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Shop Rate Follow-Up

Over the last few months, I’ve been asking shops to submit their hourly rate for an important economic study. It was mostly me being a little intrigued, to be honest. I’ve been compiling results in a spreadsheet, and here’s the running average.

I received just over 20 responses, with an average shop rate of $59.48 per hour. The lowest rate provided was $27.50/hr but I’m not sure if that’s a full time shop or just someone who does some building on the side. I don’t understand how that can be sustainable if it’s a full time gig. The highest rate given was $110/hr, but that was way above the more common high of around $75-$85/hr.

Again, this isn’t to say that you should change your rate (but maybe you should!) or to give you leverage if you’re shopping around for a builder. I think it’s probably fair to say that the quality of the work isn’t necessarily correlative to the shop rate.

Here’s a comment I received regarding shop rates/work:

$58 an hour for shop time.. $62 on anything paint and body. On bigger builds you must keep a $2500 deposit at all times. On each project, I pull cash from there for parts. Each billing period the kitty needs re filled to the max of $2500.00. If you don’t pay your invoice I then pull cash from the kitty. Once the kitty is dry, you either refill the kitty or come get your project. easy peasy….

If you want to share any sort of organizational tidbits here, I’m sure they would be helpful.

  • How do you store parts for multiple projects?
  • Do you charge a storage fee to just have someone’s vehicle in your shop?
  • What do you do if there’s a time when the customer is unable to pay for active work? Do you increase the storage charge? Roll the car outside?
  • Do you accept parts supplied by the customer? What if they don’t fit? What if they’re from a supplier you prefer not to work with?
  • Do you mark up parts that you buy for a project? Do you charge retail? If you’re building a car for a customer, part of the advantage to the customer of you (the builder) buying the parts is that you know what you want, and are taking some responsibility for the part fitting. This should be worth something to a customer.
  • How do you account for consumables? Examples: grinding discs, welding rod, air filters, drill bits, etc.
  • How do you keep the customer informed of progress? Email? Facebook?
  • Can the customer add work to the original job? Do you re-quote?
  • Do you quote a job or charge based on time & materials?

I hope I will be able to add more to this post in the future, but for now I wanted to get the info out there. Thanks to everyone who responded. Let’s keep this conversation going.

dw

 

2 comments to Shop Rate Follow-Up

  • Jack Nock

    Is there a way to sort the hourly rates by geographic area? I would imagine, for example, that rates in Southern California are higher than they are in Kansas or Alabama. But that’s just a guess.

    • DW

      Not everyone who told me their rate also gave me their zip code, in fact only a handfull did. Two shops from TX were in the top rate range, but I’m not sure if two more shops in the lower rate range were also from TX, so the data isn’t really complete. Thanks for asking though – that would be interesting to track.

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