Advice on appropriate retail price for TM Alpha

[Burt25]

I recently turned a couple of TM alphas as gifts and I now have an enquiry from someone looking to order one.
I was wondering what the consensus is on an appropriate retail price? The Alpha kit is £11, pen blank say £3, overheads say £3, Time say 2 hours @ £25? Total : £ 67.

Does that sound reasonable? Also should a fountain pen command a bit more than a roller ball?

Would love to hear opinions on whether this is in step with what others are charging?

Thanks

 

[silver]

Well you have set off another great debate here Ian.

This has been discussed so many times about pricing pens. Search for pricing pens and you will find quite a few debates.

Your theory in costings work out and to be honest the most important thing is to "price it right for selling" and don't make a loss.

If someone is happy to pay that much then all well and good, but then there is always a little thought in the back of your mind of "could I have asked for more"?

There are some on the forum who make pens as a hobby and very often only make "break even" on the bits to make the pen, there is nothing wrong with that as its good therapy for them and keeps them mobile and an interest.

As for fountain pens, yes some would be able to ask for higher prices, some may not be able to sell a FP in the area they live..

Its all down to what you can sell and what custom you gain to be able to measure the market on selling pens, mainly down to experience.

Look forward to the replies.

 

[Bammer]

2 hours seems a long time. Walter has a spread sheet that would help

 

[Walter]

This is a complex issue Ian and one which leads to endless debates on forums and groups.

These are just my thoughts on the subject, my qualification for having them is that I am a retired accountant. Others may hold different views that may be equally valid.

If you are an amateur and not making pens as part of a business, then (in my opinion) the only thing that matters is that you and the person who is buying the pen agree that the price is reasonable. You need read no further.

If you are in business, then you need to cover all your costs and make a profit. Your £3.00 estimate for overheads will just not do in those circumstances, you need to actually measure and apportion all your costs carefully otherwise you will not know whether you are making a profit or a loss.

Once you know exactly how much it has really cost you to make the pen you need to add on a percentage for profit and that is your "trade" or "wholesale" price. Most retailers then add on at least 100% mark up so double your trade price to get retail.

OK, so now you have a figure that no-one will be prepared to pay? Well that is supply and demand. The actual price you can achieve is not determined by your costs but by the market you are selling in. If you cannot cover your costs or make sufficient profit to make your business sustainable then perhaps you need to look for a different market or stop trying to make a living selling pens.

 

[Walter]

2 hours seems a long time. Walter has a spread sheet that would help

That is true Brad, I do. Thanks for reminding me, I will post a link in the morning or sooner if I can find it.

 

[Burt25]

Well you have set off another great debate here Ian.

This has been discussed so many times about pricing pens. Search for pricing pens and you will find quite a few debates.

Your theory in costings work out and to be honest the most important thing is to "price it right for selling" and don't make a loss.

If someone is happy to pay that much then all well and good, but then there is always a little thought in the back of your mind of "could I have asked for more"?

There are some on the forum who make pens as a hobby and very often only make "break even" on the bits to make the pen, there is nothing wrong with that as its good therapy for them and keeps them mobile and an interest.

As for fountain pens, yes some would be able to ask for higher prices, some may not be able to sell a FP in the area they live..

Its all down to what you can sell and what custom you gain to be able to measure the market on selling pens, mainly down to experience.

Look forward to the replies.

I havent sold any pens- only made them to give away, so I really dont know what potential customers might expect to pay. I dont expect to turn this into any kind of business, but rather see it as a means to fund the purchase of more woodturning gear! . Just need to hear from others that this level of price seems reasonable or no?

 

[Penpal]

When you say the kit price for example does that include freight etc these and other missed costs are real.Scary thing is accepting orders that when presented may have been made from an outrageous timber or plastic blank maybe unsuitable for others in the event of the customer saying for instance (not what I imagined) etc. It is much safer to have a collection for sale and sell within these, a small price tag on each helps at sale time. I am sorry pounds are now unfamiliar to me as well as UK costs involved.

Fountain pens need a premium if you run in these pens and provide inks, nibs etc IMHO a different proposition altogether. I support Eamonn when he says do not make a loss.

Experience now is what you are seeking so many members sell on this site help should be at hand even in your area. All the best.

Peter.

 

[Burt25]

Tha is true Brad, Thanks for reminding me, I will post a link in the morning.

Im looking at the time element for all aspects of producing a one off pen, so in essence the following:

Time spent ordering / buying /collecting materials.
Cutting / drilling / trimming blanks
Turning
Finishing
Packaging (Ive ordered some card boxes and little business cards and would want to include a little card with some information on the wood used)

I cant see much change out of 2 hours work or am I abominably slow??

 

[silver]

The pricing is down to you Ian,

I am certain that if like me you sell pens then that will get poured back in to buying new stock or new tools.

So if you are happy with the price then I believe you may have the answer.

But remember you will need to guarantee the workmanship and pen for 12 months, so if the customer comes back you will need to make sure you have spares and are able to keep a customer happy.

To me it is something as simple as throwing in a free replacement refill as well. but remember that has a cost.:wink:

I am sure Walters spreadsheet will cover all this.

Its a minefield pricing pens, if you are happy, the customer is happy then thats everyone happy

 

[fingwe]

If you're not looking to make a business out of it, but may want to sell the occasional pen, your working out seems perfectly reasonable to me.

 

[Walter]

I cant see much change out of 2 hours work or am I abominably slow??

In my opinion 2 hours is perfectly reasonable for all of that, possibly even an underestimate, but as I said in my post above, if you are not running a business do you really need to get into this degree of complexity. All you need to do is a agree a price with your customer that you are both happy with.

I have found my spreadsheet, here is a link but the percentages can be changed to suit:

Dropbox - Copy of Pen Costings-1.xls

 

[silver]

Im looking at the time element for all aspects of producing a one off pen, so in essence the following:

Time spent ordering / buying /collecting materials.
Cutting / drilling / trimming blanks
Turning
Finishing
Packaging (Ive ordered some card boxes and little business cards and would want to include a little card with some information on the wood used)

I cant see much change out of 2 hours work or am I abominably slow??

Depreciation.. thats a good one. Bean counters love that one. don't they Walter?

But its something you have to look at, replacing the lathe, band saw and chisels.

 

[Bigblackdog]

My opinion:

if it isnt a business, dont worry too much about the costs and timings.

You know the kit price, you know the blank price. Your other estimates will be close enough. If it takes you 3 hours, then you are not having to pay somebody for the extra hour, you just have to suck it up. If the extra overheads are £4 not £3, who cares. In reality, for a one off, you will use a bit of glue, finish, sandpaper from your stash, so the cost is a few pence extra for each of your own pens and nothing much for this one off.

If you start selling more, then yes, look into it, but for this one off it probably isnt worth spending another hour costing it.

IMHO £65-£75 for a custom made pen sounds reasonable, but on the low side. You may be able to get a bit more, but if you are happy, then go for it.

 

[Burt25]

If you're not looking to make a business out of it, but may want to sell the occasional pen, your working out seems perfectly reasonable to me.

I would love to make a business out of selling my woodturning as enjoy it so much, but I know how hard it is to make decent money out of hand crafted items as we put so much time in and customers generally aren't prepared to pay. My wife has a craft business and with the hours she puts in, she is probably making less than minimum wage!

 

[Walter]

Depreciation.. thats a good one. Bean counters love that one. don't they Walter?

We do Eamonn but it matters not one jot unless he is actually planning to run a business.

 

[Walter]

I would love to make a business out of selling my woodturning as enjoy it so much, but I know how hard it is to make decent money out of hand crafted items as we put so much time in and customers generally aren't prepared to pay. My wife has a craft business and with the hours she puts in, she is probably making less than minimum wage!

Yes, craft business owners tend not to be billionaires. FWIW your original figure seems reasonable enough if all you want to do is cover your costs as an amateur. (in my opinion)

 

[Burt25]

Yes, craft business owners tend not to be billionaires. FWIW your original figure seems reasonable enough if all you want to do is cover your costs as an amateur. (in my opinion)

Thanks Walter, Ill run with a figure in that ballpark and see how it goes.

 

[Phil Dart]

My opinion is that you are on the right track Ian. And full marks for spotting the things that are nearly always overlooked when costing your work - ordering, even putting it in a case and posting it all have an impact on your time. The thing is that the more you make, the less time it takes - someone making living from selling pens has the advantage of batch production, in which case I would say that taking 2 hours requires some thought as to how you can speed up. Whereas to make the occasional pen, taking into account all the aspects you have mentioned, 2 hours does not seem unreasonable. All that means though is the profitability is affected, if the two makers at either end of that spectrum decide that market forces dictate the same selling price (which by the way, speaking for myself, I do not think is unreasonable for the pen kit you mention).

Contrary to some opinions, I do not think you should be undervaluing your time, nor seeing a poor return for your skills simply because it's a hobby only. The pen you make commands a value - that value does not change depending on your necessity to make a living from it. There are forces that do affect the value, but your status as turner is not one of them. Craft fairs are littered with woodturners who seem to think that if they sell their work for a song it's all they want and will cover the cost of their tools. They are generally the same people who say afterwards it wasn't a very good fair. The ones who value their time realistically and who charge a sensible price for their work are generally the ones who succeed.

 

[Walter]

Contrary to some opinions, I do not think you should be undervaluing your time, nor seeing a poor return for your skills simply because it's a hobby only. The pen you make commands a value - that value does not change depending on your necessity to make a living from it.

I agree. the value is determined by the market. What does vary is the individual's perception of the value of their time and what may be an acceptable return for an amateur may not suffice to sustain a viable business.

 

[Dalboy]

There is someone who I see at many places selling woodturning that says "You are too dear and will not sell much at that price", quite often on the next stall to me but at the end of the day I sell more than him. I refuse to lower my prices if anything I have just increased them. He does not sell pens but a selection of woodturning.