This will probably start a major IMO

Signed-In Members Don't See This Ad
Signed-In Members Don't See This Ad

Texas Taco

Member
Joined
Nov 14, 2005
Messages
373
Location
Southeast Texas
Are you looking at just pricing "stock" pens or "custom" pens?

I've heard anywhere from twice the cost to four times the cost. Others I've heard just factor in what their time is worth and goes up from there.
 

DMurphy

Member
Joined
Jul 26, 2017
Messages
4
Location
WI
Here is what I use. I am not saying it is the greatest. I also only use it as a guide. (15 x hours of labor) + (material cost + 10%) + I add 5 to 25 if it was a pain in the ass.
 

jttheclockman

Member
Joined
Feb 22, 2005
Messages
12,486
Location
NJ, USA.
Guess that is the best formula. Seriously. No such formula exists. Others think they have a formula but it is just what they price their work at. Just calculate the material you have in them and think of a salary. Add whatever you feel you want for commission. After awhile you will get a feel for what each pen kit is worth. The blank will determine if it needs to be raised or not. Good luck on your first million.:) You can ask whatever you want but your customers will tell you where you truely stand. Is your quality of work worth what you are asking?? Again the customer and venue you sell at will determine weather you are in the ballpark.
 

larryc

Member
Joined
Oct 2, 2009
Messages
1,100
Location
Mableton, GA (Near Atlanta)
I use the generally accepted 3 times the cost of materials.
I also round to the nearest $5. I don’t like the idea of making change.
Of course this is not always adhered to because sometimes I may not remember what I paid for a particular blank.
 

pshrynk

Member
Joined
Dec 6, 2017
Messages
251
Location
Lake City, Minnesota
For PSI pens, they often have a "Sell This Pen For" tab on the description box. If so, I will look at that and gauge where my pen falls in the mix. Otherwise it's roughly 3 times the cost of materials.
 

mecompco

Member
Joined
Apr 24, 2015
Messages
1,607
Location
Fairfield, Maine
Start with a true COGS, including ALL overhead, parts, storage, funds tied up in inventory, marketing costs, etc. Then figure out how long it takes to make a particular pen, with a particular blank, and decide how much per hour you want to make. Add all that together, then decide if you want to mark it up more, take a pay cut, or whatever you need to do to reach the price point you're looking for. Do NOT undersell your work! This is what I do, in addition to a little market research to see where the "sweet spot" is on a particular style of pen. Formulas are all well and good, but they don't work consistently over the full range of pen kits, blanks, etc. This is just the way I do it, FWIW.

Regards,
Michael
 

Chasper

Member
Joined
Mar 22, 2007
Messages
1,922
Location
Indiana
I have found that my customers totally don't care what it cost me to make a pen, they buy or don't buy based on what they feel it is worth to them. I think that is true with all consumer goods.

My pricing method (I don't call it a formula) is to set initial prices at what I think the customer will be willing to pay, then take it to a few shows to test my value proposition assumption. From there I proceed with something like this:
1. Is the new pen getting good attention, people are picking up and looking at it, but not buying? That tells me I have it priced too high, try a lower price.
2. Is the new pen selling fast? That tells me I have it priced too low, try a higher price.
3. Is nobody even picking it up and looking at it. They don't like it at any price, don't make any more.
Finding products that sell faster at higher prices does happen occasionally.

For the old favorite pen styles I test the market at new prices frequently. Mark the good sellers up until they slow down, then back off just a little. Mark the slow sellers down until they start selling well, then raise prices slightly. That is not to say that I don't pay attention to time and materials. If the optimal selling price does not leave me with enough profit margin, I stop selling the product.

Personally I believe that there is no correct formula, every formula is a mistake. The correct price is the optimal price that the customer is willing to pay.
 

mecompco

Member
Joined
Apr 24, 2015
Messages
1,607
Location
Fairfield, Maine
Chasper makes a good point, and I alluded to that with "market research" in my reply. Most of my sales are on Etsy, with local craft fairs a secondary market. Etsy makes it pretty easy to see what others are doing. It is important to keep in mind that a somewhat higher price is not necessarily a problem, and may even increase sales. It's up to you to market your products, while being cognizant of your demographic and what price point they will accept.
 

jttheclockman

Member
Joined
Feb 22, 2005
Messages
12,486
Location
NJ, USA.
I have found that my customers totally don't care what it cost me to make a pen, they buy or don't buy based on what they feel it is worth to them. I think that is true with all consumer goods.

My pricing method (I don't call it a formula) is to set initial prices at what I think the customer will be willing to pay, then take it to a few shows to test my value proposition assumption. From there I proceed with something like this:
1. Is the new pen getting good attention, people are picking up and looking at it, but not buying? That tells me I have it priced too high, try a lower price.
2. Is the new pen selling fast? That tells me I have it priced too low, try a higher price.
3. Is nobody even picking it up and looking at it. They don't like it at any price, don't make any more.
Finding products that sell faster at higher prices does happen occasionally.

For the old favorite pen styles I test the market at new prices frequently. Mark the good sellers up until they slow down, then back off just a little. Mark the slow sellers down until they start selling well, then raise prices slightly. That is not to say that I don't pay attention to time and materials. If the optimal selling price does not leave me with enough profit margin, I stop selling the product.

Personally I believe that there is no correct formula, every formula is a mistake. The correct price is the optimal price that the customer is willing to pay.
This statement is so true. I find this in my scrollsawing items as well as pens and other turned items. The customer will let you know if you have the sweet spot on pricing. They too are not going to know the differences between platings unless they are an experienced consumer. So I suggest staying away from the wide variety of platings and either go high end or low end. Mixing the 2 will cause confusion.
 

MRDucks2

Member
Joined
Jul 17, 2017
Messages
1,748
Location
Franklin, IN
A favorite story I tell on pricing was supposed to have come from an old shop keeper or owner of a general store.

He said if a customer walks up to something, looks at the price, complains and walks away, it’s too high.

If a customer walks, looks at a price, pulls out his wallet and buys it without saying anything, it’s too low.

But, if a customer looks at something, complains it is too expensive, pulls out his wallet and buys it, the price is just right.

Something that I read in just the past week that makes a lot of sense is to make sure and understand what it costs you to make something. That should be the starting point from where you decide to price.

Following some of the above advice strictly, you could end up selling slimline or designer pens for $9-$10 at 3x parts or marking down a steampunk kit pen to $20 (losing $10-$25 on parts alone) to make it move.

I am gonna sound like John here and recommend you use the power of the new search options on this website and do a little research. From that you will excellent discussions on how to look at the market you are selling in, spreadsheets to help with COGS and pricing, the frustration and lack of need to be frustration when selling against a hobby seller who is just trying to get his money back (he thinks).

No one solution works for each of us. I add up the value of my parts (not necessarily the cost) mark them up 15%, add in a box or bag at cost, throw $5 towards other overhead, figure an hourly wage based on my skill level as newer turner which helps offset the amount time required to get good results. As my experience gets better my hourly wage will go up, but my time required may come down.

This gets me to what I want to sell my pen for. From there I have a “modifier” or multiplier that use to raise or lower the end price slightly if needed. I round that number up or down for a more uniform price then see if other pens like it sell in that range. The answer is nearly always yes.

If it doesn’t sell or I don’t like the quality or style, I don’t make anymore like that. My best sales come from people specifically ordering a style and color combination of a pen.

Or you could mark up parts 3x.


Sent from my iPhone using Penturners.org mobile app
 

Woodchipper

Member
Joined
Mar 15, 2017
Messages
2,635
Location
Cleveland, TN
I sold restaurant supplies. Another salesman would take the cost and multiply it by two. He said that was 2%!
Yes, market research is a must. I know a pen maker who says a pen will sell for $29 in one market and $39 in another.
 

jttheclockman

Member
Joined
Feb 22, 2005
Messages
12,486
Location
NJ, USA.
I sold restaurant supplies. Another salesman would take the cost and multiply it by two. He said that was 2%!
Yes, market research is a must. I know a pen maker who says a pen will sell for $29 in one market and $39 in another.
This statement is true also. Alot has to do where you are selling and to whom you are selling to.
 

dogcatcher

Member
Joined
Jul 4, 2007
Messages
1,824
Location
TX, NM or on the road
It all boils down to what are the customers willing to pay. What will the market allow me to charge? A $50 kit doesn't mean anything if you stick a plain piece of maple on it. The blank and the kit also have to complement each other, and the fit and finish have to be above par.

What are the other sellers asking for their pens? Are they selling them at that price? Are your pens as good or better? You also have to know your sales venue as to what type of customers will be there. I used to do 3 church sponsored craft fairs. I paid my dues, showed up for 2 days knowing that my sales would be slow. But I also knew a few of my good customers were members of those churches and they would notice that I attended the show. I never regretted "wasting" those shows.
 
Top Bottom