Hopefully im in the right spot.
I know not a popular question but I’m new and still trying to figure out my pricing. I have a possible return account that I could really use at this time. I have been requested to cut 20 licence plates and 20 police badges out of 14ga. Thanks for your help and guidance.
Are you trying to figure out what the material cost will be or how much to charge for those pieces?
Yep trying to figure out what to charge for 20 plates and 20 badges at a time, with me supplying the steel. O know steel prices vary so im just looking for ballpark. Thanks
how big are they? Is your picture how they will be delivered?
12x6 plate and badge 4 3/4"x 4" delivered cleaned up.
Plates $200 Badges $60 Labor and Mat
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Thanks for the info and quick response
I would suggest you come up with a system that is repeatable. This way you can compare one job with another. Example. Figure out the price of the steel per sq foot. Then calculate the total sq foot of the project.
Let’s say 20 widgets
14g steel = $4 p/sq foot
1 widgets@ 1.5x2 = 3sq foot * $4 = $12 per widget material cost
Add 10-15% for picking up material, fuel and time.
20 widgets * $12 + 15% = $276
So $276 Material cost
Now figure in your labor . How much do you need to make in a days wages. If you sit down at a computer for 2 ~ hours designing the art, including the time talking with the client to get the job. Typically you’d be around $90-$120 hr in today’s prices. I figure if a plumber or HVAC tech comes to your house for a service call, it won’t be less than $200 for a visit close to 1-2 hours.
1-2 hours cutting and sanding the edges. Packing and preparing items for pick up.
Then consider consumables. $20? (Gas, power, tips, wear and tear etc)
So….
$276 material (pick up material, material handling 1-2 hours)
$180 labor computer work (computer work and consult 2-3 hrs.includes package and pick up)
$20 shop supplies
——————————
Total $476
Depending on complexity or unknowns. You can another 10%
Grand total - $513
So you may have let’s say 4-5 hours total investment. I a job .
$513 total job cost
- $250 material cost
Gross profit $265, 51% margin.
If you do two of these jobs in a day, you’d make $500. Of course once you have multiple jobs you’d be more efficient and be able to cut 2-3 jobs at once. Saving a ton of time but charging the same.
This model you are making 15% ontop of the material and another 10% buffer. In addition to the labor. Using a method like this for “like jobs” you’ll have a repeatable system which then you can start comparing how your prices are against competitors and adjust from there.
In my experience taking projects to get cut in the past (now I can cut my own!) they would charge $100 set up fee, then another $100-$200 for a small project. And I’d bring the steel!
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Wow thats a lot of valuable info! Thank you so much for the response.
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@PC-PlasmaCut - Thanks for taking the time to post this - You clearly understand business and profit margins!
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The way I price most of my work. I have my material price per square inch.
I double the material, I charge $100 a hour for the time the machine runs. Cad work just depends on how much time involved if the person wants several and possibly more later I can eat that time.
The prep and finish work that depends on what you are worth.
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That’s good method. Doubling the material cost is another method that can work for smaller jobs or onsite welding jobs.
Also, consider your minimums. The job may only take 15min, but the total shop time from when you walk in the door to when you leave could be 1 hour or 2 hours. Consider your bare minimum for these smaller project jobs. Some charge $50-$100 per hour is a decent minimum, per hour or per job.
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Absolutely. The way I price this my stuff this isn’t my daily grind.
All of this is good info, But one thing the everyone forgot to mention is you also have to be competitive.
Competition drives everything!
If I am not very efficient and waste alot of time, I will never be able compete with the guy that is efficient!
Nope. You have to make a living. If the competition is charging less, they may have better pricing on materials so look for better suppliers. Or they may charge less for time - evaluate whether you’re willing to work for less. They may not be including machine time and are treating their capital investment as sunk cost. If that’s the case, wait for them to go out of business.
It’s common for people in niche businesses, crafting, etc to drive pricing to the bottom. The only thing your competitor’s price tells you is whether you can make something at a price the market will bear. Sometimes we simply can’t profitably make something at a price the market is willing to pay.
People who don’t care about paying themselves for their time or covering the costs to replace their tools and are doing it as a hobby can kill professionals trying to earn a living.
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So you don’t need to be competitive?
Could it be they are better equipped, more skilled, been at longer, Etc.
Just because someone is cheaper does not mean they are not making a living
I consider my business a hobby, and I sure hope I am not keeping any professionals from making a living.
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Generally not. When you buy a Mercedes are you looking for a competitive price vs a Lexus - or worse, a Hyundai? Mercedes doesn’t care what a Hyundai costs - they’re competing on technology, safety, comfort, performance and cachet. Most Mercedes buyers aren’t buying on price but based on those other factors. Yet both cars can get you from A to B safely and faster than the law allows. When you compete on price, sooner or later you’re a Yugo.
Most people start with what the competition is charging and try to meet or beat that price. I think that’s backwards. If you can’t make a profit (materials + time + equipment + overhead) selling something at a “competitive” price, you’re a charity when you sell cheap.
For a variety of reasons that we’ve both noted, it’s possible someone else can make the thing at a cheaper price than you and make money, but that doesn’t change the fact that you can’t. They’re irrelevant in terms of your pricing unless you are good with subsidizing your customer’s happiness.
You can choose to do that, find ways to cut your costs so you can make a profit, create additional value your competition doesn’t or move on to making something that can command a price that values your efforts more highly.
I favor finding niches that aren’t addressed by other people or finding a way to provide additional value - customizations, fulfillment speed, special options, etc. that can command (or justify) higher pricing.
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Good points.
My wife and I are getting ready to sell our house and build. I have typically not used a realtor when buying and selling property. My sister in-law was complaining about this to my wife. I told my wife I would be happy to use a realtor if they charged a more reasonable fee… but to me paying 16 times more money for someone to list my house for sale then I can charge to engineer the same house seems a little lopsided. Kudos to realtors sticking to their fees… I wish engineers would do the same… but you get a bunch of guys working out of their basements that practically give it away.
But with the miles to the gallon and your knees on your chest you can save allot of gas in a Yugo. 
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Yugo= you go push I"ll drive!
y
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That should be changing but not likely this year. The National Association of Realtors got sued in a class action & lost to the tune of 1.8B and they have to stop the fee-fixing that keeps the fees up there with all realtors. Of course, it will be appealed so it’ll be years before it changes.
We just sold our old house after building a new one. I agree, it seems like a lot of money considering it had offers from the first day. We shut down bidding after a week and took a “last & highest”. That just seemed to make the fee more ridiculous - a week’s work. But really, she took care of getting photos, got it listed, took care of scheduling showings, worked with the buyer’s agent on a number of things and with my lawyer on a few as well. All things I might have been able to do but didn’t have to. We are living 900 miles away and having someone back there taking care of everything so we didn’t have to keep going back was worth the money in the end.
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