 59730]

"I want a small business model that can support two people and pay the way, I am 20 years too late to be setting up a large manufacturing concern."

Colonel Saunders started KFC as we know it at the age of 62.

 

[Davek0974]

"I want a small business model that can support two people and pay the way, I am 20 years too late to be setting up a large manufacturing concern."

Colonel Saunders started KFC as we know it at the age of 62.

Never knew that
Can't stand KFC anyways

 

[KM-Tiger]

Both

Then I'm inclined to think you need different approaches.

For the products, then as said you need to price according to the market, but a cost plus for the bespoke work. But don't overcook it, if you have been doing this a while you will have good instincts as to what you can get for an object.

 

[Root 66 Woodshop]

Sorry, but I disagree.

All of the products Dave makes are bespoke products no matter how large or small - it's not off the shelf stuff therefore how can he price according to the market?

Example: Look at Drew Pritchard - technically speaking of course no offence to the chap as I actually love what he does... buys crap at a low price sells same crap after a bit of a spruce up (in some cases he doesn't even touch the stuff! ) sells for a higher price... and he does it well!

A one off item should be as stated previously, Time + Materials x 3 = Sale Price

Products that are potentially going to be a stock item let's call it a reproduction item (assuming Dave hold's stock of products) this is where the pricing would change and only change... i.e. if it's a quick turn around:

time + materials x 1.8 = Sale Price (and stick to it).

If this is a product that is constantly purchased then he would be unwise to sell it with an "over the top" price however considering we don't really know what he is manufacturing then I'd still say the "x 3" would still be more applicable.

 

[Davek0974]

The time + materials x 1.8 actually comes out reasonably close to my pricing scheme - your formula gives £291 for one of my large items, my app gives £250, they retail for £249 as i still think it sounds better to be under the £250 mark.

The time + materials x 3 model also seems to ring pretty true, a custom design bracket that is basically one of my stock range with a custom design on top, I would charge at maybe design time plus stock item retail so maybe £37 or so, your model would be £ 41.

Both seem pretty close I think.

Maybe I am doing ok as it is and don't need to worry unduly.

My basic rate was worked out on £200 per day so £25 per hour plus costs.

Some of my stuff is galleried on my site, some of the custom work is not shown as I ask before posting that and some customers express the feeling that they would not like it shown, that's fine by me.

If a customer comes with an idea that I really like and would want to add to my range, I negotiate a lower cost for them as it saves me doing the research and design twice - they get the product they want, I get an easy addition to my range.

 

[The Byre]

No one i know buys steel by the litre???

Neither do I, but one calculates the cost by working out the litres of profile steel required (profile surface area times length) and multiplying by eight. That way, you can calculate the raw material costs in your head and whilst talking to the customer.

Your model assumes I WANT a seriously large fabrication concern - that size of business is no one-man-band.

Lets keep focused on small business and not multinational conglomerates

Yes it is.

What you have in reality is a hobby. Well, I deal with people who come to me, thinking that they can turn their hobbies into businesses all the time. You want a business that pays a living wage. To do that, you have to produce more than just little brackets for hanging baskets. You can make those until you are blue in the face, but it will still remain a hobby.

The market for special brackets is just too small!

Just as nobody has ever started a commercial carpentry shop with Black-and-Decker tools and some benches bought from Screwfix, you cannot earn a living with a mig-welder and a plasma-cutter.

I have worked at every end of the steel industry at one time or another, ranging from the metallurgy department at a major steel works in the UK, to a small fabrication shop in Berlin and all sorts of operations in between.

Even a one-man shop has to produce a wide variety of products and needs bending machines, lathes, spot-welders, stamping machines and all types of welders and grinding machines.

 

[MOIC]

A key question:

How & where are you marketing your products for sale?

Given it's a hobby with (I presume) a limited amount of products to sell, you have to view your work as an artist.

Market your products where people will appreciate hand made products (and who are not looking for your average bracket)

Would you ask an artist how much to sell a painting for?

How good are your designs and the ability to personalise them in customer's required colours?

I agree with @AllUpHere, charge what the market allows. (yes, a little research, so what)

When you have a unique product, you can always reduce your price if it has not sold at the price you had anticipated.

People will pay what they think it's worth, IF the product is that unique.

Interior Designers, Landscapers, Antique Shops, Homes & Gardens (Magazine & Digital) . . . . . . .& . . . . . . . Etsy, should be your target markets.

Working at some of the ratios mentioned (1.8) will keep the hobby as it is with zero growth.

It's like drinking soup with a fork. You work tirelessly without getting anywhere.

An artist (Creator) should get what the buyer wants to pay.

Don't underestimate your value.

Market your products in the correct areas.

Good luck.

 

[Davek0974]

Neither do I, but one calculates the cost by working out the litres of profile steel required (profile surface area times length) and multiplying by eight. That way, you can calculate the raw material costs in your head and whilst talking to the customer.



Yes it is.

What you have in reality is a hobby. Well, I deal with people who come to me, thinking that they can turn their hobbies into businesses all the time. You want a business that pays a living wage. To do that, you have to produce more than just little brackets for hanging baskets. You can make those until you are blue in the face, but it will still remain a hobby.

The market for special brackets is just too small!

Just as nobody has ever started a commercial carpentry shop with Black-and-Decker tools and some benches bought from Screwfix, you cannot earn a living with a mig-welder and a plasma-cutter.

I have worked at every end of the steel industry at one time or another, ranging from the metallurgy department at a major steel works in the UK, to a small fabrication shop in Berlin and all sorts of operations in between.

Even a one-man shop has to produce a wide variety of products and needs bending machines, lathes, spot-welders, stamping machines and all types of welders and grinding machines.

Thanks, a very useful reply.

So, what is the middle ground here then?

I see your view of the "hobby" aspect although I prefer to view it as a "micro-business" as in my view a "hobby" is not to make money, it's done for fun.

I want something in-between.

I am in a catch-22 here - I still have a full time job, so, yes, I make my brackets, fire-pits, tools etc in my spare time - evenings and weekends. I have taken very little out of the "business", instead using all income on more machinery and tools - this year got me a bigger CNC plasma cutter - not a small expense, plus a new, bigger welder and other stuff.

The Pricing I feel is ok, I can work on that, but the growth plan, well???

 

[Davek0974]

A key question:

How & where are you marketing your products for sale?

Given it's a hobby with (I presume) a limited amount of products to sell, you have to view your work as an artist.

Market your products where people will appreciate hand made products (and who are not looking for your average bracket)

Would you ask an artist how much to sell a painting for?

How good are your designs and the ability to personalise them in customer's required colours?

I agree with @AllUpHere, charge what the market allows. (yes, a little research, so what)

When you have a unique product, you can always reduce your price if it has not sold at the price you had anticipated.

People will pay what they think it's worth, IF the product is that unique.

Interior Designers, Landscapers, Antique Shops, Homes & Gardens (Magazine & Digital) . . . . . . .& . . . . . . . Etsy, should be your target markets.

Working at some of the ratios mentioned (1.8) will keep the hobby as it is with zero growth.

It's like drinking soup with a fork. You work tirelessly without getting anywhere.

An artist (Creator) should get what the buyer wants to pay.

Don't underestimate your value.

Market your products in the correct areas.

Good luck.

Thanks, good stuff there.

Advertising or marketing is my next effort. I need to decide where to go first and then what the best method is. I am on Amazon(not to useful), eBay(pretty good for stock items plus a couple of good leads), Etsy(useless), my own site(ok so far for stock and custom leads but could do better), I dabbled with Adwords but could not come up with a campaign that yielded the desired result so shelved that.

We have a local magazine, I live in a fairly affluent area so might be good to get in there as a local business for arty stuff.

As for the art example, I have never figured out how some "artists" can use the price tags they do, or even if anyone ever buys the stuff

 

[MOIC]

As for the art example, I have never figured out how some "artists" can use the price tags they do, or even if anyone ever buys the stuff

They do, when exposed to the right buyer.

 

[Root 66 Woodshop]

The time + materials x 1.8 actually comes out reasonably close to my pricing scheme - your formula gives £291 for one of my large items, my app gives £250, they retail for £249 as i still think it sounds better to be under the £250 mark.

The time + materials x 3 model also seems to ring pretty true, a custom design bracket that is basically one of my stock range with a custom design on top, I would charge at maybe design time plus stock item retail so maybe £37 or so, your model would be £ 41.

Both seem pretty close I think.

Maybe I am doing ok as it is and don't need to worry unduly.

My basic rate was worked out on £200 per day so £25 per hour plus costs.

Some of my stuff is galleried on my site, some of the custom work is not shown as I ask before posting that and some customers express the feeling that they would not like it shown, that's fine by me.

If a customer comes with an idea that I really like and would want to add to my range, I negotiate a lower cost for them as it saves me doing the research and design twice - they get the product they want, I get an easy addition to my range.

Just had a nosey - all good stuff TBH

Personally, if I were you I wouldn't be too bothered about whether or not your priced higher or lower than "the market" your products will speak for themselves.

 

[MOIC]

Try leaving samples at antique shops within your area.

It may be worthwhile taking a drive to Stow-on-the-Wold, Bourton-on-the-Water, Moreton-in Marsh and surrounding areas.

Owners of the (nice) properties in these areas, will always buy something that "little bit different"

Most of the antique shops in the area will label your merchandise and add their commission.

When one item is sold, just replenish with another.

I used to go there often, to find unusual items of interest.

 

[The Byre]

I want something in-between.

I looked at your website and according to that website, you have built two live-steam traction engines. Quite honestly, you are wasting your talent, building doofus brackets in the shape of someone's genitalia, or whatever it is that they want! (And anybody who can and has built a real traction engine is top-notch in my book!)

Now, the market for traction engines, 3" and 6" scale is, to put it mildly, limited.

BUT

The market IS there in greater numbers for trains!

You could start with building replacement parts for such bodies as the Basset Lowke Society. It is a market I know absolutely nothing about, but it would probably pay dividends to speak to a whole load of model steam train nutters.

(We have 20 acres around our house and it is 500 yards down to the road and 300 to my neighbour at the rear. I have often fantasised about having a little steam train to collect the wheelie-bin and have it continue on to visit my neighbour, who also tinkers with machines in his shed!)

You could still do the brackets and house shield things.

 

[AllUpHere]

Just had a nosey - all good stuff TBH

Personally, if I were you I wouldn't be too bothered about whether or not your priced higher or lower than "the market" your products will speak for themselves.

Which is exactly why he needs to know what price the market will tolerate. Why undersell his skills by using some silly multiple of his costs, when he could potentially sell for much more?

For mass production on a large scale cost plus is fine. For a self employed person with finite hours in a day it's important to maximise the value of his time.

 

[Davek0974]

Ha, wondered when that would be spotted

Yes I did indeed build two engines, I spent a hell of a lot of time in the shop doing it as well! That's the downside - time. At some 5000 hours+ for the bigger one, it was ok as a hobby but no one would place an order and expect to wait two-three years for delivery. Those days are gone really now as there are a couple of companies that are fully geared up to produce these in kit form - they really do just bolt together! Fully CNC machined parts, and some very nice models too.

My machinery is/was all old-school manual stuff from the 60's and 70's, it could not produce work at today's pace or cost, great for making the odd part for a bigger job but not as a job in itself.

Using my past experience, I would have to make AND sell two of the larger models a year to just make a crust full-time. That would be physically knackering for one guy(me) as its pretty intensive stuff.

The two books featured on my site were written, published and sold to help pay for the cost of building the engines - so they were pretty much self-funding to a degree.

I much prefer more varied work like my "doofus brackets in the shape of someone's genitalia" as you put it - less intensive, more varied, different tasks and out the door faster with some cash at the end of it. The engine market is very poor at present and will only get worse due to the kit supply companies flooding the market, they lack the finesse of a hand-built engine but most buyers just want an engine to ride on.

 

[john1989]

Your starting point should be time + materials + overheads + desired profits.


If you don’t factor in time, you are selling too cheap. As you scale and take on more business, your model won’t allow for you to take staff on because your pricing model is lacking the time element.


I would also factor in material wastage, cancellations, nonpayers etc too.


Once you have a desired selling price, you can then see if there is a market for your products. There’s no point slaving away if you won’t be able to sell your finished products for a price that is worth your time.


The non-bespoke items should be pretty easy to price up as you should be able to see average costs and time across say 50 builds.


Bespoke items are just that, bespoke. I think it is only fitting that these have bespoke prices.

 

[Davek0974]

Your starting point should be time + materials + overheads + desired profits.

If you don’t factor in time, you are selling too cheap. As you scale and take on more business, your model won’t allow for you to take staff on because your pricing model is lacking the time element.

Understood.

Once you have a desired selling price, you can then see if there is a market for your products. There’s no point slaving away if you won’t be able to sell your finished products for a price that is worth your time.

The non-bespoke items should be pretty easy to price up as you should be able to see average costs and time across say 50 builds.

Bespoke items are just that, bespoke. I think it is only fitting that these have bespoke prices.

Yes and i think i have the methods now to work that out.

 

[Davek0974]

Time for an experiment...

Supposing you were making things from metal, on your own, micro-business with medium ideas

You have a project - details...

Steel used (at cost) £27inc
Time on CNC plasma table 30 minutes
Time to clean/prep parts 15 minutes
Welding/fab time 1 hour 45 minutes
Grinding/finish time 45 minutes
Cost to galvanise £15inc

Other costs not listed - electricity, welding gas & wire, grinding disks, plasma consumables.

You were hoping to make these a stock item, what would you cost it out at??

 

[AllUpHere]

I dont think we have enough info to say. How many hours does a plasma cutter do before it gets depreciated to 0, and what is it's replacement cost? How much do your fixed costs cost on average per hour? How much do consumables cost per hour of work? Etc Etc. We also need to know what your hourly labour rate is, to give us any chance at a guess.

Obviously my answer to the question would be 'whatever the maximum price the market will pay is', but if you want an answer to the question as it stands, we need more info.

 

[Davek0974]

Fair enough, lets throw this into the mix...

Plasma cost £1600 for the cutter and £5000 for the CNC table, probably estimate 5yr life.
Plasma consumables on this job - £10 max probably £5
Gas - £45 for a bottle, lasts maybe 6-7 hours continuous welding.
Mig Wire - negligible, £19/reel, usage on this job maybe 1/10th reel or less
Electric - maybe call it £10 per day, probably less
Grinding disks - £4 for this job
Time to drive to galvanisers and back - 1 hour
Labour - what would you charge here?

 

[Root 66 Woodshop]

Which is exactly why he needs to know what price the market will tolerate. Why undersell his skills by using some silly multiple of his costs, when he could potentially sell for much more?

For mass production on a large scale cost plus is fine. For a self employed person with finite hours in a day it's important to maximise the value of his time.

Those silly multiples of costs is pretty much the basis of majority of businesses out there that manufacturer bespoke items - so I'm not 100% certain on what you're attempting to get across...

There's a big difference between underselling his skills and making something that the market wants at an affordable price without trying to compete with the big boys and girls in a similar industry that are importing cheaply made "copies".



Dave personally, based upon your time spent and costings I'd have to have a guess here...

Stock item = £229

Based upon a previous mention of £25 per hour - then again though I'm unsure as to whether the 25 is your charge per hour - I think I missed that one

Plasma cost £1600 for the cutter and £5000 for the CNC table, probably estimate 5yr life.
Plasma consumables on this job - £10 max probably £5
Gas - £45 for a bottle, lasts maybe 6-7 hours continuous welding.
Mig Wire - negligible, £19/reel, usage on this job maybe 1/10th reel or less
Electric - maybe call it £10 per day, probably less
Grinding disks - £4 for this job
Time to drive to galvanisers and back - 1 hour
Labour - what would you charge here

Grr....

All of the above would be consumables that you would normally have to stock in order to complete the orders - therefore I'd be more inclined to say that these are non-chargeable additions... after all you've already got the facilities

But pending on how many of the items you would be able to sell would depend upon how much extra you can factor in - perhaps an additional £50

 

[AllUpHere]

£201.85 or round it down to £199.99.

 

[AllUpHere]

@Haunted Worlds I'm confused. I just read back through the thread and you seem to be arguing against your own points. You used Drew Pritchard as an example, but his model demonstrates my point perfectly. He doesn't add a set markup to what he buys, he literally sells for whatever the market will accept. If he buys something for a tenner, and can sell it for a grand he will.