Cutting Wood Price Help

I have been asked to cut some 1/4" wood for a prototype. They will need around 100 or so to start and possibly 4000-5000 at a time after that if the product takes off. They supply the wood and I do not have to clean what I cut. I cut they take. They are 12x9 L shaped with some curves. I can cut 1 in about 1-1.5 minutes. I should be able to fit 6-8 at once on an 18x24 sheet of wood in my Helix. I am thinking I can combine some of the straight cuts as one as 3 of the sides are straight. I have not tried to do a whole group yet. I am thinking I will give a price for under 100, and then some sort of increments up from there. What do people feel would be a reasonalbe quote for this? When the go to full production they would like to be in the $1 range per piece. Any help would be great.
Thanks
Tim

People have different hourly rates, that is affected by market, overhead, and how much profit you want to make. I operate out of my home now, and my equipment is paid off so I have low overhead and consider my prices low.

With 1.5 minutes cut time, plus time to change out material, frequent lens/mirror cleaning as required when cutting wood, at my hourly rate that would come out to at least $3 each. Since they provide the wood, you really are not saving anything by doing 1000 over doing $50. If anything the wear and tear on your equipment should be considered. I would pass on it if $1 each was their bottom line.

I recently posted a production job that I do regularly cutting rectangles of thin ABS, that take maybe 6 seconds each, and they are happy to pay me $0.80 each for 1,000.

At 8 hours a day, 5 days a week, that's 2.5 weeks of cutting for 4k units. This is also time that you can do little else as it's wood (and flare-ups are possible) and the turn time will be around 10 minutes/sheet... just enough time to get into a different project before being pulled out again (annoying).

If you don't mind mind-numbing, repetitive jobs, $4k for 2.5 weeks of work isn't horrible... but that doesn't include all of the overhead (and that adds up FAST).

Another problem might be the wood that they supply. Is it solid wood, or ply? What type? Whats the moisture content (moisture content will really affect cutting time)? The dryer the wood, the faster the cut. You would hate to cut a whole sheet, and then find out it's not getting cut all the way through. I have some old plywood from a old set of drawers, 3/8 thick, and cuts like butter at the same speed I cut 1/4" because it's dry, real dry.. Test the wood, before you commit to a price. But a buck is too cheap..

I don't consider $1 too cheap if you can get it down to a minute each. Even a minute and a half. That's considering they are all the same and you don't have to fiddle with them. Just load and press go. Multitask and do 2 jobs at once. It will keep your mind from going numb.

I would consider $1.00 too cheap considering the wear on the equipment and the fact that it blocks out a lot of your time for other jobs. (that may be good depending on your circumstances)

Remember that even $.20 can make a difference of being profitable and happy with the job.

I think I'd be in the $1.25 to $1.45 range.

sometimes when you run 1 part and it comes out to be 1.5 minutes and then you run 6 of the same parts, at the same time, it may reduce your time to around 1.25 to 1.1 minutes or less. If you use carry boards so you take the whole sheet out at once and unload and reload it outside the machine your time will also improve.

Wholesale price is typically 1.00 a minute with set up and design costs at one rate and repeat orders at a reduced rate. So at 1.50 per part at the 100 level you could give 10% off up to 2000, 12% off to 5000 and 15% off to 10,000. Your efficiency and multi tasking is where you can make up more profit and maybe you desire to have your machine running/tied up for 2 weeks but don't lose your other customers because of it. You could do shifts- 8:00 -12:00 run parts-12:30 to 4:30pm run other customer's stuff and then from 5 to when ever continue your parts. or just hire someone for 10.00 an hour and have them run it for you.

hope this helps and ...

my shop rate is $60 an hour for cutting. i have a $25 per hour one time set up fee per job. most jobs can be set up in 1 hour or less. this for testing power and getting the most out of a sheet.

when i have a big run of the same item say 500 or more i charge a machine service fee of $15 per 500 this is for lens cleaning and lube. this goes in to a sperate account for machine repairs and replacement tubes.

Quote:

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Originally Posted by Shawn Cavaretta

when i have a big run of the same item say 500 or more i charge a machine service fee of $15 per 500 this is for lens cleaning and lube. this goes in to a sperate account for machine repairs and replacement tubes.

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I'm sorry, but that makes no sense to me whatsoever. I can't imagine telling a customer that when they order more parts they have to pay me more so I can do proper maintenance on my machine. My strategy is to reward my high volume customers with a better price, not a higher price. I *sort of * understand the logic that might have you thinking that way, but in reality, it just doesn't make sense.

Wait, let me write it down...

Customer a - 450 pieces = 450 * price per peice
Customer b - 3,000 pieces = 3,000 * price per piece + "machine service fee"

Nope, doesn't even look good on paper...

Gary,

I thought the same thing... the maintenance costs should be "hidden" within your per piece cost. To split it out like that is just inviting a poor customer reaction.

Two bucks a minute. Plus your set up fee. An experienced operator can optimize for minimum time, so its really not expensive. I took jobs at the dollar a minute rate, as I think beginners should do. But ultimately it was too little for high tech and skilled labor.

Or if you're doing a huge run, consider getting a contract on paper. That way you can invest in a dedicated Chinese machine, pay somebody to load and watch it, and still make money at a buck a minute.

They will have the wood cut so I can use 2 sides of their wood. Using 4 corners I can cut 4 shapes in a total of about 3 minutes. If I add 2 full ones in middle of wood it takes 5.5 minutes. I still need to combine some lines to really make it a bit faster. If I figure in my removal time and setting the next one up, it will be around a minute per piece average. Does not include cleaning lens, etc. They are hoping to get to about 1000-1200 per month when up and going. Thank you for everyones help.
Tim

Quote:

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Originally Posted by Gary Hair

I'm sorry, but that makes no sense to me whatsoever. I can't imagine telling a customer that when they order more parts they have to pay me more so I can do proper maintenance on my machine. My strategy is to reward my high volume customers with a better price, not a higher price. I *sort of * understand the logic that might have you thinking that way, but in reality, it just doesn't make sense.

Wait, let me write it down...

Customer a - 450 pieces = 450 * price per peice
Customer b - 3,000 pieces = 3,000 * price per piece + "machine service fee"

Nope, doesn't even look good on paper...

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the fee is hidden it is not written down on the invoice as service fee. it is tacked in to the price of the item.

i do not give discounts for volume work. when i get an order for something i will find out how many they need then price it out. if it is over 500 of the same i add $15 per 500 items that is an increase of $0.03 per part.

i have been doing this from day one and i have never had a customer say anything about the price. i have had a couple people say that i am to cheap on my cutting fee.

You have to be practical about this quote as well. If they are expecting to sell the finished item for $3.00, it'll be hard to justify your services at $2.50 each and them supplying the wood.

The thing I'd watch out for more than anything is the "this could turn into 1000's a month" promise. If I had all those jobs that were promised, I'd have a row of lasers and 3 shifts of people. That's a commonly used tactic used by just about everyone. In their head, they think it's true, but in reality, it's really rare for that to happen and the work to come from it.

Just make sure you cover yourself on the first batch. The gut says you should work with them and help them out so you can reap giant rewards in the future, but in reality, that's not what happens. You end up doing them for almost cost and you never hear from them again because they took your prototypes and had them made with another more cost effective technique, or their idea never panned out to the 1000's and 10,000's they hoped it would.

One way around that is to charge a setup fee. Say $60 or $100 setup and then give them the good price. So if they never come back after that first order, you still got paid for all your time.

Don't ask me how I know this......