cant build a box for profit

Thanks Carol, I did take that into account and really wasn't excited to make anymore.

John Daugherty said:

I understand what your talking about Allen. I can make stuff and sale all day long, but making stuff and making a wage is completely different.

The rocking horse I made last year for a friend's first baby. I made it for her because she's a really nice lady. They'd had a hard time getting pregnant so I thought I'd make her something nice. She said several people asked what I'd charge to make one. I told her no less than 500. As slow as I am that's still probably breaking even when I factor time in the equation. I haven't had any takers, and I'm fine with that. It's a hobby for me and not a business. I like you make stuff for family and friends when I can and don't expect pay. Some do and some don't and again that's fine. I realized a long time ago that what I'd have to charge and what people want to pay is way off. It's the Walmart mentality.

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if youre not knocking that rocking horse out in 2 days you are working for peanuts at 500.00.

I dont know about alot of you guys, I only have a small garage set up with tools, and Ive invested well over 15000.00 in tools alone, then tack on another 5000 for stands, rolling bases, tables, cabinets. 500.00 for lights. couple of thousand to soundproof, 300 for an ac, 200 for heaters, ..........if you dont factor in what it cost to maintain and run a shop, you are not being fair to yourself.

allen levine said:

were drifting away from the original topic.

were drifting away from the original topic.

Toni-I took the box inside my house, and showed my wife. I asked her, what would you pay if you wanted this and were at a crafts festival and knew it was hand made by a local craftsperson(no, I dont call myself a craftsman). She said 35-50 dollars tops.(and that is after finish is applied)
She is my target customer, the middle class female american consumer, the woman who loves to go to arts and crafts shows, the woman who likes to spend money.

I dont need to ask myself, Im prejudice. I often see products with large price tags that I understand, but still would not fork over the bucks the craftsperson wants.

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Allen, I think you took my post too literally, I was not referring to you personally, I was trying to convey my thoughts in the best way possible, so problay here the language barrier has had its part.

Curiously enough, we have some sort of craftshows or small fairs here as well where most of the times there are craftsmen selling their goods, mainly silver jewelry or items made of leather, or wowen wool and so forth, some sell wooden toys or similar items, and many others sell homemade cheese, honey, bread or pastries, well those edible things are always far more expensive than the hand crafted items and also more expensive than similar products that you buy on delicatessen shop.
And I agree that people who buy things at a craft show buy mainly by impulse.

allen they need to factor in the cost of heat and cooling as well not just the mechanical.. then the building insurance isnt cheap either. i have had to look at the numbers on my shop and its a eye opener.. the cost to start a machine is much higher than most folk realize.

When we talk about cost something to remember is this is your specific cost arising from how and where you are set up.
That does not imply that just because you inccur these costs in the way and manner you operate that the market should be prepared to pay for them, if we go that route we might as well close borders and hang up a red flag with hammer and sickle.

Again a business needs management...that means constantly examining and managing all the items that appear on your P&l not just accepting them as fait accompli.

I remember the day free market thinking finally sunk in back in SA.
The mentality in any business up to that time would be...
These are my costs and this is my profit and therefore this is my price.
Yeah...right we actually had a state sponsored system of cost plus 10%.
When you meet people that have grown up in this logic they see nothing wrong with it.
You would not believe what we were paying for a telephone handset. I mean an ordinary corded homephone. It was an obscene amount and if one compared it to one MADE in USA....so we aint gotta get into the whole China (low wages) thing,
Funny thing we essentially had a communist system without it being called that.
So let me tell you about some of the mentality.....

Each "manager" had an office to rival the Oval office. Hey he was a manager so he had arrived in the land of entitlement.
Small fridge for keeping "what" cold...fancy couch...
Of course personal assistant.....the more the cost element was pushed up the greater the plus 10% was so what the heck these plants had supernumeries at every turn.
Of course a guy like me comes along and hey i get seen as the devil.

But one thing for sure you can go to town either including or cutting costs till you blue in the face, if you do not have sales its a pointless excercise.

The issue is, is there a consistent demand for what you wish to make and what is the price that the market is prepared to pay or that you can get it to pay.

Once you know that you can set about looking at meeting the cost parameters you need in order to make a profit.

I can be the lowest cost widget producer and produce the widget by the 1000...but if there is only a demand for 100 per whatever period in whatever location or area then you still not going to survive and have a business.
Getting cost under control to match market requires strategy and creative thinking.
Example ....
Allen in NY has to buy wood at local market prices....that puts his box raw material cost right up there.
By comparison John D , Larry M, Paul (i think) all secure their own wood and cut and dry it and do so in locations where its possible.
This puts their lumber raw material cost at a significantly lower point than Allen. This is one way to tackle the problem.
Allen on the other hand can look to buy across the market and buy in a decent volume to get a better price, but he would need to find space to store it.
These are all issues that need to be managed.

Hence Larry my point to you that one has to consider ways and means to offer a product with flexibility in the options sufficiently to satisfy the target customer, yet at volumes that make it economical to do.
Lets be real buying hardware one set at a time, inccuring the shipping cost for each shipment and passing this all along with a further markup (which you need to do) will never result in a competitively priced product unless both competitors are doing the same.
We should not forget what makes the whole system we subscribe to is free competition.
That means we take some calculated risks in certain areas and we get creative about costs in others.

The other point in this discussion that i think Allen is forgetting is that its all good and well for us to discuss what the resulting labor cost is and to say i can get more working at (wherever) but what do you do if (wherever) is not hiring. Even the famous or rather infamous Walmart greeter job is in limited supply.

I think Steve makes an excellent point about what his missus does.
I dont we should discount the personal reward that people get when someone buys a product of theirs that they made. Lets face it there is a huge kick here even when you give it away ...to see the people who receive it enjoy it.

Sent from my MB860 using Tapatalk 2

I dont consider raw material cost a major factor when making a few dozen boxes to sell, not even a 100 boxes.
Material costs are tiny compared to labor costs.
And people who mill their own lumber, its not an easy task, hard work, having facilities to kiln dry, to store, again, this is off what Im still talking about.

I can buy enough lumber at 1.50 a bf and make less expensive boxes, I cant cut down much off of time consumption, what this thread is all about. bottom line.

theres just so little one can do to make something go together faster in their own shop when they, just that person is the entire workforce for all the processes that gets that one item from lumber yard, or backyard to cut down trees, to the show. and every step is time.

personal reward holds no place in my thread when it comes to making profit. no place at all, because Im trying to make something for profit.

its quite clear to see how many people thought they could make profit sellling their craftsmanship, 85% of the custom woodworking businesses in NY, (as Im sure the rest of this country) have gone under the past 5-10 years.

while a business has to deal with alot more stuff than a small garage shop making small craft items, my point remains the same. Time put in, cost to maintain an efficient work place, vs. profit one will get out of it.

rob, I believe youre thinking more of the lines along a "real" business model. And home crafts dont fit into that area. Im sure most guys who sell home crafts are not claiming that income on their tax forms. Im sure most dont pay liability insurance. Dont have to get permits, or get their shops approved by local govts.
Its just some person like me, in his backyard, trying to make a box that will be nicer than the next guys, but at the same time, not take him 4 hours to put together.

I have a different take.

If I paid myself by the hour I would fire myself by the first full day at work. I take at least 2 coffee breaks in the morning, 3 or 4 in the afternoon, I've been known to take 2 hour lunches, uncountable number of bathroom breaks, walk the dog 4 or 5 times, play on the computer for a few hours, play ball with the dogs, cut the grass or shovel the snow, play a minimum of 3 games of Candy Land with my grand daughter, then try and find something for supper before the wife gets home and asks what I've been doing all day......"Working in the shop all day" is my reply. She usually responds "you must be so tired, let me make supper"

I'm retired, not by choice, but because folks don't want to pay me, the old fart, the same money I used to make. They want to pay some young inexperienced kid a third of what I was making So what else do I have to do all day except something I love doing. I don't care about how long it takes me to make something. If I can make something for $20.00 in material and sell it for $60 or $70 I'm thrilled. I have a trade mark on my company name. Mackhill Woodworks and thats it. No marketing plan, no overhead, no special insurance, no advertising and no website. Everything is done by word of mouth.
I'm thinking about doing 2 local shows this fall. If I do and I make a few hundred bucks over the cost of the table I'll consider it a success.

If I wasn't in the shop doing and making what i want I'd possible be watching TV all day, or at the bar, or napping and feeling sorry for myself. So although I can see where a lot of you guys are coming from about profit and an hourly wage, If I can add a 2 or 3 hundred bucks a week to my tool fund or my vacation fund by goofing around I consider it a success.

Exactly

And the shop gets heated or cooled whether the item is sold for profit or not. The tools are bought and most likely will be sold for dollars on the hundreds or passed on to someone that will let them rust..

Though I made it to early retirement my bail out plan if I hadn't wouldn't have passed muster here. I planned on buying a piece of equipment( whatever was in demand at the time) a trailer to haul it and go out and do dirt work. The simple idea was that I could make my living off the equipment and let it wear it self out. I wasn't worried about the replacement cost because I had reached the age where if I took care of it the one piece would have lasted me until I was done. Then scrap price wouldn't have been to bad.

I always believed that the trouble with most business plans was the either they were to inflexible. One thing I learned from my farmer relatives that made it through all the tough times is you have to go where the money is. And a little diversity always helped out.

Even at regular jobs this was/is the key. For years every time I saw someone interviewed in Pittsburgh they were an out of work steel worker. No they weren't they were unemployed and used to be a steelworker!

The plain simple truth is I don't want to be working for anyone anymore except me. I do things most people that are my age I know won't do because they are too good for it. Last week the mower on my Kubota got tore up. I have no doubt that fixing it at the shop would have ran 600-1000 dollars. But I did a little grinding, welding, drilling chasing metal and ordering bolts from fasten all and spent less that 50.00 putting it back together. Now I spent 12 -15 hours on it and it doesn't look new. But I still do a lot of my own repair work and some of it I enjoy and some II don't but I always make well over 20.00 bucks an hour doing it at my own slow way.

Now I could say that when I worked I made over 40.00 dollars an hour fixing things plus benefits but I don't see what that has to do with it. That isn't really an option for me right now and I don't want to go back to having my life directed by others anyway.

I firmly believe that if I had to; I could buy a woodlot and make a living cutting firewood. I suspect I could feed us by making rubber band guns at 10 bucks a pop. I could rent a space and powder coat.

I couldn't make wood boxes and feed my family because I am not artistic enough to sell them for a price that would buy food. And I would rather cut and sell firewood than try and make boxes others thought were pretty.

But for the individual trying to make a living and enjoy life rather than become wealthy there are a lot of ways to do it and some might even make you wealthy..

Go to you tube and look at the videos by turn wright machine shop to see how one guy does it.

My wife's grand dad made enough money on a small farm in Iowa that he quit working for the most part in his 40's. He always told me making money was the easiest thing in the world to do. Just look around and do the opposite of what everyone else in your business was doing. He got his big break in the depression, when everyone else was giving away hogs, sometimes with a bushel of corn. He took then all in.. Butchered most of the mails and gave away the meat kept the sows and the females they had. Feed a lot of people and when the better times came back had one heck of a bunch of hogs to sell.

Garry
PS
And if my 401k wouldn't have taken a dump when I was 52 I would have retired at 55.
Obviously others see it differently.....

.

Bob Gibson said:

I have a different take.

If I paid myself by the hour I would fire myself by the first full day at work. I take at least 2 coffee breaks in the morning, 3 or 4 in the afternoon, I've been known to take 2 hour lunches, uncountable number of bathroom breaks, walk the dog 4 or 5 times, play on the computer for a few hours, play ball with the dogs, cut the grass or shovel the snow, play a minimum of 3 games of Candy Land with my grand daughter, then try and find something for supper before the wife gets home and asks what I've been doing all day......"Working in the shop all day" is my reply. She usually responds "you must be so tired, let me make supper"

I'm retired, not by choice, but because folks don't want to pay me, the old fart, the same money I used to make. They want to pay some young inexperienced kid a third of what I was making So what else do I have to do all day except something I love doing. I don't care about how long it takes me to make something. If I can make something for $20.00 in material and sell it for $60 or $70 I'm thrilled. I have a trade mark on my company name. Mackhill Woodworks and thats it. No marketing plan, no overhead, no special insurance, no advertising and no website. Everything is done by word of mouth.
I'm thinking about doing 2 local shows this fall. If I do and I make a few hundred bucks over the cost of the table I'll consider it a success.

If I wasn't in the shop doing and making what i want I'd possible be watching TV all day, or at the bar, or napping and feeling sorry for myself. So although I can see where a lot of you guys are coming from about profit and an hourly wage, If I can add a 2 or 3 hundred bucks a week to my tool fund or my vacation fund by goofing around I consider it a success.

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Im not sure I understand why people have posted in this thread that they woodwork for their own personal enjoyment.
I woodwork for fun, for the challenge it presents to me daily, to keep myself occupied, to learn new things, to experience new things, but this thread has nothing at all to do with this.


Im not knocking anyone that loves to woodwork and doesnt care about making money doing it. 90% of my woodworking, no 98% of my woodworking has been for relatives or friends, or myself.

allen levine said:

I think alot of people might be fibbin.

If anyone thinks of it as a business, you have to factor in the amount of time put in. ...

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LOML and I have been out of town a few days, so I'm catching up on some stuff now.

No, the people who told me they break even or make a few bucks taking wood items and other crafts to shows are being truthful. If you take time to chat with them, you get a sense of who they are and why they do it. As I said, they use their "craft business" to pay for vacations all over the country. They work in their shop during the Winter (the ones I've talked with live in the South). They love what they do and are efficient in their processes. Some projects are quick-hitters, while others take a bit more time. They do woodworking because they love it. They travel because they love it. Their "business" helps pay for vacations or covers them completely. Hourly pay never enters their minds.

What any of us might have earned in the business world should have nothing to do with our perceived worth as woodworkers. If we are hobbyists who are trying to help pay for our hobby, then the amount of time to build something can't enter the equation. If a project is so detailed that it requires hundreds of hours to complete, it's probably something one needs to be doing for one's self or family. Items the people I spoke with build for the shows are quick builds with inexpensive materials. Just because we made $40, $50 or $100 per hour in the business world doesn't mean our time is worth that as retirees enjoying a hobby. And, "enjoy" is a key word here.

A few years ago, I thought I wanted to seek out commissions for custom furniture pieces. Coincident with that was a request from my doctor to build a cabinet for their home. I quoted a fair price for the amount of detail involved and they agreed, although not without taking a deep breath. I got my price because the piece was worth it. An important thing that project taught me was that it wasn't what I really wanted to do in woodworking. My desire is to enjoy my workshop and build what I want to build. One thing I want to build is boxes of differing types for my own satisfaction and to place in local shops on consignment or possibly exhibit at a show occasionally. The key for me is to enjoy what I do. Retirement income and investments put beans on the table.

from what i have seen here the key statements is diversification, and the need to make something that is fast completion time and can be mass produced for the ordinary folk, also doing repair work seems to be a less of a loss setup if your not guaranteeing the repairs, not the special items that take a lot of time. those are where the wood worker can make and enjoy the ride and get a high dollar price but yet has high time frame to make. we will use the fantastic jewelery Armour that Marty Walsh made years ago,, had a bunch of time doing it and got a good price tag, but that was one item and then times got dry and now he is making cutting boards and doing ok with them.. just like the box company video showed us. looks like they had around 4 employees on that video and they making a simple product that doesnt have dove tail corners or special high dollar wood.. they got branded,, THEY not the box. and there they became known and got bigger and are making there money by selling to high volume folks a simple product that is set up to be made fast.. we need to find a fast product to make our business work for us and then do the fancy stuff that we all like to make for us or others at our pace, not the competitive pace..

Good thinking, Larry.

Well, from experience I have ruined, yes ruined some good relaxing hobbies. First one, horses, went to horseshoeing school, learned how to shoe horses, shod horses until my brain became stronger than my back. Farming, went to college and figured ten years and out to farm full time. Did the whole borrow money up to your eyeballs thing, farming from dusk to dawn, not seeing much of my family, quite a few acres, junk equipment, one wet fall missing third cutting of hay that lead into a wet spring/summer where I lost first and some of second cutting of hay. Sold everything but the 40 acres we live on. Went back to farming with horses like I was raised doing. So, when I built my shop on my farm its number one reason was for my sanity. Then if it saved me money finishing my house before I die, cool. If I create positive memories for my grandkids of grandpa puttering around his shop building them cool things and them building cool things with me, call it success and spell that in capital letters. Sorry for not adding anything earth shaking to this post Allen. Just my thoughts as I have followed this thread.

Allen on the other hand can look to buy across the market and buy in a decent volume to get a better price, but he would need to find space to store it.

one also has to remember that allen pays 3 prices for the large amounts of lumber he buys. the price he actually paid, the price he told mrs. allen he paid, and the price he pays when she finds out what he actually paid.

Dan Noren said:

... allen pays 3 prices for the large amounts of lumber he buys. the price he actually paid, the price he told mrs. allen he paid, and the price he pays when she finds out what he actually paid.

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Yeah, but only two of them involve money. The third one is more about pain than anything else.

Ive listed every price Ive ever paid for lumber here. From every dealer, every private person, and every trip Ive ever taken.
even when I didnt get good prices.

ok, so heres todays project. Yesterday afternoon I picked up a sheet of oak ply and left it ready to break down in the shop.

The client is my son. who else. He decided to hide all his components under the staircase, there is a 54 inch high door, and he needed something that would fit and be exactly the measurments he wanted. He needed a certain amount of space for each component, and 20.5 inches wide was the max width I could make it.

So if I were making this for someone else.......

This will be delivered sanded and ready for any finish the person wants.

The unit took me 3 hours and 20 minutes to complete. Thats including attaching the castors. The unit still needs to be cleaned up and sanded down.

Oak plywood, and white oak(only because I had strips of it) front, to increase the depth a half inch since I couldnt cut more than 15.75 inches wide and get it with one sheet., and it had to be 16 inches total.
No back, did not attach solid wood in back either.(dado's for shelves), clamped for 2 hours, I had put pins in also>
Very, very simple. As simple as i could build.

Cost of materialsfor dan):Oak plywood 60.00
1 bf of oak-2.00
4 castors-40.00(these are not new castors, I had these old ones, but I priced them and they are 10 bucks each, no need to use new ones for my son, he agrees)
16 lag screws to attach castors-13 cents each-1.92,

figure with tax, material cost 110.00
with sanding and cleaning, Im figuring 4 hours total. I cant charge anyone for picking up plywood, I have to price for time, not for anything else, it wouldnt be fair.
So 4 hours at 40.00 dollars an hour, the average rate any NY er would pay a carpenter to build anything.
that brings the cost of this unit for someone 270.00 , without finish. If I had to stain and add a coat of poly, Id have to add another 50.00

would the average person pay 270 dollars for this? Remember, its made exactly to customers specs.

A simple put together component unit on castors for home use runs around half of this in a big store.

1 16-u Rack mount Case, commercially availalable, made out of particle board 202$
4 Very basic Rack Mount shelf units, 35 a pop 140$
4 casters 40$
Total 382$

That, versus a custom made cabinet made out of quality materials 270$

I'd say you short changed yourself.

youre shopping at the wrong places. Ive seen units for less than 100 that were adequate and nice enough looking to do the job.

allen levine said:

youre shopping at the wrong places. Ive seen units for less than 100 that were adequate and nice enough looking to do the job.

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But not at your son's specs!! You're right though, not many would pay that for something like this. Maybe you should lower your hourly wage....