Request For Quote- Question for Machine Shop owners

[ishprecision]

This is not a RFQ, just wanted to get a feedback from shops owners.
Very briefly about myself and my company.
I am 29 years old and started a CNC machine shop about 2 years ago in NY (Brooklyn). I purchased 4 CNC machines in August of 2007 and was doing pretty well all through the summer and the first week of November. I also have a manual department. Most of my customers are within 50 miles radius of my shop. But being this is NY and the taxes and wages a high, more and more companies are moving to other states or close their operations because they cant compete.

This is my question:
I charge $30.00 - $35.00 an hour for manual machining
$40.00 - $ 45.00 an hour for CNC machining. (some shop in Long Island NY are charging $60.00 - $70.00)

Manually I am not making too much money since my manual guys are making $15.00 + appx $3.00 (for work comp, insurances)

I was just wondering what is the rate for manufacturing in other states.

I look at some rfq on this website and there is no way that I can make the parts (100 pcs at $1.00 each including material and shipping). I don't know how people are making money.
I also looked at MFG.com and the prices that are awarded don't seem right. Parts that should cost $5.00 and awarded at $10.00 - Is that website a scam?

Thanks for any feedbacks.

Alex

 

[woody]

Hi,

Your shop rate seems like a bargain to me. I dropped my rate significantly and I am still having a hard time.
I quote at $50 per hour now.
If you can survive this ecomonic "downturn", you will be better for it.
I have been through this situation three times.

Companies will take the best price now because money is so tight.
They will sacrafice quality. They do not need quick delivery at this time.

The competition to get work is tough.

As for MFG.com.
I paid for their services a few years ago and got ZERO.
5 grand (or whatever they charge now) is a lot to shell out just for the chance to quote work.

Lastly, I dont even bother to quote most work here because there is NO WAY
I can justify $10 per hour. That price wont even cover the overhead.

Some people will say it's better to make 10 per hour than 0 per hour.
I dont see how that is better. I will wait for something that pays instead of tieing up my machines to make no money.

Thats my .05 worth.

 

[Dualkit]

Woody, funny how you claim people are working for $10 you are pretty close.
When I do get feed back on the 100's of quotes I have lost bidding on these
cost free online forums, I have done the math to get to the winning bidder's
price and the popular dollar figure for the shockingly low bidder averages around
$13 an hour for CNC work. This is not the case of someone having the right machine for the job where someone is whipping out a 3 minute part in one minute. They are selling time on CNC Lathes and Mills for $13 an hour. Another
thing that happens is people are not charging for material if they have it lying
around collecting dust, I have seen one offs going for not much more than the
cost of materials if it is a part with high material costs. A lot of people don't
charge out time for programming, or set-up, they just bid run time. No one
figures packaging and delivery time either. I am curious of the quality of some
of these people that work half the day for free. The few jobs I have won I have
been commended for my quality and considering they were simple parts, that would tell me the $13 an hour guys parts probably look pretty bad. I have been at the internet bidding game for a year and it seems the economy has driven prices down drastically and I am just talking about the jobs awarded to shops not in low wage countries, USA, Canada, etc. Late last year I would say half the jobs were being won bidding shop time at $40-$50hr fast forward to the present time and most winners are in the $15-$25 range. Also it seems a lot of people are flat out desperate. I have done internet searches on people that bid and have found what appears to be machine shops as large as 20,000 square feet bidding on $200 jobs! Anyway I just think we all need to whether the storm,.........Bob

 

[contract_machining_inc]

Yes, the internet bidding is for dreamers and fools. We also had a walk-in fool, handed me a stack of prints and said the guy down the road will do this for $10 an hour and they will supply his material. I almost hit the floor laughing before handing back his prints, never thought anyone was that stupid to shop for price lower than $10 an hour. I had to raise our rate to $60 an hour to get employees (still less than what the guys at the automakers getting paid including benifits for working on the line). Problem is most jacklegs do not have a clue about business and don't realize every one suffers from below cost pricing yet they continue to do it. Then when their backyard business fails NO ONE will hire them because of the risk of them stealing customers and going back on their own once the economy heals up.

As for MFG.com, stay away from that. I bought a shop from some guys that fell for it. The only job they got was by low balling then the customer burned them for 15,000. Sadly they needed cash because MFGquote.com filed papers in court for the full amount due and they did not have it.

 

[machine_nut]

I will agree, MFGQuote is a real good place to stay away from unless you like to give money away. Cost me $6700 a year ago and never made my money back. The problems I find with online quoteing is most who post are looking for you do do the work for nothing and then pay the shipping and material too. Or this is a good line,"I don't have the work yet but will be awarded from such and such company,please quote", people like this wanting you to do the quoteing for them so they can lowball you. where do these jerks come from anyway.

my 2cents
gene

 

[Jetfab]

Shop Rate

Alex,

I'm in sales and one thing that you mentioned which stuck out to me was that the larger percentage of your customer base is within 50 miles of your facility. While that can be successful in an ideal situation, you may be setting yourself up for failure in the long run.

Our shop has managed to stay afloat without dropping our rates. Our approach in a nutshell is diversification. We have a one stop shop that provides everything from parts to plating, which gives us the benefit of not having to rely on outside vendors. Buyers are looking for price cuts, but at the same time they are also looking for someone to take their headaches away. By providing turnkey services that can address the needs of a buyer’s entire package is the silver bullet within diversification.

We also spread our customer base over as broad an area as logistically feasible. We are located in Tennessee and our farthest customer is over 500 miles away. In fact, we don’t do a lot of local business. I find there are too many dogs on the bone locally and by getting out there in other states we are finding customers that don’t use the “Arkansas barn shops” who don’t provide their employees any sort of benefit package. I don’t hold it against these guys for trying their hand at business but they only hurt us all in the long run.

I ran a CNC shop in the ground trying the price cutting approach and I can tell you that buyers will run you in the ground as well. Stick to your shop rate, hire you a salesman worth his salt, and you’ll find that there is good work out there worth quoting.

As for the online quoting game; “if it sounds too good to be true then it probably is”

Thanks<><

 

[CBMach]

Hi
I run machine shop here in Thailand.
I charge for CNC milling approx 25-30 US$/ hour
I also do Alu, Iron , Brass casting too.

 

[gordon]

Hello everybody,

It is nice to meet you here. My name is Gordon and I am planning to run a machine shop on 5-axis CNC machining businesses. Does anyone know about 5-axis CNC machining markets? How much per hour for 5-axis CNC machining?

I am sincerely looking forward to hearing any suggestions, discussions and advices from you.

All the best

Gordon

 

[tmachine001]

I looked into mfg.com, but have not actually tried it. From what I could find out through their demo and examples that I requested, prices for the awarded jobs are too low for me. I guess you have to low ball to get anything and hope to get a new customer from it. The hope is that you can charge normal rates on follow up work with that customer once you have a relationship.

They also annualized all of their numbers, so it is very misleading. If the buyer asks for a quote of 10 pcs, but states that they buy 100 pcs a year, mfg.com uses the 100 pcs and applies the 10 pc price to calculate the volume and award numbers. So it is difficult to evaluate their service.

.

 

[mike@ccwindsor.com]

Going on 8 months and I landed 1 job from MFG. I made 4 brkts. for $80.00 I put in the material and shipped. The grand total was $130.00. I have not been paid.

There are people on that site that quote parts for less then the material. I bid on one job for 1000 brkts. I gave the guy a price of $1.30 each because I could fit the blanks in a scrap area of something I was cutting. Some place in India landed the job for a total of $17.00! No one can compete with that. Then the guy sends me a comment of PRICING TOO HIGH!

I don't understand how anyone can expect to stay in business in this market. I am doing OK but my pricing is 1/3rd of what it was 2 years ago.

 

[jetblackaircraft]

MFG.com

When I emailed MFG.com to ask about their services they called and called and called, begging me to join up. Ever had a girl who would not stop calling you? Kinda becomes not attractive after a while right? They should learn that concept. Bottom line is, they have quite a racket going, but it's just a good concept, not a good practical tool for machine shops.

As for shop rate, I typically charge $75/hr, but usually end up under bidding the time. I do charge for setup and coding, but same story, usually takes me a lot longer than I bill for.

Honestly the best luck I've had is from my products I have produced and sold on ebay or my website myself. Skip the middle man, straight from manufacturing to retail. I end up making closer to $100/hr on those parts.

Any shops have engineering services and CAD drafting available? What are your rates for that?

 

[tmachine001]

When I emailed MFG.com to ask about their services they called and called and called, begging me to join up. Ever had a girl who would not stop calling you? Kinda becomes not attractive after a while right? They should learn that concept. Bottom line is, they have quite a racket going, but it's just a good concept, not a good practical tool for machine shops.

As for shop rate, I typically charge $75/hr, but usually end up under bidding the time. I do charge for setup and coding, but same story, usually takes me a lot longer than I bill for.

Honestly the best luck I've had is from my products I have produced and sold on ebay or my website myself. Skip the middle man, straight from manufacturing to retail. I end up making closer to $100/hr on those parts.

Any shops have engineering services and CAD drafting available? What are your rates for that?

I do everything at 75 an hour too. Tool and mold design at the same rate as the CNCs. I do a little product design here and there, but that is usually just drawing up the customer's concept scribbles. I get more for aerospace tool and mold design, but that is due to the different quoting processes involved.

.

 

[bebop]

About MFG.com

Thank you for the info into them. I am still looking for work but not worth paying for service. I am a one person shop all manual trying to start the old way.Starting out small and trying to beat the street the old fashioned way.

 

[larrysmachine]

Hi,
This is my first post but would like to chime in on this, I own a small prototype shop with all manual machines except for one knee mill that is cnc. My shop rate is $65.00HR and I don't play the price game, my deal is quick turn around on needed parts for the oil field.

 

[versa1]

Mfg.com has no motivation to perform for you once they have your money.
I explored the idea two years ago, dismissed it, and still am getting spam emails from them begging me to throw money at them.
Stay Clear!

 

[ICan]

Mfg.com

I nearly joined up with this mess about a year ago. Luckily, the owner of another shop in town let me know he was a member.

He also let me know he had not gotten a single job after bidding on a lot of them. He had spent hours looking and bidding. NOTHING. His shop rate is / was $55.00 an hour. He said several folks wrote him wanting him to work for $15- $20 an hour. He declined.

They still e-mail me daily... wanting me to join and telling me all the work they have for me. No thanks. I'll just keep plugging along.

ICan.

 

[mikemac]

Hello Fellow Machinists;
I have just recently joined this website, I enjoy reading your comments. Especially about mfg.com. I joined mfg about a year ago, found their website by accident, big mistake, I quoted on quite a few jobs and never was awarded any of them. I tried just quoting jobs from Canada-where I am and still didn't get anything. Almost fell off my chair! One job I bid on I quoted 4.50 per pc. and the job went for 24 cents each. I don't know how far this website goes, but if you kept places like China out of it's reach I think it would help to keep a level playing field. I'm not denying anyone a living but I have to buy food in North America, oh and then there's all that tax I have to pay as well. Mike.

 

[SSmach]

Mfg.com

I am new to the rfq community, I have a vertical cnc and some manuals, i was on mfg last year it cost me 5400 for the year, i did get a few repeat customers, you basically had to play the game and bid a job low to get in with a customer, then when they see what you can do, hopefully you get some other work from them, and then bid it at your shop rate, I did seem to stay above water for the year, but I consider myself LUCKY!