I used to estimate the cost of parts in a machine shop. I know this is different, but I think it can be used.

1) determine how much your time is worth per hour. For example, let's say 25.00/hr.

2) Plan your order of operations and the estimate time involved with each one. Here is an example.

OP 1) Consult with customer 1 hr
OP 2 ) Purchase material .5 hr
OP 3A) Set up and Gluing cork rings .5 hr
Op 3B) Set Up and Shaping cork rings .5 hr
Op 3C) Set up and Assembling handle to blank .5 hr
OP 4A) Set up and wrap 7 underwraps 1 hr
Op 4B) Set Up and wrap 7 guides 1 hr.
Op 5A) Set up and epoxy guides .5 hr
OP 6) Prep finished rod for customer .25
TOTAL TIME 5.75 hrs

Multiply 5.75 X 25.00 = 143.75
Add Material Cost 125.00
Total cost 268.75
15% efficency Factor 309.06 (this is for taking breaks and such)

Go ahead and round it up to charge the customer to 310.00
It is always important to estimate high and always round up instead of down.
It would be a great idea to learn how to use an excel spreadsheet for calculating this.



Edited 1 time(s). Last edit at 04/17/2013 12:51PM by Andrew Jones.

In a capitalist society, it's really easy: charge what the traffic will bear. Where I Iive, there is no traffic. So that solves that problem. This is a destination location, so rodsters arrive with all their stuff. Fat cats from all over the world.

As to the question: When I'm consigned to do a custom rod, I charge what I myself would pay in time-tariff for the rod at hand. Degree of difficulty, number of guides, are my criteria. Materiel is materiel. I am not in the biz, therefore I'm paying retail, and tax.

The estimate guide in the post above is pretty close. 15% may be a bit high at the hobby/recreational level, (I use 5% "shop supplies"), but the rest is a great ground zero point.

I make beaucoup coin _repairing_ the fat cat's stuff...ergo: local sport shops request lots to return "Named Rods" to the factory for warranty work.

I normally put down 30-50.00 for a fix that can be done, (not a broken rod or blank, but a loose reel seat, guide replacement etc.) which the client is very happy to pay, seeing's how he gets his stick back in a couple of days, instead of 2-3 weeks, and spends much less than sending it back. No hack jobs allowed....repairs must be seamless. As above I live in a destination community, with a small population base.
Shoddy work in a small town is death. Over time, I have seen the same sports return over a period of 15+ years. (I live in a community in the Upper Skeena River Drainage, where the last of the best steelheading opps in North America are to be found: Bulkley, Morice, Kispiox, Babine, Mainstem Skeena.)



Edited 4 time(s). Last edit at 04/17/2013 02:27PM by Ken Driedger.

I trust my life with my loads Bill. Just like I guarantee my rods.

Lone Wolf Rods
"Keep your powder dry and your lines wet"
God Bless

Andrew Jones Wrote:
-------------------------------------------------------
> I used to estimate the cost of parts in a machine
> shop. I know this is different, but I think it can
> be used.
>
> 1) determine how much your time is worth per hour.
> For example, let's say 25.00/hr.
>
> 2) Plan your order of operations and the estimate
> time involved with each one. Here is an example.
>
> OP 1) Consult with customer
> 1 hr
> OP 2 ) Purchase material
> .5 hr
> OP 3A) Set up and Gluing cork rings
> .5 hr (20 mins)
> Op 3B) Set Up and Shaping cork rings
> .5 hr (20 mins)
> Op 3C) Set up and Assembling handle to blank
> .5 hr (10 mins)
> OP 4A) Set up and wrap 7 underwraps
> 1 hr (30 mins)
> Op 4B) Set Up and wrap 7 guides
> 1 hr. (40 mins)
> Op 5A) Set up and epoxy guides
> .5 hr (15 mins)
> OP 6) Prep finished rod for customer
> .25 (5 mins)
>
> TOTAL TIME 5.75 hrs
>
> Multiply 5.75 X 25.00 = 143.75
> Add Material Cost 125.00
> Total cost 268.75
> 15% efficency Factor 309.06 (this is for taking
> breaks and such)
>
> Go ahead and round it up to charge the customer to
> 310.00
> It is always important to estimate high and always
> round up instead of down.
> It would be a great idea to learn how to use an
> excel spreadsheet for calculating this.

If you use your formula above you will be altering your equation fairly fast or you'll be losing money. As you get better at the craft the times you allotted will go down. See my times in brackets above. If you become more efficient in your work, you would lose $50 on that sale if you charge the same hourly rate.

I charge by the piece and therefore it doesn't matter how long it takes me to perform a task.

Like I said, there are way too many ways to price a rod. The OP needs to learn a way for himself. Getting ideas isn't a bad idea, but so many different pricing "theories" can be overwhelming for someone who obviously does not know the basics.

Tom's suggestion of a flat profit above cost is great for beginners. Along the way they should become competent enough to make any necessary changes to their price schedule.

One thing to remember ... you operate TWO businesses, not one, when it comes to pricing. Parts = One Business, Labor = Another Separate Business. Both sides should contain profitability that stands on their own. Anything less and you are donating, period.

Jay Lancaster wrote:
>
> Like I said, there are way too many ways to price
> a rod. The OP needs to learn a way for himself.
> Getting ideas isn't a bad idea, but so many
> different pricing "theories" can be overwhelming
> for someone who obviously does not know the
> basics.
>


What makes you think the OP "doesn't know the basics?" Kinda bold of you to infer that, having never met the guy.

The method I use can and should be adjusted as the bulder's work becomes more of a demand, if indeed they are a beginner. Nothing should ever be set in stone with this, which is when you are cheating yourself. The 25.00/hr was only an example as were the times for each op.

Craig Freeman Wrote:
-------------------------------------------------------
>
> What makes you think the OP "doesn't know the
> basics?" Kinda bold of you to infer that, having
> never met the guy.






Craig Freeman Wrote:
-------------------------------------------------------
Is there a basic formula?



That should answer your question, Craig.

PS...you ARE the OP. LoL

Asking for the basics implies you do not know the basics. We are all here to help.



Edited 1 time(s). Last edit at 04/17/2013 06:53PM by Jay Lancaster.

A great question that has not been asked is if the OP is purchasing his components wholesale or retail?

HUGE difference between the two.

I only build high end fly rods, so probably not typical. My specialty is exotic grips, often using expensive burl woods.

My formula starts with the question to the client...." do you have a budget?" . As I already have an indication of the type and use or the rod, this gives me an idea of what his expectations are costwise. If I get an obviously low figure, I let him know right then that it is not going to be possible.

If we proceed, I take the total cost of all the components and materials, double that and the using my estimation of the time it will take me to build, I charge $50.00 per hour. As expensive as this may sound, I lose very few builds, and have many repeat clients.

Jay Lancaster Wrote:
-------------------------------------------------------
> A great question that has not been asked is if the
> OP is purchasing his components wholesale or
> retail?
>
> HUGE difference between the two.

If he is building for sale AND not buying wholesale, that's a problem within itself. Anyone building/selling has to pay FET, at that point you are doing ALL of the necessary record keeping for Federal purposes. I can't imagine why anyone wouldn't be using the professional status to purchase products for resale.

Jay - just seeing if you paying attention. Your statement seemed a bit harsh since you know nothing about me. I like folks that ASSume I don't know anything. It makes it easier to sneak up on them and surpass them with better skills and knowledge. If you have a shop I'd like to see it sometime, I usually hit MHC twice a year and Harker's isn't that far away. Could be an easy side trip for me, if you're up for it. And if you're ever in the Hampton,VA area you can come see my setup, if you want.

Jim - I know all about the FET!! or as I like to call the PITA!

As for me, I'm dictated by others in my area. I can't go to much or I'll lose business. My stuff is competitive with what the market allows. It's when someone sells well below market that makes me wonder, how can they do it and make money at it. I appreciate the responses and info.



Edited 3 time(s). Last edit at 04/18/2013 08:06AM by Craig Freeman.

The only constraints are those applied by the builder themselves - by choice at times, other times not. Either skill set and/or marketing effort establish the majority of those limits. There are those building traditional graphite conventional/casting/spinning rods which sell in excess of $500 and even $1,000. There are others building fly rods selling for $1,000, $2,000 and even in excess of $5,000. Builders exist in both of these groups with waiting lists sometimes reaching years into the future.

Again, my statement is that the value should be set by the rod builder without reviewing the prices of others - period. As a craftsman, if you don't know the worth of your work, how can you possibly expect anyone else to do so?

Best of luck, Craig. I'll not enter into a war of words. You asked the question about the basics. Enough said.

Thanks Jay, I can always us more luck.

Jay, you wont loose money as you start to do things quicker. The labor time remains the same as a flat rate. The more you can beat the flat rate the more profit you make. In automotive service at the dealer level this is how the pay plan works and it should be no different in any other service for hire business. Plumbers,Electricians and other professionals price jobs the same way. Difference is when a contractor does it they don't itemize the labor into hours times a rate, they just give you a number. I have spent my entire professional life honing my skills and furthering my education monthly to become more efficient. In a 40 hr week my average for last year 58.4 hrs earned . In other words I was 146% efficient. This is the reward for experience. Not that I sell many rods but the few I have I determined a menu price for labor (same for repairs) so the pricing is consistent . Only variable is the parts.

Freddwhy (Rapt-Ryte)

freddy has got it.the more expierence the faster or more consistent you will do a task to produce a better product,be it bagging groceries or building a yacht.this expierence is only aquired thru time,trial and error, and learning.this is what YOUR time as builder must be taken into account when setting a price,to go low is a disservice to yourself and the many builders who have spent their spare time or professional time to gain this expierence

www.southriverrodsllc.com

Fred, it sounds like you and I share similar pricing structures even though we come about it in different ways. Like you, my price for different steps mostly stay the same but we receive a benefit for being able to do them faster over time. We are completely on the same page.

My previous point was for a service person that literally lists the time involved and charging for that time. As your time decreases the hourly rate would need to increase. Again, this is for someone who literally lists the time it takes to complete a task. Neither of us have that issue as that isn't how we come up with pricing.

When I see people actually list a time to complete a certain process it is my assumption that they are charging solely on time. If a person uses that "time x hourly rate" to simply come up with a standard value of what to charge for that action, then they really are not charging by the hour. At that point they are charging $XXX for the step and hourly rates no longer enter into the equation.

In the end, we are in agreement.

Hopefully all this discussion doesn't confuse the OP too much.

To get back to pricing, when I began building rods I was paying retail for all the parts and that really hurt business as most people seem to be just looking for a deal. Most rods I was only able to sell for $20 over my supply cost. I've now been able to open my business officially and get all the necessary paperwork and with that I was able to get wholesalers on board so that I can get my rods and parts cheaper. I'm still in the process of trying to get my name out there but now I generally make $50-$75 over part cost which is still usually way below what the rod would sell retail. For example, if I'm using a St. Croix blank I'll go on their website and see what they are selling their complete rod for. Usually it is way over what I got into a rod and me making $75 is still below their retail even with comparative or even better components. Like I said I'm still getting my name out there and when business starts to pick up I am sure my rod price will go with it.

Michael J. Krig
Tin Creek Fishing Company, LLC

I think others would say you're selling yourself short by keeping your prices so low and hurting others that are trying to make a living doing what you're doing. What would happen if you were to see them for a fair price considering what your time and talent is worth?

I'm just asking.