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Making money

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I just started playing around making some stuff, mostly as a hobby, but I'd like to sell some of what I make to support the hobby. When I figure out the cost of material, wood, hardware and paint, and then see how much comparable items sell for, there seems to be no room for any profit.

I'm just talking about materials, not the other real costs of doing business

Skip the costs of tools, and other normal overhead - I have a $50,000 workshop already paid for over the last 25 years from hobby woodworking.

Skip the costs of web sites and computers, that's my main business, so I already own all that.

If I actually figure the full real costs, it seems I would have to sell at a loss.

What am I missing?

E.g. what could I expect to sell a 5" basswood prop bait (with a basic paint job) for, and what should be the actual cost of material?

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What is a basic paint job? I have never seen one on this site.

All the baits here are custom made or custom painted and

there is nothing basic about it.

You can turn a profit painting plastic, but if you spend

the time it takes to produce a handmade balsa or other

type of wood bait with any quality in it, you will recover

your material cost, labor is out the window.

And let me assure you the quality that fisherman are willing

to pay for doesn't come overnight.

Coley

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Without factoring in the labor, I figured each one of my balsa lures cost me approx 70-90 cents in materials,(wood, paint, hooks) now for labor each lure is approx 7-10 hours to complete from start to finish. I have sold 4 lures and I charged for quality and custom work that went into each lure and, (those covered enough balsa wood to build couple of hundred blanks.) If you put the quality into the lure it is worth charging extra for. You are building better lures than your customer can buy at wal-mart. I am not looking to build a business, I would like to cover my tools and materials but I don't want to be forced to work on lures everyday to try and keep up with any demand. I love this as a hobby and enjoy giving the lures to friends and family.

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I know of several different cranks being made in Cincy....that pull between $12.00 and $20.00 each. These guys cant make enough of them.

Of course they have to catch fish....not just the fisherman.

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Without factoring in the labor, I figured each one of my balsa lures cost me approx 70-90 cents in materials,(wood, paint, hooks) now for labor each lure is approx 7-10 hours to complete from start to finish. I have sold 4 lures and I charged for quality and custom work that went into each lure and, (those covered enough balsa wood to build couple of hundred blanks.) If you put the quality into the lure it is worth charging extra for. You are building better lures than your customer can buy at wal-mart. I am not looking to build a business, I would like to cover my tools and materials but I don't want to be forced to work on lures everyday to try and keep up with any demand. I love this as a hobby and enjoy giving the lures to friends and family.

If you look at it at dollar per hour bases, Your better off heading over to Micky D's and applying for a job. :rolleyes: Even if itonly took you 3 hrs and you got $20, that's not far from minimum wage. 8O

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You are correct Husky, I just enjoy making the lures and trying different designs. But if you are going to take the time to make a quality lure then you should be paid for at least some of that time.

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I'm just getting started with 'rolling my own" but here's my opinion on your question: If you're looking to offset some of your costs for your hobby, I'd think approaching it from a barter perspective might be more effective. Trade baits for wood, terminal tackle, etc.

If you want to make money, come up with a distinct design and then find a manufacturer to do some mass production for you. Work Smarter - not harder.

I'll go back to my newbie corner now...

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If you make a quality lure you will sell a few but if you make a lure that catches fish you can sell alot. I try to make the best fish catching lure I can. The rest is up to the guy that buys the bait. Ive been tinkering with this lure thing for pretty close to 10 years. Does anyone make a profit I have no idea for me If I am even at the end of the year I'm happy

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Just can't do it! Are they going to buy your expensive custom lure or are they going to look at the look alikes in the sporting goods bin for $1.99 and buy 1/2 dozen. Thats the Mfc. thats pumping them out at 1000 plastic molded lures at a time VS your 1 wood lure. Your going to need some BIG help like He! He! W A L M A R T. to be reconized. Good Luck!

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You can do it. You can make quality lures and make a profit. You won't get rich doing it by yourself..... but you can make a modest living. It is alot of work just like any other business. You will have to put out money for equipment and materials. It is all part of the game. You will also have to be part wood worker, laborer, artist and engineer. If you come up with something that a company wants to buy from you so they can make it, then you could make some "Flash in the Pan" money. It seems like a chunk but it doesn't go far if you really think about it. I had that experience 2 yrs. ago. After thinking hard about it I did not sell the rights to the bait. Nothing in this hobby comes easy. Making money "Consistantly" with a quality product that produces fish is the name of the game. Like Blackjack said.... The fisherman has to do his part also.

Skeeter

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If you want to make any money at this,you have to remember the type of client your courting...the average guy who fishes a few times a year is going to Wal-mart...He is not going to drop 20-30.00 bucks for a lure.

You are looking for the tourney fisherman.....they are looking for that little edge that may put several thousand in there pocket...or the trophy hunter like the boys out in California.......they'll drop 100.00 for a swimbait if it's a proven trophy bait.

This is all assuming your after the Bass Market....If your looking at the Muskie market,a 20.00-25.00 dollar bait doesn't even raise a eyebrow.

Quality is the key here...If you build a better mouse trap...."They will come"..Nathan

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Nathan is right on about making money in the fishing business or any other business for that matter. Even the best products of any type are no good unless you know how to market them. In order to get charters here on the Detroit River, I might do 4 to 10 sport shows a year in places where walleye fishing is a hot item, ie Chicago, Indianappolis, Milwaukee and guys are looking for trophy fish. I generally have far more business than I can handle, in fact my partner and I have been booking for other captain's also. We are getting too old to run doubles, but would have no trouble booking them. At the shows, we have lots of photos of big walleyes to reinforce our fishing claims plus a fiberglass mount of the MI record walleye. Stops them in their tracks. But the main factor here is that we produce and word gets around.

Your lures must also produce fish for those willing to pay the price to purchase them. Having been around tourney fishing since it began (both bass and walleye) I can assure you that a unique lure or technique that will give an angler the edge is a genuine hot ticket item. I remember when the first of the so called fat or alphabet lures (the Big O) hit the B.A.S.S circuit. Guys were actually renting them for tournaments. They were sold by the half dozen in egg cartons for $30 a pop, an unheard of price back then, and the fact a feature article in Field and Stream appeared back in 1971 or 72 really gave the product a boost.

Like many things, timing is everything. Within a few years there were so many similar lures on the market that the Big-O sort of faded into obscurity with a bunch of other crankbaits like Fat Albert, The Big-N, etc. The fact the originals were wooden, handmade items but the mass produced ones were plastic also had an effect as the plastics didn't seem to be as productive.

The fishing lure industry is full of table top lure makers coming up with winning items (Charlie Helin, Tom Mann, Al Linder to name a few) but they only seem to really make it big when properly marketed by others.

The Big-O probably represents tourney fishing and tackle marketing more than any other crank ever made. With that said, keep on trying, as someone somewhere will invent the next Big-O and like it's inventor probably not make much money off it.

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My hourly rate in "the real world" tells me I should get about $200 plus materials for every crank I turn out. Any takers? Didn't think so! After seeing several well regarded rodmakers go out of business, I remembered something my business savvy Dad once told me: "Son, if it costs you $20 to make a thing and you're selling it for $19.95, the better your business gets, the faster you'll go broke." Bottom line for me - do it for fun and give them away. If they want to pay tell them they can't afford it. :wink:

Fortunately for us fishermen, not all custom crank makers think the same way!

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I'm convinced a guy can make money at this otherwise there wouldn't be so many big names doing it. Now whether us small guys making a few baits at a time can make money is another story. I am making a bit of money on my baits but if I were to figure out my hourly wage I'm guessing it would be somewhere around 5 dollars an hour; but for me as a second job this still beats flippin burgers, pumping gas, etc..

I build lures first and foremost because I enjoy it and what little money I make on the baits is mostly dumped right back into materials.....well except for that Lear Jet I purchased last month. If you want to make money at this I would say you will have to do what all big companies are doing to be successful..... outsource. Take a look at anything you buy these days from Cabelas, or whoever, nearly everthing has a tag on it saying "made in china or made in india". There's a reason why so many products come from overseas and why so many jobs from this country are headed that way, it makes money! Look at WalMart.

Beyond that tho, you will need a product that is better than most and better than all would be better yet.

Jed

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Growler, I just received my 2005 Bass Pro spring catalog in the mail today. There are hand crafted balsa cranks in there with custom paints jobs that looked nice, but I've seen much much better on this site.....The guy that made them was charging $22.95 a piece. The way you are going to make money is to charge 19 or 20 dollars per bait. Some tournament anglers will swear by custom made baits and this is where you can make most of your money. If you go to the Boat, Sport, and Travel show, there are all kinds of baits hand-crafted for 19.99. Just some of my own advice. Hope it helps.....someone correct me if i'm wrong on this one.

Catch em up

Brian

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Havent looked through the new catalog yet.....not thoroughly anyway. But Bass Pro a month ago was carrying Tim Hughes baits. $22.95 in Cincy. $20.00 bucks is the going price for custom cranks.....the ony people that will buy them are tourny anglers though....people that know how to cast. They arent afraid of losing them.....Oh boy....not that weekend anglers cant cast. For the most part it would be tourny anglers...wanting the edge. Look at Lucky Craft.....$15 a pop, for mass produced nice paint jobs, but mass produced. Rico's $22.00 to $25.00 the last 5 years. Can you make money at $20.00 a piece though? Some people say NO on Balsa baits. I would say about 5 bucks an hour...and if you are selling them at the ramps....you would avoid taxes if.......if......you chose to go that route. Not that you should do anything to get yourself in trouble. More of a way to get your name recognized. Of course it may support the Bass Boat a little bit as well.

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Well, I am in the middle of a experiment...

Last year I sold enough cedar cranks to peak my interest in seeing if I could "really" produce a salable handmade crank and possibly actually make a living doing it. Mind you this is 20 years in the making as to reasearch, developement, and component sourcing.

So in the past week I have put in nothing but time in on mass producing a flatsided cedar crank that I have been selling quite well with vith various diving lip configurations. I have in various stages over 800 units moving along the assembly line. Today I glued the belly weights in over 100 and will be sealing them and drying overnight.

This leads me to ask, what is a fair price per lure to ask for a good quality handmade crank, and be able to sell them at the rate I can produce them? Taking in to mind I have just under 90 cents into each lure including package, brass hangers, various injection or die cut lips, oval split ring and premium hooks. Right now I sell them as fast as I can make them at 9.99 each. I am really not inclined to raise the price just to match the others making handmade cranks, and actually am considering lowering the price if production starts to far surpass demand.

I really dont need anymore cranks in my boxes!

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CatchingConcepts! So are you claiming that you are now a Mfc. company and paying a Mfc. tax plus all the other taxes? Now that you mass produce . your no longer a hobbyest. These taxes will have to be figured in. Fed., State, local. This can drive the price up. Do you have a company name and product name? is it protected on the trade? I'm courious!

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Damn... just take all the fun outta it by mentioning taxes! IF this thing gets off the ground I will pay my share including the damn excise tax and all...

Not worried about protecting anything trade wise... too many get caught up in that patent stuff and is not the productive direction to go when you are start up.

For now, I am a hobbiest with aspirations, we shall see what becomes of all... like I said I may have plenty of crankbaits to fish with!

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http://www.taxlinks.com/rulings/1985/revrul85-152.htm is the link for the Federal Excise Tax imposed upon fishing lure manufacturers. If you don't pay your excise tax Uncle sam will take you to court, find you guilty and close your business down until you pay your excise tax and the financial penalties assessed by the court . There are IRS agents that search for online sites that are selling items and do not pay their excise tax. Believe me everyone here on this site if you are selling and not paying your excise tax Uncle Sam will catch up to you. If you do not have the capital to pay your penalties Uncle Sam has the right to sieze any assets that pertained to manufacturing. So before you get in to deep, contact an attorney get incorporated as a Business with a Fed. Tax ID # and contact an accountant that is familiar with the Exise Tax and have him/her file your taxes. These are the reasons that I charge 20.00 per bait. I am actually think of jacking my prices up to $25.00 per bait . If you can charge $9.99 a bait pay your state and federal taxes and you Excise Tax God Bless ya. If you are making a quality product that catches fish then there are buyers that will pay your price. Sorry about the long post but I know of people who have lost their business because they either thought they did not fall into the manufacturer category, were ignorant of the law, or were just taking a shortcut.

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Thats one of the Items that shot me down! either go all out or in trouble for Mfc. lures with the taxation!. this can make you or drive the cost up and then break you. You'll need a registerd name to get out and I'm not talking a pat# when I say product name and company name protection. You don't want someone selling your name on the lure or calling your lure by somone else's protected name. > If i make a copy of a Zarra Spook> I can't use that name and I must make a small change in the lure. So you got trade marks and copy rights to think about. Its not easy! this is why they look for sponsors and to get reconized for a sponsor its a long road starting in your own backyard. Also with a tax # > you'll get big breaks from suppliers on line. Some only deal with companies that are registerd. GOOD LUCK!

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BlackJack is right, the tax concern is a valid one and I have been keeping careful records of all my sales in this past year to deal with it. If your baits are selling at $10.00, leave the price there, why come down? There are mass production bait such as Lucky Craft that are more than that each...if anything I would go up!

Regarding a business name it's no big deal, register your name with the state in which you are living in, think it was 50 dollars here in Oregon. As far as a federal tax ID#, it's my understanding you use your SS# unless you are hiring employees. I see no reason to copyright your business name or logo as there really isn't any big advantage for someone else to use it anyway. And the fact that you are using your company name now and can likely prove that in court provides you with some protection. Patents? Forget it, every possible concept you can think of has a dozen patents covering it, save your money.

RM

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Riverman is right on! If you have any questions take advantage of the taxes you already pay and visit a small business administration office or at least call or visit a their web site. If you are a veteran or handicapped, there are even special loans and other sevices available to you through SBA. Don't let others make you give up your dream. Only you can fulfill it or tell when it isn't going to work. Good luck.

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Just curious, are you saying that you have put out 800 baits at some stage in one weeks time? 800 pieces.... At 10 dollars a piece that is 8 grand. Take out the say 1000 cost as you have spec'd and that is enough profit to keep most happy for a month. Just on the initial 800 pieces. Can you start 800 baits a week? Way beyond me......If you could start 800 a week assuming you could sell this many and continue every week forward you are talking about clearing over a quarter million a year. Or have i misunderstood something? Of course you would have to pay the taxes...but even at that........

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