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I Forge Iron

How do I price my iron work?


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Hey yall,

With the comming of cooler weather, I have been out in the blacksmith shop a LOT more, and forging some new pieces. like the cookware set
and today I am working on a fireplace set.

After every project, I don't realy know how to price my work. Yall got any advice on this matter?

Thanks,
Trip

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When in doubt about pricing, allowing that you're trying to make a stab at actually making some money and not taking this on as a hobby, go no lower than the mid range metal fab shops in your area and bump it up from there.

On bids I try to go by a per foot cost after I've broken down the job.

Be prepared to educate as to why your products cost what they do.

Try to keep from giving on the spot estimates on ANY potential job, whether you have blueprints or napkin scribbles.

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What Thomas said. I have a shop rate and price/bid accordingly. Hand made costs more because it takes longer and as further explanation I will tell a potential customer how many years I have invested and that they're not paying for the material nearly as much as they're paying for my years learning.

I never, NEVER "educate" the customer, just the term is insulting. Maybe it's just me but I don't do business with an outfit that "educates" me without asking. Yeah, I'm down the road in one. I either make what the customer wants if THEY are WILLING to PAY THE PRICE. OR send them to Sears or where ever. Sure, I'll BS em in a friendly manner, even laugh at what they think they should pay. This is after all NOT the 19th century. Okay, so maybe I do engage in instructional conversation but NEVER, EVER educate a customer as such. UNLESS "education" is what they're paying me for.

Of course that's just my opinion, I could be wrong.

Frosty The Lucky.

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Maybe out in Montana but there were a heck of a lot of factories producing stuff in the 19th century---even in the first half. And from the last half there are still a large number of catalogs around showing where you could buy pre-made items and have them shipped by train. (The first Sears catalog was published in 1888.)

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I think you will find that custom ironwork wasn't cheap in the 19th century either when you compare it to the prices of things then. it may have been even higher as there was less competition with "Fab shops".


What I meant is most or many folk only know the price, not the value. A skilled craftsman in the 19th century may earn a couple dollars a day. Paying say $15 for a front gate would indeed be expensive. So, the "customer" I was referring to were the ones who only want to give you the $15 but in 2012 dollars.

Smithy, fab shop. If the smith couldn't drill a hole and run a bolt through it he was there sweeping floors till he could see over the anvil.

Frosty The Lucky.
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Dear All,

I price my work on the basis of how much time I put into it. All I have to sell is my time and the skill experience has given me. I usually figure $40/hour is reasonable for a craftsman of my skill. If an object takes a half an hour to make it is $20, either wholesale or retail. Generally, the material cost for my projects is nominal. If the materials are more than say, about $5 I will not add much for material cost.

I follow the model of most proffessionals who charge by the hour, attorneys, doctors, engineers, etc.. The overhead costs are included in the hourly cost which is why the hourly costs are often so high.

If I add too much the unit prices reach a point that the only people who can afford my work are those with too much money and not enough sense. I'd rather sell ten $10 items than one $100 item if I have a choice. What I'd really like is to sell ten $100 items in the same time that I usually sell the ten $10 items but that doesn't happen too often.

It is a difficult calculus to determine what the market will bear, what is a fair wage for you, what can you expect to sell and how often, and the demographic of your customer base. Good luck. Some experience will educate you better than any of us.

Economically,
George M.

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Dear All,

I price my work on the basis of how much time I put into it. All I have to sell is my time and the skill experience has given me. I usually figure $40/hour is reasonable for a craftsman of my skill. If an object takes a half an hour to make it is $20, either wholesale or retail. Generally, the material cost for my projects is nominal. If the materials are more than say, about $5 I will not add much for material cost.

I follow the model of most proffessionals who charge by the hour, attorneys, doctors, engineers, etc.. The overhead costs are included in the hourly cost which is why the hourly costs are often so high.

If I add too much the unit prices reach a point that the only people who can afford my work are those with too much money and not enough sense. I'd rather sell ten $10 items than one $100 item if I have a choice. What I'd really like is to sell ten $100 items in the same time that I usually sell the ten $10 items but that doesn't happen too often.

It is a difficult calculus to determine what the market will bear, what is a fair wage for you, what can you expect to sell and how often, and the demographic of your customer base. Good luck. Some experience will educate you better than any of us.

Economically,
George M.

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over the past few years I've had this conversation with several smiths. My take on it is, how much do you pay an auto mechanic ?
there are several answers to this, backyard mechanics get paid less than the dealers ( who get around $100 an hour ) and there are private shops that get $65 an hour. Mechanics are everywhere, our trade no longer has a vast number of practitioners, don't you think we at least deserve a mechanics wage ? Now it boils down to what kind of mechanic are you, dealers?...backyard ?.. in between ?.

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George,

I haven't seen your work........but you're too......inexpensive. The lowliest fab shop with a little wire feed welder charges more than $40 an hour for their "metal work". If we were competing for a job in my area and you were charging $40 an hour we would be having some lively conversations. Decide on a minimum charge for material even if you picked up an old bolt for a meat flipper out of the ditch on the way to your smithy. You had the eye to spot the material and the skill to turn it into something.

Have you ever seen what a glass blower charges? Not to belittle, but at most times, moving metal around at heat is far more intensive than making a cylinder out of molten glass, yet they charge double what most working smiths would balk at charging. And, sadly, that disparity in pricing falls more on blacksmith's not charging enough, not glass blowers charging too much.

The old school craft need not suffer from old school pricing.

That being said, sometimes, you have to be open to the idea of being a little generous by not charging for every little thing on the bill.
If you pass on a freebie that should be on the invoice also. They won't know that you were giving them a deal if they don't see the
"no charge" and a dollar amount next to it.

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I'm a professional estimator and there are several points I see that haven't been made so far. #1 the "going rate" is very regional. Material costs may not change much, but there are lots of factors that influence why something's more costly here than there. Not the least of which are things like urban centers, industrial districts and the like. For a long term enterprise located in a well-known trade district, the clientele are well aware of the shop and it's capacity. For a shed in the country, there's not much to go on. Prices and delivery times will reflect these circumstances.

Being forced to compete tends to stabilize the going rate in a given market. If you can't compete, consider what the competition is doing- it's time to learn how to make a profit at the going rate. I have found many folks overestimate the planning and underestimate the performing. It's often worth keeping notes of how long each phase took. For folks that don't compete, it's well advised to work on your sales technique. Be quick to reply with more cost effective options if the price is protested. Remember that "helping" someone with no money and high expectations will hurt you in the end.

For the savy estimator, you'd be well served to have a design rate, a tooling rate, a production rate, and an install rate. When you're designing, the shop's not moving, neither are the supply trucks but your overhead costs keep coming. When you're tooling up, you're stuck purchasing or fabricating what you'll need to do the job. Your shop's equipment and overhead are going towards making something that has little to no value to anything else. You're investing in the job. Do it well and you're investing in your shop as well. Production is your bare blow and go wage expectations with overhead. This is where you'll need to be HUGELY efficient if you're going to make any gains at all. Install is a wild card. Don't forget to include lifts, cranes, jacks, rigging, protection for finished surfaces, etc. All the tools are at the shop, now they've got to be toted out to the site. Install is slow, meticulous, and risky. If you damage your finish, the finish on adjacent surfaces, etc, you've got to fix it. If you break out your pricing, you may find your customer will opt to contract the install themselves as a way to work with you. Be aware that anything you write down can and will be used against you. Unit pricing leads to haggling, which consumes time which equals money. The key is to provide broad strokes to show where the money's going, not a menu for a la carte purchasing. Offer design services at an hourly rate - you put in the time to know the answers, they can pay the rate to learn them from you. Walk away from endless consultation without contract. I know of at least one contractor who spent so many man hours solving their customers problems for free that they can't break even on the job.

Apply your overhead against how it factors to your shops workload. If your shop will be 100% dedicated to the job for it's duration, the bid needs to reflect that. If it can be done alongside other jobs, figure accordingly. Overhead should be a fixed rate over time.

I strongly advise against using percentages on top of total for overhead. Overhead costs accrue over TIME. Say you're making two identical things out of two different metals. There will be a cost difference between the metals. There's no more (or less) overhead involved just because you're using a more expensive metal. This is how to win. Conversely, a relatively cheap material doesn't compensate for a lot of work. I've tracked it myself and I know that the dollar amount of overhead driven by percentage is not accurate enough. For those who think I'm quibbling, consider that when you make a gate, it's a professional who's got an accurate fit. The company that can win the bid, make a profit, and never take a shortcut is the professional operation.

Also be aware of opportunity cost. The time spent doing this job is time you can't be spending on other work. If you turn a steady profit making S hooks, the time and energy to score a railing job may result in less net income.

Getting the job done efficiently is not a pleasantry, it's a dire necessity. Long lead (wait) times are the #2 concern (after price) for construction projects. If buying a tool doubles your production but doesn't complete the work any faster, you're not investing- you're collecting. Every investment in tooling and staff should have verifiable yield, sometimes that yield is opportunity in a new market.

Finally, what I consider to be the hardest thing to get into an entrepreneurs head. It's not the job you lose that puts you out of business, it's the job you win. Getting in over your head with one job, or taking on one (or twenty) jobs too many, is how deadlines start slipping, and money starts going out the window. Consider the total bid amount to be a check YOU wrote to the customer. That is your risk of not completing the job. Total all the outstanding jobs in your shop and that's your running risk. I have seen many occasions where one "cherry" job turned a shop into a non-profit for everything else they were doing.

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I've never done BLACKSMITHING work for money, but i weld and fab things on the side. Here's my formula;

Typical material cost+ 35%
(If material costs me less then it's extra in my pocket, if it costs more then i use that price)

Labor rate- $75-$100 per hour depending on the job at hand. Absolutely nothing less than $60/hr (typically if I'm brazing or soldering something stupid)

consumables (filler wire, gasses, tips, etc.)+ 10%

Then i total everything up and that's their bill. When i give an estimate, i figure up all my materials and consumables and figure how long the job is going to take but for every hour i figure for labor i multiply it by 1.5 to give myself a cushion.


Now, ^ this^ is for items on a large(er) scale.... If i do small repair work, or if i just have to come in and lay down some weld, it's $3-$10/inch (depending on the task at hand, tolerances, and process).

In addition, if I'm brazing or soldering as a repair, i consider my "consumables" (ie; solder, braze, flux) as my material and tack on the 35%

-Hillbilly

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Thank you Rockstar, well said. My Father's business, metal spinning competed in a cutthroat business and his shop was full of machinery, tools and stock bought at auction of spinning businesses that blew a bid. One bid and it was usually a GEM of a job.

You make it or break it in the bid. I got so tired of Dad talking about bidding the next job, little did I know how much he was teaching me. For instance for one lucrative bid he included completely rearranging his shop to increase efficiency and it was just fine for what we already had on the floor. We went from in the door, cut up the middle to punch and circle shear, back almost to the door on one wall, then to the other wall and and back to the door for shipping. Sure he had us kids to run materials through the shears and pack it to the spinners, then to the next spinner and so on. HAH. AND he often had several jobs running so parts didn't have to make the whole circuit.

Once rearranged, material came in the door, was square sheared, the circle shears were both directly behind the square shears so you only had to take three steps. Then to the punch press, sometimes blanks had to be punched before circle shearing but Dad changed that process to match the new layout. After punching you hit the first spinning lathes, from there parts passed along the back wall, the longest distance traveled without being worked, usually. Then down the other wall for final spinning, trimming, polishing, and there it was the shipping end of the shop, right by the overhead door, across the floor from the incoming sheet.

He almost killed us kids and all his employees rearranging the whole darned shop, some machinery weighed a few tons and NO we didn't have a hoist, we moved it with pinch bars, not even rollers. Anyway, he couldn't have even submitted a bid for what turned out to be a gateway job. I HATED that job, I got to polish thousands of al nose and tail cones for wingtip drop tanks, Three different grits of emery cloth and kerosene. I was silver grey for days after every time I had to polish the darned things. Dad made a killing and better yet we got lots of jobs based on our efficiency and quality on that one job. The military and NASA is less interested in unit price than they are in quality, people's lives often rely on the things. Heck, some of our jobs were no bid awards, the guidance thruster exhaust bells for the Mercury, Gemini and Apollo capsules for one.

One of his rules of thumb about bidding was, "If you win every bid you're bidding too low. I'll watch for the auction." And the corollary, "If you never win a bid you're bidding too high. I'll watch for the auction."

Again, thanks Rockstar, great information it's wonderful to hear from a pro. AND it brings back some wonderful memories even if I hated hearing about the stuff at a young age. I really miss Dad, I have some questions I'd like to ask him.

Frosty The Lucky.

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Rockstar's comments should be put into a sticky.
It is all sound advice (advice which I do not follow, will not follow and will forever complain about not having followed). More of us fail from lack of business acumen than lack of metal specific skills...the less skilled at the craft who are better at the bones of business will do better financially than the "master artist".
I am loosely associated with several universities and those that produce artists are continually setting the students up for failure due to zero requirements for business classes. Time and again I ask instructors if they have basic business classes in the curriculum..they say "No, but that is a good suggestion"..which means often that they do not understand business and feel put-off suggesting that art and business must hold hands.

If you can not keep the doors open then you can not progress.

Ric



I'm a professional estimator and there are several points I see that haven't been made so far. #1 the "going rate" is very regional. Material costs may not change much, but there are lots of factors that influence why something's more costly here than there. Not the least of which are things like urban centers, industrial districts and the like. For a long term enterprise located in a well-known trade district, the clientele are well aware of the shop and it's capacity. For a shed in the country, there's not much to go on. Prices and delivery times will reflect these circumstances.

Being forced to compete tends to stabilize the going rate in a given market. If you can't compete, consider what the competition is doing- it's time to learn how to make a profit at the going rate. I have found many folks overestimate the planning and underestimate the performing. It's often worth keeping notes of how long each phase took. For folks that don't compete, it's well advised to work on your sales technique. Be quick to reply with more cost effective options if the price is protested. Remember that "helping" someone with no money and high expectations will hurt you in the end.

For the savy estimator, you'd be well served to have a design rate, a tooling rate, a production rate, and an install rate. When you're designing, the shop's not moving, neither are the supply trucks but your overhead costs keep coming. When you're tooling up, you're stuck purchasing or fabricating what you'll need to do the job. Your shop's equipment and overhead are going towards making something that has little to no value to anything else. You're investing in the job. Do it well and you're investing in your shop as well. Production is your bare blow and go wage expectations with overhead. This is where you'll need to be HUGELY efficient if you're going to make any gains at all. Install is a wild card. Don't forget to include lifts, cranes, jacks, rigging, protection for finished surfaces, etc. All the tools are at the shop, now they've got to be toted out to the site. Install is slow, meticulous, and risky. If you damage your finish, the finish on adjacent surfaces, etc, you've got to fix it. If you break out your pricing, you may find your customer will opt to contract the install themselves as a way to work with you. Be aware that anything you write down can and will be used against you. Unit pricing leads to haggling, which consumes time which equals money. The key is to provide broad strokes to show where the money's going, not a menu for a la carte purchasing. Offer design services at an hourly rate - you put in the time to know the answers, they can pay the rate to learn them from you. Walk away from endless consultation without contract. I know of at least one contractor who spent so many man hours solving their customers problems for free that they can't break even on the job.

Apply your overhead against how it factors to your shops workload. If your shop will be 100% dedicated to the job for it's duration, the bid needs to reflect that. If it can be done alongside other jobs, figure accordingly. Overhead should be a fixed rate over time.

I strongly advise against using percentages on top of total for overhead. Overhead costs accrue over TIME. Say you're making two identical things out of two different metals. There will be a cost difference between the metals. There's no more (or less) overhead involved just because you're using a more expensive metal. This is how to win. Conversely, a relatively cheap material doesn't compensate for a lot of work. I've tracked it myself and I know that the dollar amount of overhead driven by percentage is not accurate enough. For those who think I'm quibbling, consider that when you make a gate, it's a professional who's got an accurate fit. The company that can win the bid, make a profit, and never take a shortcut is the professional operation.

Also be aware of opportunity cost. The time spent doing this job is time you can't be spending on other work. If you turn a steady profit making S hooks, the time and energy to score a railing job may result in less net income.

Getting the job done efficiently is not a pleasantry, it's a dire necessity. Long lead (wait) times are the #2 concern (after price) for construction projects. If buying a tool doubles your production but doesn't complete the work any faster, you're not investing- you're collecting. Every investment in tooling and staff should have verifiable yield, sometimes that yield is opportunity in a new market.

Finally, what I consider to be the hardest thing to get into an entrepreneurs head. It's not the job you lose that puts you out of business, it's the job you win. Getting in over your head with one job, or taking on one (or twenty) jobs too many, is how deadlines start slipping, and money starts going out the window. Consider the total bid amount to be a check YOU wrote to the customer. That is your risk of not completing the job. Total all the outstanding jobs in your shop and that's your running risk. I have seen many occasions where one "cherry" job turned a shop into a non-profit for everything else they were doing.
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Try to keep from giving on the spot estimates on ANY potential job, whether you have blueprints or napkin scribbles.


This is a biggie, I have rarely if ever gained form this practice. Either you're too low or too high, too low and the gravy is all gone, too high and you will likely get under bid. I Never do a spot bid unless I know in my own mind that I'm spot on. The bigger the job the more it hurts either way.
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