How do you quote your parts?

I originally bought my PCNC1100 purely to prototype parts and to do small production runs for OEM electronics products. It's been great, and a customer has recently asked me to do some mechanical design work/ production for them. It's a great opportunity, but I really have no idea how to quote him for these parts. There's obviously the time it takes to make each part, but how do you account for other factors? I have $20,000 of machinery and the knowledge to do something useful with it, that's definitely gonna factor into my cost. I have to make fixtures, toolpaths, etc and lots of other things that don't factor into the machine time of a part as well. How do you guys do it? What do you think is a fair amount to charge per hour of machine time?

Thanks!

I charge money per hr of machine time. If I get a minimum order of X number of parts, then there is no setup time. If they are under the minimum order, then I charge them for a setup charge, which varies but is typically a minimum of 15 minutes. 4th axis setup is more fiddly, so setup can vary from 50% to 100% of the run time. Run time includes changing out the finished part for a rough blank, tools changes, etc... What happens if you underbid the job? Well, you still made some money, just not a lot, and you learned something and got to play with your toys. It's not all bad, is it?

NOTE: I purposely did not put my hourly charge in here. You have to determine what your time is worth. I base my hourly rate on 33% more than I make at my day job because my personal time to go fishing is what have to give up in order to take side jobs.

As far as quoting, your first few times, program the part out to get an idea of how long it will take to run. With time, you will be able to look at a part and envision how long it should take to machine, add 20% onto your estimate, and give the customer a low to high price range, saying it could cost $XX to $XX, but I won't know for sure until you have me run prototypes. Make sure to include the material costs in the charge as additional to the machining time.

I also charge for programming which is just time.

It's all in what works for you.

Wade

As a professional estimator I can say there are many factors that go into bid for a contract.
You touched on a few and they are all very important. I would suggest researching and reading a couple books on estimating for long term knowledge.
Over the years I have paid for an education at any ivy league school from my mistakes. Then paid to move the school to my city and paid for yet another education.

For this project I would set down and do a spread sheet of every expense you can think of and then decide what percent of these costs should be charged for this project.

building rent
insurance
tools
supplies
electricity, water , sewer
labor
insurance.
professional services.
taxes

This is a summary then you break it down

Example would be tools
One way would be to use a business tax model and depreciate your major tools of x time.
Say 4 years so for this project 20k /4 years is 5 k a year then divide that by 200 work days = 25$ per day those tools cost if used or not.
Then you add cost of tools that wear out and require replacement every x amount of time, in my little garage I can see easy 5$ a day in tool wear.
The more detail you break down and cost out in the spreadsheet the more accurate your estimate will be in most cases!
All the way down to cost of power per kilowatt x kilowatt's used in shop including machines, lights, computers office heat and a.c. the lists can get very detailed and long.
Guessing you get the idea, I will note a couple rules

Material is fixed and known quantity and should never be underestimated.
Be complete and accurate or get ready to build monuments and get more educations.
Never lost money on a project O didn't get.

Final note
If this is a new business and a new venture for you. There is also wisdom in the other post about working cheap to get established.
We call it dog fooding. :) Spread some or all those costs out over more time and more customers and contracts.

hope this helps
md

For a quick, off-the-top-of-my-head quote, I multiply material cost by 3.3

if your bidding less than $60/hr your screwing yourself and everyone else involved in the business.

Thanks for all the info everyone! Just what I was looking for.

Another method to estimate and quote costs to a owner would be the setup and run method.
You can detail a cost estimate for the setup and quote based on that.
Example:

Setup cost
design widget 100$
cam widget 100$
tooling for widget 100$
fixtures for widget 100$
material per widget 100$
make 1 widget 100$

Total cost for setup $600.00 and 1 widget complete.

All widgets after that can be quoted at cost of time and material only, no setup. or 200$ as example details.
Of course this is one time and if the customer needs more at later date. You would revise proposal and deduct design and cam cost for that run of widgets.
And included all other setup costs to start that run.
Then the cost per each widget can be quoted like before.

Another estimating method to consider
md

Quote:

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Originally Posted by mountaindew

Another method to estimate and quote costs to a owner would be the setup and run method.
You can detail a cost estimate for the setup and quote based on that.
Example:

Setup cost
design widget 100$
cam widget 100$
tooling for widget 100$
fixtures for widget 100$
material per widget 100$
make 1 widget 100$

Total cost for setup $600.00 and 1 widget complete.

All widgets after that can be quoted at cost of time and material only, no setup. or 200$ as example details.
Of course this is one time and if the customer needs more at later date. You would revise proposal and deduct design and cam cost for that run of widgets.
And included all other setup costs to start that run.
Then the cost per each widget can be quoted like before.

Another estimating method to consider
md

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This seems like the ideal way for me to do it. Most parts in question would be for very limited production runs, so getting the set up cost right is the most important aspect to me. Thank a lot!

Glad to help.
This is one area I have experience.
Don't be afraid to detail your costs and show them to the client.
After all they are in business and also have the same costs when they price their product or service.
A complete and professional proposal will always get considered!
md

I have a $350.00 minimum charge. If you bring it to me and I have to sit down at the computer and make a program it's gonna cost you $350.00.

I had a guy come by about a year ago to ask if I could make a bracket for him to mount a camera on his remote control drone type helicopter. I told him one piece would be $500.00, 50 pieces would be $45.00 each. He didn't understand it doesn't matter if you're making one part or 50, program time is the same.

If I can do what you want on a drill press, then go to Subway and buy me a sandwich, but if I have to put it on the CNC, that's going to cost you some money.

I mean, I have a $16,000.00 investment here. Why should I run it for free? Would you?

Here's a simple spreadsheet that I use.

Well I cant figure out the attachment thing. message me and I'll email it.