Dilemma - Sell or Gift

[rfas]

I made the "mistake" of posting pictures of my chaos pens on my Facebook page. Now everybody and his brother and all of his cousins are messaging me wanting to buy them. I'm was completely caught off guard by the response. I was just sharing my handiwork with friends and had no idea people would be all over these. They're definitely unique and I guess that uniqueness is drawing people to them. I never expected that people would actually want to buy them. Some people are even placing orders. "I'll take 6 of those whenever you get around to making them." I find that one pretty funny because they're literally made from cutoff scraps from making cutting boards. It's not like I have an infinite amount of that stuff laying around.

The thing is, there's not much hard cost in these - basically a $5 pen kit and scrap material that I'd otherwise just toss - but they're pretty labor intensive. Lots of cutting, gluing up, cutting again, gluing up again, etc. And I'm getting relatively low yield out of the blanks. A fair number of them ended up with voids or otherwise disintegrated on the lathe. I'm afraid a lot of people I know would be taken aback if I sold them for what I thought they were worth based on the time I put into them. I'd almost rather keep supply limited and keep these as "high value gifts" to give away once in a while.

On the other hand I may have found my pen turning niche, but I'd have to make an awful lot more cutting boards to keep up with demand.

 

[Brian G]

I first suggest asking a moderator to move this thread to the Marketing and Shows forum. A savvy (or accidental) web searcher on "chaos pens" will find this thread in the open discussion, discover how low you value the costs, and not want to pay anything above that.

Price them for what you'd sell to someone you don't know, and don't think twice about it. Friend and family discounts are nice, but don't make them too generous.

Get what you can for them, because it won't be long before someone else duplicates your approach and takes advantage of your idea. "I'll take 6" at $75 each turns into.."well, maybe 2 for now."

 

[Aurelius]

If you're selling them, that means you are treating this like a business and that means you should definitely account for the fact that the blank is labor intensive. If you price these at a loss, people will line up for them because they are obviously worth more than you are charging. That's not fair to you as the maker nor particularly sustainable either.

 

[jrista]

I made the "mistake" of posting pictures of my chaos pens on my Facebook page. Now everybody and his brother and all of his cousins are messaging me wanting to buy them. I'm was completely caught off guard by the response. I was just sharing my handiwork with friends and had no idea people would be all over these. They're definitely unique and I guess that uniqueness is drawing people to them. I never expected that people would actually want to buy them. Some people are even placing orders. "I'll take 6 of those whenever you get around to making them." I find that one pretty funny because they're literally made from cutoff scraps from making cutting boards. It's not like I have an infinite amount of that stuff laying around.

The thing is, there's not much hard cost in these - basically a $5 pen kit and scrap material that I'd otherwise just toss - but they're pretty labor intensive. Lots of cutting, gluing up, cutting again, gluing up again, etc. And I'm getting relatively low yield out of the blanks. A fair number of them ended up with voids or otherwise disintegrated on the lathe. I'm afraid a lot of people I know would be taken aback if I sold them for what I thought they were worth based on the time I put into them. I'd almost rather keep supply limited and keep these as "high value gifts" to give away once in a while.

On the other hand I may have found my pen turning niche, but I'd have to make an awful lot more cutting boards to keep up with demand.


View attachment 319682

I'm surprised you get the kits for just $5...around here, I can't find a decent sierra-style kit like that for less than $10, and some of those with nicer platings are getting close to $20... Same kits a few months ago were a couple bucks cheaper, beginning of the year they were much cheaper...but today, the prices are skyrocketing...so, that is something to consider!

Also, the labor matters. If you have an overwhelming response to pens like that (something I'd be totally ecstatic about!), your time IS money, so don't write that off!

 

[rfas]

I'm surprised you get the kits for just $5...around here, I can't find a decent sierra-style kit like that for less than $10, and some of those with nicer platings are getting close to $20... Same kits a few months ago were a couple bucks cheaper, beginning of the year they were much cheaper...but today, the prices are skyrocketing...so, that is something to consider!

Also, the labor matters. If you have an overwhelming response to pens like that (something I'd be totally ecstatic about!), your time IS money, so don't write that off!

Actually the kits are closer to $8 and sometimes a bit more, depending on which plating I choose. This is the Gatsby from PSI.

 

[magpens]

FWIW . . . I say don't give them away and don't sell them.

You DO have a niche . . . protect that niche until you perfect the concept. . . There are improvements you can make.

Now . . . down to the nitty gritty . . .

Making pens for sale is not a haphazard process. . . The time factor is all important and has to be accounted for realisitically.

Consider a surgeon repairing a blockage in an artery. . . If he did not charge accurately for his time what would he come away with ?
Sure, he has expenses to pay for ... hospital operating theater and disposables ... but other than that it is his TIME !!

Same goes for hand-made pens . . . . the TIME is nearly everything.

Price your product accordingly. . . What does it cost you to get a tire leak repaired ? . How long does it take ? . What else is there ?
The answers are . . . it takes about 20 minutes and it costs about $50.

For you to make a pen, it takes about . . . at least 2 hours . . . So go figure . . . $150 would not be unreasonable.

But most of us would be happy to get $100 . . . including the cost of the "kit + blank" or whatever.

That's how I see it. . . And if YOU sell for cheap, that affects every last one of us . . . in this day and age of world-wide marketing !!!!!!!

 

[RGVPens]

I can relate to Ray, although I don't have a cool blank design...yet.
My first pen stays with me...my first born. I finished the second last Sunday just as some close friends came over. During dinner and cocktails she said she loved it and wanted to buy it! I thought it was the cocktails...but about the third time se said it I thought...WOW someone really likes my work. I gave it to her, as they have done a lot for us and are good friends.

But...I am planning on selling most all of my work along with my scroll saw art. I would really appreciate it if some of you folks shared the formula you use to price your work. And should I sell low now raising my price with the number of items I make/experience?

 

[rfas]

I can relate to Ray, although I don't have a cool blank design...yet.
My first pen stays with me...my first born. I finished the second last Sunday just as some close friends came over. During dinner and cocktails she said she loved it and wanted to buy it! I thought it was the cocktails...but about the third time se said it I thought...WOW someone really likes my work. I gave it to her, as they have done a lot for us and are good friends.

But...I am planning on selling most all of my work along with my scroll saw art. I would really appreciate it if some of you folks shared the formula you use to price your work. And should I sell low now raising my price with the number of items I make/experience?

LOL Gary, I don't have a cool blank design either. This is pure chaos. Take cutting board cutoffs, randomly glue them up in whatever order makes the least amount of sense, slice into strips, shuffle, rotate 90 degrees, slice and shuffle. and repeat 3 or 4 more times. I'm not joking when I say that mess probably had a pound of glue in it by the time it was done. I have no idea what any given blank is going to look like after it's turned.

 

[RGVPens]

LOL...just cover it in Titebond, slap the clamps to it, run it through the planer and onto the table saw? The guy that bought our house in MO the end of August was a woodworker, I think he just wanted my shop. I left him a large rolling wood rack I built overflowing with wood and cutoffs.

 

[Aurelius]

I would really appreciate it if some of you folks shared the formula you use to price your work. And should I sell low now raising my price with the number of items I make/experience?

The way you've been thinking baout it is generally referred to as "cost-plus" pricing. That's where you take all your costs, in this case the kit and the raw materials to make the blank, and then add some amount to it. This is very commonly used in mass market commodities. You are not mass producing anything. These are handmade works of art, the materials cost is effectively irrelevant.

As for a formula, there really isn't one. You need to sort of feel out your market. Think about how much time it takes you to make the pen (including the blank). Think about how long it took you to develop the skills to turn that blank into a pen. Finally, think about how much someone would be willing to pay. By that I do not mean is how much they will hand over without even batting an eyelash but that delicate point where they wish it were a little less but are still willing to pay. A good way t do that is look at locla craft fairs, check out etsy shops, wherever you can get a sense for what similar things are selling for and then decide how special your special material is.

The one thing I will say is that you should absolutely no sell low and then try to raise your prices. You can always offer a discount later but, once you set a price, it will get stuck in people's heads and you could actually turn off repeat customers when they try to buy a second (or third or fourth) pen only to find that this one is significantly more than the first. Now that is not to say that it's all doom and gloom. In fact, there has been a bunch of research that shows that it is sometimes easier to sell something by raising the price because people perceive it as being more valuable.

 

[rfas]

LOL...just cover it in Titebond, slap the clamps to it, run it through the planer and onto the table saw? The guy that bought our house in MO the end of August was a woodworker, I think he just wanted my shop. I left him a large rolling wood rack I built overflowing with wood and cutoffs.

That's pretty much it, except I didn't even bother with the planer. The pen blanks are downright ugly looking. Not even close to square. It doesn't matter much once I get a few passes with a scraper. I've even taken the leftover scraps from cutting out the blanks and glued those back up, and those should be even more random when I get around to turning them. When I started I had no idea if it would even work or not.

 

[WriteON]

I'd almost rather keep supply limited and keep these as "high value gifts" to give away once in a while.




View attachment 319682

Decide today what you want to do. Make money or keep them. People want them until you say $75 -$100+ and they get silent. I was charging "cost only" to casual friends/neighbors and got tired of that real fast. Your work is nice. Believe in yourself. You're a skilled craftsman. The few that I sold I added $40-60 on top of costs. And that's for single barrel.

 

[jrista]

That's pretty much it, except I didn't even bother with the planer. The pen blanks are downright ugly looking. Not even close to square. It doesn't matter much once I get a few passes with a scraper. I've even taken the leftover scraps from cutting out the blanks and glued those back up, and those should be even more random when I get around to turning them. When I started I had no idea if it would even work or not.

People like eclectic stuff! Put some worth to your time and effort, your brash throwing of things together, and take what people are offering: To be raving fans and customers of your eclecticism.

 

[jrista]

BTW, keep in mind there are more costs than just the blank and the kit. I was surprised when I first got my shop going, especially during the colder months (which around here is more than half the year), just how much more I was spending on electricity each month! With all that equipment, dust collectors and filters, heaters, high amperage machines, etc. It added up. And I am not a full-day all week workshop kind of guy...I'm usually out there a few hours mostly on the weekends, with maybe another evening or two during the week.

The energy costs, the costs for finishing materials, the costs for, say, boxes if you want to package your product up nice, etc. etc. There are actually a lot of costs...and costs that are starting to rise parabolically with what's going on in the world. You should be accounting for all of those costs as a bare minimum baseline below which you won't price anything. All the costs added in, you are probably not looking at any less than $10, maybe more depending on the worth of the materials you are gluing together. I've got piles of little pen blank cutoffs that I refuse to throw away, as even those little bits, once glued together with fragments from other thin and long cutoffs of various other woods I've picked up here and there, are worth plenty! The kind of segmented blanks I like, usually sell for $20 or more at least.

Minimum wage these days is $15-20 an hour, and that really doesn't go that far anymore. So, if it takes a couple hours to make a pen, that is at a bare minimum, $30-40 worth of your time, right? But you are an artisan, even if its random, I wasn't really joking before...its eclectic! Its definitely got a style that people like, and even though it may be scrap materials in your mind, it still takes time and effort and some thought (which may get more organized if you actually make something out of this happy little accident, to borrow from a beloved painter) to turn those scrap into something artistic.

So baseline costs for materials and time worth, you are looking at $60-70 at a minimum per pen. That said, given the kind of response you seem to have received, you already have a customer base that is scrambling for your pens! Despite the times (or maybe that should be ever more so now because of the times?), demand is still a critical economic factor. If your work is in demand, then its more valuable!

 

[rfas]

BTW, keep in mind there are more costs than just the blank and the kit. I was surprised when I first got my shop going, especially during the colder months (which around here is more than half the year), just how much more I was spending on electricity each month! With all that equipment, dust collectors and filters, heaters, high amperage machines, etc. It added up. And I am not a full-day all week workshop kind of guy...I'm usually out there a few hours mostly on the weekends, with maybe another evening or two during the week.

The energy costs, the costs for finishing materials, the costs for, say, boxes if you want to package your product up nice, etc. etc. There are actually a lot of costs...and costs that are starting to rise parabolically with what's going on in the world. You should be accounting for all of those costs as a bare minimum baseline below which you won't price anything. All the costs added in, you are probably not looking at any less than $10, maybe more depending on the worth of the materials you are gluing together. I've got piles of little pen blank cutoffs that I refuse to throw away, as even those little bits, once glued together with fragments from other thin and long cutoffs of various other woods I've picked up here and there, are worth plenty! The kind of segmented blanks I like, usually sell for $20 or more at least.

Minimum wage these days is $15-20 an hour, and that really doesn't go that far anymore. So, if it takes a couple hours to make a pen, that is at a bare minimum, $30-40 worth of your time, right? But you are an artisan, even if its random, I wasn't really joking before...its eclectic! Its definitely got a style that people like, and even though it may be scrap materials in your mind, it still takes time and effort and some thought (which may get more organized if you actually make something out of this happy little accident, to borrow from a beloved painter) to turn those scrap into something artistic.

So baseline costs for materials and time worth, you are looking at $60-70 at a minimum per pen. That said, given the kind of response you seem to have received, you already have a customer base that is scrambling for your pens! Despite the times (or maybe that should be ever more so now because of the times?), demand is still a critical economic factor. If your work is in demand, then its more valuable!

I definitely understand and appreciate everything you said. I'm a small (or some might say medium) business owner with 26 employees, so I put a high value on my time. I don't really want my turning or anything else out of my home shop to become a business as I think that would take some enjoyment out of it. It would be nice to get some extra cash once in a while to buy more toys for the shop, but that's not a high priority for me. I'm like you - a weekend warrior who's in the shop for a few hours on weekends. And I'm a pretty new turner. I used a lathe for the first time about 6 months ago and I've turned 3 bowls and about 30 pens, so I'm still sort of figuring it out.

After reading everyone's feedback on here I think I'm going to hold onto these for a while. I've learned the hard way from my own business that if I treat friends and family much differently than my other customers it usually doesn't work out too well in the end. I'll have people nagging me for a while but that gives me an opportunity to hem and haw about how much labor I put into them, and maybe eventually I'll be able to sell a few of them at a good price point.

 

[444]

Don't forget the cost of your equipment wear and tear on it should go into the base cost.

 

[WriteON]

Don't forget the cost of your equipment wear and tear on it should go into the base cost.

I like to think…
Cost
Shop supplies
Labor

Would like to discuss Shop Supplies. Aside from kit/blank/materials ( that includes shipping/tax). Around $5.00? …. Wear and consumables..Equipment, glue, abrasives, polished, tools, electric,gloves, respirator filters, etc.

Your feelings on cost of shop supplies added in?

 

[RGVPens]

You have to account for shop supplies. To do it right takes a little while though, and you have to keep good records of everything and the number of products you can make from that box of gloves, bottle of thin CA, bottle of medium CA, etc. Then there's paper towels, sandpaper, velvet bag or pen box. They all add up...sometimes to more and quicker than you think! And that's not even getting to tools and equipment yet. You need a little plugged in to cover repairs at least.

I make a lot of puzzle animals, like the photo. I timed several of varying difficulty and got an average time for a base. I use Poplar on most all the puzzles, so I kept track on the average number of square inches per puzzle. That way I knew the number of puzzles I could make from say a 1"x8"x24" board. I also knew about how many Puzzles I could get from a container of finish. And the blue shop towels etc.

Costs have changed over the last couple of years (like lumber!) and I can't find my notes after the move...so I need to analyze it again. Although I'm new to pens, and turning in general, I'm sure it's the same. I intend on selling some to most of my pens so I need to know costs and pricing!

 

[rfas]

I like to think…
Cost
Shop supplies
Labor

Would like to discuss Shop Supplies. Aside from kit/blank/materials ( that includes shipping/tax). Around $5.00? …. Wear and consumables..Equipment, glue, abrasives, polished, tools, electric,gloves, respirator filters, etc.

Your feelings on cost of shop supplies added in?

I worked in manufacturing for most of my career (I'm a mechanical engineer with an MBA and now own my own, completely unrelated business). In the manufacturing world they use what is called "standard cost." It is virtually impossible to figure out your actual cost per part of any manufactured item. You have materials, labor, and overhead. The overhead can be broken down into fixed overhead (your building and major assets like machine tools) and variable overhead (your consumables, utilities, etc.) So if you were really to follow a good manufacturing model, you would have to factor in things like depreciation of your lathe and table saw, how much of your home's electricity goes into making pens, etc. For things like sandpaper and glue - I do other woodworking so I have those supplies on hand anyway, but they still factor into "cost of manufacture." So you would have to figure out how much you spend on shop consumables and what percentage of that goes into your penmaking. It can be a very, very involved process.

As a side gig business, I don't think you necessarily have to get that detailed. Just a quick estimate of how much you spend on consumables over a given period, prorated per pen, should be close enough. For example, if I spend $1000 on shop consumables every year, and I spend 40% of my shop time turning pens, that's $400/year. If I make 40 pens a year that's $10 per pen in consumable costs. Just a round numbers example of how I'd approach it in a side gig business.

This is part of the reason why I really don't want to get into the pen selling business. This is a hobby for me. The number crunching is something I do in my everyday business and it would take a lot of the enjoyment out of my hobby if I let my work world creep into it. I do know, especially based on the feedback I've received here, that I have uncovered a penmaking niche and if I ever do opt to sell any of these I need to place a high value on them. I may not mind that at some point after I've built up inventory and have grown tired of holding onto them, if that day ever comes. Or I might give one away here and there, not as a casual gift for someone who comes over for dinner, but as a highly valued gift for a very special situation.

 

[leehljp]

Your "Chaos" pens are hitting a niche market and one thing being missed is that the "niche" market is the form of artistic tug or drawing people in. It is one thing to make a good fit and finish pen, but it is the artistic side that adds extra value. Artistic creations take more time also. Don't underestimate the value of artistic draw on your pens. I'm not suggesting to over price them, but rather look at the value that you have created and don't undervalue it.