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Material and consumable prices

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  • Material and consumable prices

    Just wondering if anyone is being affected by rising cost of material and welding supplies? For awhile now my customers have shrugged it off as the cost of doing business but just recently I have been seeing customers second guessing repair work especially if it requires a lot of material. I have raised my hourly rate $2 which may or may not cover increased consumable cost. As far as material cost I just pass it along. My lws does not stock like they used to so I try to call a week ahead to order instead of just stopping in and picking up wire, etc.

    Just curious what others are seeing. For the most part construction here in northern NJ is still booming so I'm still very busy.
    Trailblazer 250g
    22a feeder
    Lincoln ac/dc 225
    Victor O/A
    MM200 black face
    Whitney 30 ton hydraulic punch
    Lown 1/8x 36" power roller
    Arco roto-phase model M
    Vectrax 7x12 band saw
    Miller spectrum 875
    30a spoolgun w/wc-24
    Syncrowave 250

  • #2
    I bought a plate for a job and it was an experience and in hindsight would have patched it. Between the wait for bends and the cost,,, I would have been done, it caused a delay I havnt recovered from yet. I bought 44# wire the other day, wasnt terrible, bought it LWS and 10# from Menards . But,,,, I dont use much, before the last plate I hadnt been to the steel house in quite a while, cant even remember exactly and have been sifting thru using up stuff. Last couple years I have been doing that to simply reduce, reuse, clean it out. Same for other parts, sifting thru.


    • #3
      Pricing is the hardest and really most interesting thing in this biz and the most important. My mentorship on this was terrible and at the end of my career am finally undoing some of it. I overbid a building last week, ok, didnt lose and didnt really want to do it now anyway and it might come back in the end so,,,
      For established guys, slightly different than start ups but,,,, no one notices rate increase really, the 2$ should have been 5 and back up and do it again.
      I have an implied rate but its fluid. Depends on the job type and the speed and service is billed hourly but the restoration which is most of it is bid. The service is being compared to real dealers who have products to sell and my bills are modest in comparison, I do price some against that and not every call is the same. My bud does cars and there is a sign up with a rate and against the dealer it looks great, as he said, he raise 10 and no one notices due to the fact he has same customers for decades.
      I just did 3 calls for an outfit. The first I got 375 for 4 hrs local, I took a helper. The second was 225 for 2 or 2 1/2 or so and the last 130 for 2 with just me. There was some method to this and not strictly mathmatical. They had been using some other people and a dealer or 2 not shy about sticking it to them. I didnt want them to THINK at least that every bump was gonna be 400$ and it appears I am watching real time. 2nd, the last call was at 6:30 evening as I was eating and I show up at 7 and help easy like to meet a schedule they had for next day. They are gaining a lot of confidence and trust and now used to me asking,,, when you need it and if they have work scheduled for something I jump on it and tightening a couple bolts makes me look like a hero withough a grand service call from a dealer want to add a 500$ part.
      The trust factor means a lot, I do what I can for us without robbing them, they simply say you know where to send the bill, they even paid me in advance for some stuff due to wanting to close some fiscal books. They do not complain when I add additional but its always for something they do actually need or should be done and if I can show it saved money or fown time they dont even bllink. I l9ike the work stream and they were really having a problem, they figure they want to keep us handy and if the rates are too low we look elsewhere. These are not dumb azz, they understand the math and that idf they paying me hourly there is no reason for me to skimp and they let me use their accounts so no reason to shave materials when its not out of my pocket, no real reason for me to spend when I am not marking it up and we use some drop for that so to speak, I did buy a quart the other day and should have got gallon.
      The only materials I add are some small items,,, the supply line. Once in a while add grinding wheen for 5$ or some welding rod or few bolts etc and even a piece of steel or 2 but they are small and I simply tell them on occasion, I bought a gallon of black, used 1/2 but thru some red I had in for the trade. I am going to add roll of 80 grit DA paper to one now and a little shot of enamel hardener to the account.
      I do some auto but really for people I know and they are local and they dont even mind picking parts. I dont want to deal with the sales tax, part of the pitch is I am not marking up the parts, I nick the labor a little, sometimes I add a misc to the bill or simply add a tube of silicone or can of brakecleen to the parts list when I call it in.


      • #4
        I am currently upside down on a bid job, which is why I generally don’t do bid jobs. It’s my fault, I drastically underestimated the rise in cost of the materials. I had a local shop chop me off a 4’x5’ hunk of 3/16” steel and was floored when they charged me $300 for it. The cost of materials has recently changed the minds of a couple of potential customers for some fab work. I have two small jobs waiting, one customer provided his own materials. I have turned to scavenging materials from people I know. I have a small shop and do not have the facilities to store a lot of leftovers, but now I’m taking all the drops I can get so I can stay competitive on the small jobs.


        • #5
          As one bud said, I spray painted my backhoe and raised the rates 10 an hour and no one noticed. As I mention, I ask, when you need it? They comment the other day,,, we get good service from you, there an hour, 2 after we call, work was turnkey, we look for other problems not only the line item they call for and they7 got no problem with the extra juice,,, we found loose frame bolts or cracked weld etc.
          Had a tractor come for paint a while back, other line items add up to a grand, had some electric, we fix the AC, find a noise, clean a bunch of grease, buff the hood, replace wipers, check the fluids, replace the batteries. It looked like we paint the whole ting, looked so good it left here and went to 2 parades, was ready.
          Point of this,,,, it aint all that way but we been working on better customers, are going to refine this for a run at it now. This type is understanding they bring something in Sept they need in Dec knowing its a process and that I need to do it part time along the way which keeps some cost down, can spread some labor fall back. This kind of thing seems to come in surges.


          • #6
            Get a quote from your suppliers including a date on the quote in which the price will no longer be good your work accordingly based on the date and let your customers know that any increase will be passed on............In my prior life of construction I was bidding multi-year projects that may not start due too permits , environmental , weather or funding for 180 days or more.....This means your looking forward on every cost including potential labor contracts. , fuel futures etc. for projects that can last several years...........It's a moving target for sure and all the verbiage needed in your contracts to protect you is quite stunning.... Private work is a little harder to built in escalations clauses vs Public Works.....but in either case you can get burned.