help with pricing of a project

[pierhogunn]

Folks, I am looking for some help with a per piece pricing on a batch of aluminum flag poles that I am building for a retailer.

While sitting with them this past weekend we figured that $75.00 a piece for an 8' long anodized flag pole that broke down into 4 24" pieces that are shock corded together like a tent pole, made out of anodized aluminum, and weighing about 1 pound was reasonable.

but after searching on the internet I can get a telescoping 6' flag pole for about $30.

The major differences in mine are

1. Mine is made out of anodized aluminum that looks like chrome
2. Mine does not telescope, but breaks down into a smaller package ( in length)
3. Mine is easily repairable
4. Made in America...


So I humbly approach this august body and ask for some help, and helpful criticism so that I can make a better flag pole to sell .

The retailers went absolutely crazy over these things and wanted 20 of them right off the bat. I have enough material to make 33 poles

[iceman61]

Dan, it sounds like you may have a winner. Congratulations!

Could you elaborate a little more on exactly where you need the help?Your post is kind of confusing. Your post title is asking for help with pricing but you stated that you already had a meeting with the retailers & everyone agreed on a price already? I'm thinking you stand a big chance of losing the account if you go back to them & try to renegotiate right off the bat before the ink is dry on a contract. You ended your post asking for help building a better flag pole. It may just be me but I'm having a hard time trying to figure out what you are needing help with.

I do have some advise. Build & sell as many of those flag poles as you can today. Try to not stockpile too many materials. That way you don't get caught if orders start getting cancelled. You don't know what tomorrow will bring with today's economy so ride that wave! Good Luck!

[LarryG]

I think Dan's concern is potential buyers balking at $75 for his pole, if they can buy a flagpole they perceive as similar for only $30. Many buyers might say, "Okay, sure, this $30 pole is two feet shorter, but it's also less than half the price. so why should I pay $75 when I can pay $30?" So the question is how to market his pole, and persuade buyers it's worth the extra dosh.

Right, Dan?

[RAV2]

Be careful - have you seen this (16' telescopic aluminum with flag for $33 or less):

http://www.harborfreight.com/cpi/cta...emnumber=92901

My old neighbor used to always complain that the projects that he priced out frequently cost more in raw materials than what a similar commercially available item would cost.

Selling an item like this is only possible if you are trying to recover some costs from a hobby - not become a financially viable business.

[Alex Franke]

1. Mine is made out of anodized aluminum that looks like chrome
2. Mine does not telescope, but breaks down into a smaller package ( in length)
3. Mine is easily repairable
4. Made in America...

Be clear about what sets yours apart and set the price at $75. It's a lot easier to go down in price than up, and these things don't have a shelf life. You might even bundle a flag.

I'd also make the "does not telescope" feature sound more like a positive than a negative. (e.g. why is it better than a telescoping pole) -- oh and also say "Made in USA" instead of "Made in America".

What an absolutely perfect way to spend some economic stimulus package dollars with pride... on a flag pole, made in the USA!

[pierhogunn]

I think the 2 biggest selling points for this flag pole are it's very small size when collapsed, and it's finish.

The retailer and I are meeting next Wednesday to discuss actual in store pricing, and wholesale pricing for them.

the outfit that I am working with is CaberDancer, you can do a google search for them. they produce flags and banners for people who travel all over the country and fly flags with their heraldry on them ( Scottish Clan Stuff) but the never have a flag-pole of their own, they always have to borrow one from the local folks.

This product can / will be bundled with the banners, and with some of the other products.

I am also working on a companion products to mount these things to the tents that they have at most of the highland games w/out having to use duct tape on the nice shinny aluminum.

If the pricing is right, I will be offering these poles in gold and bronze anodized aluminum, along with some of the flouro-painted colors from SAF

[poolhound]

Dan,

When you said $75 was this your price to the retailer or a MSRP? Did the retailer give you any indication for the market size (how many he can sell and over what time period)?

A good place to start is material cost. From your point of view you dont want to be out actual cash based on what you paid for materials. Next step is how long do they take to make. lastly in a perfect world what would you like to get out of it - your margin?

The bottom line is that "market based pricing" is the only real way to do this. What is a consumer willing to pay for a product with certain features and benefits. To justify a higher price there needs to be some clear and distinct differentiation from other products.

Think tools e.g. HF vs Delta vs Powermatic. they all sell the same thing - right!! Powermatic prices are probably at least 4X HFs or more depending on the tool so why dont we all buy everything from HF - some do I guess

[jackellis]

Dan, I think you were pretty clear about the differences. One more to consider is durability. Is the telescoping pole going to stand up to minor abuse as well as yours?

[just started]

Your sections are all the same size (strength) tubing as opposed to telescoping having each section needing to be smaller (weaker) tubing so it can fit inside the lower section.

Made in the U.S.A!

You didn't say how much the raw material costs you or how long it takes to turn that into a flag pole so it's hard to determine if that is a reasonable price (or if that is your sale price or retail), and if that is retail what are you getting?

[pierhogunn]

materials are

per flag pole with current batch of aluminum

$3.50 in aluminum
$2.00 in dowel
$.50 in shock cord
$.12 in screws

$6.12 in materials
and 1/2 hour per pole, and I charge about $65/hr for technical support so $32.5 in labor

so my cost is 38.62 per pole

these flag poles did withstand some very high winds the past weekend when a strong storm system blew through NC. so I know they are quite tough

[just started]

I should have said HAND made in the U.S.A!

At that cost $75 sounds like a fair price for you to get from the retailer.

[Rslaugh]

Your customer is the guy who agreed to pay you $75 for 20 pieces which sounds like approx 50% margin to you. Take the order. make sure you get paid on delivery. Marketing to his customers is his problem. If he over-estimated what he can get his customers to pay for them he might have to sell them at a loss. Not your problem (yet). Its a secondary product for him. He really makes his money selling flags so it's not that big a deal in the long run. On the next order he may come back to you and re-negotiate. Then you have another decsion to make. is it worth it to you or not?