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Well, it works - if a bit simplistic. You could set up something similar in a spreadsheet.
However, (as has been said elsewhere on the forum) if you are making and selling pens as a business, there are many considerations which would have to be included somewhere in your "material costs" and "hourly wage".
Over to others....
However, (as has been said elsewhere on the forum) if you are making and selling pens as a business, there are many considerations which would have to be included somewhere in your "material costs" and "hourly wage".
Over to others....
Lons
Fellow
I think it's largely irrelevant Derek although as Graham said it does kind of work.
If selling as a business which is very different from a hobbyist just covering material costs, it has to be calculated slightly differently as you have to know your overhead costs which is not the same as just cost of materials and needs to include a proportion for heat, light, rates, office costs etc. and purchase and replacement of tools, equipment and consumables. All those lovely kits and materials we keep in stock are costing money as well.
How many hobbyists remember when working out costs that those kits and blanks actually cost postage or fuel to collect as well as the time taken to get them and just think that kit was a tenner and blank £3 so £13 total?
So overhead cost plus time/labour plus profit gives a selling price which then must be adjusted to what the targeted market will pay assuming the legwork has been done to find that out and what the competition is doing? That's if there's actually a market to target in the first place.
Initial pricing might need to be less than you'd want but hopefully production will speed up with practice and therefore you'll make more. On the other hand, pricing too low in the first place means you're underselling a hopefully quality product and it's pretty difficult to get those prices up, far easier to give a "temporary discount" and keep the perceived quality of the product high.
Anyway my comments aren't aimed at you 'cos you're an old dog and you know what you're doing.
If selling as a business which is very different from a hobbyist just covering material costs, it has to be calculated slightly differently as you have to know your overhead costs which is not the same as just cost of materials and needs to include a proportion for heat, light, rates, office costs etc. and purchase and replacement of tools, equipment and consumables. All those lovely kits and materials we keep in stock are costing money as well.
How many hobbyists remember when working out costs that those kits and blanks actually cost postage or fuel to collect as well as the time taken to get them and just think that kit was a tenner and blank £3 so £13 total?
So overhead cost plus time/labour plus profit gives a selling price which then must be adjusted to what the targeted market will pay assuming the legwork has been done to find that out and what the competition is doing? That's if there's actually a market to target in the first place.
Initial pricing might need to be less than you'd want but hopefully production will speed up with practice and therefore you'll make more. On the other hand, pricing too low in the first place means you're underselling a hopefully quality product and it's pretty difficult to get those prices up, far easier to give a "temporary discount" and keep the perceived quality of the product high.
Anyway my comments aren't aimed at you 'cos you're an old dog and you know what you're doing.
I have given up debating this because there is only one way to do it properly if you are seriously treating it as a business.
If you are in any kind of business you need to do what Bob says and make sure you are taking into account ALL your costs and building in a profit margin. If you don't do this you won't be in business very long. To do this you need to carefully establish and understand what all your costs are, how they relate to your products and then apportion them into your prices accordingly. All other formulae and systems are irrelevant and misleading. The calculator in the link you have provided Derek misses off anything that is not a direct cost and is thus fundamentally flawed as a business system.
If the market won't bear the cost you need to sell at to cover your costs and make a profit then you don't have a viable business. Do something else to make money.
If you are just doing it as a hobby then what you charge is down to what you and your customer agree is a fair price. Nothing else matters.
If you are in any kind of business you need to do what Bob says and make sure you are taking into account ALL your costs and building in a profit margin. If you don't do this you won't be in business very long. To do this you need to carefully establish and understand what all your costs are, how they relate to your products and then apportion them into your prices accordingly. All other formulae and systems are irrelevant and misleading. The calculator in the link you have provided Derek misses off anything that is not a direct cost and is thus fundamentally flawed as a business system.
If the market won't bear the cost you need to sell at to cover your costs and make a profit then you don't have a viable business. Do something else to make money.
If you are just doing it as a hobby then what you charge is down to what you and your customer agree is a fair price. Nothing else matters.
Penpal
Grand Master
Selling satisfaction is driven by profit, everyone loves a bargain at the same time. In a Wood Guild like ours I see the clear differences. For fifteen year one long term member has capitalised on the way people make and sell.He buys all he can at the going rate at shows and exhibitions then resells at his price for a tidy profit. Two happy people those that sell through the club get their amount as reseller the other guy gets what he chooses.
Peter.
Peter.
wm460
Grand Master
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This could get interesting.
rayf6604
Registered
Walter’s advice is perfectly sound, however, if I and probably most others applied this pricing structure our products would likely be priced out of the market. I may be misled in thinking that I can’t put a realistic price on my time, enough to pay myself a wage. I earn over £11 an hour in my job. If I added 2 or 3 hours depending on the item, and then materials and other costs, one pen could end up being a price punters would never pay.
Sent from my iPhone using Tapatalk
Sent from my iPhone using Tapatalk
Lons
Fellow
That's why I said the above in my post Ray.
I agree with Graham, Bob and Walters quotes..
At one point in time the pen turner and seller was seen as an "irritation" by the many so called woodturners many didn't believe it was worth doing as there were many more skills used in woodturning in general and so they appeared to try and elevate themselves above pen turning..
However, I have seen many many more woodturners switching to pens as they see it attracts punters to the table at the Fayre they are standing at to sell their wears..
They are finding the pens are selling, but I suspect that many put them on as a loss leader. (Seen the prices myself.) As Bob explained, start low then you can't get the price up, start high at least you can drop the price for a discount..
Along with the now many penturners that are in the market for selling it's getting even more of a challenge.. I know from the market stalls I have been too that there are many selling pens where you would have only seen one if you were lucky.
Some disagree with the pens and kits donated to "charities" raising money for the good causes, I see it as it should be keeping the prices up, as many of the people buying those donated hand made pens understand that they are helping people so tend to pay a little more for them. so can only help keep the prices up.
What we also find is that many of the pen sellers are doing it for therapy, often retired and doing it to keep them going and helping them make friends with like minded people. (Such as on here)
My view on pricing is;
1.For business and making a living, then be prepared to price your pens accordingly and include every cost.
2. For pleasure. Then price the pens at what you would be happy to receive for them.. but importantly cover your basic landed costs of kits, blanks and replenishable materials (glue, sand paper and tooling) (landed costs are pricing including all shipping to your door)
At one point in time the pen turner and seller was seen as an "irritation" by the many so called woodturners many didn't believe it was worth doing as there were many more skills used in woodturning in general and so they appeared to try and elevate themselves above pen turning..
However, I have seen many many more woodturners switching to pens as they see it attracts punters to the table at the Fayre they are standing at to sell their wears..
They are finding the pens are selling, but I suspect that many put them on as a loss leader. (Seen the prices myself.) As Bob explained, start low then you can't get the price up, start high at least you can drop the price for a discount..
Along with the now many penturners that are in the market for selling it's getting even more of a challenge.. I know from the market stalls I have been too that there are many selling pens where you would have only seen one if you were lucky.
Some disagree with the pens and kits donated to "charities" raising money for the good causes, I see it as it should be keeping the prices up, as many of the people buying those donated hand made pens understand that they are helping people so tend to pay a little more for them. so can only help keep the prices up.
What we also find is that many of the pen sellers are doing it for therapy, often retired and doing it to keep them going and helping them make friends with like minded people. (Such as on here)
My view on pricing is;
1.For business and making a living, then be prepared to price your pens accordingly and include every cost.
2. For pleasure. Then price the pens at what you would be happy to receive for them.. but importantly cover your basic landed costs of kits, blanks and replenishable materials (glue, sand paper and tooling) (landed costs are pricing including all shipping to your door)
Penpal
Grand Master
For all the good reasons and bad Penmakers will be regarded as part time turners. We all try for good quality in blanks, kits or no kits. Being honest with ourselves,motives,results and outlets is easy.
Respect for others choices seems to be the problem.
This forum can not or should not decide who can or can not make choices.
I have so many Gurus in my life who help me by example when I make my choices. Thank you to my Gurus on this forum.
Peter.
Respect for others choices seems to be the problem.
This forum can not or should not decide who can or can not make choices.
I have so many Gurus in my life who help me by example when I make my choices. Thank you to my Gurus on this forum.
Peter.
Lons
Fellow
I don't see any disrespect or dictating going on in this thread Peter. I must be seeing the posts differently to you.
A question was originally asked and points made but they are exactly that, our opinions based on experience, nothing more or less and the whole point of a forum is freedom of speech as long as it remains on a friendly footing.
Personally it matters not one jot to me whether any other members agree or not, we are all individual and make our own choices do we not?
cheers
Penpal
Grand Master
What I do see overall is when a member has observed another at a sales venue that undercharges or makes pens differently etc we tend to form an opinion. Comparison and competition prompted me to make isolated remarks. This thread was not in my mind when I made my remarks. Personal experience was promoted at our recent Exhibition, sales of the Wood Guild. If I make a reference I normally include the reference in a reply if not I simply make a point by myself.
Thank you for your interpretations Bob I agree with you, Walter because I agree with you and yes thank you Derek for your reference to a calculator at the beginning of the thread.
Please enjoy your penmaking and sharing.
Kind regards Peter.
Thank you for your interpretations Bob I agree with you, Walter because I agree with you and yes thank you Derek for your reference to a calculator at the beginning of the thread.
Please enjoy your penmaking and sharing.
Kind regards Peter.
I understand where you come from Peter, and your comments seem to direct towards one of my comments.
What I did say is below..
I have never commented on the quality of workmanship or they have made them "differently" or whatever reason there is.. but I will stand by my comment on selling them as a "loss leader" as I know the kit pricing and know what goes in to pen turning and selling the same as you do Peter. I believe I have knowledge and experience to enable me to make that decision.
I believe that someone selling a slimline kit for £3 is a loss leader..
What I have experienced and seen first hand is traditional profesional wood turners are now doing pens as they need to raise funds and help to pay for the table, venue or finance their hobby..
my comments were based on pricing and not workmanship.
What I did say is below..
I have never commented on the quality of workmanship or they have made them "differently" or whatever reason there is.. but I will stand by my comment on selling them as a "loss leader" as I know the kit pricing and know what goes in to pen turning and selling the same as you do Peter. I believe I have knowledge and experience to enable me to make that decision.
I believe that someone selling a slimline kit for £3 is a loss leader..
What I have experienced and seen first hand is traditional profesional wood turners are now doing pens as they need to raise funds and help to pay for the table, venue or finance their hobby..
my comments were based on pricing and not workmanship.
Penpal
Grand Master
Great Eamonn what a vex path turning pens. Been uninstalling both from 3 phase to single phase preparing the lathe for removal next tuesday for the mens shed guys. Its a long bed Woodfast. Neat to get feeling back after 1 1/2 hrs crouched. Tuesday will see four trailer loads in total, luckily they provide the labour. Thanks for your comments mate.
Peter.
Peter.
Lons
Fellow
I don't know how you do it all Peter
Wears me out just thinking about all that work. Must be all the sunshine you get in OZ, on a dull rainy day over here when it's getting dark at 4pm it's not easy to get motivated. Not today though brilliant clear blue sky and collecting my new motor at 2.30pm
Yee-haa. Hasn't impressed the missus though 'cos I've only had the Audi 12 months.
Penpal
Grand Master
Now I feel prompted to ask which new motor Bob, always liked Audi. Enjoy the motor mate.
Peter.
Peter.
Lons
Fellow
My current Audi is an A6 avant ( estate) quatro black edition which is 16 months old Peter, no reason whatsoever to change tbh as I love the car and it corners like a go cart but we bought a huge twin axle caravan earlier this year which while it tows it without problems made us look at SUVs. My missus thinks it will make me drive a little less fast :wink:
The Audi Q5 gives us no more than my A6, I don't like the BMW X5 shape much, new Landrover discovery is too expensive and the Jaguar F Pace is too light so have gone for a Mercedes GLC 250d 4matic with all the kit. It's a pre registered model so 2 months old with a huge discount. This is a pic but I talked them into fitting running boards/steps so will look slightly different. Will have my personal number plates fitted as well 'cos I've taken them off my old car.
It is VERY black
My missus says I change my car more often than my socks.
