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    if anyone has some suggestions for bidding/pricing work or at least some experience as a small small shop trying to bite on some work your feedback would be greatly appreciated. i have the opportunity for some repeat work, not too complicated, and im trying to put something together for this guy that is attractive to him and also to me. i dont want to be greedy, however my freetime is short and i dont want to do work on my days off and not be worth my while. as far as the parts go, one of the pieces would take a while to set up and the quantity is 1-5 at a time. others are small jobs/parts 10-50 at a time with small set up times. any past experience or feedback would be beneficial.
    thanks ,
    steve
    extreme tractor racing

  • #2
    Hope you don't run into the situation I once had. Fellow at work heard I had a shop and wanted me to make a firing pin to replace the broken one in his ".22 automatic rifle". After looking at it, and checking the cost of one from Numerich, I told him it would be cheaper for him to buy one from Numerich. He said "Naw! I want you to make it for me!" And he handed me a piece of what he said was "tool steel". When I told him what my hourly rate would be, he exploded "But I figured you'd want to do it for the experience!" Nuff said.

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    • #3
      Figure out what you would do it for, example(square up block of steel $30.00 anhour or whatever you think you're worth, if they don't like it tell them experiance isn't cheep and cheap ain't experianced.)Trouble with this trade someone always will do it cheaper but 99 out of 100 will be shady at best. Stick to your guns and good luck.

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      • #4
        I do nothing for the experience unless she is beautiful and UNattached and then I only reduce what I charge an hour. Bidding is difficult, and I only do one of a kind things these days. Depending on the machines or tools needed and how dangerous the process is, my prices vary and if it something that voids my insurance the rate goes up very high, beyond what most people can afford.

        Jerry

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        • #5
          I tell them if they want a ball park its $30 an hour however long it takes and I try to give them an accurate number,but tell them not to hold me to it,if they want a fixed price I figure it as close as possible then add 30%.On repair work the first thing I ask is how much does a new one cost?Often times I find that people don't have to good an idea as to how much work and therefore exspense is involed,in other words frank terms sometimes cut to the chase.Another thing to consider is that if you are working for him when you could be working on something of yours and you don't charge him a fair price for your work you are subsidising him ,if you want to do that then that is your choice,if he exspects you to do that tell him where to go,even the best of friends can take advantage of you if you are not careful.

          [This message has been edited by wierdscience (edited 04-27-2003).]
          I just need one more tool,just one!

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          • #6
            Tell you'll do one piece at your shop rate. then charge him that. If he studders to much you can discount for quanity, if you want.

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            • #7
              When we quote work, we quote by the completed job, not by the hour. We know how much we want to make an hour and the customer doesn't really need to know that figure.
              By quoting the completed job we don't have to clutter up the quote with too many details. We figure in our setup time, production time, handling time, materials, finishing, quality control and consumables. The only price that may be broken out separate is a non-recurring tool charge. Sometimes we bury the tooling costs in the quote as we know the ones who don't like to pay for tooling.
              Very rarely do we get asked for an hourly rate. The ones who do are usually shopping for the absolute cheapest price, not a fair price.

              We have customers who will just show up and drop off material and ask us to make them some parts. They know that the invoice they receive will be a fair price, but not a cheap price. If only all our customers were that way....
              Good luck.
              Les

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              • #8
                I had a customer this morning wanting me to make a sword cane for him. He is about 450 pounds, so the body of the cane will be steel pipe.

                My price, which is CIA (Cash In Advance) and the cash has to clear the bank, its whatever the law says is the fine for making such things times 2, and $60 an hour for any jail time (of course times 2).

                He wouldn't take no until I told him that I want the money up front, that it's against the law and if you sticks around, I will call the police.

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                • #9
                  Wierds* has the right of it.... There are two ways of looking at pricing. One is cost - your cost of doing it, your choice of doing something else... your materials and your time. That gives you one answer and if you don't like this MINIMUM answer, then you walk away. Go watch Mr. Ed again.

                  The other part is "Their Cost" - what does the new thing cost them? What are you fixing and how much does that cost? What are you saving them (!!!)? If that number is not good, then they walk. When the economics are bad for them, then why are you being asked to do it?

                  It is also true that changing batteries on a pacemaker costs more than changing batteries for flashlights. Don't take flashlight jobs when you could be changing - and charging for - pacemaker battery changes.

                  --jerry
                  dvideo

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                  • #10
                    Don't forget, there is no such thing as a quantity discount. Don't be bulldozed into one if there isn't a justification.

                    If you lose too much business on account of that, re-evaluate your operations and see if you rally do have savings that you are leaving on the table.

                    Either material or labor has to be less in larger quantity in order to make a discount reasonable.

                    Several things MAY make quantity cheaper per unit. They don't HAVE to, since they may not apply.

                    1) materials cost, may be less per unit for a larger qty. Might also be more, if your time to acquire and cut up is charged. A "cut-to-length" prep operation to produce a blank for later work costs labor the same as anything else.

                    2) Setup. If there is significant setup cost, i.e. time, then once you set up it is cheaper per unit to run more parts. It is NOT cheaper if you have to tear down to run something else "real quick" in the middle of your original run.
                    And if setup is nil anyway, there is no savings for more parts.

                    3) tooling. If your quantity produced means you can spend time or money to get a tool (or even a machine) that will speed operations, then you may be able to save money and offer less cost (or make more on the job!).

                    if you know or expect you will run a part again, a tool (or machine) may be a good investment even if the initial qty does not justify it. Later, your cost to set up, and to do each part may be reduced enough by tooling to make it well worthwhile.

                    But some tooling isn';t worth it, and you have to know or guess, which way it is in order to bid right.


                    [This message has been edited by Oso (edited 04-28-2003).]

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                    • #11
                      I have helped couple men get their small businesses running- and bid many jobsfor other companies. First of all, most single operators do not charge enough for their time and machine and knowledge.

                      Add up your fixed expenses, rent, insurance, taxes, phone, transpoprtation, equipment costs (too many have some equipment and when the equipment is worn out they have to get a job to buy more), Tax preparer, FICA, just keep adding those in as you encounter them. don't forget some expenses come just once a year.

                      Then add the hours you need to stay up to date (reading trade magazines, machinery handbooks, finding and buying materials for those jobs, the hours you spend talking to customers who do not send you work, answering questions (what size nut fits this bolt? or "I need a 5/8inch bolt about this long to fix my lawn mower - Yes I know its 5/8 inch, here is the wrench I put on the nut- says 5/8 right there"). Time you spend sweeeping up, repairing YOUR machine, doing paper work (who mails the sales tax to the state?), dumping trash, going to court if some one sues you, explaning why your prices are so high. Add up those hours.

                      Now there are about 168 work hours in a work month (at 8 hours per day). Deduct from 168 those "non working hours" you just added up and you have the MAXIMUM hours you can be working.

                      Then figure some sick time, vacation time, holidays at hours per day. There are 2080 work hours (again @ 8 hours per day) in a year.

                      You really don't have much time to spend on the job at 30 to 50 dollars per hour (the amounts you used to bid the work). You will be lucky to have around half your time available to work on the bidded work. Its the "overhead" that makes the self employed hunt for "cheap" labor (wife, minimum wage office help and janitorial service) which does not give you relief from ALL the above burdens- it just reduces the burden to some lower figure but adds in time needed to train and supervise the help. And each time you hire you take a big risk- you invest time and money hoping to get it back in the long run. Probably hire several times to get one that will stick with you- and if you are a compassionate "help the down trodden" type you will hire many times before you find someone who will be on time and give 8 hours work for 8 hours pay.

                      All I am trying to say is that most charge way too little in small shops. Production shops (like AMMCO, Midas) have low priced help and enough hired to man the shop. The small shop has ONLY one highly competant worker who deserves high pay because he has tools and machines. But too many customers expect him to under bid the place that hires minimum wage help- and the lowest paid man capable of doing the work does the work in those shops.
                      So the small shop must take only jobs the "big boys" will not take. Carve a nitche and develope a customer base.
                      Steve

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                      • #12
                        I just did some work for my Brother in-law. What i figured was just a couple of hours work turned into about 8. It would have probably been easier if i had shopped around for the right size metal and/or had some different tooling. Now he has been bugging me to know how much it is going to cost him. Now what. When i do landscapping for ppl on the side i always tell them it is X an hour. If they don`t like it then i will stay home. The good part is that i know they are getting their money`s worth. When i get a job that i don`t like then i know i am getting my money`s worth. Starting up is always the hardest. If things go well then voilأ . You made money. If things go s**t then you have learned something, hehe don`t do that again. No matter what, you end up with $$$ at the end. But money doesn`t make everyone happy. Just make sure you are!!!

                        Spkrman15

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                        • #13
                          Good advice from all posts. Asking how much the part is worth is important because sometimes people think that it is cheaper to make than buy a part. Sometimes it is and sometimes it isn't. Sometimes the shopmade part is better, some times not.

                          The reason that it is important to figure out the smartest thing for the customer to do is that sometimes they plunge into something only to discover in midstream that it was a mistake. If you have a lot of time and trouble invested and the project goes south then you are usually stuck. If someone wants me to make something that doesn't make sense to me, I tell them before I start. If they insist on going forward, I get money up front just in case they come to their senses during the project. Thanks--Mike.

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                          • #14
                            Guy Lautard has some suggestions for bidding on work in one of his "Machinist Bedside Readers." I think most of it has already been covered by previous posts though. One thing he said: if you win all the bids, you're bidding too low.

                            The last time I hired an electrician, several years ago, he charged $50/hour. My local car dealership is now getting $72/hour shop rate. Other parts of the country may be different, but the point is, skilled labor costs money so don't be afraid to charge for yours.
                            ----------
                            Try to make a living, not a killing. -- Utah Phillips
                            Don't believe everything you know. -- Bumper sticker
                            Everybody is ignorant, only on different subjects. -- Will Rogers
                            There are lots of people who mistake their imagination for their memory. - Josh Billings
                            Law of Logical Argument - Anything is possible if you don't know what you are talking about.
                            Don't own anything you have to feed or paint. - Hood River Blackie

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                            • #15
                              Working cheap is a nasty viscious cycle to fall into.
                              If you bid work cheap just to get some, it will be tough to raise your prices and secure further work.
                              I have a couple of customers who have us blank and punch parts and then send them off to another shop for further operations. They have found places to do those ops cheaper and that is fine. I would never even start the machine for what they are willing to pay for that work.
                              Your quality and expediency is what the customer will respect. We have had customers go elsewhere and comeback to us. It seems we have spoiled them with our short lead times and 100 percent part acceptance.
                              Emergency work is just one of our niches.
                              When the refinery is down and they need six custom washers, price is not the issue. Having their parts completed and ready to go in a couple of hours is what we do.
                              It has required a considerable investment in tooling sitting on the shelf ready to go for us to maintain our niche. When we aren't running production we are making punches and dies. I have customers who are used to calling out dimensions to +/-.005" and expect the parts within 2 days. Try that with most stamping shops. It requires hundreds and hundreds of punches and dies to accommodate any diameter and thickness.
                              Build a reputation for quality work, not cheap work. It has worked for us since 1947.
                              Les

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