# How to price my pens?



## Lee Foreman

New to pen turning and not sure how the best way to price my pens. Any guide lines I go by, just not sure how to set the prices.

Lee


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## nsfr1206

Some info on this in marketing. Try taking your pen kit price, add 5 dollars for your blank, and tripling it. So a jr. gent black titanium with a brooks acrylic on it would be around $57.00. Of course this depends on your market and some blanks will need to be charged more for. This won't work for a gator jaw bone blank!


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## JimB

Pricing is like doing a ca finish - you will get as many answers as there are members. Some use a formula like the one stated above while others will strongly disagree with this approach. When I first started the 3X formula above worked well for me but as I improved my skills, made different style pens and different materials I stopped using the formula as I did not believe it represented a fair price for my pens. Also, the demand for different styles can/will influence price. There are also a lot of other expenses involved in making a pen other than just the kit and blank.

If you go through the Marketing forum you will find many threads on pricing. I think that is the best way to get started.


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## GoodTurns

JimB said:


> Pricing is like doing a ca finish - you will get as many answers as there are members. Some use a formula like the one stated above while others will strongly disagree with this approach. When I first started the 3X formula above worked well for me but as I improved my skills, made different style pens and different materials I stopped using the formula as I did not believe it represented a fair price for my pens. Also, the demand for different styles can/will influence price. There are also a lot of other expenses involved in making a pen other than just the kit and blank.
> 
> If you go through the Marketing forum you will find many threads on pricing. I think that is the best way to get started.



+1

the one thing I always try to do is make sure that there is some noticeable progression in your pricing.  If you stick to a straight formula, your entire pricing schedule might not make sense.  Your buyer should be able to SEE the difference between a $50 and $100 pen. (or $100 and $200....)


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## Rangertrek

Lee, I have had many pricing strategies over the last two years.  My first rule of thumb is the 3x materials cost.  This is generally my starter price for a pen.  This formula does not well for low end pens (slimline) unless you are willing to sell one for under $20.

I have a set cost overhead cost for my shop, consumable materials, etc.  Then I add the kit, parts and the blank.  Then evaluate my labor to make it.  I have sold pens up to $200 based on just a great looking pen or something special about the blank.

After you sell a few you will learn what works and what does not for your area.
I also do craft shows and generally do not even take a pen less than $30 to the show.  I have some other turners willing to sell a slim or sierra for under $25.  I let them have that market.  My product looks better and I try to offer the better platings.

Good luck with whatever approach you take.


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## broitblat

It also depends on who/what you are pricing them for.  You may price differently if you sell direct, over the web, on consignment, or wholesale, for example (although I advise against selling the same product through different channels at dramatically different prices).

I tend to start with the cost of materials, add a multiplier for margin, then add an additional amount representing the labor that went into the pen.  YMMV.

  -Barry


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## jbswearingen

I would add that if you're selling them online to look at other sites to see what your competing prices are.  Price accordingly.  I was amazed recently to see a woman selling cigars for $180 when I price them at $35.  I know I'm a bit on the low side, but I didn't think I was THAT low.


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## Smitty37

*caution*



jbswearingen said:


> I would add that if you're selling them online to look at other sites to see what your competing prices are. Price accordingly. I was amazed recently to see a woman selling cigars for $180 when I price them at $35. I know I'm a bit on the low side, but I didn't think I was THAT low.


 
I would caution that offering for sale is not necessarily selling....I sell Component Sets I could offer slimline kits for $10.00 each - that doesn't mean I'd sell any at that price.


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## tim self

nsfr1206 said:


> Some info on this in marketing. Try taking your pen kit price, add 5 dollars for your blank, and tripling it. So a jr. gent black titanium with a brooks acrylic on it would be around $57.00. Of course this depends on your market and some blanks will need to be charged more for. This won't work for a gator jaw bone blank!



#1  I would NEVER well a Jr Gent for $57.  I'd give it away first. (No offence David)

#2  Using this formula exclusively will have you pricing an Elegant Beauty Sierra for the same price as a Jr Gent.

#3  Whatever your market will bear.  I did an art show 2 wks ago and have adjusted my prices SLIGHTLY for a show next week.  Differnt market.


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## jbswearingen

tim self said:


> nsfr1206 said:
> 
> 
> 
> Some info on this in marketing. Try taking your pen kit price, add 5 dollars for your blank, and tripling it. So a jr. gent black titanium with a brooks acrylic on it would be around $57.00. Of course this depends on your market and some blanks will need to be charged more for. This won't work for a gator jaw bone blank!
> 
> 
> 
> 
> #1  I would NEVER well a Jr Gent for $57.  I'd give it away first. (No offence David)
> 
> #2  Using this formula exclusively will have you pricing an Elegant Beauty Sierra for the same price as a Jr Gent.
> 
> #3  Whatever your market will bear.  I did an art show 2 wks ago and have adjusted my prices SLIGHTLY for a show next week.  Differnt market.
Click to expand...


You would never sell one at $57...that's too high or too low?  I'm assuming too low a price.




Smitty37 said:


> I would caution that offering for sale is not necessarily selling....I sell Component Sets I could offer slimline kits for $10.00 each - that doesn't mean I'd sell any at that price.



Oh, I know.  Seeing all the work on her site, I'm assuming she does sell at that price.  She's showing a a craft fair here soon, and may well be a member here.


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## Frank Nemke sr

Its real easy to drop your price, but almost impossible to raise prices if your dealing with the same customer base unless you upgrade your product line.  With a higher margin you can wheel and deal.   Lets say you sell slims for $20  If some one wants a deal on 3, and you give them for $50, your down to just over $16.50.   Your profit margin just went to hell. But! if your priced at $25 and sell the same 3 at $60.
   If someone comes to you and wants to by a display of say 12 you could sell a$25 pen at $15 and let him sell them for whatever he wants if theres no return


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## OKLAHOMAN

OK! I've said this here before. 
#1 before you can determine what to price YOUR pens  you need to take a good hard look at them. Is the fit perfect, does the finish not only look good but when you run your fingers from top to bottom are there ridges between the final and the nib
#2 what venues are you going to sell at, I don't care if your pen is an Emperor with a $50 blank and is perfect your not going sell it for big bucks at your local farmers market or most small town craft shows. On the other hand the same pen priced to low at a venue that caters to folks that are looking to purchase merchandise that will make a statement like a sculpture, or a high end piece of jewelry you won't sell it.
#3 formulas are good if you want to sell slim lines for $20 and Jr. Gents for $50.
#4 Every product ever made has a perceived value and so do our pens if it looks like a $10 pen then thats what it's perceived value is, if it looks like a $500 pen then thats what its value is. 
#5 The moral of the story is only you know how ,where and what(slim lines or Emperors) your going to sell, how well made they are and what is the perceived value at the venues your going to sell at. We can't tell you its up to you.  Everyone here has an opinion of what they can sell a pen for but we have no idea what you can.


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## ed4copies

You have to ASK what YOU believe the pen is worth.

IF you are trying to sell, you need to believe your product is worth what you are asking for it.

Do a few small shows and use different prices for the same pen, until you find YOUR comfort zone.  Then, when you do bigger shows, remember your overhead goes up--small shows can be $25 per day, bigger shows generally run $200 ish per day.  You better price that in.

Good luck and the best teacher is experience.  Do a few shows and you may decide you'd rather give away your pens than have to tell people WHY they are worth your asking price.

Not everybody was meant to be a salesman.


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## Smitty37

*Might well be*



jbswearingen said:


> tim self said:
> 
> 
> 
> 
> 
> nsfr1206 said:
> 
> 
> 
> Some info on this in marketing. Try taking your pen kit price, add 5 dollars for your blank, and tripling it. So a jr. gent black titanium with a brooks acrylic on it would be around $57.00. Of course this depends on your market and some blanks will need to be charged more for. This won't work for a gator jaw bone blank!
> 
> 
> 
> 
> #1 I would NEVER well a Jr Gent for $57. I'd give it away first. (No offence David)
> 
> #2 Using this formula exclusively will have you pricing an Elegant Beauty Sierra for the same price as a Jr Gent.
> 
> #3 Whatever your market will bear. I did an art show 2 wks ago and have adjusted my prices SLIGHTLY for a show next week. Differnt market.
> 
> Click to expand...
> 
> 
> You would never sell one at $57...that's too high or too low? I'm assuming too low a price.
> 
> 
> 
> 
> Smitty37 said:
> 
> 
> 
> I would caution that offering for sale is not necessarily selling....I sell Component Sets I could offer slimline kits for $10.00 each - that doesn't mean I'd sell any at that price.
> 
> Click to expand...
> 
> 
> Oh, I know. Seeing all the work on her site, I'm assuming she does sell at that price. She's showing a a craft fair here soon, and may well be a member here.
Click to expand...

   The point is not whether a specific person is actually selling pens at that price.  Some makers are, but most are not.  
I certainly don't pretend know for sure, but my guess would be that for every website successfully selling in that range there are a half dozen or more that are not.


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## SCR0LL3R

It's hard to look at the prices some people charge. I personally will not make a pen under $30 ... It's just not worth my time... I'll give it as a gift before that. I see people making slims for $15 and euro's for $20.. that's not for me.

Also, when it comes to rollerballs and fountains, I bump the price up a little more than ballpoints, even for basic ones like Jr. Gent 2's. I feel they are a little more prestigious than any ballpoints and price them accordingly.


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## IPD_Mr

GoodTurns said:


> JimB said:
> 
> 
> 
> Pricing is like doing a ca finish - you will get as many answers as there are members. Some use a formula like the one stated above while others will strongly disagree with this approach. When I first started the 3X formula above worked well for me but as I improved my skills, made different style pens and different materials I stopped using the formula as I did not believe it represented a fair price for my pens. Also, the demand for different styles can/will influence price. There are also a lot of other expenses involved in making a pen other than just the kit and blank.
> 
> If you go through the Marketing forum you will find many threads on pricing. I think that is the best way to get started.
> 
> 
> 
> 
> +1
> 
> the one thing I always try to do is make sure that there is some noticeable progression in your pricing. If you stick to a straight formula, your entire pricing schedule might not make sense. Your buyer should be able to SEE the difference between a $50 and $100 pen. (or $100 and $200....)
Click to expand...

 
Jon pretty well nailed it.  One thing that will help sell your mid-priced pen is to have some really nice high end pens.  They can make your mid-priced pens look like a bargain.  You should also learn your market.  If you have pens in a custom jewelry store in Naples, the price would be much different than in a bookstore in Gainesville.

There really is no set rule just some common sense guidelines that you have to adapt to yourself.  The other thing that you have to learn, is if you don't think the pen is worth the price you are asking, then you probably will not sell it.  Value yourself and your work.  Pay yourself for your time creating your product.


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## SCR0LL3R

SO many things to factor...

I have a store(gallery) that is considering buying a bunch for next summer season. They advertise that they sell at the same price as the artist's own gallery. The owner tells me he puts 100% markup...

So he expects me to charge double my wholesale price to everybody else just because he buys a dozen pens at once? If he does decide to buy them, I will see what I can do to work something out but I can't/won't do that.

I can offer him an exclusive style of kits or blanks that I won't sell elsewhere or take prices off my website since it's really just a gallery of my work, but that's about all I can do for him.


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## tim self

One more thing, as Roy told me a few yrs ago, you will never sell a pen for $300 unless you ask for it.  That changed my whole attitude towards this hobby and set my goals higher.


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## IPD_Mr

Tim the easiest way to do that is to make a pen that you do not want to give up.  Sure you can always make another in most cases, but it will not be the exact same.  That is when it is easiest to ask the higher prices, because you really don't care if you sell it or not.  The sad part is I have sold too darn many pens that I wish I hadn't.  I think we are running into that same problem with the vintage pens we are playing with now.


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## Haynie

SCR0LL3R said:


> SO many things to factor...
> 
> I have a store(gallery) that is considering buying a bunch for next summer season. They advertise that they sell at the same price as the artist's own gallery. The owner tells me he puts 100% markup...
> 
> So he expects me to charge double my wholesale price to everybody else just because he buys a dozen pens at once? If he does decide to buy them, I will see what I can do to work something out but I can't/won't do that.
> 
> I can offer him an exclusive style of kits or blanks that I won't sell elsewhere or take prices off my website since it's really just a gallery of my work, but that's about all I can do for him.



Having dealt with Galleries on the photo side of my life I decided that Gallery is another word for scam.


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## JimB

SCR0LL3R said:


> SO many things to factor...
> 
> I have a store(gallery) that is considering buying a bunch for next summer season. They advertise that they sell at the same price as the artist's own gallery. The owner tells me he puts 100% markup...
> 
> So he expects me to charge double my wholesale price to everybody else just because he buys a dozen pens at once? If he does decide to buy them, I will see what I can do to work something out but I can't/won't do that.
> 
> I can offer him an exclusive style of kits or blanks that I won't sell elsewhere or take prices off my website since it's really just a gallery of my work, but that's about all I can do for him.



Just because he told you this doesn't mean that is actually what he does. More likely he is just setting the tone to get the best price from you that he can. On the other hand, in retail, doubling the wholesale price (or more) is common. That is how they make money.


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## nsfr1206

No offense taken. We live in a rather poor county and I have only sold one pen over $50 iirc.


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## David M

price them alittle on the high side . you can lower the price , but try to raise the price when someone is looking at it . the only time that happens is when your getting gas '


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## TexasTaxi

I've never done a show and I most certainly don't have the talent that many forum members have ... so take this as you will.

I started selling my pens on a hunting forum, I frequent. Hunters love antlers and love wood. Pretty easy to pick a winning material, for them. I started selling slimlines for $25. I slowly bought more bits and bushings until I was making a few different styles. I sold Sierras for $35 and Cigars for $45. Recently, I got into the nicer rollerball kits and frequently sell Majestic Jr.s and Gentleman's Jr.s for $100. My most expensive pen to date, was sold in a silent auction, on that same forum. It was a Jr. Gent that went for $600. 

I don't consider myself a "pro", or anywhere near it. When I got into pen making, I thought it would be a cool way to use up some of the scraps, in my shop. The prices I came up with, were basically pulled out of my butt, since I mainly do this for fun.

That probably didn't help you, did it? :biggrin:


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## tim self

IPD_Mr said:


> Tim the easiest way to do that is to make a pen that you do not want to give up.  Sure you can always make another in most cases, but it will not be the exact same.  That is when it is easiest to ask the higher prices, because you really don't care if you sell it or not.  The sad part is I have sold too darn many pens that I wish I hadn't.  I think we are running into that same problem with the vintage pens we are playing with now.



As soon as I priced one at $300, I sold ita Irish Bog Oak on Jr State FP!!  Like David, I live in a depressed area so I must travel some to sell anything over $100.  I just got lucky with the high priced one.


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## Lee Foreman

Want to thank everyone for all the Great information. Iam going to set up next month at an craft show and just see how my pens sale.

Thanks Again
Lee


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## intillzah

I sell my pens as follows:

Slimlines: $20.00
Carbaras: $30.00
Sierras: $40.00

The area that I am at, the people complain liked sticked pigs when it comes to the price.  But if I drive 50 miles to where my daughter is going to school.  They sell like hotcakes.

Go figure....


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## Smitty37

*Hmmmm*

I price mine with those little bow tie labels - put a letter on the label and have a list connecting the letter to a price. I've only gotten as far as G so far.


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## Lee Foreman

Smitty37 said:


> I price mine with those little bow tie labels - put a letter on the label and have a list connecting the letter to a price. I've only gotten as far as G so far.


 

Smitty, Where do I get the bow tie labels?
Lee


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## ttpenman

Lee,

Watch the classifieds for the bow tie lables.  I got some a couple months ago.

Jeff in northern Wisconsin


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## SCR0LL3R

Smitty37 said:


> I price mine with those little bow tie labels - put a letter on the label and have a list connecting the letter to a price. I've only gotten as far as G so far.



That sounds like an awesome way to do it! This would mean I wouldn't have to ever swap price tags depending on where I'm selling.


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## Smitty37

*watch classified*



Lee Foreman said:


> Smitty37 said:
> 
> 
> 
> I price mine with those little bow tie labels - put a letter on the label and have a list connecting the letter to a price. I've only gotten as far as G so far.
> 
> 
> 
> 
> 
> Smitty, Where do I get the bow tie labels?
> Lee
Click to expand...

Someone on here frequently has an ad for them - if you don't see something is a few days I have a couple of hundred around here someplace I could send you some to tide you over.


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## Lee Foreman

ttpenman said:


> Lee,
> 
> Watch the classifieds for the bow tie lables. I got some a couple months ago.
> 
> Jeff in northern Wisconsin


 

Jeff, How big are these lables? Can I get them at an office supply? I googled did it but they looked to big.
Lee


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## Smitty37

*Yep*



SCR0LL3R said:


> Smitty37 said:
> 
> 
> 
> I price mine with those little bow tie labels - put a letter on the label and have a list connecting the letter to a price. I've only gotten as far as G so far.
> 
> 
> 
> 
> That sounds like an awesome way to do it! This would mean I wouldn't have to ever swap price tags depending on where I'm selling.
Click to expand...

 
You can just make a little poster sign for each venue and put it on your table - or you can keep it behind the counter where you can tell everyone who asks.  Works just fine.


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## Smitty37

*size*



Lee Foreman said:


> ttpenman said:
> 
> 
> 
> Lee,
> 
> Watch the classifieds for the bow tie lables. I got some a couple months ago.
> 
> Jeff in northern Wisconsin
> 
> 
> 
> 
> 
> Jeff, How big are these lables? Can I get them at an office supply? I googled did it but they looked to big.
> Lee
Click to expand...

 
They are about 2 inches long and 1/2 inch wide at the widest point.  They fold in half when you use them making them 1 inch long and 1/2 inch wide.  they don't seem too big to me.


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## Richard Van Hulle

I suspect that those low priced pens are of a lesser. They don't use fully stablized wood, quality acrylics, the better pen kits and they do not posess the necessary skills to make a quality pen with a quality finish that will last for an extended period of time. Maybe they do not have the confidance in their work and do small local craft shows or flea markets where their customers don't look for the quality since they can buy a pen for under ten cents at the dollar stores. Maybe they don't know or understand how to display or good business principals since they only count what their pen cost is. I would be cautious around those folks and read the threads of "Good Turns" above that is giving you good advice. Study the good guys not the cheapos.


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## Drstrangefart

I typically charge roughly $35/hour. It seems to cover the bases nicely. I am rarely disappointed with the returns. All I do is Slimlines right now, so it is liable to be revised as my shop gets better.


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## Lee Foreman

*Pricing..*

I have gotten a lot of great information....all of it has given me a better understanding of how to set my prices. I appreciate all the help.
 
Thanks
 
Lee


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## sbell111

SCR0LL3R said:


> SO many things to factor...
> 
> I have a store(gallery) that is considering buying a bunch for next summer season. They advertise that they sell at the same price as the artist's own gallery. The owner tells me he puts 100% markup...
> 
> So he expects me to charge double my wholesale price to everybody else just because he buys a dozen pens at once? If he does decide to buy them, I will see what I can do to work something out but I can't/won't do that.
> 
> I can offer him an exclusive style of kits or blanks that I won't sell elsewhere or take prices off my website since it's really just a gallery of my work, but that's about all I can do for him.


Honestly, I would just quote him your wholesale price and let him sell it for whatever he wants to.  If he doesn't buy because he can't add a 100% markup and still sell for your retail price, then so be it.  It's no different than any person who fails to buy because the price is higher than they want to pay.  It's not reasonable to expect you to lower your price to the point at which this customer is comfortable.


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## sbell111

Regarding pricing, I firmly believe that pricing based on some multiplier of costs is an error.  We calculate costs only to find a floor at which prices cannot fall below.  This floor is cost plus our minimal acceptable profit.

Our pricing model consists of several 'steps'.  At each of these steps, we offer styles of pens that have general appeal with both men and women.  We then add a price 'bump' based on material used.

Pricing in this manner allows a customer to easily understand how the price increases throughout our range and within each style of pen.  Further, it rewards us for cost savings and efficient processes, rather than to pass these savings to the customer.  This is important since the customer need not be aware of when you improve your methods to eliminate waste or find savings in the sourcing of materials.  All they need care about is the quality of the resulting product and it's final price.


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## spilperson

As much as the market will bear. Look for higher-end shows and snooty little shops.

If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?

Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc. 

Good luck!


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## Smitty37

*Profit motive*



spilperson said:


> As much as the market will bear. Look for higher-end shows and snooty little shops.
> 
> If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?
> 
> Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc.
> 
> Good luck!


 
If you are claiming on your taxes you better show a profit two out of every five years or the IRS will likely tell you it is a hobby not a business.
That's not bad except if it is a business you can write off losses against other income and if it's a hobby you can't.


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## OKLAHOMAN

Smitty37 said:


> spilperson said:
> 
> 
> 
> As much as the market will bear. Look for higher-end shows and snooty little shops.
> 
> If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?
> 
> Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc.
> 
> Good luck!
> 
> 
> 
> 
> If you are claiming on your taxes you better show a profit two out of every five years or the IRS will likely tell you it is a hobby not a business.
> That's not bad except if it is a business you can write off losses against other income and if it's a hobby you can't.
Click to expand...

 
 If I remember right you need to report a gross profit not a net profit, If I'm wrong I'm sure someone will strighten me up on this.


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## Smitty37

*Maybe once...*



OKLAHOMAN said:


> Smitty37 said:
> 
> 
> 
> 
> 
> spilperson said:
> 
> 
> 
> As much as the market will bear. Look for higher-end shows and snooty little shops.
> 
> If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?
> 
> Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc.
> 
> Good luck!
> 
> 
> 
> 
> If you are claiming on your taxes you better show a profit two out of every five years or the IRS will likely tell you it is a hobby not a business.
> That's not bad except if it is a business you can write off losses against other income and if it's a hobby you can't.
> 
> Click to expand...
> 
> 
> If I remember right you need to report a gross profit not a net profit, If I'm wrong I'm sure someone will strighten me up on this.
Click to expand...

 
I don't think so.  I have not looked it up lately because my business is making a profit every year but the last time I checked it was bottom line.

Well like many other tax issues. That requirement is not an absolute.  The requirement is that you are operating with the intention of making a profit.  If you're running a grocery store the presumption of the IRS will be that you are not doing that as a hobby and you would not have to meet the two out of five years profit.  

Since most people engage in pen turning as a hobby, the presumption of the IRS will be that it is a hobby and you have the burden of proof to show that it is a business.  

On the other hand, unless you get audited, and the chance of that is small, you will get away with it.  But, for most people here I would advise they not try to write off business loses against other income, unless they have real expectations of turning a profit in the near future.


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## JamesB

This is a good thread.  I dropped a pen off at local business yesterday with hopes of a consignment deal but they called me back asking for a wholesale price on them!  I didn't know what to say. I'm pretty stoked about it but a little anxious, wondering if I'll do it right.  It's the PSI 50 cal kit (I know many people here don't like them), so it's not that expensive to make, do you suppose $15 is a fair wholesale starting offer?
Thanks


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## Carl Fisher

Smitty37 said:


> The requirement is that you are operating with the intention of making a profit.




This is the understanding that we have come to with our accountant.  If you can prove intent even at a running loss then it should technically satisfy the requirement.  Having a dedicated sales outlet such as a website plus spending to travel and setup at a show with intent to sell at a profit, marketing material, _ACTUAL BOOKKEEPING_, etc... all go towards proving that intent.

Again, this is just our understanding of it.  It seems like it should be up to you and your accountant to determine this for your scenario.


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## firewhatfire

NO!!!!!  $40 maybe and let them sell them for 65



JamesB said:


> This is a good thread. I dropped a pen off at local business yesterday with hopes of a consignment deal but they called me back asking for a wholesale price on them! I didn't know what to say. I'm pretty stoked about it but a little anxious, wondering if I'll do it right. It's the PSI 50 cal kit (I know many people here don't like them), so it's not that expensive to make, do you suppose $15 is a fair wholesale starting offer?
> Thanks


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## firewhatfire

I didn't sell a $200 pen until I had a $650 pen in my collection.  I sold 2 of those to the same guy.


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## PenMan1

You can PRICE pens with any formula, Excel Speadsheet macro, or any other "gizmo" that you want. Heck, you can even roll dice or use a Ouija Board. Any of these methods is just as useless as the other.

If you are actually selling pens, your market will determine the price- Regardless of the price you put on it. As you market changes, so should your pricing. The same pen that sells quickly at $350 at one show, may not even get a second look at another show.

My advice would be to throw away the formulas, then figure out the "bottom dollar" that you would take for a given pen. THEN, do some market research for your venue and set you price accordingly.  If you price too low for the show, you are perceived as a low quality product. If you price too high, show attendees will buy that painting to go behind the sofa rather than your pen.


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## tbird1957

Pricing:
First thing you need to consider - What's the quality of your pen! I've seen some Cigar pens that should sell around $25.00. I've seen others in the $90. - $100. range. Like said before, the cost of making a pen is more than just the blank and kit. First you have an investment of a Lathe - Chucks - Tools - CA - and all type of sandpaper, micro mesh etc. These are all true cost. Also, have you ever had a ruined a pen? This cost also has to be considered. Do you want to cater to high end pen collectors, are just someone looking for a nice pen to carry with them.  My favorite pen is the Cigar pen. Their are so many choices for the Cigar pen, wood, acrylic or something special. Also the Atrax is beautiful pen and very reasonably price. For my pricing I consider all factors above. Kit plus blank x 3.5 is a good start. Add a little if you really get a high quality pen, deduct a little if it is just a pen. If it is a really poor quality pen - give it someone or disassemble it and start over, but never sell a poor quality pen - it will stick to you like a plague. My price for quality (of course my OPINION of a quality pen) pen - $49.95. High end quality of a Cigar or Atrax - $69.95 - $99.00 or somewhere in between. I just sold 3 pens yesterday. One was a Cigar Texas Flag Pen - $69.95. One was an Apollo Infinity - $125.00 (very nice pen made with Bubinga) - The other pen was a Atrax $59.95 (made with Arizona Ironwood). Enjoy making your pens and make your pens - Your Pens.


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## bubbamorse

Smitty37 said:


> OKLAHOMAN said:
> 
> 
> 
> 
> 
> Smitty37 said:
> 
> 
> 
> 
> 
> spilperson said:
> 
> 
> 
> As much as the market will bear. Look for higher-end shows and snooty little shops.
> 
> If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?
> 
> Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc.
> 
> Good luck!
> 
> 
> 
> 
> If you are claiming on your taxes you better show a profit two out of every five years or the IRS will likely tell you it is a hobby not a business.
> That's not bad except if it is a business you can write off losses against other income and if it's a hobby you can't.
> 
> Click to expand...
> 
> 
> If I remember right you need to report a gross profit not a net profit, If I'm wrong I'm sure someone will strighten me up on this.
> 
> Click to expand...
> 
> 
> I don't think so.  I have not looked it up lately because my business is making a profit every year but the last time I checked it was bottom line.
> 
> Well like many other tax issues. That requirement is not an absolute.  The requirement is that you are operating with the intention of making a profit.  If you're running a grocery store the presumption of the IRS will be that you are not doing that as a hobby and you would not have to meet the two out of five years profit.
> 
> Since most people engage in pen turning as a hobby, the presumption of the IRS will be that it is a hobby and you have the burden of proof to show that it is a business.
> 
> On the other hand, unless you get audited, and the chance of that is small, you will get away with it.  But, for most people here I would advise they not try to write off business loses against other income, unless they have real expectations of turning a profit in the near future.
Click to expand...


In the infamous of Anthony Hopkins in the movie [Legends of the Fall] "Screw the Government!". I stand by the premise that you claim everything that is a lose as one to offset any profits. If you get audited you get audited, accept the fact that the IRS is NOT on your side and you have every *right* to pay a little in taxes as possible.


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## Smitty37

bubbamorse said:


> Smitty37 said:
> 
> 
> 
> 
> 
> OKLAHOMAN said:
> 
> 
> 
> 
> 
> Smitty37 said:
> 
> 
> 
> 
> 
> spilperson said:
> 
> 
> 
> As much as the market will bear. Look for higher-end shows and snooty little shops.
> 
> If you are really trying to make a business out of it, selling a pen for $20 is wasting your time, no offense to those who do that. Using higher end kits and blanks will attract a higher price, almost certainly a higher margin and a $ per hour rate for your labor. which would you rather sell - a pen for $20 with $5 worth of parts, or a $100 pen with $40 worth of parts?
> 
> Don't forget to track every little item of expenses as well, if you are claiming this on your taxes, plus the room for your lathe, mileage, phone calls, etc.
> 
> Good luck!
> 
> 
> 
> 
> If you are claiming on your taxes you better show a profit two out of every five years or the IRS will likely tell you it is a hobby not a business.
> That's not bad except if it is a business you can write off losses against other income and if it's a hobby you can't.
> 
> Click to expand...
> 
> 
> If I remember right you need to report a gross profit not a net profit, If I'm wrong I'm sure someone will strighten me up on this.
> 
> Click to expand...
> 
> 
> I don't think so. I have not looked it up lately because my business is making a profit every year but the last time I checked it was bottom line.
> 
> Well like many other tax issues. That requirement is not an absolute. The requirement is that you are operating with the intention of making a profit. If you're running a grocery store the presumption of the IRS will be that you are not doing that as a hobby and you would not have to meet the two out of five years profit.
> 
> Since most people engage in pen turning as a hobby, the presumption of the IRS will be that it is a hobby and you have the burden of proof to show that it is a business.
> 
> On the other hand, unless you get audited, and the chance of that is small, you will get away with it. But, for most people here I would advise they not try to write off business loses against other income, unless they have real expectations of turning a profit in the near future.
> 
> Click to expand...
> 
> 
> In the infamous of Anthony Hopkins in the movie [Legends of the Fall] "Screw the Government!". I stand by the premise that you claim everything that is a lose as one to offset any profits. If you get audited you get audited, accept the fact that the IRS is NOT on your side and you have every *right* to pay a little in taxes as possible.
Click to expand...

 That is perfectly legal...but if it is a hobby you can't use excess losses as an ofset against other income (W2 income, dividends, interest, etc.)


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## Smitty37

*Cost vs Price*

When I go to the store to buy a shirt - I look at a tag that gives me a price.  I compare that to other prices for similar shirts and buy what appears to be the best value, which may or may not be the lowest price.
The shirts' cost to the store is of no interest at all to me.  Only the price and if I can't find the item I want at a price I'm willing to pay, I do without it.

Whether we like it or not that scenerio applies also to the pen making and pen component business.   If CSUSA has a big sale, small vendors' sales go down because members see that sale as a better value.  That's life.

Your prices will be determined mostly by the venue.  You won't sell $500 pens in a $20 market or visa-versa.  You have to decide where you are going to sell and the price is "Whatever the market will bear"  your costs will determine if you can sell profitably in that market and that's all.  You can decide the minimum price you can sell at based on cost, but if you are selling in a $50.00 market and need to get $100 to make a profit - you'd better find a new market.

In regard to business, hobbies and taxes.  The easiest way to prove you intend to make a profit is to have a profit motive and operate like you want to make a profit.  Here are a few hints that will help you satisfy the IRS in a tax audit in the unlikely event that you are called for an audit.

1.  Have a business plan, decide the market you're going to be in, the price range you're going to sell at, who your competition is (don't automatically assume it is only other hand turners either - Mont Blanc are made in a factory), where you are going to source your raw materials, etc.
2.  Keep your business money separate from your non-business money.  Get a separate business account.
3.  Keep accurate records - you can but probably don't have to keep every receipt if you use a computer program like quickbooks to track
sales and purchases.
4.  Get a separate business credit card and use it ONLY for business purchases.  If you don't use it, so much the better, but get it anyway.
5.  Learn enough about the tax code to work it to your advantage
6.  Show smaller losses year by year - make changes to increase profits.  Drop unprofitable lines, add new lives.
7.  Show all transfers of money from your other funds to the business as either additional paid in capital or as a loan.  Show all transfers out of the business to your other funds as either a owner's withdrawal, loan repayment or something made for a special reason - record the reason.
8.  If you buy inventory and use a lot of it for personal reasons (pens made for personal gifts, etc.) keep a record of your withdrawals for personal use.
9.  For most people - set up your accounts to fit 1040 Schedule C unless you incorporate - if you incorporate see a tax accountant who specializes in small corporations.
10. Report all of your business income including cash sales that the IRS would probably never uncover.  If you don't lie about your income you don't have to remember what lie you told.  Expenses are fuzzy at times - income is not.


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## mikespenturningz

Well there is certainly a formula for figuring out the wholesale price for a pen. I use the cost of kit +$5 for incedentals +5 for blank  then I add $35 for labor. Now this is as a hobby. If I were a business I would have to add more for labor because this doesn't include any benefits at all. That comes close to giving me the wholesale price. This doesn't work on slimlines or comforts!! Then if you are going to sell these you need to mark them up. Labor is an overhead not your profit that is how I look at it. So to get the retail you can double or triple this wholesale price. Now you have overhead to allow for consignment and still make a good profit. Just my .02 worth.


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## Smitty37

mikespenturningz said:


> Well there is certainly a formula for figuring out the wholesale price for a pen. I use the cost of kit +$5 for incedentals +5 for blank then I add $35 for labor. Now this is as a hobby. If I were a business I would have to add more for labor because this doesn't include any benefits at all. That comes close to giving me the wholesale price. This doesn't work on slimlines or comforts!! Then if you are going to sell these you need to mark them up. Labor is an overhead not your profit that is how I look at it. So to get the retail you can double or triple this wholesale price. Now you have overhead to allow for consignment and still make a good profit. Just my .02 worth.


Never-the-less, you have to price to fit the venue regardless of what you think the value is.  Buyer's don't really care how much or how little profit you make, they care only that the price is what they believe is fair market value.


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