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Shop rate 2023 in California

KD2009

Plastic
Joined
Jul 1, 2023
Hi PM members,

I'm a new owner of a small machine shop in Southern California. I retired my boss and took over the accounts and I have all the prices in my records. Recently work has been slow. I have been hustling and going to companies that would need my services. I have picked up some jobs mostly prototypes. I was just wondering what is the going shop rate currently in 2023 in southern California?

Thank you.
 
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I probably average 75-100$/hr for prototype work and 100-300/hr for production on 3 to 4 axis mills. If you want to compete with Xometry and Rapiddirect, your shop rate has to be 10-50$/hr. Trying to win work by competing on price is a fools errand. In Socal a plumber charges 1000$ in labor to replace a water heater which is about an hour of work plus drive time. If you are struggling in the machining business, why not try living life on easy street as a plumber, electrician or HVAC tech? My neighbor the plumber parks his Maserati in front of my shop every day and asks me when I'm going to upgrade my 10 year old Nissan Altima. I often wonder how my life would have been different if I knew about plumbing before I started a machine shop.
 
Is plumbing the new hot dog cart? Last time I did a plumbing job on my own house it was done in 2/3 the time the plumber quoted, including time to buy materials, and I did it without a helper he was going to charge me for.

While I understand the guys who have a promotion to show up and clean roots out of a drain for $100 aren’t making much, I’m amazed at what plumbers and HVAC folks get to charge.

On topic, I’m a customer, but for our prototypes I typically expect shops to bill in the $100 to $200 per hour range. Of course they end up with some losers that take too long vs what they billed, and in exchange I don’t complain when they find a way to do a short run in half the hours originally quoted.
 
I probably average 75-100$/hr for prototype work and 100-300/hr for production on 3 to 4 axis mills. If you want to compete with Xometry and Rapiddirect, your shop rate has to be 10-50$/hr. Trying to win work by competing on price is a fools errand. In Socal a plumber charges 1000$ in labor to replace a water heater which is about an hour of work plus drive time. If you are struggling in the machining business, why not try living life on easy street as a plumber, electrician or HVAC tech? My neighbor the plumber parks his Maserati in front of my shop every day and asks me when I'm going to upgrade my 10 year old Nissan Altima. I often wonder how my life would have been different if I knew about plumbing before I started a machine shop.

$1,000 in labor?!? For a water heater?!?
 
Those are the exact words I said to the plumber that first gave me the quote. Imagine my disbelief when the next 4 quotes were the same. Really makes you ask yourself what you're doing with your life.
You’d need to own the place too, though many here do. When I was in Texas several years ago and surprised by the high plumbing rates I looked up the wages for plumbers. At the time I think plumbers were charging $200 per hour (plus a helper for many things) and wages were closer to $25 or 30/hour.
 
As a remodeling contractor in a historic district, the HVAC guys made the most money for the time invested, followed by plumbers, then architects.

New construction plumbers make very little - they have to compete on price for the most part.

Normal residential repairs are pretty easy and some plumbers make the mistake of competing on price.

The plumbers that can really make money are in upscale neighborhoods with picky clients and historic neighborhoods which require more technical skills. Historic remodels are essentially gut and replace everything, but it’s really important that they know how to do it well in more limited space.

$1000 for a hot water heater sounds like a lot, but there are many screwed up half assed installations that cause owners nonstop headaches. There’s also quite a big cushion for times when the process knocks some crud loose and it goes downstream and plugs up faucets. I work with plumbers all the time, and the old guys all say you just never know when faucets will plug up even when everything is done right. Back flushing every faucet and valve, cleaning screens, and hoping to get ceramic valves cleaned out is time consuming and more and more faucets aren’t serviceable and just get replaced.

10 years ago, a typical remodel would be stripped to the studs and all new systems installed - the real winner was the hvac guy - $20k for all new ducts and furnace/ac - one employee would measure, bend up ducts, install it all in 4 days. $10k in materials, $1k for the one employee and $9k in the bank. The HVAC contractor made so much money he had to start investing in larger and larger warehouse space to reduce taxes, but then with so much space he started renting some of it out which made even more money, so he bought undeveloped land next door during the recession and that part of town took off so he made even more money, so he bought mountain properties to build vacation homes and that’s about when the state had a building boom and upscale property values doubled. Not bad for only having one good employee and shop space the size of a three car garage!
 
While machining has different challenges than the residential trades...

I'm pretty sure the owner of a machine shop that can't get any work sold at $100-$200/hr wouldn't be able to do much better at any other business.
99% of the time when we hear "I should be in a different trade, it's impossible to make money in the one I picked", it wouldn't matter, that guy would suck managing a business either way.

Sometimes an industry is over-supplied or a trade is no longer necessary and there's no money it it, but usually the grass actually just seems greener and someone really only needs their sales or trade skills worked on.
 
While machining has different challenges than the residential trades...

I'm pretty sure the owner of a machine shop that can't get any work sold at $100-$200/hr wouldn't be able to do much better at any other business.
99% of the time when we hear "I should be in a different trade, it's impossible to make money in the one I picked", it wouldn't matter, that guy would suck managing a business either way.

Sometimes an industry is over-supplied or a trade is no longer necessary and there's no money it it, but usually the grass actually just seems greener and someone really only needs their sales or trade skills worked on.

I disagree.

I suck at job shop work. I can't compete with you guys that make parts to someone else's print. I don't know how you guys quote all that shit, order materials and tooling and do more than 2 hours of actual machining in a day.

But bring me a split in half excavator boom, a U-shaped hydraulic cylinder or a giant grease covered crate of torch-cut-to-remove yarder parts and I'll make $150+/hr and make the customer very happy with repair work.

I primarily sell products that I make. There's a ton of milling, turning, forming, welding, electronics, packaging, etc. But the making of it is a small part of the job. I know my markets. I can sell the stuff I make very effectively. I never make under $100/hr making my products and job shops in the USA would have a hell of a time making a profit doing what I do.

Then I see job shops trying to get a product off the ground it's painful. Like a fish out of water. Takes a different mindset to make a living at it.

Being good at business is one thing, but it doesn't mean you can shine brightly at whatever you choose to do.

I think in general it's safe to say many small machine shop owners are not good businessmen.
 
I probably average 75-100$/hr for prototype work and 100-300/hr for production on 3 to 4 axis mills. If you want to compete with Xometry and Rapiddirect, your shop rate has to be 10-50$/hr. Trying to win work by competing on price is a fools errand. In Socal a plumber charges 1000$ in labor to replace a water heater which is about an hour of work plus drive time. If you are struggling in the machining business, why not try living life on easy street as a plumber, electrician or HVAC tech? My neighbor the plumber parks his Maserati in front of my shop every day and asks me when I'm going to upgrade my 10 year old Nissan Altima. I often wonder how my life would have been different if I knew about plumbing before I started a machine shop.
Maybe you just aren't good at owning a machine shop, or just bad with finances!

I don't own a Maserati, I would have zero interest in ever owning one or any sort of "luxury" vehicle. I have a 2017 Ram 3500 Mega Cab that's been paid off for years, but I came real damn close to pulling the trigger on a brand new one about 6 months ago, the price tag was $105k. I just don't personally see the point in spending that much on a vehicle. So, in all reality I could be a machine shop owner with a Maserati!

......................oh and BTW I've done quite a bit of work for Xometry.

If I could give advice to anyone going into business, any business, stay out and get out of all debt, business and personal, build yourself a decent savings so you have no worries month to month. It will be the best thing you ever do in the long run! The peace of mind will outweigh any material item you will ever own.
 
$1,000 in labor?!? For a water heater?!?

I have a buddy that is in HVAC and plumbing as well, he does water heaters for $1200/labor alone. We actually just put in a top of the line, high end tankless in my house and he said labor alone for that would be $2800. The tankless unit I put in was $2500 itself. We had it done in 3 hours.

As a remodeling contractor in a historic district, the HVAC guys made the most money for the time invested, followed by plumbers, then architects.

New construction plumbers make very little - they have to compete on price for the most part.

Normal residential repairs are pretty easy and some plumbers make the mistake of competing on price.

The plumbers that can really make money are in upscale neighborhoods with picky clients and historic neighborhoods which require more technical skills. Historic remodels are essentially gut and replace everything, but it’s really important that they know how to do it well in more limited space.

$1000 for a hot water heater sounds like a lot, but there are many screwed up half assed installations that cause owners nonstop headaches. There’s also quite a big cushion for times when the process knocks some crud loose and it goes downstream and plugs up faucets. I work with plumbers all the time, and the old guys all say you just never know when faucets will plug up even when everything is done right. Back flushing every faucet and valve, cleaning screens, and hoping to get ceramic valves cleaned out is time consuming and more and more faucets aren’t serviceable and just get replaced.

10 years ago, a typical remodel would be stripped to the studs and all new systems installed - the real winner was the hvac guy - $20k for all new ducts and furnace/ac - one employee would measure, bend up ducts, install it all in 4 days. $10k in materials, $1k for the one employee and $9k in the bank. The HVAC contractor made so much money he had to start investing in larger and larger warehouse space to reduce taxes, but then with so much space he started renting some of it out which made even more money, so he bought undeveloped land next door during the recession and that part of town took off so he made even more money, so he bought mountain properties to build vacation homes and that’s about when the state had a building boom and upscale property values doubled. Not bad for only having one good employee and shop space the size of a three car garage!
Right here 100%.

When I built my house in 2016, the HVAC and plumbing portion was $25k, two guys did it in 4 days.

I think electricians follow in the trades, I ended up doing my electrical on my home build myself, but I had $6500 in material and was given a $15k credit from my builder, the $6500 in material was almost double what the builder would have had into it, had I let him do it. I went way overboard with my outlets, sub panel, both my panels are the biggest panels you can get, and every room has its home run/circuit, along with cat 5 and coax in every room. But 3 of us banged out the rough in electrical on a weekend and finished it in one day.
 
HVAC....#1 ripoff trade....
But let me backup, grew up with Dad in the business, we charged a fair amount and did fine........
now fast forward.........
Friend of mine had a local company come out for a HVAC checkup, they did their thing and told him he needed a new capacitor.
He said go ahead, got horrendous bill.......the run cap , their price was $150.00.
He asked me about that and I can buy them for $6 .
He did get reimbursed the cap cost......but how many folks did/do they still rip off every day?

Sorry, but I got to sleep at night.......
 
Got to add why its the worst ripoff trade.
All started back in the early 90"s when our wonderful leaders decided we must go green and get rid of floro /cloro's.
So bye bye 12,502 ,11 . hello, drop in's blends etc.
Now all the mfg's have to redesign their units to work with the new freons
this put the big push to obsolete the old systems, and the HVAC guys(refrigeation too) took advantage of this by jacking the repair's sky high and telling the customer , look for only X thousands more you can get a new system with all the wonderfully "green' refrigerant.
Now just a few years ago the industry went thru the same thing again, but now we are going to use propane in the systems. (mostly refrigeration) and the new
401 we had, well not green enough so its on its way out.
So just keep on changing the rules and the mfg makes money, the repair guys tag along using that as an excuse, it's one big racket.
Wholesale 30# jug of 22 is now $1625 as of a few days ago, $54 a lb so you can only wonder what the HVAC guys are going to charge for that now.
Around here when it was $15 the going price per lb was $125

Ok i'm done....:angry:
 
I disagree.

I suck at job shop work. I can't compete with you guys that make parts to someone else's print. I don't know how you guys quote all that shit, order materials and tooling and do more than 2 hours of actual machining in a day.

But bring me a split in half excavator boom, a U-shaped hydraulic cylinder or a giant grease covered crate of torch-cut-to-remove yarder parts and I'll make $150+/hr and make the customer very happy with repair work.

I primarily sell products that I make. There's a ton of milling, turning, forming, welding, electronics, packaging, etc. But the making of it is a small part of the job. I know my markets. I can sell the stuff I make very effectively. I never make under $100/hr making my products and job shops in the USA would have a hell of a time making a profit doing what I do.

Then I see job shops trying to get a product off the ground it's painful. Like a fish out of water. Takes a different mindset to make a living at it.

Being good at business is one thing, but it doesn't mean you can shine brightly at whatever you choose to do.

I think in general it's safe to say many small machine shop owners are not good businessmen.
That's fair. I think it would have been more accurate for me to say it's specifically the "machining is a sucky business overall" folks who have issues. Obviously everyone will have work they are more suited to (most machinists end up screwing up the whole part instead of repairing it so big kudos to you), but an actual blanket "No one can make money in this business" statement is usually BS. Maybe that person can't, but the industry is still pretty good if you know what you're doing and are suited to it.
 
Wholesale 30# jug of 22 is now $1625 as of a few days ago, $54 a lb so you can only wonder what the HVAC guys are going to charge for that now.

HVAC is a racket! Good friends little brother is mid 20's his wife is a stay at home mom for their 3 kids, he drives a $110k new diesel pickup and just bought a vacation house. He works for a big commercial HVAC contractor and he's their stubborn problem solver guy. I bet he makes north of $200k as a farm kid with just a high school diploma.
 
That's fair. I think it would have been more accurate for me to say it's specifically the "machining is a sucky business overall" folks who have issues. Obviously everyone will have work they are more suited to (most machinists end up screwing up the whole part instead of repairing it so big kudos to you), but an actual blanket "No one can make money in this business" statement is usually BS. Maybe that person can't, but the industry is still pretty good if you know what you're doing and are suited to it.
It's like any business, there will be those who make money and those who do not. The reason for those who do not can be from many reasons. I would say our industry has such a wide range of customer base that can determine your businesses profitability.
 
HVAC is a racket! Good friends little brother is mid 20's his wife is a stay at home mom for their 3 kids, he drives a $110k new diesel pickup and just bought a vacation house. He works for a big commercial HVAC contractor and he's their stubborn problem solver guy. I bet he makes north of $200k as a farm kid with just a high school diploma.
If you can get into a good HVAC company that offers a good base pay along with commission on upselling, they can make an absolute killing. I also know plenty of machine shop owners making just as much if not more.
 
Let's say I go to a customers location, weld up a broken bearing mount and fabricate new guarding for a machine.

I'll have some customers say $400 is WAY over priced and some that would say $4,000 is WAY too cheap.

Every customer is different and can change their way of thinking minute by minute.
 








 
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