Charging more for cnc work

[simso]

I had an interesting discussion today with a customer, re cnc use on jobs.

He was commenting that any job that uses a cnc should be charged out more.

This got me to thinking, should it or shouldn't it, from a business aspect yes it makes sense to charge out more.

From a personal aspect i dis-agree, my theory if it saves me time then that equates to less labour costs, so I should not charge more for something that reduces this component.

Thoughts??

Steve

[kiwigeo]

I'd take the view that price would be lower if my production costs were decreased...but at the same time if the end product is better quality then that's argument for making price higher than the lower quality/less precise alternatives.

[simso]

It is an interesting concept is it not.

I view it as a time saver, so if it saves me time, it saves me money and gives me the same end result, so I can do more work.

However I was discussing this only today and they were talking about it should cost more, as it is a tool and you not only have to factor tool wear and replacement you also have to factor in initial costs.

Won't change the way I charge or do things, but really made me think, that really as luthiers we know very little about business.

Steve

[Allen]

If all you are is a hobbiest, then you probably wouldn't worry about the initial cost of the tool, and ongoing cost of tooling and wouldn't even take into account the cost of replacement when time comes.

I ran Panel / Smash Repair business's for most of my life, and there we break down every job into 0.1 hour increments, and have a different charge out rate based on the task. Taking into account the employee working on each step of the repair, and their assosiated costs. And even down to how much each square meter of the premises cost us each day. Working out a break even point at a certain hour of the week, then knowing when we were actually making money for ourselves. Most people would have no idea that the break even point for most Panel Shops is sometime around mid Friday afternoon. A really efficent one gets that time to mid Thursday afternoon.

To a leser extent I still run my luthier business like that. Just me as the labour certainly simplifies that aspect.

My CNC and laser saves me heaps of time on jobs, and without a doubt make them much more accurate. If I charged work out at a rate that was the same as my general labour rate it would be a long time to see any return on investment to the purchase of both of these tools.

[simso]

Very close to how it was explained to me Allan.

Steve

[routout]

I built my CNC to make most things not being production style things just a head stock here and a neck there inlay is a breeze that's one advantage .If someone want's a special tool then one or a dozen of those I would not charge more for it ,kind of like buying the helical planer and charging for dressing boards better It's repeatable accuracy takes a lot of the hand made errors away then the last 4 necks I finished by hand a rough guts sanding spindle on the pedestal drill then my old wooden spoke shaves for a close finish therapy.

[demonx]

Everyone is going to work out their pricing different, as long as hours are accounted for as well as wear and tear etc.

One thing I find surprising is how many people think CNC is faster. It's not! On most tasks CNC takes much longer, and that's not even accounting for all the modelling and coding.

So using that theory, as a smaller non factory builder, I can see that a CNC guitar if quoted properly should cost more than non CNC..

[Jim watts]

I think this might of been captured somewhere above, but to be an effective industrial tool the part should cost less.
I should be able to charge a higher hourly rate yet be able to sell the part for less due to the efficiency gain in my process. Think Martin and Taylor. Really great guitars for the money. Granted if your doing one offs it's bringing something else to the table.