Pricing a very large order

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jackgreen91
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Pricing a very large order

Post by jackgreen91 »

Hi all,

Reasonably new to this world but I've been cutting small stuff for a while. Some big firm caught wind that I have a CNC plasma and want me to quote for them, I'm ok making a small loss figuring the pricing out on one-off jobs, but this needs to be priced well or I will be selling the house to make up for errors in pricing as the work load is huge for me but it would kick start me if I can pull it off.

300mm x 300mm x 12mm with 4no 22mm holes per plate, the customer wants 1000 of them and is supplying the plate. I need to quote for cut, handling and shipping. I work it out to be about nearly 10 tons of stuff, so even the handling would come in to question.

Not figured out my price per linear or per pierce, I've always based the few jobs I have had upon jobs which I've had previously done and guessed the suppliers numbers to put me in the ball park but I fear this could put me way out.

I'm in the UK but all ears on opinions regardless.

Best regards,
Jack
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Re: Pricing a very large order

Post by acourtjester »

If you use SheetCam they have a Job report that will show info on the cutting process. Time, inches, number of pierces ect, there is also a post here on how to price jobs in a spreadsheet form. You plug in your values for labor and other charges like loading material, clean up and consumable costs. I also would do a test cut to be sure they are happy before an contracts were signed.
Hope that helps, I'm sure the business type member will chime in with helpful info.
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Re: Pricing a very large order

Post by adbuch »

When you say the customer is supplying the plate - do you mean they are having it delivered to your shop, or they are paying for it, but you will need to arrange transport from the supplier to your shop? So in US terms, 12" x 12" x 1/2" thick with qty. 4 22mm diameter holes (0.866") per part. How large and sturdy is your cutting table, and to you own a forklift? What dimensional accuracy is specified on the customer drawing? Particularly the holes. And how much taper is acceptable for both the holes and cut edges?

What is the overall size of the plates as delivered to you before you start cutting them up?

How many pieces can you cut per sheet of material? When nesting your parts, will you cut all 4 sides of each plate or butt them together for common cuts between adjacent parts?
common cut edges.jpg
GRBL Parameter Limit Switch settings 2.jpg
Is there any required post processing involved, such as grinding edges, deburring, etc?

If it were me, I would estimate the total required time to do the job and apply your hourly rate. Then multiply that total time by a factor of at least 1.25 to cover any discrepancies in your calculated estimate. If you hourly rate does not include consumables and any other supplies, then include them as separate costs. I would quote the job FOB your shop with the individual parts stacked, packaged, and palletized. Any transport costs including your time to load pallets onto the freight truck, or your time to load and deliver the order to your local freight terminal - will be additional.

So you will need to figure:
Time to receive and unload steel plates from shipper
Time to load each plate onto your table.
Time to program your system to create cut paths and nest of parts.
Time to cut one plates worth of parts.
Time to unload parts from table,clean off remnants, and get ready to load next plate.
etc.

I would also figure in the time to do a "first article", that is to cut some individual test parts to check quality - overall dimensional accuracy, etc.

If there are some other competing cnc shops in your area, then it wouldn't hurt (if possible) to have them quote a similar job so you can get some idea of the market rate for that type of work. Then compare to what you would charge and proceed accordingly.

David

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Re: Pricing a very large order

Post by Joe Jones »

jackgreen91 wrote: Fri Jul 15, 2022 4:29 pm Hi all,

Reasonably new to this world but I've been cutting small stuff for a while. Some big firm caught wind that I have a CNC plasma and want me to quote for them, I'm ok making a small loss figuring the pricing out on one-off jobs, but this needs to be priced well or I will be selling the house to make up for errors in pricing as the work load is huge for me but it would kick start me if I can pull it off.

300mm x 300mm x 12mm with 4no 22mm holes per plate, the customer wants 1000 of them and is supplying the plate. I need to quote for cut, handling and shipping. I work it out to be about nearly 10 tons of stuff, so even the handling would come in to question.

Not figured out my price per linear or per pierce, I've always based the few jobs I have had upon jobs which I've had previously done and guessed the suppliers numbers to put me in the ball park but I fear this could put me way out.

I'm in the UK but all ears on opinions regardless.

Best regards,
Jack
The BIGGEST mistake people make in small businesses is undervaluing their own work.

1,000 1/2" plates? 4,000 22mm holes? :-o All of the handling, and stacking, and such ....

Ask the customer DIRECTLY, "What do you expect to pay for 1,000 plates, cut and with the holes you have specified?"

I am betting you are feeling guilty about charging $5.00 per plate "because the customer is supplying the material" but the CUSTOMER might be thinking, "I sure hope he comes in at less that $30.00 per plate!"

Once you know what the customer sees as a ""deal" you can be the hero by coming in a few dollars per plate UNDER the number that was rolling around in his head, and still making MORE that you ever thought you would make. Remember, if he could do it himself, he would not have come to YOU.

Quite honestly, I would find out what a nice NEW or USED hydraulic ironworker will cost you, and quote that price, plus something for your time. Scotchman makes a nice one. Piranha makes a good one too!

I would either take the plate to have it sheared in one dimension, and then use the iron worker to shear the 12mm planks in the other dimension, or I would MORE LIKELY farm out the entire shearing job to them, and quote to cover their cost. If they are using some 300 TON shear, I guarantee they can do the shearing for less than you could, using your plasma table. The customer does not need to know HOW you produced the pieces!

Then a nice set of 22mm hole punches and a simple jig ... punch four holes per plate, and FORGET about the plasma machine for this job. 1,000 of them at $18.00us each is $18,000.00, enough to get a nice ironworker for your shop at the customer's expense. Why burn up your compressor and your plasma machine, when a good metal yard will shear that plate for ($ n.nn) per cut?

Also, remember this! He is not getting 1,000 of these plates made for his kid's backyard swing set. He has a BIG construction job that pays BIG BUCKS.

That is what I would do.

Joe


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Last edited by Joe Jones on Sun Jul 17, 2022 2:38 am, edited 5 times in total.
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Re: Pricing a very large order

Post by adbuch »

Or farm out the entire job and just mark it up?? But where would be the fun in that? I personally do farm out many of my parts to have cnc laser cut as opposed to cutting them myself on my plasma table. In my case, the laser cutting is more economical plus they do laser etching in some of my parts that might be difficult to do with my plasma table without a lot of fooling around. Yes - I know the 45xp will do "engraving", and I have other cnc machines that could accomplish that as well. But for the prices I pay per part at the cnc shop for large orders, it would be hard to justify spending my own time and effort to do these parts.

Here are a few examples. The Radius Gauge is cut from 16 ga. steel and laser etched with the sizes. I pay around $7 each finished, debured, individually wrapped, and ready to go in lots of 50. This photo was from several years ago. The parts I am getting now have deeper etching for better visibility.
radiusgauge1.jpg
radiusgauge2.jpg
Here are some plates for one of my machine kits. These are 3/8" CR Steel laser cut and etched with cross hairs to mark hole locations and dashed lines to mark where the adjoining part is to be placed when they are welded together. This is part of one of my "Welder Series" kits, where the customer does the drilling of holes, welding, etc.

David
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Re: Pricing a very large order

Post by Joe Jones »

adbuch wrote: Sun Jul 17, 2022 2:19 am Or farm out the entire job and just mark it up??
Nah ... why let someone else make money on the labor of the holes, when you can buy a new ironworker for your shop, and just punch the holes yourself? At the end of the job, you might not make much, or you might only break even. But you'll have a NEW IRON WORKER in your shop! :HaHa

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Re: Pricing a very large order

Post by adbuch »

I expect Iron Workers are more expensive and harder to come by in England where the OP is located.
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Re: Pricing a very large order

Post by Joe Jones »

adbuch wrote: Sun Jul 17, 2022 2:19 am Or farm out the entire job and just mark it up?? But where would be the fun in that? I personally do farm out many of my parts to have cnc laser cut as opposed to cutting them myself on my plasma table. In my case, the laser cutting is more economical plus they do laser etching in some of my parts that might be difficult to do with my plasma table without a lot of fooling around. Yes - I know the 45xp will do "engraving", and I have other cnc machines that could accomplish that as well. But for the prices I pay per part at the cnc shop for large orders, it would be hard to justify spending my own time and effort to do these parts.

Here are a few examples. The Radius Gauge is cut from 16 ga. steel and laser etched with the sizes. I pay around $7 each finished, debured, individually wrapped, and ready to go in lots of 50. This photo was from several years ago. The parts I am getting now have deeper etching for better visibility.

radiusgauge1.jpg
radiusgauge2.jpg

Here are some plates for one of my machine kits. These are 3/8" CR Steel laser cut and etched with cross hairs to mark hole locations and dashed lines to mark where the adjoining part is to be placed when they are welded together. This is part of one of my "Welder Series" kits, where the customer does the drilling of holes, welding, etc.

David

pmax plates 1.jpg
Damnit, David! you're going to make me buy a LASER table now! :lol:

you are right. It makes more sense to farm out certain jobs, or at least SOME of the work of those jobs. I would never waste my time trying to cut out a thousand 1/2" plates on a plasma table. Punching the holes is another story. That is sitting at the punch, with an assistant to hand you a plate... punch four holes and hand it back to him to stack onto a pallet. At the end of the job, there is a shiny new Scotchman Ironworker in your shop!

Joe

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Re: Pricing a very large order

Post by Joe Jones »

adbuch wrote: Sun Jul 17, 2022 2:41 am I expect Iron Workers are more expensive and harder to come by in England where the OP is located.
David
True, but then he would also charge MORE than we would in 'Merica for the same job.

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Re: Pricing a very large order

Post by Joe Jones »

If you farm out the shearing, ask the customer FIRST, what tolerance he will allow. You don't want a yard to shear the material and then have him say, "Ohhh .. it is a millimeter off! I won't take these!" :shock:

When I do a job like this (multiple plates or gussets) I tell the customer there are TWO prices...

$n.nn for plates cut to within .10" of specified dimensions.
$n.nn x 2 for plates cut to EXACT dimensions.

In this way, when they want something 24" long, and I can get TWO pieces out of a 48" plate if they are 23.875" long, then I SAVE MONEY.

In some construction jobs, the EXACT dimensions are not critical. For instance, base plates that are built into poured concrete walls. However, if the pieces are "show pieces" such as decorative braces and saddles for timber beams that will be visible in a fancy restaurant, the price per unit is higher because the customer WILL BE PICKY.


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Re: Pricing a very large order

Post by adbuch »

Shearing will also often time affect flatness of the sheared plate. Perhaps it doesn't matter here. Depends on the application. The customer supplied drawings should spec all of this out. Tolerances, flatness, etc.
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Re: Pricing a very large order

Post by Joe Jones »

I believe the "specs" will be on a napkin or a Post-It note.

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Re: Pricing a very large order

Post by adbuch »

For a legit company, they should certainly provide drawings for parts with specs for dimensions, tolerances, flatness, etc. But perhaps you are correct. Time will tell.
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Re: Pricing a very large order

Post by Joe Jones »

I am just looking at the math. It would take 100 hours of cutting to produce those 1,000 1/2" thick plates with 22mm holes. At $150/hr for the table, it would be a $15,000.00us job anyway.

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Re: Pricing a very large order

Post by cstroke »

The problem with customer supplied materials is that when a plate gets screwed up you don't have the mark up of selling the material to cover it.
So with that being said you have to add to your cutting price to make up for these things.
It's amazing what some can charge for stuff depending on where you are.
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Re: Pricing a very large order

Post by tnbndr »

I've been approaced by several small machine shops in our area to cut production pieces/parts for them. I have no interest in production work, I get bored easily.
Whatever number you come up with, I would pad it greatly. If you take one job for cheap or at a loss you will get a lot of work, but for what purpose?

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Re: Pricing a very large order

Post by abmetal »

I had a local hospital approach us about cutting stainless parts for their operating room. We took a quick look at the print and subbed it to a shop with a water jet because of the tolerances and finish. No brainer and we still made money.

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Re: Pricing a very large order

Post by Joe Jones »

RULE #! on big jobs - GET EVERYTING IN WRITING, and have the customer SIGN the agreement or contract.


1. Determine the price the CUSTOMER wants to pay for each plate, or the price he wants to pay for the entire job.

2. Get a definite DEADLINE for completion of the job.

3. Determine IN WRITING the tolerances you have to work with, and other requirements so the customer cannot reject the job with a micrometer in his hand. For instance, can the holes be punched, or MUST they be cut with a CNC plasma table? Can the plates be slightly rectangular, or MUST they be spot on SQUARE? Can the holes be 23mm or 21mm, or MUST THEY be exactly 22mm? Can the plates be slightly dished, or MUST they be straight edge flat?

This CAN HAPPEN. YOU quote the customer $20.00 per plate. AT THAT MOMENT it is the best bid he has received, so he agrees, but NOT IN WRITING. He delivers the material to you. (See RULE #1, above)

He gives you the material. You do your best to produce the pieces he wants. Meanwhile, he shops around.. He manages to find some starving old retired recovering alcoholic metal guy at the edge of town who offers to make them for $8.00 each, but the customer has already asked YOU to make them for $20.00 each. Believe me when I say, he will find ANY EXCUSE to reject your work.

YOU cut up his material, expecting to be paid $20,000.00. He looks at the plates you cut and says, "These are off by 3 mm in one dimension, and 4mm in the other direction! I will not accept these! REPLACE MY MATERIAL immediately and we will just call it even!" You replace his material at your cost, and he takes your material to the old guy to save $12,000.00 on the job. YES, this can and DOES happen.

If the total price the customer AGREES TO PAY will cover the cost of partially or completely subbing out the job, then do it and collect the money.

If the total price of the job will put a new ironworker in your shop, and all YOU have to do is put in (n) hours of your labor to make it happen, buy the ironworker and collect the money.

My uncle told me, "The farther you stick your neck out for someone, the easier it is for them to cut your head off."

Finally, SEE RULE #1 !!!!

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Re: Pricing a very large order

Post by Joe Jones »

tnbndr wrote: Sun Jul 17, 2022 10:46 am If you take one job for cheap or at a loss you will get a lot of work, but for what purpose?
JMHO
WORD! There is nothing worse than bidding a job TOO LOW, just to get the customer, and then trying to make money off of that customer on future jobs, after you have established your LOW RATES.

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Re: Pricing a very large order

Post by SegoMan DeSigns »

Jack.

Was there any specs as to packaging and or parts ID #'s on each piece? Like the others posted get a P/O signed and at least a 50% deposit on the order remainder due on job completion. I like to cut a sample piece for the customer to approve..
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Re: Pricing a very large order

Post by Joe Jones »

SegoMan DeSigns wrote: Sun Jul 17, 2022 2:44 pm Jack.

Was there any specs as to packaging and or parts ID #'s on each piece? Like the others posted get a P/O signed and at least a 50% deposit on the order remainder due on job completion. I like to cut a sample piece for the customer to approve..
A sample piece is a good idea, but if he is going to have the sheets sheared at a metal yard, to give him the 300mm x 300mm squares to punch (or cut) holes through, that might be difficult to arrange.

According to this online calculator ... ONE plate will weigh Total Weight = 18.69 lbs / 8.48 kg so 1,000 of them will be 19,000 pounds, or 8.480 kg. Add in the weight of the pallets for shipping. Actually they will weigh just a little less, because you will cut four 22mm holes into the plates.

http://www.toolcrowd.com/steel-weight-calculator/

I wonder ... this has to be a local customer. No one is going to drag plate across three states to have it cut by "a guy with a plasma table."

What are the material dimensions? Are you expected to cut up 4x8 sheets, or whatever the metric equivalent is?

You could cut the plates into 300mm wide strips, and then cut them to squares with you new ironworker! :HaHa

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Re: Pricing a very large order

Post by SegoMan DeSigns »

Or you could just put it on your table and cut it at 45" / min with 85amps (aprox 2 -3 min per piece), there was no mention of radius on the corners so until further info is provided we are reverse engineering an unknown project to yield a big ?..
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Re: Pricing a very large order

Post by adbuch »

tnbndr wrote: Sun Jul 17, 2022 10:46 am
Whatever number you come up with, I would pad it greatly. If you take one job for cheap or at a loss you will get a lot of work, but for what purpose?

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Re: Pricing a very large order

Post by Joe Jones »

SegoMan DeSigns wrote: Sun Jul 17, 2022 4:32 pm Or you could just put it on your table and cut it at 45" / min with 85amps (aprox 2 -3 min per piece), there was no mention of radius on the corners so until further info is provided we are reverse engineering an unknown project to yield a big ?..
Assuming efficient removal of cut pieces, 3 minutes per piece by your estimate is still 50 HOURS of cutting. Add to that, the change of material plates, since you cannot get all 1,000 pieces out of one sheet. Then removal of the skeletons....

Even at your estimates cut speeds, it is a 100 hour job. At $150/hr. shop labor rate, that is a $15,000.00 job for LABOR, and you will run both your compressor and your plasma machine into the ground. Add in the cost of the consumables you WILL burn through on a job this large ... :roll:

Really, the only way to make this work is to have a metal yard shear the squares, and then you punch the 22 mm holes with your new ironworker! :HaHa

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Re: Pricing a very large order

Post by cutnweld »

adbuch wrote: Sun Jul 17, 2022 7:11 pm
tnbndr wrote: Sun Jul 17, 2022 10:46 am
Whatever number you come up with, I would pad it greatly. If you take one job for cheap or at a loss you will get a lot of work, but for what purpose?

:Like :Like :Like
Agreed. I have a customer that always wants cheap cheap cheap. Looks for pricing on a 10 dollar bearing that I have in stock and checks around to see if its cheap enough, all the while spending millions each year on land and machinery. Dont take on jobs for the cheap guys, they will never be done complaining
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