Pricing questions

[CHICAGOHAND]

I have just been asked to make 5 woodcraft Atlas platinum pens $6.99 each. 5 woodcraft European satin nickle $5.50 each. And 5 woodcraft platinum European letter openers $8.50.
All done in an acrylic blue of my choice $2.99.
Total price for parts was $150.00.
So what do you think I should have charged this man.
this order according to him was just the beginning of work he wanted me to do.
He is a "CPA" and wants to hand them out as appreciation gifts to customers.
Now we have yet to discuss boxes and he has shown interest in having his logo laser engraved.
Thanks for all your comments I hold them to the highest esteem

 

[ashaw]

I would be in the ball park of around $850.00 - 900.00 retail. Maybe you can knock down 20% for volume discount. Anything less than that you will not be making money on. Notice I said retail. with 850-900 you should cover you with 2 days of shop time, profit and taxes.

 

[Randy_]

If you use the 3x formula that lots of folks like, the price would be $450.

If you get $50 per unit, that would be $750.

If you get $900, that would translate to $60 per unit which is more than what I think those items would bring in a normal market.

Being that you are using acrylic blanks (less finishing time and 1/3 of the order is letter openers that only have a single barrel (less construction time) I wouldn't think it should require 2 days of shop time.

That being said, if your client has a Beverly Hills zip code, you can probably get twice the numbers we are mentioning in this post. And yes, if I were pplacing an order like this I would be expecting a little bit of a quantity discount; but 10% might be more reasonable than 20%.

 

[CHICAGOHAND]

The Atlas is also a single balak so that is helping me with cutting down some time.
The problem I am having is this may turn into something quite regular and i dont want to loose him with to big of a piece of bait.
I figure that i can add a few dollars on boxes and he is also talking engraving. So if i play the middle man there too Ican add something just for being in the middle.I dont know what do you think.
I didnt think this was gonna turn into a business, you guys did'nt warn me about that.
Thanks for all your comments.

 

[kent4Him]

I would also be in the $450 range. If he wanted boxes and engraving, I would charge for one and throw in the other and put the total at $525.

 

[cdcarter]

I just went through a slightly simpler version of this, delivering 6 Euros, 6 Cigars, a Churchill and a Cambridge. On all of these, I used T/N Gold kits, and the blanks were all wood -- tulipwood, kingwood, bocote and macassar ebony. The ebony was the only blank that cost more than a couple of dollars.

I charged her $25 each for the cigars and euros, because my price was $30 on those and I give a standard $5 discount to people in her company, which is a client of my PR business. $45 for the Churchill and $90 for the Cambridge. That came to $435 for the basic pens, but she also got a dozen boxes ($1.50 markup). With shipping, she ended up sending me a check for nearly $500.

That may not look like top dollar, but it's fairly close to the "3x cost of materials" formula on most of them, a little better on the Cambridge. I figure I'm getting $60-80 per hour for my turning time, counting blank preparation. That's about half what I make in my day job, but it ain't bad for a hobby, and it pays for all my woodworking equipment -- flat and turning alike. That's all I really ask of it. Supports my habit.

Efficiency -- not rushing -- is the key for me. I can fart around (can you say that here? [] ) for two hours on a single pen, but when I'm in production mode, I cut, drill and glue tubes in all the blanks in batches, and it goes really fast. Then when I'm turning, there's no lost motion, and I can focus on the quality of the shape and finish without rushing, yet still get a lot of pens done.

All that said, I have just raised a few of my prices by $5.

 

[rherrell]

Originally posted by cdcarter
<br />I just went through a slightly simpler version of this, delivering 6 Euros, 6 Cigars, a Churchill and a Cambridge. On all of these, I used T/N Gold kits, and the blanks were all wood -- tulipwood, kingwood, bocote and macassar ebony. The ebony was the only blank that cost more than a couple of dollars.

I charged her $25 each for the cigars and euros, because my price was $30 on those and I give a standard $5 discount to people in company, which is a client of my PR business. $45 for the Churchill and $90 for the Cambridge. That came to $435 for the basic pens, but she also got a dozen boxes ($1.50 markup). With shipping, she ended up sending me a check for nearly $500.

That may not look like top dollar, but it's fairly close to the "3x cost of materials" formula on most of them, a little better on the Cambridge. I figure I'm getting $60-80 per hour for my turning time, counting blank preparation. That's about half what I make in my day job, but it ain't bad for a hobby, and it pays for all my woodworking equipment -- flat and turning alike. That's all I really ask of it. Supports my habit.

Efficiency -- not rushing -- is the key for me. I can fart around (can you say that here? [] ) for two hours on a single pen, but when I'm in production mode, I cut, drill and glue tubes in all the blanks in batches, and it goes really fast. Then when I'm turning, there's no lost motion, and I can focus on the quality of the shape and finish without rushing, yet still get a lot of pens done.

What? I know I turn slow but... What? Heckuva day job too... What?

 

[TBone]

Originally posted by CHICAGOHAND
<br /><b>The problem I am having is this may turn into something quite regular and i dont want to loose him with to big of a piece of bait.</b>
I figure that i can add a few dollars on boxes and he is also talking engraving. So if i play the middle man there too Ican add something just for being in the middle.I dont know what do you think.
I didnt think this was gonna turn into a business, you guys did'nt warn me about that.
Thanks for all your comments.

I look at it from another perspective. If this guy does turn out to be a regular large order customer, you don't want to price so low that you're locked into turning out mass production at a rate that isn't worth it. My wife paints just about anything from wine glasses to wall murals. I preach to her to quote prices that are worth her time. If they want it, fine. If not, you're not stuck. I'd price it so that it's really worth your time, then possibly a 10% discount if it involves volume.

 

[ashaw]

Randy

You are right about the $450.00 price. But again if your are talking retail that price would raise to $900.00. The reason for the higher price is should Dave start to sell to retail customer one of two things happen. Dave sell price to a retail customer would be $225.00 based on the $450.00 or the set sells for $900.00 and you get the $450.00 price. With the $900.00 price range you have room to play with the pricing. As opposed to playing with 450.00 price. Otherwise you will be cutting into your profits. Again remember you have to account for taxes because the client will write-off the set at tax time.

 

[louisbry]

Dave,
It didn't seem like you added anything for sandpaper, glue,electricity, tool wear and tear etc. If you add $2 per pen to cover these overhead items to your basic cost of $150, then the total for cost (not counting labor) would be $180. Three times that would be $540 or $36 per item. It would take me 15 hours to do the order (I am slow but thorough). That would give me $24 per hour for labor (fun), which I would be happy with since this is my hobby. If I could make a pen from blanks to assembly at about 17 minutes per pen without sacrificing quality (by the way I take almost 17 minutes for the finish alone), then it would take me 4.25 hours to complete 15 pens and letter openers. At this rate I would make approximately $85 per hour for labor (not fun). It seems to me that the 3x is a pretty good rule of thumb. The single most important variable appears to be the amount of time it takes to make a pen.

 

[kirkfranks]

Originally posted by CHICAGOHAND
The problem I am having is this may turn into something quite regular ...

One other thing to conider.
I seem to remember someone posting a few months ago that they charge more not less for large orders.
Once the orders get any larger than this it can have the effect of changing hobby (fun) into work (not fun). The point of that poster was that the larger orders can get very boring (if I remember correctly.)
Think that through before offering a discount for volume.

 

[Rmartin]

$30.00 per unit, plus cost of box and engraving

 

[workinforwood]

yep, I'd be running those around $30 a unit too, plus cost of box and engraving. I wouldn't be paying as much for the kits too as I wouldn't buy them at woodcraft, so that adds more profit. The Euro's you have take a few more minutes work, but the atlas and letter openers are simpler and balance it all out.

 

[Cecilia]

Yeah, I'd probably charge somewhere in the $35-$50 range per pen, depending on the market. I don't know where your CPA is or how much expendable income he/she has to play with. The value of anything depends on what the market will bear. If your consumers are mostly well-to-do, charge as much as they'll pay. If they're not so well off, charge whatever they can afford. Make sense? Whatever you charge, make sure you cover *all* your materials, plus wear & tear on your equipment, not just kits and blanks. And be extra sure to pay yourself for your time and energy.

For extras, I don't add too much of a "handling" fee. I charge a flat $5 for plain gift boxes, which covers the $3 - $3.50 I pay for each box and about $1.50 ea for tax &/or shipping, depending on where I buy. For engraving, I charge what it costs me, which is $5 per pen, plus shipping, which is usually around $10, round trip.(The nearest laser engraver I trust to do decent work is about 5o miles from me, so it's easier and cheaper for me to ship via USPS Priority Mail.) So if they only want one pen engraved, it's $15; if they want 15 pens engraved, it totals $85.

So, basically, for an order like yours, I'd charge $35-$50 per pen, plus a total of $160 for gift boxes and engraving. That would come to a total of $685-$910 for the whole order, maybe settling around $750.

I've been told that I set my prices too low, but c'est la vie. It's not my meat & potatoes. I like to make enough money for it to be profitable, but not so much that it feels more like work and less like fun.

Hope this helps.

 

[CHICAGOHAND]

Great comments I am so glad for all of your extensive insight.
And all I wanted to do is turn some pens and maybe sell a few.
This is becoming a second job, and oh by the way the wife is really happy when i go to the shop and leave the little ones with her.
They are 6 and 4 1/2.

 

[alxe24]

I'd be between $500 and $600 depending o nthe prospect and wether or not you have other things going on. But I would shoot for $600 it seems a reasonable cost for give aways.