Hey, if this is out of line please delete it.

Just curious, having built something way out of the ordinary for me. That and looking over the latest catalog and seeing prices for a certain type of rod has me wanting to ask.

What type of rods offer you the best profit margin in a build? I'm not talking about fancy thread work or feather inlays and hand crafted grips. More like do you do better, considering parts and labor, on a spinning rod, conventional rod, offshore rod, bass rod, fly rod, etc.

Russ in Hollywood, FL.

For me, offshore and fly were the most profitable.

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

Hi Russ,

I think it is based on how you set up your charges. If you buy wholesale and sell MSRP then the more expensive components on the blank will generate more money. Same if you are building on a $100 blank versus a $20 blank.

I have not forgotten to answer your PM. Just need some time.

Capt Neil Faulkner

I only offer inshore and light offshore spinning to the public for purchase. Most definitely, it is the permit and tarpon rods (heavier) that offer the most profit ... immediate and total. The rods are more expensive (heavier blanks, seats, titanium alloy guides) which provide more immediate profit AND the "warranty" returns were much lower (harder to break a 50-65# class rod with heavy-duty DF guides). In addition, as a Daiwa and Shimano Top-Tier dealer, the accompanying reel sales are more profitable on the heavier rods - since it costs quite a bit more to get a larger reel with a truly capable drag and gearing.

For me, it's fly rods, and in particular, spey rods and switch rods. These are more "method specific" and command a higher price. On the less profitable side are salmon/steelhead/sturgeon boat rods. Lot's of serviceable rods out there that can sit in a rod holder. The more an angler is dependent on the one to one connection with the rod in terms of "feel" and sensitivity, the more they are willing to pay for a rod designed just for them.

The new Edge Rods by Gary Loomis fit in this category where salmon and steelhead drift rods are going to command a much higher price and with Gary's reputation, they will be outstanding rods. This market is sort of narrow, however.

Terry

What is this profit of which you speak? ;)

Ron,
Profit is normally considered the money that is made after paying costs - including labor on delivering a product to a customer.

If you are a rod builder, where building rods is your only livelihood, you need to make money to live a decent life and be able to put money away for retirement.
So, you take every part of running the business, from buying components, paying the costs of buildings, and real estate, paying taxes and insurance, paying labor costs, and any other related costs that are part of running the business.
Then, after all of the costs are added up, including the cost of labor that is being paid to your self - any money that is left over is the profit for the business, that may be banked or saved for the future.

and

[en.wikipedia.org]


Take care
Roger



Edited 1 time(s). Last edit at 02/25/2012 11:43AM by roger wilson.

I don't build for profit, just for myself. That leaves me paying retail and of no threat to you guys. I'm just curious is all. The majority of my builds would fall into the 12-30# class offshore type.

You can build a trolling rod on a uni-butt, throw on a leather foregrip, and wrap a few roller guides without a lot of labor. The rod will look its part and command a decent price as a comparable off the shelf offering isn't cheap. I can see decent profit to be made when buying parts at wholesale. Such rods require a certain amount of time in thread work as butt wraps are expected.

If I build a spinning rod on a St. Croix blank chances are high you could buy the factory wrapped rod for the same or less.

A certain catalog arrived the other night, and as I was thumbing through it, my daughter asked me why I was building a fly rod when I don't fly fish. Reasonable question from the non-addicted. I replied I couldn't pass them up for the price and showed her the catalog with page after page of 500-700 dollar fly rods. The blanks, handles, and reel seats aren't cheap but one needn't put much labor into them. The guide wraps are minimal, often the same color as the blank with a simple single trim band. There are no butt wraps, just a decal. These rods were typically priced at least twice the going rate of the retail price of the blank. A far cry from that St. Croix spinning rod!

Even though it was my first attempt I found it quite easy to build a fly rod in an afternoon. It just seemed to me that even if you spring for a top of the line seat, grip, and rec guides it wouldn't be hard to see a couple hundred profit for a few hours work. It made me feel like I'm putting way too much effort into some of my builds (in relationship to market value). For example I recently did some 15-30# tri-flexs as a gift to a friend. He paid for parts. I hand fitted full length graphite arbors. It has a slick butt, perfection ball gimbal, channel lock reel seat, 9 virtus guides on a 7' blank. Full underwraps, 4 thread colors 3 of which were metalics. Three coats of lite build threadmaster, etc. I came to the conclusion that any fair price (to me for my labor) would be well above what I'd be willing to pay for the rod....LOL!

Russ in Hollywood, FL.

Russell,

The question you asked has many variables, for my answer (as above) with others. I build a specific line of rods for the area I am located in which is the lower Columbia River. Salmon/Steelhead/Sturgeon rods are the specific line of rods I build. Mostly Salmon rods for boat fishermen. The reason I mentioned this, is because it dictates the components and blanks in specific I use that are cost affordable then profitable for me to build. In my experience with making a profit! Is having something you can do that will sell its self to the customer. This means, what do you have to offer that makes it worth the money the customer is willing to pay, that makes his new rod unique from any other. You have to be able to read your customer's individually and regionally in respect. This is hard for the beginners but can be done with diligence.

I suppose an example (scenario) would be necessary here to help with my point! If you have a customer who wants to spend, lets keep this in true numbers here shall we! $250 for a nice Salmon/Steelhead rod 7' foot range thats a reasonable amount someone would pay at a show for a affordable custom rod within ones means. Now I am going to ask everyone here who is willing to take the time to answer. How would you make a $100.00 Profit on this customer? I could make a $100 profit on this sell easy, as I would think many on here could do. There are no rules on how one could do this its all about what the customer! He wants that signature rod to fish with but he doesn't want to pay for the blank then components and labor. But he has an old 7 foot Loomis thats out of action he paid $198.00 dolors for and is willing to use this for his blank option. The rest is history here for most of us, you don't always have to use a new blank for the job and even if you did, you could still by an affordable equivalent blank for this build and still make an above $60.00 profit done right. But keep in mind Your not only making money your making a life long customer and reputation to boot even if you have one already. One more never hurts in my eyes. Have a great day folks!

Rick H.

rwheil@msn.com

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Russell,
Points well stated.
Compare rod building labor to labor costs being paid in other industries.
The fast food industry pays minimum wage of about $6.50 per hour.
A carpenter gets about $34 per hour.
An auto mechanic gets about $30-$40 per hour.
A plumber gets about $65 per hour.

So, if you look at skill levels, it would not be unreasonable to compare an "excellent" rod builder to some of these other vocations.

So, lets go mid range and say that you charge $40 per hour for your rod building.

Now, take your price of components, add your labor at $40 per hour and this should give you the market price for your rod that you are building.

Take care
Roger

Thanks gentlemen. I understand this is your how you put food on the table and I appreiate the honestly. It seems I'm not far off as fly rods and offshore rods seem to be the most profitable to others too.

So having just knocked together my first fly rod I'm jonesing to go get a reel and line and try to teach myself how to cast. I started with my least powerful and cheapest blank, a utmost closeout 5 wt RX7. Its a decent blank but nothing special (IMHO) and I think it is true to its line class. Planned use is strickly fresh water for pan fish and whatever bites. So I'm thinking cheap line storage and a WF5F and I'm good to go. I also bring an unbuilt 6 wt RX8 that I do think will be special and perhaps fish (way?) beyond rated weight. I wanted advice as maybe I should spring for a better salt water capable reel and share it between the two rods. Was thinking reddington rise or lamson konic for 6 wt but feeling like they are overkill for a 5 wt bluegill rod.

Get this. The guy refused to sell me anything. Said I must build out the 6 wt. and come back to meet his guy that gives casting lessons. Claimed my workmanship and blanks were of too high a quality for him to suggest anything, including a line. Despite 25 years of fly fishing experience he felt his expert was needed to personally cast my rods before he would consider selling me a line leave alone a reel. I was pratically begging the guy to sell me something. It was kinda hysterical but I reckon I should feel complimented. Maybe I just found out fly rods are my niche??? I'll have to actually try on this 6 wt. build. The understated look isn't quite my thing. Too bad I don't feel the UL3 reel seat I bought is up to the task and the ones for the 9 & 12 wt. are way too much. I need a nice, cheap, all aluminum UL2 seat for a recessed grip.

Russ in Hollywood, FL.

Forgive my ignorance, but could you tell me what aPermit rod is?
Thanks

Permit are a member of the jack family. In Florida they are often fished for "on the flats" in water depths measured in inches. I don't know the Florida record weight offhand but I'd guess around 50 pounds. They are very good eating and very tough fighters. They are somewhat rare and considered a real prize.

Russ in Hollywood, FL.

Its fairly simple really but there are 2 types of profits.....profit to do the job and "profit margin" on the job.
the profit to do the job can be "hidden" a lot easier using very expensive components and by building big game rods,,,however saying that, the profit margin on these big jobs is very minimal...
on the other hand, a very cheap rod with cheap components has an incredible profit margin..

Selling Price minus Cost of Materials equals Gross Profit Dollars (GP$)
GP$ divided by Selling Price equals Gross Profit Margin (GP%)

Cost of Materials plus Operating Costs equals Net Cost
Selling Price minus Net Cost equals Net Profit Dollars (NP$)
NP% divided by Selling Price equals Net Profit Margin (NP%)

Allocation of Operating Costs to Jobs can most easily be done based on Hours to complete the job and Operating Costs per Hour. If your Jobs span a varied type of build and/or client base then you would want to track your Operating Costs within these categories where possible; for example, if you build for charter boats and for freshwater tournament fishermen you may see a much higher rate of return from one group over the other. By allocating your cost of handling these returns you can avoid penalising one group over the other and perhaps losing sales from your higher profit base. Reviewing your NP$ will show you if you're overall pricing (or sales volume) is high enough. Reviewnig your NP% by Job Type will show you where you may be able to raise prices (or lower them). The amount you need to change your pricing can be applied to calculate a GP% break-even point for a typical job.