I found a really nice sport jacket in a thrift shop for $34. Brought it to a hole in the wall tailor, where nobody spoke English and it cost $90. It was a complete rebuild, including changing the shoulder width. I thought it would be a simple lengthen the sleeves job.
The cost is also going to depend on your location . Being in NYC doesn't help. A good tailor is like finding a good mechanic. You get what you pay for, and hopefully nothing extra tacked on.
I paid $120 to have work done on two jackets, including lengthening sleeves, taking in the waist, and a couple small repairs (separated lining IIRC and some other misc. stuff). I think you're being over-charged.
I think your location is going to affect pricing significantly. If you're in a large metro area $40 doesn't seem unreasonable for a quality tailor who will keep the integrity of the piece while giving you a fine alteration. On the other hand, if you're in the midwest I think you could find a quality tailor to do the alterations for $25ish.
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