Pricing larger orders

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dexter0606

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Jun 11, 2009
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I've been asked to supply pricing for quantities 12, 24, 36 and 48 of a logo sierra pen that I made as a sample for a company.
I've come up with pricing based on the price breaks that I get on my materials by buying quantity but I'm wondering what to do with my labor hours. There isn't a significant difference in my sell price. Just a couple of dollars.
I'm not set up to run "production" so I'm not sure if there is any time savings between 12 and 48 pens.
Any suggestions?

Jeff
 
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OKLAHOMAN

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My thoughts on quantity sales are that some one is going to pay for my boring time spent doing repetitive work so if I want the sale and that would be a big if no more than a 10% discount off my regular price. I would need 50% up front before I start with the rest upon delivery. Just my way and no way should it be the only way.
 

TomW

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I'm not set up to run "production" so I'm not sure if there is any time savings between 12 and 48 pens.
Jeff
I'd be inclined to discount the materials as you have done, but hold the labor pretty much constant. That way I wouldn't be constantly thinking about how to speed things up (e.g. epoxying 24 barrels at once with one batch of 5 minute epoxy, etc (BTDT)).

Depending on the type of logo, your total labor time could be within a few percent for the first and 48th.

You could also consider the savings in delivery per pen for different quantities (packaging, postage, gasoline, etc).

Good luck!
Tom
 

dexter0606

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Thanks guys
I'm going to have to think this through. I've only been making pens for a short time and really enjoy it. I've come up with what I think are some pretty good looking custom pens in acrylic and wood but right now the acrylic with custom decals seems to be the one.
I've been out of work now for about 8 months so I've been keeping busy in the shop.
At this point this is by no means a "job" but more of a labor of love that earns me a few extra bucks.
I would like to get this order (I think!!) but a the same time I'm not going to give it away. We'll see.
Thanks again for the input

Jeff
 

Daniel

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Jeff, there is a huge savings in time when you do it by production. but it does not help if you are looking for a difference in 10 pens or 36 pens. it is simply the time you save in drilling when you can just pop blank after blank in the vice without the added set up time. for example a single pen generally takes 2 hours to make. while 10 can easily take only 8 or so, 30 I would guess might be 25 or so. I give some added savings for the extra 20 because as you start turning etc the repetition tends to let you speed up just how fast you can get them on and off the lathe. so the second pen will be faster than the first. at some point even this levels off and you have pretty much reached the limit of your time shaving. In all a large order can be giving a pretty large discount (say even up to 50%) and you will make it up in both discounts you get by ordering in quantity and time you save in the shop. my discounts start at 20% just to order two pens or more and I have given up to 50% off for orders of 20 pens. this is pretty much my limit simply because I will not take orders larger than that. It simply becomes to much of a struggle for me to try and crank out more pens than that.
In order to get the max time savings with production you have to do all the pens at the same time. this means drill all blanks in one setting. you then save the time it takes to find the correct bit and set it up in the drill press on every barrel except the first one.
then glue all tubes, trim all barrels, turn all of them and then assemble all of them. I even do the assembly in steps such as pressing in all transmissions etc. the time saving is made in not changing the task not in getting faster at pressing parts etc.

My largest example of production work and how much time it can save was when I made 100 pens for the Freedom Pen project. I not only was able to drill 200 slimline blanks in just a few minutes. the actual time to drill a blank fell as low as a little more than 1 or 2 seconds. it actually took more time to remove one blank from the vice and put the next one in than it did to pass the drill bit through them. gluing tubes became the same thing. I figured out a way to put a lot of glue in the first blank. plug the ends of the tubes and was able to basically push this big glob of glue from one blank right into the next. I had enough glue flowing that I could glue up 4 or 5 tubes before having to add more glue. the process went extremely fast. maybe 30 min or so for 200 blanks. Barrel trimming again became more an issue of getting the blanks in and out rather than the time it took to actually trim. turning was the funnest part at first since I got to watch the time it took to actually get a barrel to shape drastically improve. the first pen taking maybe 10 or 15 min. by the time I was on the 10th pen or so that time had fallen by at least 2 or 3 min. by the time I was to pen 100 I actually was down to a couple of minutes per pen. I didn't know something could be turned that fast and is was all pretty amazing to see it getting done and knowing it was me doing it.

finishing really had no time savings other than the set up time for every pen. finishing is finishing and takes time, stuff only cures so fast. I was able to put three blanks on the mandrel at a time so was actually getting about 1 and a half pens for the same amount of time. assembly again had huge saving and the time was actually so short (minutes) for the entire pile of 100 pens, that it would not even be worth considering in the price of the pen.
In truth when it comes to large orders, I am charging more for the manotany I have to suffer than for making the pens. So for anyone thinking that hey I can crank out a bunch of pens and sell them cheap. Just remember that it may very well come at the price of your love of making pens at all. You cannot admire the beauty of the wood as you work. it is all about slamming out the piece and getting to the next. but i have often thought of getting 100 slimline pens with some nice but not stabilized blanks and knocking out a bucket of pens that could be sold at a good profit for $12 to $15 each. yeah the cheap stuff I know. but there is a market for a cheap novelty type pen. I have never done it because I also know there would be no enjoyment in doing it. it would all be for nothing but making some money. hell I'll do that just by going to work today and it is much less agonizing.
 
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ashaw

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Jeff
My rule of thumb is 10% for the first 10 pieces 20% 20 - 50 30% off 50+. Note the is off your retail price no production/wholesale price. As Daniel said you can do the same work very fast. I just got done a proposal for 250 pens with engraving.
Good luck with your sale.

Alan
 

mdburn_em

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I just got an order for 28 pens. I gave the guy 25% off my normal retail for an order over 25. I just figured that I pay 25% to have a couple of shops sell my pens, why not here to get the business?

This guy owns his own company and thinks that some of the people he knows may want some too. I'm not holding my breath over that one.

I did tell him that future orders may not be quite so generous (percentage wise.)
 

dexter0606

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Mark
I'm a little leery on giving a discount the first time round and upping the price on t he next order. I think it's best to ask what you feel is fair price (for both parties) and go from there. If the deal falls through, no biggy.

Jeff
 

Jgrden

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I agree with the monotony part of mass pen making. i had a chance to do 400 pens once but figured I would need to do 11 pens a day for 7 days a week. Now that i read your aritcle, I think I should have taken the order. But the monotony - sheesh.
 
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