How do you know what to charge for a rod with a decorative wrap on it? Say for example a 6'6'' Spinning rod with a cork grip and a fish wrap. Maybe $50 in parts alone.

David Dosser
Coshocton, OH

David - there have been many posts about this on this BBS and I strongly suggest you search for them using the search engine provided. More than that, there have been a number of articles in RodMaker magazine about this as well, and I strongly suggest you find copies and read them too.

What we charge for our rods depends on several factors:
1) The cost of the materials
2) The overhead costs associated with making a rod, stocking the materials, and having the equipment to do the work
3) A shop rate for anything like custom wrapping, which some folks say should be $10-per-inch, and some folks say should be based on an hourly shop rate (say, $20/'hr)
4) However much "clear" profit you want from your work over and above the costs listed in 1, 2, and 3 above. One rule of thumb is to doble your "real" costs. If it costs you $65 for 1, 2, and 3 above, then sell it for $130. Some folks say that regardless of cost, you should never make less than $100 "clear" prfit on a rod. So if it costs $65, you should charge $165.

Of course, if you want to do a rod for a friend, then leave off #4, above. And if it's a "pure" gift, don't charge anything at all for it.

We charge what our market will accept for custom rods. You get what you pay for, but the least of our rods is better than anything offered in the tackle shops, in terms of fit, finish, personalization, balance, weight, casting properties and fish-fighting properties, and guarantee and support.. We can demonstrate these things anytime a customer wants us to. We will do side-by-side comparisons without hesitation.

But ultimately, if the customer balks at the price, NEVER NEGOTIATE! You will be denigrating the value of your work. Set your prices so that your rods will sell, sure, but not to be competitive with the WalMarts or BassPro or Cabelas of the world. If a customer says the magin words - "well, I can get one like that at Wal Mart for much less" the answer is simply, "then go buy it at Wal Mart". And that's the end of the conversation.

You don't have to be rude, abrupt, or arrogant. You just have to do a little selling, but your rods should sell themselves. The guy looking for a "discount" price and who will argue the price is not your target customer. I'd rather give a rod to a needy organization for @#$%& than to sell one to a customer like that.

Uncle Russ
Calico Creek Rods



Edited 1 time(s). Last edit at 09/15/2008 10:08PM by Russ Pollack.

Well said .......

Thank you very much. That's some great advice. I guess I was a little scared of pricing the rods too high, but it really is a lot of work to build one (right).

David Dosser
Coshocton, OH

In addition, be sure to click on "Library" at the top and read the article penned on Sportfishing Excise Tax. It is real and it is applicable to your situation.

Russ, how do you find words to say something so bluntly, yet elegantly worded?

Also, keep in mind your personal ability when setting your pricing.

Thanks, Sean.

You cannot believe the hours of conversation Gary and Lib and I have had about this very subject. We've learned every bit of this stuff the hard way, as we've built our little business. We've agonized over every decision about what our prices should be, and stuff like "justifying" our price, (until we realized that the rods speak for themselves), and even about the reactions of various folks who have come to our shop. Along the way, we've learned to recognize all sorts of customers - or non-customers, as the case might be. We've dissected every sale we didn't make, just as much as the ones we did make, in order to understand what "works", and what doesn't.

I also have no hesitation about crediting Bill Stevens for so graciously passing on so much of his business knowledge here.

I don't know about elegant. I just know that "straight-up" is often more useful than politically correct.

Uncle Russ
Calico Creek Rods

ok elegant may have been the wrong wording, basically you got your point across without making anyone feel bad

And I too (like most if not all custom builders) would rather tell someone to go buy a rod they said they can get at [big box store] at XX price than build them one. It's not my interest to even remotely try and compete with big retailer marketing.

I like to hear "Yea, I got the rod and reel for 20 bucks!" Then next week you see it at the park, broken and in the garbage can.

David Dosser
Coshocton, OH

Personally I can never disrespect a 20.00 rod and reel. I grew up on them , and still have a few of them that I have used and abused for years. However, none have ever fit my exact wants or needs in terms of fit finish and feel. I get more gratification from selling a rod for too little to a guy who otherwise could not afford a custom rod. Because lets face it, a custom rod should be far higher quality than a 20.00 Wally's World special but the plain fact is that most anglers cannot afford one, at least in my area. If I price my rods much over a hundred dollars I just killed 85% of my target demographic. Now when my rods get out and sales start to spread it won't matter so much what the locals will spend but I would still like to see people in my area fishing with my rods, so I will keep building some rods for well under a hundred dollars, and just take the loss of profit when necessary.

I built a fly rod for a guy a while back who had never had a rod that cost over 20.00, he is a friend of my brother in law and would do anything for us but my BIL would not let me give him the rod, and the guy insisted that I make a profit of some sort off of it. So I sold it to him for 50.00 and told him I had less in it (I did not) but it was 50.00 he had to pay me out on and it took a month for him to pay me. But I don't think I have sold one to an individual who is more proud of what they received than this guy is. And that made me feel good.

I am fairly new to rod building but my point is that at times it is better to stay within a range where you can make a possibly smaller profit but more people can afford your product than to just target those who have a lot of money or are willing to spend a lot of money. I think this approach will gain me more satisfied customers and a better reputation in the long run.

I totally agree. The area that I live in is not going to pay what the rod is really worth. My dilemma is, should I just sell them and not make a profit for a while or use a formula to determine what to sell it for. I'm not trying to get rich on this, I just want the parts and maybe some labor covered so I can continue to do it. I really love to build rods and make fishing lures. The lures are located in two stores in my area and sell very well. They sell because I fish with them where people can see me catching fish with them. The problem is that it might be hard to sell even an $80 dollar rod in this area. There is an outdoor store here that will carry my rods, but the rods that they carry currently are $40 dollar rods. Do you think mine will sell when they are next to those cheaper rods?

David Dosser
Coshocton, OH

Some of your rods will sell just because they are hand made locally. I think they will easily sell sitting next to a 40.00 rod. The thing is, People are willing to spend a little more for something nicer and better, but it has to be within reach. At 80-100.00 it is within reach for a guy that will buy a 40.00 rod, he just may have to save for another week or two. Price the rods at 150.00 and he will see it as out of reach.

Russ gave the best advice that can be given. Charge what you feel you have to have to cover the overhead, materials, taxes, design time, head scratching time and actual work time. Strive to do the best work you can and let the rest of it take care of itself.

I will be the first to admit that I am a lousy businessman and an even worse salesman. Yet I have survived as an engraver for 20 years about 15 of that full time. Like Russ I have learned a lot from the school hard knocks and a lot of times survived literally by the grace of God.

Things to ponder on this issue.

1. If your local market won't support the worth of a custom rod, find the market that will. It takes work to build up a clientèle. You can't expect to hang out a shingle and have folks come in by the dozens to hand you business. I have one repeat customer in my state (one repeat customer in my whole state). I have engraving customers all over the world and right now have almost a year backlog. That did not happen by hanging out on Main Street in Festus, MO. It takes money and work to build a business. Get out and travel to shows, develop a good web presence, get your work in front of people and educate them as to why your rods are superior to whats in the sporting goods stores.

2. As Russ said learn to tell some customers NO. While you want to encourage customers you don't want to encourage bad customers who waste your bench time trying to finagle you into giving them a rod cheaper than you can legitimately make it.

3. Really look at your cost to build that rod. A friend of mine once wrote an article that showed that the average self employed craftsman has to charge a shop rate between $50 and $70 per hour for their bench time in order to make a $50,000 a year salary.

When it is all added up; Cost of workspace, percentage of property taxes on workspace if you own it, electricity, heat, water/sewer, accounting fees for taxes etc. , materials, tools, etc, etc. it cost you a whole lot more to make that rod than just materials plus time spent on THAT rod.

4. Figure up how much you need to make per hour. When you build a rod keep a stop watch on your bench and keep track of EACH step so you know how much time various procedures take (this includes any planning or design time spent). It won't be long until you can make yourself a chart of what to charge for various options. This will help you know how much actual time you spend on a rod. That time + actual materials cost (include shipping)+ 20% to cover those extra cost is a good basic formula to use until you get a better feel for what you can get once you have a repeat clientèle built. Please not this doesn't even touch the fact that self employed people often have to pay for their own health insurance like I do.

5. I don't mean to offend anyone nor presume to tell another guy how much he should charge but. I read on this forum and others guys who are charging $10-$20 an hour for a highly developed and experience skill. Hey guys that's nuts. A very good friend of mine is paid $17 and hour plus basic benefits for being the custodian/janitor in our church. I love Dale like a brother but his job does not require the kind of skill you all have developed. Your skill is worth a whole lot more than a mere $20 and hour.

My 2cents,

Ray

Ray Cover
My Projects Blog
[raycover.blogspot.com]

Ray's right - true enough, $20/hr is not a good return on your skilled time, unless you also charge a minimum shop rate, regardless of the actual time involved. That's what most pro craftsmen do - engravers, custom carpenters, gunsmiths, etc. If we flat-rate a job of work, it's because we base the estimate on that minimum rather than the actual time we know it'll take.

We've actually timed the work. We've been able to reduce our actual time on many tasks, but there's always exceptions to the rule and you can't assume you won't have a problem on any given rod or repair. The $20 minimum covers the overhead for that kind of thing. And then we add our general shop overhead onto that. So $20 + 30% is really $27, and that's still not where Ray would consider adequate - and he's right.

Take a look, sometime, at what the master engravers who do custom gun work charge. Take a look at their backlog (for the top folks, it's usually over two years). But wait - figure out how many jobs they can do per year. All of a sudden, you realize they're not getting rich. Well known, maybe even famous - but not rich.

And Cody's right too - we never complain about the $40 Wal Mart customer. We never denigrate their gear out on the pier or beach. NEVER. They love to fish as much as we do. They buy what they can afford, and by doing that they don't ruin the fun they have fishing. It's the ones that come to us and argue the price with the "I can buy it at "XXX" store for $XX" that we pass on. But heck, we get customers who CAN afford our rods who will argue the price, and we pass on them too. A word from experience - both kinds of these customers will never be a good reference. They will instead brag about how they "skinned" you. Ask yourself this - if your quoted price is negotiable, then what is your "real" price and how did you get there?

Uncle Russ
Calico Creek Rods

Excellent advice. I think my father would have said "Amen to that" You know, sometimes I have to stop and realize that I grew up using a fiberglass rod from Gibsons with a Zebco 202 and used it and caught fish with it for years. Why? Because that's what my dad could afford and he wanted me to fish. The first rod I built was built from a used old fiberglass rod. My dad sold it for $5 and it took me a week to build it; the old fashioned way. I had no wrapping machine. It was just my hand, the rod, and some rod varnish. All this really brings you back to the fact that a fisherman will fish with whatever he or she can get their hands on. I should be the same. I love to build rods. So if someone can't afford my rod then at least he looked at it and at least he will buy something else and go fishing; hopefully with his or her kids. God bless America! Thanks again guys.

David Dosser
Coshocton, OH