How would you price these two parts?

[redneckgateart]

Howdy All,

A trailer manufacturer has approached us about cutting a lot of their small parts.....probably 10 sheets per week...3/16". 1/4", 3/8" and 1/2". I think pricing is one of the hardest things to get a grip on....so I'm asking for a little advice. I know that there are a couple of pricing spreadsheet here, but I really wanted a little advice, especially considering the volume. This guy imports a lot of his other parts from China...so I don't think we're going to see eye-to-eye on pricing.

I would appreciate it if y'all would take a minute and give me your input on a couple of parts. The first part is simple...it's basically a washer...4" OD with a 1" center hole....1/4" thick. I thnk I got them nested at 311 pieces per sheet.

A drawing of the second part is attached. Roughly 6"x8" with a 1" diam. hole, 1/2" thick. After the piece is cut, it also gets a 45 deg. bend along the dotted line. These nest at 96 per sheet. The customer insists on providing material, so I just need to quote the cutting and de-slagging.

I'm running a 6'x12' Practical CNC table that is being retro-fitted to use CandCNC's controls and THC...Thermal Dynamics A-120 torch. The parts tumbler that we recently built is working better than expected and I've got a 100 ton press brake, so the clean-up and bending isn't a problem.

Thanks in advance for your time! I appreciate it!
Clark

[dark_horse]

Like you said, with parts coming from China it might be tough to match or beat their price. I kind of run into the same situation. I live in a very small isolated town, the nearest shopping center is an hour away. Sometimes folks bring me a picture of something they've found in a magazine or online and want to know if I can make a similar product. Just as in your case, the item they want is usually imported and cheaply priced. In most cases I don't get quite as much as I'd like to and it takes a good pitch to make the sale. I tell people that my price will be higher, but so will the quality and if they ever have a problem I stand behind what I make 100%.
Find out what the parts cost from China and decide if that price would be worth your time, you may not make much on each individual piece but the volume could compensate for that. If your as stubborn as I am you may do it just because the thought of losing business to a foreign country makes your blood boil.

[mdwalker]

I would charge $3.40 each for the washer and $14.26 each for the bracket not including the 45 degree bend. That is if the customer supplied material delivered to my shop in good usable condition in full sheets. For comparison if I furnished the material it would be $4.33 each for the washer and $19.71 each for the bracket not including the 45 degree bend. The above prices are based on quantities of 20 or more of each part.

If I were to cut just one of each part and furnish the material it would be $5.29 for the washer and $21.45 for the bracket.

Danny

[redneckgateart]

Thanks for the input guys.

As far as quantities go, everything is in "sheet-lots"....as many parts as possible on a sheet. Because of their buying volume, they're getting a little better pricing per sheet than I am and they don't mind furnishing the material. That's good and bad at the same time. It's nice not having to deal with the ordering, delivery and cash flow of 20+ sheets per month. The down side is that there's no potential for profit on the material, since they'll furnish it.

They buy a lot of items from China but their previous supplier for these parts is actually here in Texas. I almost choked when I saw the prices they were getting.

The washer, including 1/4" material, is $1.56. Those parts nest at 311 per sheet. With their material pricing, that boils down to $0.45 for material and $1.11 for cutting. WOW!

The other bracket is $5.90 and that includes 1/2" material, cutting AND bending. At 96 parts per sheet, that's $2.90 in material, which only $3.00 for cutting AND bending. Double WOW!

The only reason they are even considering switching suppliers is because I'm local and don't require a 4-week lead time like the other guy. I had to tell them "No Can Do" at those prices. They are willing to pay more to get local, faster service but we're a long way apart!

[Oldsarge]

Pretty low prices for the wear on your table let alone the labor of loading, unloading, bending, tumbling and packaging.... If they pay a little more, maybe you can get them to pass along the savings they are getting on volume of sheet goods which you could then mark up on your other projects... Just a thought!

Oldsarge

[CNCCAJUN]

My two cents . . .

I think you are getting ready to get into a price game . . .

My thinking is his current supplier/cutter has a large high end table that cost him based on usage time.

Although these arrangements typically has a minimum.

So in order to keep the table during lean times he is willing to work it for true cost. Pays the note & keeps the table around for better times.

If he is getting a good deal now, why come to you.

Is his current cutter getting ready to get busy, so he is going up on prices.

Or did he come to him with promise of high volume with good material and fail to meet the promises.

I would proceed slowly . . . a lot of heavy material & high volume will probably put a strain on your table and possibly your shop.

I have always approached pricing for anything I do from the stand point of what it cost & how much I want to make. I don't want any one customer to represent more than 15% to 20% of my business. . . It gives him too much leverage. New customers are easier to find thatn working for less than you are worth.

Just my two cents . . . Hope I offered a thought or two . .

[twicecustom]

Just figure out what you could cut in an hr and divide by a decent shop rate and don't forget the power and consumables you will use.... just an example, I cut a 3-1/2" circle out of 1/4" for a customer, gets them in lots of a hundred or so, I charge $3.87 and I buy the material. I do a few other parts for him, 1 being a triangle that is from 3/8" that only nests 7 per 4x8 sheet, that's a pain because you don't do much cutting for the trouble handling the 3/8".. and a 1/2" ear tab thinggy as well.. I'm a little higher than his last guy, but he doesn't have to pay freight and I can get them done in a day or 2..

[thinwater]

I had a trailer manufacturer ask me to price out some spindles because the ones he gets from China are failing him due to crappy metal. My cost for the metal was more than he pays for the fully machined part, delivered. This is one reason I dont try and compete against China. Their stuff sucks but people use it due to the cheap price.