Pricing structure for plasma cutting

[Wine Country]

Hello again,
I was wondering how some of the other members price their plasma work. I have been using the following
guidelines below.

$ .33 per cut inch.
+ $ .15 per pierce point. Factors in consumable replacement cost.
+ $ 1.67 per minute of cutting based on $100.00 per hour for machine.
+ Material cost.
+ CAD, scanning, @ $55.00 per hour.

This seems to be working for me so far,and my projects seem to price out fair.
Just wanted to get some idea how my pricing compares.

Marty

[PlasmaDoodler]

Hi, I also was wondering how to price my product- so could you give an example of how this would work with some of your finished work? How did you arrive at the $100/hr for the machine?

[Scratch]

I'd also like to know how others do it. I always feel like I'm too cheap. I charge by the square inch of the piece I cut, plus any welding, painting or assembly at $50/hour.

[Wine Country]

We invest quite a sum in our machines,along with the knowledge to operate them. I based my price at $100.00 per
hour as a start. I want to amortise my machine as quickly as possible, and there are always software upgrades,repairs, etc. that we need to make. I just cut a sign with over 2000 inches of cutting 10 minutes ago. Try doing it by hand. I am doing a sign for an iron shop here in Lodi. I was there the day they cut over 20 feet of lettering for a subdivision. Their guys spend
hours cutting it and 2 days cleaning up the jagged edges with a grinder. When I was flying, each hour costs money,even if you own the plane. Engines are only good for 2000 hours before a mandatory rebuild. At $12,000 for a rebuild, that works out
at $6.00 an hour + fuel (electricity) + hangar (shop space)+ operator knowledge. We perform specialized work, and should be paid for it. I work in San Jose as a commercial electrician. Auto dealers are charging $125.00 an hour to work on your car there. Don't short change yourself. In 1995 I owned my own business doing electrical,audio, and automation work. The
architect wanted special speaker grilles made. I had them cut out of 3/16 plate with his design .
I will have to post a photo soon. There were several of them in many sizes. There were literally thousands of pierce points when they were done. The laser cutter said he would Never do a job like this again,as it tied up his machine for 2 days!. It might be easy for us to turn out some great products,but not everyone has the ability, and that makes us specialists
in a specialized field. Our stuff doesn't come from China, nor found on store shelves at WAL-MART or TARGET. When I give a quote on something, I sometimes hear , "Why so expensive ?" . I ask "Expensive ?". You want quality one of a kind work that
nobody else has, yet you have a Mercedes or Bentley in the garage. I feel you cannot price by the square inch or foot due to the complexity of the artwork. It will always vary,and you may be cheating yourself. This is why I base my prices on cut inches, cutting time, and pierces. Even with my pricing, I am often told that my prices are too cheap! But I would rather sell more at a fair price than hardly any at a higher price. My clock which is posted on the photo section went for $742.00. I was
told by others I could get $1000.00 + for it. I am not a shyster,and based it on my formula. Everybody won at $742.00 in my opinion.
Marty

[PlasmaDoodler]

Oh, i'm not criticizing you, i was curious. To be honest i have not bought a cnc table yet. I do my cutting by hand. i am still shopping around and, for me, it is a big ticket item. It is interesting to see a break-down -which may be useful when people ask how items are priced. thank-you for your candor.

[plain ol Bill]

Wine Country when you have a customer come in w/ an idea and wants a price to make it do you design the cut file before quoting the price? I guess what I am trying to figure out is how do you determine cut inches without a final cut pattern which you invest time into? I fully agree w/ the the way you are pricing your work but I have to have a cut file made before I know cut inches and sometimes that is a lot of time to get to that point.

[Wine Country]

Wine Country when you have a customer come in w/ an idea and wants a price to make it do you design the cut file before quoting the price? I guess what I am trying to figure out is how do you determine cut inches without a final cut pattern which you invest time into? I fully agree w/ the the way you are pricing your work but I have to have a cut file made before I know cut inches and sometimes that is a lot of time to get to that point.

Normally I require a deposit of at least a hours worth of cad time. Just like some businesses charge for an estimate.Most
people I deal with are serious and have no problem when it comes to custom work. When you make repetative products to
sell, you create your drawings and set the prices accordingly. When I do estimate drawings, I draw them without lead ins
and offsets. I then load the drawing in my converter software and just create the G-code to load on the cutting program to get my time,pierces,and cut inches. Once the contract is signed, I go back and do my offsets,lead ins, and any fine tuning
as needed. I normally need a design drawing anyway to show what the finished product will look like.

Marty

[plain ol Bill]

Thanks Marty. The way you do it is a good pricing lesson. I use the same method occasionaly, especially if the job looks pretty complex. Most of my quick guesstimate pricing is done by the square ft. and taking in a guess about how complex the the work is on a sliding scale of 1 to 4 with 1 being the simplest. Sometimes ya bite the bullet on one and sometimes you come out really good. In the end it seems to even out.

[mdwalker]

I have an easy to use Excel worksheet that i designed to calculate item prices. By entering the item height and width in inches, the total cut inches, the number of pierce points, and if it is a large item that has to be indexed enter the number of indexes and the worksheet will calculate the item price. Just by entering the above info it will give you the price for the item cut from material from 16ga through 1/2" and will also calculate quantity discounts. If you are familiar with Excel the sheet can be easily edited with your own price structure. If anyone needs help editing the file let me know and I will try to help.

Danny

[mdwalker]

Had some questions on how to unlock the price worksheet for editing in Excel. I use Excel 2002. Hopefully this will work for other versions.

For those of you that are not familier with Excel I am posting an updated file with the fields that can be easily edited highlighted in yellow. These include the price per square foot of material and the price per cut inch. Once you unlock the worksheet you can simply click in each of these fields and type in the new value. Be sure to re-protect the worksheet after you edit these values. These are the only fields that can be easily edited without editing formulas. If you are familier with formulas in Excel, you can edit the calculations that the worksheet does such as calculating the cost per pierce, the cost per index, and the amount of markup on the material. If you need help editing these fields, let me know and I will try to help you as I have time. When the worksheed is locked, the data entry fields are highlighted in light blue.

Here is how you unlock and lock the worksheet.

1. open worksheet in Excel
2. click on Tools/Protection/Unprotect Sheet to unlock the fields for editing.
3. when finished, click on Tools/Protection/Protect Sheet. A pop-up box will appear. Make sure the Protect Worksheet & Contents of Locked Cells box is checked. Leave password field blank unless you want to password protect the worksheet. On the lower part make sure Select Unlocked Cells is checked. All others should be blank. This makes it where you can tab through the data entry fields without having to tab through the entire worksheet.
4. Click OK

Hope this helps.

Danny

[kjzitur]

Hi winecountry, my compliments on the spreadsheet.....very nice! one question though, where do you figure in the amount of cut time or maybe I am just missing something...thanks..........ken

oops! sorry about that..........mdwalker gets the thanks for the spreadsheet.......

[mdwalker]

Hi Ken,
Thanks for the compliment. The worksheet calculates the price based on the price per inch cut. I suppose if you wanted to charge by time instead of inches cut you could enter your total time in minutes and modify the price per inch to reflect the price per minute.
Thanks,
Danny

[plain ol Bill]

I have a question about the spreadsheet. What is "indexing"? I have a senior moment on that particular entry.

[plain ol Bill]

DUH! I should have known that. Like I mentioned it was just another senior moment. My table will take 5x10 ft. sheets so I doubt I will need to index anything. Thanks.
Bill

[Streetwerkz]

very nice program, thank you!!

Josh

[Scratch]

Nice spreadsheet! I use Corel for my drawings and WinCNC for my cutting software. Does anyone know if either of them will figure the "cut inches" for me?

[pdjcutandfab]

This question regards a price for $.33 per cut inch, me being new this whole process, how do you arrive at that, what is all included in that price. Also, with the excel spreadsheet that is here, he has different prices based on the thickness of the material and the quanity being cut, how are these numbers arrived at. any help would be great.

Thanks

Pat W.
PDJ Cutting and Fabricating

[mdwalker]

Pat,

I will try to answer your questions the best I can. I?m sure others will have their own techniques that they use to calculate prices.

The price that the spreadsheet calculates is the total price that I charge for an item less painting, welding, and any special design charges. I try to sell all of my items as bare metal and let the customer paint to suit because I hate to paint. Sometimes you just have to paint it to make the sale. On the welding if all it takes is a quick tack or two and I am not doing multiple items then I usually don?t charge for it but if it takes much time then I charge. The same on design charge, if it takes much time then I charge. This will be whatever your hourly rate is or what you feel your time and effort are worth. Also, if the fish are biting and I am working, then I charge.

The price per cut inch includes loading the material on the machine, laying out the part, cutting the part, and cleaning the slag, if any, from the part. I use a 4 ?? grinder with a wire cup brush and brush each item. If your machine is set up right, this is sufficient to clean what little slag is on the part. I added the price per pierce point to cover the expense of keeping fresh electrodes and nozzles (consumables) on the torch. Most of the wear on consumables is during piercing. There is more wear on consumables when piercing thicker material so I charge more. I added the cost for indexing to cover the time and expense of physically moving and re-aligning the material when cutting a part that is larger than the table. The price per cut inch increases as the material thickness increases because the machine cuts slower on thicker material and it takes more time and effort to load a sheet of half inch than it does to load a sheet of 16ga. Most of the parts I cut out of 3/8? and ?? material are for oilfield units worth hundreds of thousands of dollars each. These are CUSTOM parts that you can?t go to the local hardware store and buy so they are simply worth more. I added the quantity discount because it is much faster and easier to lay out multiple items of the same design and thickness than it is to lay out several different designs. When calculating the amount of material to charge for I simply draw a box around the part and measure the sides, ie if the box is 14? x 21? then I enter this in the spreadsheet and it adds on the cost of material with a markup. The markup covers the expense of keeping the materials in inventory. One company that I cut for usually furnishes their own material so I just leave the measurement entries blank to keep the spreadsheet from adding on the cost of material.

Now for the less scientific part of determining the actual cost per cut inch. Trial and error. My software will calculate the total pierce points and total cut inches of the part. I simply calculated the cost of several different designs and adjusted the price per inch until the price came out close to what similar items were selling for in my area. You can use the prices in the spreadsheet as a baseline and adjust up or down to match the market conditions in your area.

Bottom line is you have to charge enough to cover expenses and make money or you may as well go fishing.

Hope this helps??..I?m going fishing!

Danny

[pdjcutandfab]

Thanks, that helps ALOT

Pat

[cambo]

Had some questions on how to unlock the price worksheet for editing in Excel. I use Excel 2002. Hopefully this will work for other versions.

For those of you that are not familier with Excel I am posting an updated file with the fields that can be easily edited highlighted in yellow. These include the price per square foot of material and the price per cut inch. Once you unlock the worksheet you can simply click in each of these fields and type in the new value. Be sure to re-protect the worksheet after you edit these values. These are the only fields that can be easily edited without editing formulas. If you are familier with formulas in Excel, you can edit the calculations that the worksheet does such as calculating the cost per pierce, the cost per index, and the amount of markup on the material. If you need help editing these fields, let me know and I will try to help you as I have time. When the worksheed is locked, the data entry fields are highlighted in light blue.

Here is how you unlock and lock the worksheet.

1. open worksheet in Excel
2. click on Tools/Protection/Unprotect Sheet to unlock the fields for editing.
3. when finished, click on Tools/Protection/Protect Sheet. A pop-up box will appear. Make sure the Protect Worksheet & Contents of Locked Cells box is checked. Leave password field blank unless you want to password protect the worksheet. On the lower part make sure Select Unlocked Cells is checked. All others should be blank. This makes it where you can tab through the data entry fields without having to tab through the entire worksheet.
4. Click OK

Hope this helps.

Danny

thanks for the quote sheet i think it works great i was just wondering if that included design time or not?

[mdwalker]

A previous post was missing that expains what is included in the pricing. It's back in place, see the third last post above.

Let me know if you need more info.

Thanks,
Danny

[cambo]

that is perfect thank you very much.being new in the business there was no shortage of ideas just wasn't sure how to price them.that spreadsheet seems to price pretty fare up here in alberta canada.thanks again

[GoingCustom]

What's the forums opinion when it comes to "full fledged fab shop" pricing vs "side business" pricing? I am a police officer for my main source of income, but do metal work for side income (mostly goes back into more tools and/or project vehicle parts). I too have struggled with how much to charge when it comes to using my cnc table and a majority of the time feel like I have undercharged. I realize some of it has to do with what the market is willing to pay, but I've gotten to the point where I feel I have done enough "charitable pricing." I would love to make my business profitable enough to not have to be a police officer anymore (it's fun, but I would rather do the metal work aka be my own boss lol).

I don't have any business overhead or employees to pay (hopefully my g/f doesn't start asking to be paid to help, lol). But what difference, if any, do you guys think there should be between a full fledged fab shop vs someone like me? I plan on using the formula posted (thank you very much by the way) from here on out. I plugged some numbers into it from previous projects I've done vs how much I actually charged and found that sold myself short by a couple hundred dollars. I like what was stated about people on here having "specialized equipment" and if people actually sat down and thought about what it would cost time/money wise to do by hand they would understand why.

A lot of what I cut now is for family/friends/personal stuff. And as long as material costs/consumables are paid for, I haven't really said anything, but unfortunetly it seems my generosity is being taken advantage of when it comes to friends. I have recently advised a lot of them that prices were going to go up do to said taking advantage of so I thought I'd ask on here if anyone has been in a similar situation? Hopefully I've made some sense? And thanks for any input

[AnotherDano]

My haircut doday was $20 with the tip. I'm generous.

How long did that take and how long will it last? Think about it.

On the way back to the car I thought about the signs I make and the powder coating that goes on them - and TRY to get $25.00 for. People here thing that's an outrageous price. How long did it take me to make it compared to the hair cutter and how much overhead does she have compared to me?

People are strange.

My prices are going up. They have to for me to cover my costs and put a few buck in my pocket.
They may have to drift down if sales go flat but darnit, folks just have to get used to it; I'm NOT a Chinese or Mexican factory!

[plasmafab]

I have not been here for quite some time, and upon returning the other day and a little surfing of the site , I stumbled onto this wonderful Excel spreadsheet that mdwalker made available to all of us. I took a look at it and decided to give it a try. I am not an excel person by any means, (30 yrs of fabrication and welding, and buying a cnc plasma machine does not make one a proficient computer person automatically, Ha Ha, and I have no training in how to use Excel, but my wife has. After about 45 minutes with her adjusting the price fields for our current steel pricing here in the northwest and adjusting the actual per inch price that I charge, I think this spreadsheet is really going to make my life a lot easier when it comes to bidding and charging for a job. I love the layout, and how it populates a total price amount when I enter the appropriate fields of cut inches, total indexes, etc. I would really like to thank mdwalker for making this available to the people here at plasmaspider. !! Blake