What will we do.

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Smitty37

Passed Away Mar 29, 2018
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I don't know how many of you follow economic news very closely but my guess is that this year we are going to see a serious increase in the cost of persuing our hobby or pen making business.

Without going into the reasons why, it looks like we will be seeing serious increases in price for most of what we buy from Asia be it Chinese or Taiwanese. Perhaps also for things we get from Europe.

The question is, if it happens what can/should we (as pen turners) do to prepare? Is there anything we can do?

If it happens, a lot of other prices will increase as well, since our pens are discretionary spending will out hobby/business be hurt more than other businesses (i.e. Walmart, Target, etc)

Your thoughts --- please don't go into politics just your thoughts on what we can or should do if we are hit with a sudden increase in prices.
 
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Since you are talking about cost increases they must be passed on by all at each level. Most sellers have margins which are modest and they can not afford to buy replacement kits that cost too much more than the last ones without considering increasing their product prices now.

Some of us have been stocking up for future use and can live off that surplus for a short time. My personal surplus covers more than just pen kits and wood as my wife likes to point out.

I think that you are right about the Chinese economy being in a major state of uncertainty. Prices are jumping over there and their economy is showing major stress at this time. It is not nice to live in interesting times or uncertain times.
 
If prices increase beyond what I'm comfortable with, I doubt I'll give up making pens and other items. I do think that I'll be be forced into coming up with creative new ways to make them. Instead of buying asian kits, I'll start going kitless or perhaps looking to US made kits. I already make blanks but I may have to get more creative there also. I'm not a production turner so my sales may not be affected much at all. I'm more of a hobbyist with a decent stock pile than a show going salesman! I keep thinking "someday I'll set up a table".... Just haven't gotten around to it! When I do, hopefully the market will be better better.
 
When I started making pens in the mid nineties, a slimline kit sold for over $5. There were only a few places to buy them. "Plastic" blanks were also about $5.

Since then, Asian competition has driven prices down. But we SOLD pens, based on the above prices with a much more valuable dollar. So, are you saying today's penmakers don't have the same sales skills we did??

The cream will rise.

As the signature line goes, "If you believe you can succeed or you can't, you are correct!!"

The better sellers will weed out the herd. That is probably a GOOD thing!
 
ed4copies said:
When I started making pens in the mid nineties, a slimline kit sold for over $5. There were only a few places to buy them. "Plastic" blanks were also about $5.

Since then, Asian competition has driven prices down. But we SOLD pens, based on the above prices with a much more valuable dollar. So, are you saying today's penmakers don't have the same sales skills we did??

The cream will rise.

As the signature line goes, "If you believe you can succeed or you can't, you are correct!!"

The better sellers will weed out the herd. That is probably a GOOD thing!
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No,I really have no idea about selling skills Ed - I just asked a question. :tongue::eek:
 
The question is what will we do. My answer is nothing. Everyday of the week things rise and we cope. You don't give up your hobby because of a few pennies here and there. Charge more for your product. Like the business world goes pass onto the next guy your expense. Continue to look for the best prices available for what you want to buy. I see increases in lumber every week. You don't stop buying.

Someone here just wrote about coming up with creative ways to make blanks and pens. DUH wake up man that is what you should be doing anyway. Think outside the box. Stop being that everyday humdrum pen maker. If you are doing this for a hobby to give away your pens then stick in the rut but if you are serious about selling your product then step outside the lines and step up your game and create. Don't mean to pick on you but you printed those words. This message goes for everyone. Be Creative man.

Just my opinion:smile:
 
I think Ed's point is for most of us, we are not competing with the Wallyworld pens here....We sell our pens based on the story we sell of how it's hand made, the interest of the material, the quality of the parts used, etc. Our pens sell not because of the price, but because of the value WE add to it. That is done by the selling of our story, the better the story the better the asking price. If one doesn't sell the sizzle, the steak won't taste that good. I don't think a few dollars increase in a kit will change my profitability one dime.

Smitty37 said:
ed4copies said:
When I started making pens in the mid nineties, a slimline kit sold for over $5. There were only a few places to buy them. "Plastic" blanks were also about $5.

Since then, Asian competition has driven prices down. But we SOLD pens, based on the above prices with a much more valuable dollar. So, are you saying today's penmakers don't have the same sales skills we did??

The cream will rise.

As the signature line goes, "If you believe you can succeed or you can't, you are correct!!"

The better sellers will weed out the herd. That is probably a GOOD thing!
Click to expand...
No,I really have no idea about selling skills Ed - I just asked a question. :tongue::eek:
Click to expand...
 
Ever thing goes up: with the exception of my retirement check; fewer trips to town, out of town to visit family, fewer steaks off the grill, now it looks like fewer pens for my charity's..................
 
Just to add to the above comment, here is one thing I did to help sell a pen in one of the galleries I sell in. This is also on the gallery's website. This pen sells for $80.00 of which I get $50.00. I have probably $15.00 into the pen. The "flyer" took all of about 20 minutes to do and about 35 minutes in making the pen. If the kit goes up a buck or two, I won't miss out on much. If I were asking $30.00 for this pen as many do, I may have to raise my price.
 

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Smitty, when gas was $1.00 a gallon we drove to work and bitched about the price of gas, but we still used x number of gallons a week and most of our cars got 10 MPG, (.10 a mile)today most cars get 25MPG, we pay $3.50 a gallon (.14 a mile) and drive more than ever. We all adapt to today's prices. The free market place will determine our prices and those that make pens, take pictures, wear tennis shoes or use any other product we use in the USA that comes from China or any other country will continue to do so.
 
Well my pen material costs are at the bottom of my priority, my company is in open enrollment and my rates for me and my kids went up 35% this year. Who coulda seen that coming......
 
Well if you think about it maybe this will increase business for some of the american made products. It may come to the point that it is cost effective to make more of this at home? I will not worry about the cost increase, I will buy more of what is made here. Lazerlinez here we come make sure you get ready.
 
I sort of think it's comparing apples and oranges because the way gas is priced is kind of unique. I don't think any othe commodity is priced the same way. But......

:smile:When gas was $1.00 a gallon, I drove my vehicle 17,000 miles a year now with gas $3.50 a gallon I drive my vehicle about 5500 miles a year. When gas went over $.50 per gallon in about 1974 I was driving a Ford LTD Station Wagon with a 428 cid engine - it got about 11 miles to the gallon down hill with a tail wind. Since then most of my vehicles have averaged over 20mpg which is what my current vehicle gets. My wifes have averaged a little better (I drive pickup trucks and she drives a car)

btw it's only been about 10/11 years since the last time gas was below $1.00 here in Delaware and my vehicle was getting a lot more than 10 miles to a gallon. Also adjusted for inflation the price of gas is only about 20% - 30% above the average since 1918 so while it's expensive right now it's not that expensive:smile:

OKLAHOMAN said:
Smitty, when gas was $1.00 a gallon we drove to work and bitched about the price of gas, but we still used x number of gallons a week and most of our cars got 10 MPG, (.10 a mile)today most cars get 25MPG, we pay $3.50 a gallon (.14 a mile) and drive more than ever. We all adapt to today's prices. The free market place will determine our prices and those that make pens, take pictures, wear tennis shoes or use any other product we use in the USA that comes from China or any other country will continue to do so.
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I've always thought that foreign pricing of manufactured goods will ultimately even back out with prices of US manufactured goods as the lifestyle and cost of living rises their new found income from those jobs and functions that left the US. At that point we'll be more of a world economy rather than a US economy vs China economy vs India, etc.

Will this happen in our lifetime? Maybe not because changes of that scale take decades to occur, but I do believe it will ultimately happen.

As far as how all this affects the pricing of our pen components and selling of our finished products, we'll simply have to adjust pricing as the cost of materials increases just like happens in every industry. And at some point based on my view of the distant future we just may have more sources close to home as that cost of manufacturing evens out over time and the added cost of shipping becomes the price differential.
 
When the cost of importing pen kits rises to a tipping point then maybe some American
companies will take note and produce products.
It won't take too much more and I'll be out of the Emperor game,so if they price themselves out of the market it will just make other options more competitive.
I can make a Sterling kit just as easily as a plated kit and if I'm going to spend over $100 a kit I may as well go American Sterling.
 
The old sales adage is still true, "The customer pays for everything."
On the other hand, this just in from London:

"A new report, the YachtWorld Market Index, set to be released at the upcoming Tullett Prebon London Boat Show in January will analyse trends in the boating industry, worth £3.16 billion annually in the UK. Whilst many sectors have fallen foul of the recession, the report will show that the UK boating industry has emerged relatively unscathed. This is primarily due to the fact that boaters, like many dedicated to their leisure pursuits, are very unlikely to forfeit their passion even in times of economic uncertainty.

Despite two thirds of consumers still worrying about the state of the economy and being 'very cautious' about spending on non essential items*, boat owners continue to buy , mostly from pre owned brokerage stock.
The value of boats has not been adversely affected by the recession either; boats have held their value well with a rise in people opting for brokerage boats versus new models. "The large majority of boat buyers are fairly prudent with their purchases opting for good quality pre owned boats as opposed to higher value new boats which will depreciate rapidly by comparison." remarked Ian.



Whether it's yachts or pens of high quality your market and marketing may adapt a little but the craft will survive.
My 2 cents.
WB
 
Where is your supply of used pen kits going to come from?:biggrin: If you read what he said carefully, he does say the new boat market has slowed with boaters opting for pre-owned....they are already built so the boat building industry has slowed.

It also indicates that there are enough used boats on the market to fill demand....meaning there are as many people getting out of boating as getting into it. Not the best sign either.

All in all, it looks to me like the writer is "whistling past the graveyard" trying to show the best side of a bad market. Not a terribly unusual thing to do, our politicians do it all the time.
 
I used the recession as an excuse to STOP fixing boats. From 2008-2010 we did a lot of warranty work on high dollar brand new boats. I said then just as I say now the recession did not hit some people. They benefited from it.
 
Parts prices are outpacing the overall rate of inflation. That pretty easy to recognize, when a Jr Statesman that cost $26 in 2010 costs $39 2013 dollars. That's about a 50% jump. About the only "staple" around here to see more than 50% is gasoline.

BUT, at least so far this year, demand for our work has been brisk, AND the margins are getting back close to the profit margins of 2007 and 2008.

I guess I'm a "glass half full" guy, but the market for luxury and impulse buys seems MUCH better, here. Still not a "recovery", but better. With rising gasoline prices, increases in shipping rates and potential customers hanging on to every nickle, I look forward to a brisk spring season. The winter season was good for us. But the last two years have been slow.
 
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THERE IS NO QUESTION that prices will be going up. In economic classes they teach us that approximately 50 percent of the cost of most products is shipping. As fossil fuels continue to rise, the cost of shipping continues to rise. EVEN IF suppliers could obtain raw materials at 2008 prices, they'd still have to pass on shipping.

Take our hobby/business, for example. The raw materials must be shipped to the primary manufacturer, then the manufacturer must ship his products to the plating company, then (with any luck) the plating company ships directly to the company (Dayacom in this example) puts all of the different pieces into the little bags. The Dayacom ships the "kits" to a "middleman or broker" who then sells and ships them to distributors such as CSUSA, who then sells and ships to penmakers who make pens and then, guess what..... The penmaker then sells and SHIPS to the end users. Even IF the makers could hold the line on labor, material costs AND EVEN INCREASE EFFICIENCY, the price HAS to go up because of the record costs of fossil fuels used to ship materials and products.
 
Smitty you are fishing for something. What is that you want to hear??? I think everyone that has answered your question the way you posed it has agreed there is nothing we can do about price increases. We accept them and either pass them on or find another business slash hobby. It is the way business works. Do we all like it hell no. But everyone from the buyer to the maker understands. It has been going on way before you or I were alive and will continue. The big rub alot of the time is the salaries do not keep up with inflation.

But I think you know all this being a business man yourself. I feel either you are trying softly let people know your kit prices will be increasing.:smile: Am I off base here???
 
I don't make money with pens. I sell a few but making money isn't my primary goal with this hobby. For me I'll head more in the custom direction. I'll continue to buy kits until the price gets completely crazy. There will be some styles I won't make unless someone wants that style and price of pen but that is even true in the present. As prices of some styles have already headed for the stars vendors have responded with cheaper different styles. Even with prices going up I won't sacrifice durability for price. The prices of materiel will always go up sales overall seem to be on the rise as well. This was never a cheap hobby to start with.
 
In my area the oil money fuels the economy, there hasn't been a shortage of buyers or many cheap buyers. If parts prices increase, so will the selling prices. Not that a price increase is a problem, I keep a lot of inventory on hand, I probably could go for a year or more without buying pen parts or blanks. From reports the local boom should be good for another 10 years. By then I should have retired for my 3RD time.
 
jttheclockman said:
Smitty you are fishing for something. What is that you want to hear??? I think everyone that has answered your question the way you posed it has agreed there is nothing we can do about price increases. We accept them and either pass them on or find another business slash hobby. It is the way business works. Do we all like it hell no. But everyone from the buyer to the maker understands. It has been going on way before you or I were alive and will continue. The big rub alot of the time is the salaries do not keep up with inflation.

But I think you know all this being a business man yourself. I feel either you are trying softly let people know your kit prices will be increasing.:smile: Am I off base here???
Click to expand...
I'm not fishing for anything I just posed a question based on what I see happening in the economy here and abroad. I know what my opinion is but I wanted to see how others were thinking about it, if they are thinking about it.
 
Smitty37 said:
jttheclockman said:
Smitty you are fishing for something. What is that you want to hear??? I think everyone that has answered your question the way you posed it has agreed there is nothing we can do about price increases. We accept them and either pass them on or find another business slash hobby. It is the way business works. Do we all like it hell no. But everyone from the buyer to the maker understands. It has been going on way before you or I were alive and will continue. The big rub alot of the time is the salaries do not keep up with inflation.

But I think you know all this being a business man yourself. I feel either you are trying softly let people know your kit prices will be increasing.:smile: Am I off base here???
Click to expand...
I'm not fishing for anything I just posed a question based on what I see happening in the economy here and abroad. I know what my opinion is but I wanted to see how others were thinking about it, if they are thinking about it.
Click to expand...

I guess no one is thinking about it because it is an everyday occurance. But good luck to us all in the fiuture.:smile: This is the future or did I just read that the world ended and I did not get the memo:eek:
 
Smitty37 said:
I don't know how many of you follow economic news very closely but my guess is that this year we are going to see a serious increase in the cost of persuing our hobby or pen making business.

Without going into the reasons why, it looks like we will be seeing serious increases in price for most of what we buy from Asia be it Chinese or Taiwanese. Perhaps also for things we get from Europe.

The question is, if it happens what can/should we (as pen turners) do to prepare? Is there anything we can do?

If it happens, a lot of other prices will increase as well, since our pens are discretionary spending will out hobby/business be hurt more than other businesses (i.e. Walmart, Target, etc)

Your thoughts --- please don't go into politics just your thoughts on what we can or should do if we are hit with a sudden increase in prices.
Click to expand...

Essentially we as turners are creating art, even our pens are art, and art has always been a discretionary or spur of the moment/impulse purchases from the buyers, when the costs to make pens reaches a point where it's not profitable, I will likely move on to other items that will sell more readily and have a lower cost factor. I gather a lot of my wood from local sources and most often without cost other than the gas to go pick it up, so bowls are becoming my most profitable item.
 
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