Simple Pen Pricing Model

[YoYoSpin]

If you have Excel, dial in here and use your own numbers to play with the model: http://yoyospin.com/pricing_model_pens.xls

Note that page one of this file has a similar model for bottle stopper pricing.

And, if you don't have Excel, here are the same files in pdf:
http://yoyospin.com/pricing_model_pens.pdf
http://yoyospin.com/pricing_model_stoppers.pdf

 

[thewishman]

Thanks, Ed. I have been trying to figure out pricing - pretty much guesswork and local conditions up to now. I wish I could turn 5 pens/hour.

Chris

 

[Stevej72]

Ed, thanks, that is very helpful. Also, I bought your closed end pen DVD from AS and it came the other day. Lots of information, I learned a lot. Great value for the price.

 

[Marc Phillips]

Thanks Ed.... that's excellent... get it?... excel lent? ... geez, I crack myself up []

All kidding aside, that spreadsheet is great... thanks again []

 

[wicook]

Thanks for sharing, Ed.

Marc...you'd better be careful with that sense of humour...it's getting close to being as sharp as a skew!! []

 

[Rudy Vey]

Ed,
this is great!! I tried it for a number of my pen types I make and sell a lot (Barons, FT's and Slimline) and I was amazed how close the different pricing calculations came to mine. I worked very well for standard wood pens, but then I used it for my Titanium pens and here the difference between the program and what I can get for them was quite large. The problem was that Titanium prices went up like hell and it is very labor intensive.
But nevertheless, I like this approach and keep a copy on my computer.
Thanks!

 

[woodpens]

Nice job, Ed. That is a very intelligent pricing model. I am due to update my prices and will use this with a great deal of weight in the final decision. Thanks for sharing it!

 

[JohnLifer]

Thanks for the spreadsheet. One thing though, you show $30 per hour for your labor, unless you are paying someone else, or are incorporated, this is profit also and is taxable. If you are a self proprietor, your labor expense it taxable.

 

[YoYoSpin]

There are lots of ways to slice and dice the tax code, and that’s not really what this model is trying to address.

Everyone should feel free to change the model to accommodate their particular situation. If you’re just a hobbyist for example, with no business entity, then the direct labor rate and profit figures could be merged into one item.

For me, the model is set up so that there are two taxable entities...Davidson LatheCraft LLC pays tax on the 8% profit and I would have personal taxable income based on the $30 per hour rate that the LLC pays me.

 

[Hiram33]

very nice spread sheet will come in handy

 

[Randy_]

Ed: I assume the figures in your posted model are for a basic slimline kit. Plug in an Emperor or other high end kit and I think your model is going to generate a price that many will be unhappy with.

Also, this model model will give a result that is at significant variance with the oft quoted 3X method of pricing.

Personally, I think your method is a much more realistic/honest way of pricing pens; but I am sure there will be many who disagree.

(In all honesty, though, your model generates what one might consider to be a minimum price for a "for-profit" pencrafter. If some pencrafters want to charge more for their pens and they can find buyers who are willing to pay higher prices, then more power to them!)

I guess another question that comes to mind is the 8% business profit.......that seems quite low to me??[]

 

[bradh]

This is a good excercise to understand what it really costs to make a pen and should be kept in mind when setting prices.
Ed, I noticed you had $.10 for consumables. I think that is too low for most of us. I worked mine out to be about $.90. I included sandpaper, CA glue, polyurethane glue, BLO, micromesh, acetone, paper towels, Ren wax, buffing compounds, disk sander disks. There are many expensive items we use and they all need replacing at some point.
Thanks for the Excel file Ed!