How do we calculate a price for......

[Wood Butcher]

the custom pens we make? I spent at least 2 hours today cutting and gluing up a blank that may well explode when I turn it and it ain't done yet but it was fun, I must say. I see the pen art being created by the members here some must have taken 2 or 3 days to plan, prep, assemble, turn, finish and only then begin breathing again. So, how do we figure a price for these creations? The laser kits that sell well and are always popular raise the same questions. I sell pens by word of mouth only (at 72yo I'm not lookin' to start another business) and anywhere from $free to $90 with a box but if I charged by the hour, some would be priced at $1000 or more. Without divulging any secret info, how do you calculate a value on the customs.
WB

 

[JD Combs Sr]

There is no way possible for me to recoup my time for making a pen. I agree that if I did that my pens would run hundreds if not thousands of $s. I am happy if I can double the price of materials but basically my pricing is guided by similar pens I see online adjusted by what local traffic will bear.

 

[SecretGman]

This is the way I do it here, location has a lot to do with what you can sell for, Price of the kit plus $5 for a "normal" blank and glue, finish etc, then double that.

Bolt Action Gold ($15) plus Curly Maple ($5) double to $40'ish. Like I said it depends on where I am selling and to whom, this is the friends price.

Hope this helps

-Chris

 

[ed4copies]

Years ago I had a lady look at my pens for quite a while, then turn to leave, without purchasing.

The pens were cigar pens, priced at $38 and they sold well. But, she was clearly not going to buy. So, I asked her why.

She replied she was looking for a gift for some good friends---she expected to pay about $100 for each. I continued, asking her, "Well, if these were, say $90, would you buy them for your friends?" She said she probably would.

From that time on, I had a special presentation case that I kept for only the most discriminating buyers. It housed my cigar pens, made of Italian madreperlato and special "alternative" materials. Each pen was $89. I did not sell them real often, but I DID sell them.

I've often thought about the way she changed my thinking---perhaps she will help you, as well.

FWIW,

Ed

 

[paintspill]

i will divulge
i try to sell a pen for what it would cost me to make that pen for someone custom order.
i'll try to explain that.
if someone said " i want x pen in x wood." i try to figure out what it would cost me to collect those materials and spend my time (calculating worst case scenario) i've spent easily 3 hours laying down a perfect finish.
keeping in mind there is a huge difference between a hobby and a business. the big thing is to figure out what you want to do. if its a business, you need to include, hydro, heat, rent, if applicable.

i've made some of my finest pens from free scraps. but you can't price that way. as my wife is always quick to point out. you need to also add travel or shipping costs. this is about where the headache starts.

i realize i'm probably babbling at this point, but i think what it comes down to in the end is 2 things.
#1 make it worth your while
#2 make prices and stick to them, i.e. i sold some pens to a girl at my sisters work and i priced a little high cause i knew i could. later i got another sale through this same girl. so i had to keep my pricing legit, so i didn't cause problems.
now i stick to my pricing and only lower prices for close friends and family but make sure they know what its worth so they don't go and show it off and say "it was only $xxx.00

in the end your market will dictate.

 

[brownsfn2]

I have a story similar to Ed's but slightly different. Someone bought an Atrax RB with a Brooks acrylic from me on Ebay for about $80. After he recieved the pen he sent me an email. He had previously order an Atrax RB for $40 from another buyer and he thought the quality of my pens would be better because I charged twice as much. He said he was not dissappointed and thought my quality was much better.

I searched his buying history and found the pen he bought previous. I would say it was equal quality to mine. To better and certainly no worse. I think the price totally gave the perception that my material and workmanship was better.

That buyer has been back to buy several more. Perception is everything.

 

[keithbyrd]

Marc said "keeping in mind there is a huge difference between a hobby and a business"
I totally agree - I am trying to make a business out of my hobby!!
I price my pens by taking the cost of the pens components, shipping, blanks (minimum 4.00 for a blank) total up and then multiply times three. From there I adjust for value - value is the uniqueness and quality and market.
Problems:
1. it is difficult for a customer to determine the difference between a cigar kit that you buy for $6 and one for 14.00 because of the plating. Or one with a $29.00 M3 blank vs a $4.00 bocote. the blank alone in this example using my method creates a $12 - $87 price difference. So I adjust for uniqueness, value and market and tend to bring the the lower priced pen up more than the higher priced pen down. If I used a $14 kit and 29 blank I have $43 in it already - can you sell one of those for $129? Or would you have a $30 dollar cigar on display next to a $100 cigar?
2. When you have so many websites or other pen makers at shows - pricing really becomes difficult. I was at a show where I had some cigrs for $60-80. Another pen maker one row over was selling what looked to be the same pens to the customer for $30-40

Conclusion - there is no easy way to price

 

[jttheclockman]

I have to reply and not with any good answer to the question because to me pricing is a feel thing and no scientific answer to it. But I have to say I am impressed that the few people who replied did not go into this big long formulas about 2X this or 4 times that because that is all bunk. There is no exact answer for each and everyone. In the past and you can do a search on this because like many questions here this has been asked many many many times before and answered and usually the answers are with some formulas for kits, finish, materials used electricity used, hours of making such pen. It gets so confusing and then people jump in about selling for rediculous prices and getting them. And some go the other way and tell us all how they give them away and never sell them.

What I am trying to say you just got some of the most sensible answers to a question that gets asked so many times and within all the replys is your answer. Take from that what you may and run with it and I am sure you will be making adjustments as you get more involved. The venues that you sell your pens at will be a huge factor but keep in mind as one poster pointed out try to be consistant because people do compare shop and and that includes your own prices.

Good luck.

 

[joefyffe]

Now I'm confused! Bill, see what you started:wink::biggrin: But THANKS! Some good answers!

 

[OKLAHOMAN]

Venue,Venue,Venue has been said many times and I will say it again. Formulas for pricing just don't work. If your mixing chemicals than you need a formula . Price your work according to what your comfy with and the venue your doing your selling in. You won't get $500 to $1,000 at your local craft show, flea market or farmers market but on the other hand if your at a highly juried art show you won't sell many, if any under $75.00 -$100. If your selling at the venue of your choice and have a web-site price your work the same at both.
A few years ago I had the pleasure of having perhaps the most successful pen salesman and his wife spend some time at my home and we talked sale, and then we talked more sales and then some more about sales. Some of you might remember him, his name was Steve Roberts and he sold pens only at high end art shows, his lowest priced pen was $125.00 and he had some up to $3,000.00 (all of these were component or as most here call kit pens). He asked me my reason for my prices and I answered something to the effect "well you take 2x's this and add 3x's that add that to the cost of x and he looked at the pen we were talking about and started to laugh, then said that the perceived value of that pen was at any of his venues $350.00 , I had a price under $100 on it. He then asked me what venues was I selling at and I told him local craft shows and some craft shows in Texas. I also said I just can't seem to get into the juried "Art Shows" I apply to as I guess my work isn't good enough for them. He then went out to his car and brought in his pens, nice but not any better than mine (most weren't as nice) and he said he gets into just about all shows he applies to. I asked him how and he smiled and said "PRICE" !!!! I didn't understand so I asked him to explain. Here is where I learned that if you act like a artist you'll be judged like an artist not a crafter. He said when you apply to an art show you will be asked on each photo the price range of that work of art. You'll likley be rejected if your work is priced like at a craft show but your chances increase 10 fold if your priced higher as an artist.
Now this only will apply to those of you who want to make a business out of your pen making and if you have the ability to SELL.
If your happy with just going to an occasional craft show, the local farmers mkt., there is nothing wrong with that but price you pens according those venues. If your comfy with a formula and the pens are selling at the prices your formula dictates so be it it's just that a perceived value even at lower end venues will bring you higher sales and make you more money for your hobby in my opinion.

 

[jttheclockman]

:biggrin:

Venue,Venue,Venue has been said many times and I will say it again. Formulas for pricing just don't work. If your mixing chemicals than you need a formula . Price your work according to what your comfy with and the venue your doing your selling in. You won't get $500 to $1,000 at your local craft show, flea market or farmers market but on the other hand if your at a highly juried art show you won't sell many, if any under $75.00 -$100. If your selling at the venue of your choice and have a web-site price your work the same at both.
A few years ago I had the pleasure of having perhaps the most successful pen salesman and his wife spend some time at my home and we talked sale, and then we talked more sales and then some more about sales. Some of you might remember him, his name was Steve Roberts and he sold pens only at high end art shows, his lowest priced pen was $125.00 and he had some up to $3,000.00 (all of these were component or as most here call kit pens). He asked me my reason for my prices and I answered something to the effect "well you take 2x's this and add 3x's that add that to the cost of x and he looked at the pen we were talking about and started to laugh, then said that the perceived value of that pen was at any of his venues $350.00 , I had a price under $100 on it. He then asked me what venues was I selling at and I told him local craft shows and some craft shows in Texas. I also said I just can't seem to get into the juried "Art Shows" I apply to as I guess my work isn't good enough for them. He then went out to his car and brought in his pens, nice but not any better than mine (most weren't as nice) and he said he gets into just about all shows he applies to. I asked him how and he smiled and said "PRICE" !!!! I didn't understand so I asked him to explain. Here is where I learned that if you act like a artist you'll be judged like an artist not a crafter. He said when you apply to an art show you will be asked on each photo the price range of that work of art. You'll likley be rejected if your work is priced like at a craft show but your chances increase 10 fold if your priced higher as an artist.
Now this only will apply to those of you who want to make a business out of your pen making and if you have the ability to SELL.
If your happy with just going to an occasional craft show, the local farmers mkt., there is nothing wrong with that but price you pens according those venues. If your comfy with a formula and the pens are selling at the prices your formula dictates so be it it's just that a perceived value even at lower end venues will bring you higher sales and make you more money for your hobby in my opinion.

Roy you peeked at my answer:biggrin::biggrin::biggrin:

 

[azamiryou]

I spent at least 2 hours today cutting and gluing up a blank that may well explode when I turn it and it ain't done yet but it was fun, I must say. I see the pen art being created by the members here some must have taken 2 or 3 days to plan, prep, assemble, turn, finish and only then begin breathing again. So, how do we figure a price for these creations? ... if I charged by the hour, some would be priced at $1000 or more. Without divulging any secret info, how do you calculate a value on the customs.

I find it interesting how few of the responses talk about time.

From a business (not hobby) perspective, your "$1000 or more" is appropriate pricing. If you can't sell the pen for that price, then it does not belong in your regular lineup. If it's underpriced and ends up being your big seller, then it'll do you in.

Even within a business, though, there's room for experimenting and fun. After all, I think most of us enjoy penmaking. So if you like doing segmented pens but can't sell them without underpricing them, go for it! I'd just recommend sharply limiting quantities to make sure you don't end up spending all your time making segmented blanks for 50 cents an hour.

When I find certain projects take more time than they're "worth" (as in price I can sell them for), I like to use them for gifts, exchanges, portfolio, or personal use. Or sell them at a discount, and if someone wants a second one, I'll quote them the "real" price rather than the discount price.

 

[jttheclockman]

I spent at least 2 hours today cutting and gluing up a blank that may well explode when I turn it and it ain't done yet but it was fun, I must say. I see the pen art being created by the members here some must have taken 2 or 3 days to plan, prep, assemble, turn, finish and only then begin breathing again. So, how do we figure a price for these creations? ... if I charged by the hour, some would be priced at $1000 or more. Without divulging any secret info, how do you calculate a value on the customs.

I find it interesting how few of the responses talk about time.

From a business (not hobby) perspective, your "$1000 or more" is appropriate pricing. If you can't sell the pen for that price, then it does not belong in your regular lineup. If it's underpriced and ends up being your big seller, then it'll do you in.

Even within a business, though, there's room for experimenting and fun. After all, I think most of us enjoy penmaking. So if you like doing segmented pens but can't sell them without underpricing them, go for it! I'd just recommend sharply limiting quantities to make sure you don't end up spending all your time making segmented blanks for 50 cents an hour.

When I find certain projects take more time than they're "worth" (as in price I can sell them for), I like to use them for gifts, exchanges, portfolio, or personal use. Or sell them at a discount, and if someone wants a second one, I'll quote them the "real" price rather than the discount price.

Time is such a small aspect in determining a price. Yes is is a part of it but man if you based yopur prices on how long it takes to make a pen then you will be way out in left field. Everyone makes pens at different rates of speed. So many factors can go into the time factor. Mass production, the fact you done one the next is easier, the material used, the complication of the blank. I have to laugh all the time and I will never answer someone when they ask how long that took to make that blank or I bet that is some time involved in making that blank. SO WHAT different does it make how long it takes to make a blank. If you are serious into a business you found ways to make it more productive but for the average pen maker and 99% people here are average pen sellers.

My point is do not sweat the time factor. Yes considerate in the price but don't charge by the hour.

 

[OKLAHOMAN]

John, of course I peeked:biggrin::biggrin::biggrin::biggrin:

 

[azamiryou]

Time is such a small aspect in determining a price.

I guess it depends on how one values their time, but the way I value my time, I put waaaaaaaaaay more time than materials into my pens. So for me, materials are a very small aspect in determining a price (except when I go to super-expensive materials like a gold nib).

Yes is is a part of it but man if you based yopur prices on how long it takes to make a pen then you will be way out in left field. Everyone makes pens at different rates of speed. So many factors can go into the time factor. Mass production, the fact you done one the next is easier, the material used, the complication of the blank.

Absolutely true. For variation with my own line of pens, I try to allocate time according to "typical" time spent on a particular pen. In other words, a mistake on a particular pen makes that pen take longer, but I consider time spent correcting the mistake as overhead, rather than putting it in the price of that one pen.

From one maker to another, if someone makes pens twice as fast as me but just as good, then more power to them. Depending on their market and salesmanship, they can charge my price and get paid twice as much as me per hour, or get paid the same hourly rate as me and sell for much less. You talk about way out in left field - but what does that mean for a product that can sell for anywhere from 29 cents to 20,000 dollars?

I have to laugh all the time and I will never answer someone when they ask how long that took to make that blank or I bet that is some time involved in making that blank. SO WHAT different does it make how long it takes to make a blank.

Well, if it takes you 4 hours to make each pen and you're selling 10 of them a week for $30 each with $10 in parts and supplies (parts * 3 is a formula I've seen thrown around here), you've got yourself full time (a 40-hour week) employment making $200/week, or $10,000/year with a two-week vacation. And that's without considering overhead time, so your week is probably more like 50 hours.

Now, if it takes you 20 hours to make each pen and you're selling 2 per week with the same materials and supplies (therefore you're selling at $30), you've got full time employment making $40/week or $2000/year.

Or if you spend 1 hour on each pen, you're making $800/week or $40k/year.

THAT's what difference it makes.

 

[Haynie]

These threads really never go anywhere because there are way to many unknowns and no one has the same reality to deal with. I think the statement was made to price it based on what you feel is right. This is what makes sense to me.

 

[Wright]

+1 Mr. Haynie.

 

[Smitty37]

Fair price is what a informed willing and able buyer will pay a informed willing and able seller when neither is under any obligation or pressure. This will vary according to venue, economic conditions and what the buyer wants the pen for.

If the price is too low there will be no sellers - if it's too high there will be no buyers.

The cost is not a consideration right now there are homes in my area selling for 10s of thousands of dollars less than their original price because the market has changed - a prospective buyer for my home does not care how much it cost me....and trust me on this, a prospective buyer for your pens does not care how much they cost you, or how long it took you to make them or whether you need the money to buy the baby new shoes.

That is just Economics 101 stuff.

If you are a business, you set the price at what the market will bear in the venue where you intend to sell, and you should set it to maximize your total profit - not to maximize the profit on a single pen.

 

[OOPS]

The problem with using time as a variable in pen making is that some blanks are a snap to turn, while others take a considerable amount of time. Various types of acrylics require their own delicate approach. Tru Stone and M3--again all different. Also, (this might just be me personally) but some pens are just easier for me to make than others. For me, one of the most bothersome is the Euro pen. If I priced by time spent, a Euro would be as expensive as a Roman Harvest! But the way I figure it, that is MY problem, as I need to learn to make Euros without spending the whole evening. Finally, I don't try to speed through a pen as though my time is worth "X" because I like turning, sanding, micro-meshing and watching an ordinary piece of wood turn into something really nice.

I think the best way to price is to establish some prices and see if they sell. If they don't, lower them a bit. If the pens are snatched up quickly, then slowly raise the prices. You'll soon learn what is appropriate. If they are overpriced, you can always put them "on sale." You can't reprice a pen you sold too cheaply.

 

[azamiryou]

For me, one of the most bothersome is the Euro pen. If I priced by time spent, a Euro would be as expensive as a Roman Harvest! But the way I figure it, that is MY problem, as I need to learn to make Euros without spending the whole evening.

Perfect example. If you're treating this as a business, then you can

1. Learn to make them faster
2. Learn to sell them at the higher price
3. Stop making them
4. Continue making them and selling them at the lower price even though you'd get more money for your time making something else.

Number 4 there is not very business-like in general, but can be if it somehow serves to help maximize your overall profits, as Smitty said.

And of course if you're in it for the turning rather than for the money, then number 4 is a great choice for someone who enjoys making Euros. I know I do, and I love the shape! They're one of my favorites.

I think the best way to price is to establish some prices and see if they sell. If they don't, lower them a bit.

Or raise them a bit. There are many tales of people who find things sell much better at higher prices rather than lower. Different price levels are different markets, and someone in the market for a $500 pen may well buy a $500 slimline, but there's no way they'd buy a $30 slimline.

 

[1080Wayne]

I think the best way to price is to establish some prices and see if they sell. If they don't, lower them a bit.[/quote)

(quote)Or raise them a bit .

Totally agree with the latter , as the FIRST step , and maybe more than a bit . My impression from reading this forum over the years is that people are generally too quick to fold on price , and too willing to position themselves as followers rather than leaders of the pack .

I will not forget trying to sell plain slimlines at $25 for 2 years . Never did sell one , only the `slightly` nicer wood ones for $40-80 .

 

[Bob Wemm]

I don't make pens yet, but all the other stuff I do is priced on the assumption that "Someone" will want another, just like the one that had already been sold. So, I work out what it would cost me to acquire all the materials and allow a bit for time. Like OOPS said, if they sell like wildfire then they are probably priced too low, and vice versa.
Bob.
_______________
The sun came up this morning. Great start to the day, now it's up to me to make it better.

 

[avbill]

Remember 1 thing about Pricing "VENUE"

Your market place will dictate your prices Roy said it best "Venue,Venue, Venue!" I have several pieces of wood from sunken ships / historical in nature. The one piece I bought from IAP over 250 dollars. I also have 4 battleships from WWII This collection is worth a lot more than just the price of the wood plus doubling it! especially if the person was stationed on the ship.

No one has talked about the WOW factor. I bought one of these waste-wood and acrylic blanks. then turned there was a happy face on the upper pen barrel. Did it sit on my table for a long time YES but someone did buy it at the X-factor I wanted for it!

I have / had a matching Set of His/her of a Pau shell and mother of pearl set. ( bride & groom set. ) They were on a emperor & Jr emperor set. I had it for over two years. Many people asked why so expensive. Yet I just sold them for my asking price.

What Venue are you marketing to. There are more people who can buy the 40 dollar slimline. and very few who are in the Mitt Romney arena. Yet the people in that arena have the money to spend on a 1,000 dollar pen or a collection of pens.

Who are you marketing too!

VENUE, VENUE, VENUE​

 

[raar25]

Wow these are some great posts. I appreciate the comments about sell it for what your comfortable with and what the market will bear and essentially agree with both of these and hopefully the two are pretty close, however there are several things to consider as well. First the concept that has not been mentioned here is a term called cash flow and carrying costs. It is nice when you make a fine pen and it eventually sells for hundreds of dollars, but if it takes 1-2 years to sell, than you will be waiting a long time for a paycheck. If everything takes 1-2 years to sell than this is not very good cash flow and if you bought the materials on your credit card and paid it back when the pen sold your carrying costs would be eating away at that nice price. So the bottom line is when you plan your products you should have product that sell quickly to generate cash flow and help finance the nicer items. These are typically lower profit margin items and should be based off of a cost basis calculation. So I use a cost basis for everything and just add additional profit into the nicer pens. For those who are really looking for the caculation here goes:

material costs + shipping inbound cost + consumables materials (glue, sandpaper etc typ $1/pen)+ + packaging material costs+ overhead (planning and finance) (10-20% of cost total)+selling cost (web site, paypal fees etc 8% typ of selling price)+ direct labor cost (I use $20/hour)+ profit (market venue adjustment +/- as necessary)=Price before sales tax and shipping

Until I laid it out with this formula I was missing alot of my hidden costs which at the end of the year I realized it was costing me as much to make the pens as I was selling them. I actually sold some key chains that I ended up making less than a $1 on when I took all of the costs into consideration, lesson learned. So you notice I break everything down to a per pen basis and peanut butter all overhead and selling cost based on a rate and dont worry about being exact as long as you capture your non-productive labor and show/web costs to sell some how.

So now you have a formula, good luck.

 

[Smitty37]

Wow these are some great posts. I appreciate the comments about sell it for what your comfortable with and what the market will bear and essentially agree with both of these and hopefully the two are pretty close, however there are several things to consider as well. First the concept that has not been mentioned here is a term called cash flow and carrying costs. It is nice when you make a fine pen and it eventually sells for hundreds of dollars, but if it takes 1-2 years to sell, than you will be waiting a long time for a paycheck. If everything takes 1-2 years to sell than this is not very good cash flow and if you bought the materials on your credit card and paid it back when the pen sold your carrying costs would be eating away at that nice price. So the bottom line is when you plan your products you should have product that sell quickly to generate cash flow and help finance the nicer items. These are typically lower profit margin items and should be based off of a cost basis calculation. So I use a cost basis for everything and just add additional profit into the nicer pens. For those who are really looking for the caculation here goes:

material costs + shipping inbound cost + consumables materials (glue, sandpaper etc typ $1/pen)+ + packaging material costs+ overhead (planning and finance) (10-20% of cost total)+selling cost (web site, paypal fees etc 8% typ of selling price)+ direct labor cost (I use $20/hour)+ profit (market venue adjustment +/- as necessary)=Price before sales tax and shipping

Until I laid it out with this formula I was missing alot of my hidden costs which at the end of the year I realized it was costing me as much to make the pens as I was selling them. I actually sold some key chains that I ended up making less than a $1 on when I took all of the costs into consideration, lesson learned. So you notice I break everything down to a per pen basis and peanut butter all overhead and selling cost based on a rate and dont worry about being exact as long as you capture your non-productive labor and show/web costs to sell some how.

So now you have a formula, good luck.

That formula will work as long as the price you come up with is the fair market price in the venue where you sell. As I said earlier, the buyer doesn't care what your cost is - only whether the price he/she gives you is a fair price for the item.

 

[mikespenturningz]

I have to say that if you don't at the very least keep track of your base costs you will have a hard time coming up with an actual price. I have seen folks selling pens for literally nothing! I have seen slimlines on the web for $8 and these guys just wanting to get something back for their hobby. I do think if you want to properly price your pens you need to know basic costs! It is actually higher than most people think!
Then what at least one post said about uniqueness and actual work to make a particular pen is very important! Now it is very hard to make a cherry pen and say I had to charge x ammount extra because I had a blank decide to come apart on the lathe but if you are double dying, triple dying, stabilizing and casting and you have a blank blow up you need to calculate those loss costs into the mix. If you get a few really great blanks out of a piece of buckeye burl that you paid $80 for you need to maximize the usually relatively few truly outstanding blanks that you get! I recently purchased a really nice piece of buckeye burl and have been turning several great pens out of it but not every blank that I get is primo!

If you are simply purchasing all of your blanks from retailers you can calculate those costs but not every blank you get that way will be primo either!

Too many variables, information overload, oh I forgot to add that! Thus the spreadsheet with all that in there to begin with! Just for the base price mind you!

 

[Smitty37]

I have to say that if you don't at the very least keep track of your base costs you will have a hard time coming up with an actual price. I have seen folks selling pens for literally nothing! I have seen slimlines on the web for $8 and these guys just wanting to get something back for their hobby. I do think if you want to properly price your pens you need to know basic costs! It is actually higher than most people think!
Then what at least one post said about uniqueness and actual work to make a particular pen is very important! Now it is very hard to make a cherry pen and say I had to charge x ammount extra because I had a blank decide to come apart on the lathe but if you are double dying, triple dying, stabilizing and casting and you have a blank blow up you need to calculate those loss costs into the mix. If you get a few really great blanks out of a piece of buckeye burl that you paid $80 for you need to maximize the usually relatively few truly outstanding blanks that you get! I recently purchased a really nice piece of buckeye burl and have been turning several great pens out of it but not every blank that I get is primo!

If you are simply purchasing all of your blanks from retailers you can calculate those costs but not every blank you get that way will be primo either!

Too many variables, information overload, oh I forgot to add that! Thus the spreadsheet with all that in there to begin with! Just for the base price mind you!

You are right that you must know all of your costs to know whether or not you are making a profit...But, as a buyer I really don't care, what your costs are, or how you arrived at your asking price. I only care that asking price for the item is one that I am willing to pay. And, what I am willing to pay, as several folks have mentioned, will be determined as much by the venue as anything else. The local church craft show is not going to fetch you a lot of $200.00 pen sales.

 

[mikespenturningz]

I have to say that if you don't at the very least keep track of your base costs you will have a hard time coming up with an actual price. I have seen folks selling pens for literally nothing! I have seen slimlines on the web for $8 and these guys just wanting to get something back for their hobby. I do think if you want to properly price your pens you need to know basic costs! It is actually higher than most people think!
Then what at least one post said about uniqueness and actual work to make a particular pen is very important! Now it is very hard to make a cherry pen and say I had to charge x ammount extra because I had a blank decide to come apart on the lathe but if you are double dying, triple dying, stabilizing and casting and you have a blank blow up you need to calculate those loss costs into the mix. If you get a few really great blanks out of a piece of buckeye burl that you paid $80 for you need to maximize the usually relatively few truly outstanding blanks that you get! I recently purchased a really nice piece of buckeye burl and have been turning several great pens out of it but not every blank that I get is primo!

If you are simply purchasing all of your blanks from retailers you can calculate those costs but not every blank you get that way will be primo either!

Too many variables, information overload, oh I forgot to add that! Thus the spreadsheet with all that in there to begin with! Just for the base price mind you!

You are right that you must know all of your costs to know whether or not you are making a profit...But, as a buyer I really don't care, what your costs are, or how you arrived at your asking price. I only care that asking price for the item is one that I am willing to pay. And, what I am willing to pay, as several folks have mentioned, will be determined as much by the venue as anything else. The local church craft show is not going to fetch you a lot of $200.00 pen sales.

You are so right Smitty but we are not buyers we are sellers. I have seen way too many sellers selling their pens for little or no profit or without taking into account any labor costs. If a venue won't allow me more than my hardware set price a decent profit I simply won't go there at all it isn't the right venue to begin with!

 

[keithkarl2007]

Here's one extreme example. When i worked in the joinery where I was employed we had priced a kitchen for something like €60,000. The client felt our price was a little low for such a high end kitchen and went to a company who specialize in bespoke kitchens. The kitchen she got from them cost her €72,000 and when it was completed and fitted she said she was dissapointed with the kitchen and that she should have gotten us to make it. Go figure.

These prices are the real prices and not exaggerated.

 

[Rudderman]

The maker of "Red Bull", a company that sells energy drinks for twice what the competition gets was interviewed by a reporter. The reporter asked, "how can you justify your high prices". The owner replied "how will they know its better if I don't charge more"? He's made a fortune from an obscure formula he got in the Far East.
Rudderman

 

[Smitty37]

I have to say that if you don't at the very least keep track of your base costs you will have a hard time coming up with an actual price. I have seen folks selling pens for literally nothing! I have seen slimlines on the web for $8 and these guys just wanting to get something back for their hobby. I do think if you want to properly price your pens you need to know basic costs! It is actually higher than most people think!
Then what at least one post said about uniqueness and actual work to make a particular pen is very important! Now it is very hard to make a cherry pen and say I had to charge x ammount extra because I had a blank decide to come apart on the lathe but if you are double dying, triple dying, stabilizing and casting and you have a blank blow up you need to calculate those loss costs into the mix. If you get a few really great blanks out of a piece of buckeye burl that you paid $80 for you need to maximize the usually relatively few truly outstanding blanks that you get! I recently purchased a really nice piece of buckeye burl and have been turning several great pens out of it but not every blank that I get is primo!

If you are simply purchasing all of your blanks from retailers you can calculate those costs but not every blank you get that way will be primo either!

Too many variables, information overload, oh I forgot to add that! Thus the spreadsheet with all that in there to begin with! Just for the base price mind you!

You are right that you must know all of your costs to know whether or not you are making a profit...But, as a buyer I really don't care, what your costs are, or how you arrived at your asking price. I only care that asking price for the item is one that I am willing to pay. And, what I am willing to pay, as several folks have mentioned, will be determined as much by the venue as anything else. The local church craft show is not going to fetch you a lot of $200.00 pen sales.

You are so right Smitty but we are not buyers we are sellers. I have seen way too many sellers selling their pens for little or no profit or without taking into account any labor costs. If a venue won't allow me more than my hardware set price a decent profit I simply won't go there at all it isn't the right venue to begin with!

On the other hand - should you expect buyers of your wares to act differently then you do when you act as a buyer of someone elses goods and services. We can set any price we want on our pens - and if a buyer agrees that it's a fair price, we'll sell it.

 

[OKLAHOMAN]

Perfect answer:biggrin::biggrin:

The owner replied "how will they know its better if I don't charge more"?
Rudderman

 

[Smitty37]

Perfect answer:biggrin::biggrin:

The owner replied "how will they know its better if I don't charge more"?
Rudderman

Agreed --- if it is really better. I happily pay about twice as much for certain root beers than what I can buy others for, because they really are better.

 

[panamag8or]

Perfect answer:biggrin::biggrin:

The owner replied "how will they know its better if I don't charge more"?
Rudderman

Agreed --- if it is really better. I happily pay about twice as much for certain root beers than what I can buy others for, because they really are better.

I'm that way with Mexicokes. Much better than American ones, and a glass bottle, too.

 

[Wood Butcher]

Whew, I guess I opened a Pandora's can of worms with this thread. The answers, comments and recommendations have been super and will benefit lots of folks on this site as they sell their wares. A dear old friend of mine used to say, "Willing seller, willing buyer, all's well.", and I agree. If you are creating pen art as a business all of these answers should assist you in your endeavors. If however, you are creating pen art for the mere enjoyment this all is fun to read but doesn't apply to you, yet. I have spent many hours developing and assembling a blank that I was sure would rock the pen making world back on its heels only to have it blow up with the intensity of a M80 firecracker as I drilled it in prep for the tube or turned it at super sonic speed. I then retire to the man cave with Capt. Morgan and contemplate whether I want to do that again. After a day or two I begin again and see where this one will go. The fun of doing it is the challange and the joy of handing a work of art to a friend, grand child, loved one or a stranger who has endured the rigors of health issues and the ensuing smiles and appreciation are plenty for me. Don't misunderstand me, I do sell some; have to fund all that enjoyment you know, but the price willd depend on the client's life situation, resources and what they intend to do with the pen. All in all, if it ain't fun, I ain't doin' it at my age.
WB

 

[76winger]

Perfect answer:biggrin::biggrin:

The owner replied "how will they know its better if I don't charge more"?
Rudderman

Agreed --- if it is really better. I happily pay about twice as much for certain root beers than what I can buy others for, because they really are better.

And I've paid 4 times as much for good bourbon. Because it's B-E-T-T-E-R! :wink:

Seriously, good thread. I always like seeing the various answers when questions like this come up.

Thanks for asking it Bill!

 

[Smitty37]

Perfect answer:biggrin::biggrin:

The owner replied "how will they know its better if I don't charge more"?
Rudderman

Agreed --- if it is really better. I happily pay about twice as much for certain root beers than what I can buy others for, because they really are better.

I'm that way with Mexicokes. Much better than American ones, and a glass bottle, too.

That one I know the answer too - Mexicokes are still using the original (sans cocaine) formula in their cokes and it is better.

 

[Randy Simmons]

I'll give you the same advice that my mom gave me when I started my business.

First of all, what are your materials costing you? the kit, the wood, take it all into account. Then, how much are you paying yourself? 20 dollars an hour, 40? add that all together and that is your wholesale price. That's what you'll sell to consignment shops and such. Take that price and double it, and you have arrived at your retail price.

 

[RSidetrack]

I'll give you the same advice that my mom gave me when I started my business.

First of all, what are your materials costing you? the kit, the wood, take it all into account. Then, how much are you paying yourself? 20 dollars an hour, 40? add that all together and that is your wholesale price. That's what you'll sell to consignment shops and such. Take that price and double it, and you have arrived at your retail price.

This is the formula I generally use. However, a lot of people on here have different attitudes. Some say using a formula is the worst thing you can do. I honestly don't believe there is a right or a wrong way.

You can look at a pen and say "I'd buy that for $50" so you sell it for that.
You can do the formula and end up at $75
You can have someone who prices on perceived value and get $250
You can have someone who does it as a hobby and just wants their money back and get $15

Everyone has a different strategy, and the target market is the most important part of that strategy. However, no matter what you do - if you spend $15 on materials and shipping and handling to make the pen, you don't want to sell it under that $15, otherwise you are just losing money.

I only sell on Etsy right now - and that market doesn't seem to interested in my pens at their prices right now, but I am not changing my prices because I set the price and will always stick to it.

 

[Ulises Victoria]

I have an Excel spreadsheet where I write the price of the kit and the blank. Then the program adds a 20% that I get charged by my custom broker to deliver the items from the USA to my home in Mexico and then convert Dollars to Mexican pesos. I usually don't consider shipping charges by the supplier. To this the program adds a 75% for labor and then a 20% profit. This is my *supposed sales price*. I still end up selling my pens for anything between 2 to 4 times this amount.

Good margin here.