How to price CNC work.
As always I have to start off with a bit of commentary. Every business is different, every location is different, every job is different.
These are factors on how I set a price for my services.
My point being a hobbyist probably won’t charge what I charge, flipside, my hourly rate is NOWHERE near say Titans of CNC. I learned many things from my MBA at Texas A&M, but one of the big ones was, the cost of doing business is set based on the environment and the goals of the business.
Fixed rates don't work in pricing jobs.
Making a this costs $1.99 list doesn’t work for CNC & woodworking. The reason for this is that the costs of electricity, fuel, materials and the overhead is generally not fixed. Wood being a great example of this. In 2022-23, wood of just about all types was extremely expensive. If you set a fixed price and the price of the material goes up, you just lost money. Another great example is Baltic Birch Premium Plywood, guess where it comes from! The Ukraine. So right now that material, which is arguably the best for Cabinets, is 100% unavailable.
My General Template
- Consultation Fee: Many businesses lose money upfront. People want things completely for free, without any thoughts toward your time. For me, if I am not behind a computer or CNC, I am losing money. I charge a $20 consultation fee, that I (often) roll into the job if we come to an agreement. That stops the people who are not serious customers. IF you don’t have customers, you may want to leave this one out, but it’s a double-edged sword.
Hourly Rate: This combines what I have to make to cover costs, and what I believe my time is worth. I will share some more of the breakdown in a section below.
Design time: With CNC, you can’t just say make me a potato-shaped desk. Programming must be done, and I have found that for most things custom, I will spend at least 2 hours designing it. I generally do a flat rate. But again, if I am designing, I’m probably not cutting so this time has value.
Materials: This one is really up to you, but I rarely accept the customer’s materials. Why? Well, it is a lot of things, but the big ones are: I can usually get it way cheaper, I know where it came from and the environment it was stored in (humidity, moisture content), and metal… If any metal is in the wood, it could ruin my Planer and Jointer, or break a CNC bit. I generally do my cost, plus 8%. This comes from a mathematical predictive analytics rate calculating the cost of acquiring the material.
Delivery: If shipping, I go with the best rates via PirateShip (which is just the business I personally like) or explicit shipping instructions via the customer. If delivering locally, I do 95 cents per mile. Again, this is figured out via an in-depth calculation.
Pricing my Hourly Rate
Hourly rate is what it costs to do business, plus my value (what I am willing to get off the couch for). Kind of sounds crass when I say it like that, but haven’t we all said, “this isn’t worth my time?” You want a happy CNC operator if you want quality work.
These are some items that I use to calculate my hourly rate. (Not inclusive – just for demonstration)
1. Power Consumption of Laguna Smart Shop 2 Pro
According to the manufacturer, the Laguna Smart Shop 2 Pro CNC router typically uses around 1.5 kW (kilowatts) of power when running at full load. However, the actual power consumption may vary depending on the task (cutting, idle time, etc.), but for simplicity, let’s assume it uses 1.5 kW of power per hour of operation.
2. Electricity Rate (Cost per kWh) in Texas
According to recent average electricity rates for residential customers in the state of Texas, the cost of electricity is typically around $0.12 to $0.15 per kWh. To make this calculation, we’ll assume the average rate is $0.13 per kWh.
3. Formula to Calculate Cost of Running the Machine
The general formula to calculate the electricity cost is:
Cost per hour=Power consumption (kW)×Electricity rate (per kWh)\text{Cost per hour} = \text{Power consumption (kW)} \times \text{Electricity rate (per kWh)} Cost per hour=Power consumption (kW)×Electricity rate (per kWh)
4. Calculate the Cost
Given:
- Power consumption = 1.5 kW
- Electricity rate = $0.13 per kWh
Using the formula:
Cost per hour=1.5 kW×0.13 USD/kWh\text{Cost per hour} = 1.5 \, \text{kW} \times 0.13 \, \text{USD/kWh}
Cost per hour=0.195 USD\text{Cost per hour} = 0.195 \, \text{USD}
Answer:
The cost to run the Laguna Smart Shop 2 Pro for one hour is approximately $0.195, or 19.5 cents.
What about for the Onefinity?
To calculate the cost of electricity to run a Onefinity CNC with a 2.2 kW spindle, we’ll follow a similar process as before, using the following steps:
1. Power Consumption of Onefinity CNC
For this calculation, we’ll assume the spindle power consumption is 2.2 kW (kilowatts) as specified. The actual power usage of the entire CNC machine might be higher, but we’ll focus on the spindle power consumption, as this is typically the most power-hungry part of the machine.
2. Electricity Rate in Texas
As mentioned earlier, the average electricity rate in Texas is around $0.12 to $0.15 per kWh. We’ll use an average rate of $0.13 per kWh for this calculation.
3. Formula to Calculate Cost of Running the Machine
The formula to calculate the electricity cost is:
Cost per hour=Power consumption (kW)×Electricity rate (per kWh)\text{Cost per hour} = \text{Power consumption (kW)} \times \text{Electricity rate (per kWh)}
4. Calculate the Cost
Given:
- Spindle power consumption = 2.2 kW
- Electricity rate = $0.13 per kWh
Now, applying the formula:
Cost per hour=2.2 kW×0.13 USD/kWh\text{Cost per hour} = 2.2 \, \text{kW} \times 0.13 \, \text{USD/kWh}
Cost per hour=0.286 USD\text{Cost per hour} = 0.286 \, \text{USD}
Answer:
The cost to run the Onefinity CNC with a 2.2 kW spindle for one hour is approximately $0.286, or 28.6 cents.
Summary of Calculation Steps:
- Identify the spindle power consumption (2.2 kW).
- Determine the electricity rate for your location (zip code 78163) (assumed $0.13/kWh).
- Use the formula:
Cost per hour=2.2 kW×0.13 USD/kWh\text{Cost per hour} = 2.2 \, \text{kW} \times 0.13 \, \text{USD/kWh} - The cost per hour is approximately $0.286.
This is the cost for running just the spindle at full load. The total cost could be higher if other components (motors, controls, etc.) also draw power, but the spindle typically accounts for most of the electricity used in CNC machining.
- Keep in mind. That is for the CNC itself.
If you really want to nug down on your costs, you have:
- Lights
- Air conditioning
- Dust collection
- Air filtration
- Vacuum table
- Insurance
- Shop Rental
- If you have employees (medical, insurance, vacation days, pay)
- Tax man
- Tax man paper filler outer smart guy
- And don’t forget that your machine WILL have to be replaced someday, so you need to factor that future cost in.
And last in my hourly rate pricing is me.
I know with 100% accuracy I can go empty trash cans at a cabinet shop for $19 an hour. So, if that’s my minimum, what VALUE do I put on all the “risk” I mentioned above and my happiness.
Make sure to check out the rest of my website and blog! My store has many of the common items I personally use and the WHY behind it.
Have a great one!
Royce
Hill Country CNC & Woodworking is an affiliate marketing business, but it is one with ethics and morals. We only promote the items that we use in our daily business. Let’s help each other! I will give you my experience (and discounts sometimes) and you can help me grow.
