Whats the fairest and most attractive way to price your labor? A percentage of the material costs?, flat rate per rod?. per foot?, per guide?, per hour?, ......

Tom did an excellent artical on pricing in on of the past RMs. He will probably chime in with the volume and availability.

How much is your time worth? If you have a "real" job figure up your hourly wage. Would you work for less - especially when you're using your hard-won rodbuilding skills?

Shop rates seem high when you go to the car dealer. But the work they do is based on a "standard" time for each task. The price they get for the houry rate is the total cost of the employee, plus at least double that for overhead and maybe even double that again for profit. But they have the skills, the parts, and the shop.

Rodbuilding is as muchart as science, as much artisanship as any other - woodworking, for example.

What would you pay for a rod you produce, if someone else made it for you? Now take away the cost of the blank and parts, and at least double that for overhead. What have you got left? Divide that by the number of hours it took you to build the rod. That's your hourly rate. Are you quite happy with that, or does it seem low?

Nobody can answer this for you and it wasn't meant as a challenge - more as a supplement to Tom's writings.

Uncle Russ
Calico Creek Rods

What is your labor worth and what is your local market willing to pay? Only you can answer that... personally, I generally charge per grip and per guide, plus materials and buttwrap, whether they want a buttwrap or not.

Whether somebody wants a $20 dollar blank or a $200 blank, my labor is the same. Charging a person based on component cost is terribly unethical to me. It doesn't cost a builder more to build on a high end blank than a low end one. work is work, pleasure is pleasure. Cost of material shouldn't enter the equation. Charge for what your labor is worth.

Well I be ... apparently I am now unethical along with more than a few others on the board.

I am going to go out on a limb here and guess that you don't have 10K or more tied up in inventory either. I am going to go really far out on that same limb and assume you don't operate as a profitable business. I have to make a return on my investment, period. The manufacturers do, the distributors do - But in your eyes a dealer/retailer is NOT supposed to?

I have to pay taxes on my inventory at the end of each year - tangible property tax. I have to pay to have space for that inventory. I have to forgo any interest I could have earned on that money had it been sitting pretty in a CD at the bank. I have to count that inventory, occasionally to make sure my books balance and at year end for taxes. I have to provide security for that inventory at a cost - believe it or not, there are people that would like to take MY stuff and not pay.

I mark up my components a fixed percentage, add a small amount for shipping expense, add another small amount for consumables, add yet another small amount for "warranty funds", add my fixed labor charge, add any "labor" upgrades and finally add $10 for the FET. Now we have a price that can be quoted. I don't feel like I am giving anything away, that surely isn't my intent - but I also don't feel like I am "terribly unethical".


Mick McComesky Wrote:
-------------------------------------------------------
> Charging a
> person based on component cost is terribly
> unethical to me. It doesn't cost a builder more
> to build on a high end blank than a low end one.
> work is work, pleasure is pleasure. Cost of
> material shouldn't enter the equation. Charge for
> what your labor is worth.

If your intention is to do this as a business, the you should charge what the market will bear. It may take some time to find out just what your local market will stand, pricewise, but it can and should be done. I like to think that if you make every sale, you're selling for too little. If you don't make any sales, you're asking too much. When you sell most, but not all, your prices are about right.

When you make a sale, you are not selling parts and labor - you're selling a fishing rod. I cannot imagine selling a rod, even a the simplest one, and not making a minimum of $100 on the sale.

The entire issue of rod pricing is far too complicated to be covered in message board posts. There are just too many things to consider to really be able to do it any justice on a forum of any kind. The RodMaker Volume 8 issues numbered 3, 4 and 5 have in depth articles on pricing custom rods. They include a lot of things related to your actual cost (this is far more than just blank and component costs) along with sample pricing for a wide variety of rods produced by custom rod builders from different geographic locations. You'd almost surely find these helpful.


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It may be prudent to develop a business plan before you decide on individual rod pricing.

What is/are your target market(s) -

What is your actual cost basis -

What are your immediate goals - to learn - cost recovery - establish brand loyalty - expand product line - increase volume - make a profit -

What are your long term goals - continue enjoyment of craft - support yourself and family - cover all direct, indirect, inventory, casualty and overhead costs - make a profit - increase staff - survival - retire to Cabo -

The real tough thing about custom building is that there comes a point in time where a "forced" ramp up in pricing will completely destroy your volume - think long and hard before you low ball the first one out the door.

Giving away your time and talent is one thing - giving away your money is another -

Really think this thing through early - you will have a ton of customers if you are priced too low and they will put you in the poor house! They will want to buy rods for what you sold them last year and when they bring the broken one back and want a free replacement you may find your self in a place you wish were quite different.

The series of articles in Rodmaker should be carefully studied.

Gon Fishn

Question is ,,, can you compete with Wal-Mart ?

A very small percentage of fishermen want or need a custom rod, even a smaller percentage want to pay for one.

I am sure there are a few on this forum that make their living building and selling custom rods,,, but I am fairly sure it is a VERY small percentage of readers and or contributors..

Making a rod for a friend and being paid for it is a different issue.

It's important to know your market. Assuming you want to sell custom rods as a business (part time, full time, occasionally, etc.) you want to focus on the part of the market that is likely to buy a custom rod in the first place. Most of the folks who buy the $50 and under rods aren't ever going to be good candidates for custom rods. It's not cost effective to worry about educating them on the benefits of custom rods.

Instead, you focus on guys that are already buying rods that cost a good deal of money, say, $150 and up. They're already paying a premium to get what the want or believe to be required to do what they want to do. At that point you're no longer dealing with folks who have to be reprogrammed into paying more for their rods. This leaves you free to focus on other performance enhancements which the people buying the more expensive rods are far more likely to be open minded about.

.............

Thanks for all the advice. I just want to be able to quantify how I set my prices. I always want to be treated with fairness and honesty and want to treat perspective customers the same way. I guess I'll be buying the rodmaker back issues.

In a closing thought,,, and I know it has been gone over before on more than one occasion: I price my rods by the piece, in other words, if it has 6 guides I charge X $'s per guide for wrapping, this includes the guide, ( it cost me the same amount of time if I wrap a guide that cost me $1.20 or $10.00. I charge X $'s to install a preformed grip and stock reel seat. As your experience increases your speed increases.. so do not limit yourself to a $/hr situation,, #1 no one will pay it, (I was a carpenter, Chicago area , in excess of $35 / hr. you think someone is going to pay me that for a rod??) #2 your going to be cheating yourself in the end, when your faster at building a rod.

The other part of the equation is the materials,, your cost, your profit/overhead. Normal margin in any business is 40%. So, you can pretty much go from there..

I remember talking to Mark Crouse once and asking how to charge, he charges so much to remove a wrap and so much to do a wrap. Mark may be someone to contact, as he is free giving with his knowledge.

In closing,, I recall some advise my mother got from the people she bought her restaurant from, they told her, regarding (not charging friends and relatives for food), " FRIENDS ARE FRIENDS, AND BUSINESS IS BUSINESS".

Hope this helps.

I usually don't post to a thread more than once but we just went through a week where this exact issue - or problem - hit us right between the eyes.

We have accounts witha couple stores. One is extremely well known, and has boththe high end and low end customer types. The other is a small local bait shop. Both wanted the same kinds of rods for the coastal market.

The deal we made to crack the market was that the stores didn't pay until the rod sold. Just that simple. We figured out our costs (as described so well by a bunch of folks above - and BTW, my ethics must also be questionable as regards pricing parts - and added the store's margins and arrived at a price.

We closed the smaller account this weekend. In four months, they sold not one rod. In fact, they used our rack as extra display space. They claimed no one wwould pay the price, especially since most of their customers were buting $59.95 major brand rods. They made no attempt to discuss the rods or actually sell them - they just sell off the rack. They did not know that the literature on our rack contained a warranty. They had no knowledge of why our rods are designed as they are. They wanted more rods - preferably all the same just different colors. Bottom line - they had no investment in the process of selling the rods. As a last ditch attempt to save the account, we offered to build rods that would sell for $99.95, with a cost that still allowed us a profit, but that the store had to actually pay for the inventory. That was the deal breaker - they had no intention of paying for a local "brand", no matter what the potential margin was.

The other store has not sold any either. We plan to ask to a re-education of their staff, and also a pay-for-the-inventory deal. We have changed our literature to a much more assertive/agressive presentation of what our rods are "about". We struck a responsive cord with another store and before we could talk deal the offered terms that included an actual invoice on delivery. They want a variety of rods at the higher end but expect to make the "real" money from a portion of "pure" custom orders that come through them. They want us to educate their staff, and do "event" with them to demonstrate and explain - i.e., sell - our rods. Quite a difference.

A potential customer told us, this weeked, that he does to a shop on the ocean that has "hundreds" of surf rods in stock. They let the customners take demo units out to the beach. Then the customer comes back in and either buys the rack rod (new or used) or calls the maker for a custom order, usually, the same as on the rack but in different colors. The rack rods are all made by the same local maker.

So there you have stories about pricing, marketing, and selling your rods. Not hard facts or formulas, but real parts of this business regardless of price.

Hope it helps.

Uncle Russ
Calico Creek Rods

Russ this is a very very complex situation. It may be more about the cash flow than the sale of consignment rods to the guys that own, lease or rent the storefront. If a sale is made from the store all the cash coming in for that sale may be needed to satisfy the financial side of the books for the day. He may be in a situation that if he sells one of yours and pays you your share that he will be unable to pay the light bill for the day. The ones you really need to worry about are the ones that sell your rods and do not have enough cash left to pay for them. There is a lot of difference to the store owner in being able to utilize all the proceeds of the sale in his cash flow than to pay a percentage of the individual sale to a vendor. The real solution to the problem is for the builder to own, rent or lease the storefront to sell his own work product directly to the client. If you can figure out a way to solve this issue I am quite sure that a lot of us would like to know how it was done.