The cost of a Custom Cue
- Thread starter Arnot Wadsworth
- Start date
Any cue I build was started over 5 years ago. During those years I worked on the shafts, cores, veneers, and exotic woods, turning them repeatedly and throwing away any that failed for any reason. Additionally some 20-40% of the wood I receive from my suppliers is rejected as soon as it comes in the door. (If too much is bad I find another supplier)
The only way I know to tell how much time it takes me to make a cue is to figure that I make about 50 cues a year including sneaky's and I work at least 2,000 hours including paperwork. That is 40 hours per cue. This doesn't count anything at all for the cost of anything I use. Wood, screws, finish, linen, phenolics, gasoline, show costs, advertising or electricity.
I have a $30,000 wood inventory,a $50,000 machinery inventory,and a tooling inventory of $30,000+. All housed in a seperate building for my shop that I cool year round. I've been working on cues for almost 50 years and building full time for 20. What would be reasonable price for a cue?
The only way I know to tell how much time it takes me to make a cue is to figure that I make about 50 cues a year including sneaky's and I work at least 2,000 hours including paperwork. That is 40 hours per cue. This doesn't count anything at all for the cost of anything I use. Wood, screws, finish, linen, phenolics, gasoline, show costs, advertising or electricity.
I have a $30,000 wood inventory,a $50,000 machinery inventory,and a tooling inventory of $30,000+. All housed in a seperate building for my shop that I cool year round. I've been working on cues for almost 50 years and building full time for 20. What would be reasonable price for a cue?
WheatCues
Banned
Paul Dayton said:
Paul,
This is where YOU are the only one who can command YOUR price due to the fact of ALL the expenses you have to consider...
Also you are an accomplished Cuemaker so people are accustomed to spending a little more for your cues becasue of your going market price...
I would think you have pretty much set your prices and the public knows what to expect from you...
So given that scenario, do you feel your prices are sufficient, or too high or are they too low ?
Sincerely, Eddie Wheat
Paul Dayton said:
Hours in a year 2080
Pay yourself a pittance 25
52000
Materials Cost 5000
10 years equipment depreciation 10000
10,000 New Equip each year 1000
Tooling Depreciation 6000
New Tooling 6000
Shop @1500/mo 18000
Cost 98000
Markup (50% margin to allow for resellers) 196000
Per cue $3,920 , Will that be cash, check, or charge?
WheatCues
Banned
dchristal said:
Would you mind translating that into lamen's terms for us uneducated idiots like me that cannot decypher exact value of the determined numbers due to the fact that the detailed info is lacking that gives us reference to formulate your equation !
I would greatly appreciate it becasue it looks very interesting on how you acheived your answer...
Sincerely, Eddie Wheat
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I love lamp.
Removed from forum
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Straycat
Banned
truth hurts eh arny.i cant spell and u cant build a cue that hits worth a crap either and ur customer service suks arny.a players cue hits a lot better than any of ur overpriced cues.
heres a link fer you:
http://forums.azbilliards.com/showthread.php?t=87377&highlight=arrogant+cuemakers
heres a link fer you:
http://forums.azbilliards.com/showthread.php?t=87377&highlight=arrogant+cuemakers
I'm a little embarrassed to be responding to this
Sorry Eddie,
I'm not going to fuel your marketing engine by becoming involved in a lengthy thread. If this doesn't cut it for you I'm sorry. I do see a couple of typo's in my post and it really doesn't look much like the spreadsheet I did it in.
Equipment should probably depreciate over 5 years rather than 10, so 50,000 depreciated over 10 years is correct, but it should have read 5 years.
Paul didn't mention new equipment purchases, but I imagine that does buy new equipment once in a while, so I accounted for it. Again, 5 years is a typical lifetime for equipment, and maybe 10k in new equipment per year is a little high, so let's just assume that Paul buys about $5k in new equipment in a typical year and recognizes $1k.
$30k in tooling depreciated over 5 years is $6k per year in tooling cost.
It's not reasonable to think that Paul will never buy any new tooling so I estimated that he replaces $6k in worn tooling each year, but I failed to account for deprecation so you got me there, it should have been $1k for this year. Go ahead and subtract $200 from the price of a cue ($4,000 overstated tool expense / 50 cues).
I don't know the size of Paul's shop, how well insulated it is, what he pays in taxes each year, or much anything else about him for that matter, so I scientifically wild ass guessed at his facilities cost (1,000 feet, dollar a foot, 50% for taxes, juice, maintenance, etc.)
This concludes the explanation of what it costs Paul each year to produce his 50 cues. Since you have been in the cue business for almost 20 years, I must assume that you and your tax accountant have covered these topics in your tax planning.
Now, regarding the 100% markup (50% margin), I imagine that Paul wishes to spend his time making cues and allow someone else to market them. Of course, no one will want to do that if their customers can go straight to Paul and get them for half price.
Now here's the really tricky part. I don't think that Paul was really looking for a full analysis on his cue pricing. IMHO he was simply making the point that it will be a cold day in hell when cuemakers really get paid what they should. My answer was simply to reinforce that argument tongue in cheek (not to provide a lesson on depreciation to laymen).
Eddie, if you still need more answers you'll need to get your friends to post your questions to me, because right now, you're on COD.
Kind Regards,
David Christal
WheatCues said:
Sorry Eddie,
I'm not going to fuel your marketing engine by becoming involved in a lengthy thread. If this doesn't cut it for you I'm sorry. I do see a couple of typo's in my post and it really doesn't look much like the spreadsheet I did it in.
Equipment should probably depreciate over 5 years rather than 10, so 50,000 depreciated over 10 years is correct, but it should have read 5 years.
Paul didn't mention new equipment purchases, but I imagine that does buy new equipment once in a while, so I accounted for it. Again, 5 years is a typical lifetime for equipment, and maybe 10k in new equipment per year is a little high, so let's just assume that Paul buys about $5k in new equipment in a typical year and recognizes $1k.
$30k in tooling depreciated over 5 years is $6k per year in tooling cost.
It's not reasonable to think that Paul will never buy any new tooling so I estimated that he replaces $6k in worn tooling each year, but I failed to account for deprecation so you got me there, it should have been $1k for this year. Go ahead and subtract $200 from the price of a cue ($4,000 overstated tool expense / 50 cues).
I don't know the size of Paul's shop, how well insulated it is, what he pays in taxes each year, or much anything else about him for that matter, so I scientifically wild ass guessed at his facilities cost (1,000 feet, dollar a foot, 50% for taxes, juice, maintenance, etc.)
This concludes the explanation of what it costs Paul each year to produce his 50 cues. Since you have been in the cue business for almost 20 years, I must assume that you and your tax accountant have covered these topics in your tax planning.
Now, regarding the 100% markup (50% margin), I imagine that Paul wishes to spend his time making cues and allow someone else to market them. Of course, no one will want to do that if their customers can go straight to Paul and get them for half price.
Now here's the really tricky part. I don't think that Paul was really looking for a full analysis on his cue pricing. IMHO he was simply making the point that it will be a cold day in hell when cuemakers really get paid what they should. My answer was simply to reinforce that argument tongue in cheek (not to provide a lesson on depreciation to laymen).
Eddie, if you still need more answers you'll need to get your friends to post your questions to me, because right now, you're on COD.
Kind Regards,
David Christal
Arnot Wadsworth said:
How bout I buy a $1000 custom on Tuesday... sell it for $1200 that same day and go play pool for free all day long (cause pool is free all day long on Tuesdays) take the $200 I made... buy beer with it...drink it... and play pool with a house cue.
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dchristal said:Sorry Eddie,
I'm not going to fuel your marketing engine by becoming involved in a lengthy thread. If this doesn't cut it for you I'm sorry. I do see a couple of typo's in my post and it really doesn't look much like the spreadsheet I did it in.
Equipment should probably depreciate over 5 years rather than 10, so 50,000 depreciated over 10 years is correct, but it should have read 5 years.
Paul didn't mention new equipment purchases, but I imagine that does buy new equipment once in a while, so I accounted for it. Again, 5 years is a typical lifetime for equipment, and maybe 10k in new equipment per year is a little high, so let's just assume that Paul buys about $5k in new equipment in a typical year and recognizes $1k.
$30k in tooling depreciated over 5 years is $6k per year in tooling cost.
It's not reasonable to think that Paul will never buy any new tooling so I estimated that he replaces $6k in worn tooling each year, but I failed to account for deprecation so you got me there, it should have been $1k for this year. Go ahead and subtract $200 from the price of a cue ($4,000 overstated tool expense / 50 cues).
I don't know the size of Paul's shop, how well insulated it is, what he pays in taxes each year, or much anything else about him for that matter, so I scientifically wild ass guessed at his facilities cost (1,000 feet, dollar a foot, 50% for taxes, juice, maintenance, etc.)
This concludes the explanation of what it costs Paul each year to produce his 50 cues. Since you have been in the cue business for almost 20 years, I must assume that you and your tax accountant have covered these topics in your tax planning.
Now, regarding the 100% markup (50% margin), I imagine that Paul wishes to spend his time making cues and allow someone else to market them. Of course, no one will want to do that if their customers can go straight to Paul and get them for half price.
Now here's the really tricky part. I don't think that Paul was really looking for a full analysis on his cue pricing. IMHO he was simply making the point that it will be a cold day in hell when cuemakers really get paid what they should. My answer was simply to reinforce that argument tongue in cheek (not to provide a lesson on depreciation to laymen).
Eddie, if you still need more answers you'll need to get your friends to post your questions to me, because right now, you're on COD.
Kind Regards,
David Christal
No real bone to pick here, you are being helpful and breaking things down to demonstrate how the value of a cue needs to be established for a builder in order for him to pay bills and eat.
I would point out though that I believe your tooling and equipment turnover once the needed inventory is built up is on the high side. If maintained, the lathes and saws etc last a very long time, and maintenance is relatively cheap. Also, most of the expensive tooling lasts a long time with little wear and tear, and what needs to get replaced that often is of lower value. Don't get me wrong, new equipment and tooling is always needed (and building up that inventory is very expensive), but 11K a year to completely replace his entire inventory every 5-10 years (I recognize you reduced the initial estimate of equipment from 10K to 5K a year) just seems very high and sounds unnecessary to me.
Kelly
WheatCues
Banned
dchristal said:Sorry Eddie,
I'm not going to fuel your marketing engine by becoming involved in a lengthy thread. If this doesn't cut it for you I'm sorry. I do see a couple of typo's in my post and it really doesn't look much like the spreadsheet I did it in.
Equipment should probably depreciate over 5 years rather than 10, so 50,000 depreciated over 10 years is correct, but it should have read 5 years.
Paul didn't mention new equipment purchases, but I imagine that does buy new equipment once in a while, so I accounted for it. Again, 5 years is a typical lifetime for equipment, and maybe 10k in new equipment per year is a little high, so let's just assume that Paul buys about $5k in new equipment in a typical year and recognizes $1k.
$30k in tooling depreciated over 5 years is $6k per year in tooling cost.
It's not reasonable to think that Paul will never buy any new tooling so I estimated that he replaces $6k in worn tooling each year, but I failed to account for deprecation so you got me there, it should have been $1k for this year. Go ahead and subtract $200 from the price of a cue ($4,000 overstated tool expense / 50 cues).
I don't know the size of Paul's shop, how well insulated it is, what he pays in taxes each year, or much anything else about him for that matter, so I scientifically wild ass guessed at his facilities cost (1,000 feet, dollar a foot, 50% for taxes, juice, maintenance, etc.)
This concludes the explanation of what it costs Paul each year to produce his 50 cues. Since you have been in the cue business for almost 20 years, I must assume that you and your tax accountant have covered these topics in your tax planning.
Now, regarding the 100% markup (50% margin), I imagine that Paul wishes to spend his time making cues and allow someone else to market them. Of course, no one will want to do that if their customers can go straight to Paul and get them for half price.
Now here's the really tricky part. I don't think that Paul was really looking for a full analysis on his cue pricing. IMHO he was simply making the point that it will be a cold day in hell when cuemakers really get paid what they should. My answer was simply to reinforce that argument tongue in cheek (not to provide a lesson on depreciation to laymen).
Eddie, if you still need more answers you'll need to get your friends to post your questions to me, because right now, you're on COD.
Kind Regards,
David Christal
Thankyou for taking the time the break that down for me... I find it very interesting and will definitley sit down and put everything on paper regarding my equipment and overhead costs and see what I come up with as well !!!
I appreciate your time.....
- Eddie Wheat
WheatCues "The last thing I want to do is corner the market, becasue then this wouldn't be fun anymore..."
Edie-the only market you're going to corner is the whacko market.
BTW-in speaking with a couple of very well known cuemakers in your area, and guys who play a lot down in your neck of the woods and know you, they tell me that you can't play worth doo-doo.
They also had some interesting stories about you from yesteryear. After hearing those stories, it was easy to understand how your version of reality differs from everyone else's reality.
Edie-the only market you're going to corner is the whacko market.
BTW-in speaking with a couple of very well known cuemakers in your area, and guys who play a lot down in your neck of the woods and know you, they tell me that you can't play worth doo-doo.
They also had some interesting stories about you from yesteryear. After hearing those stories, it was easy to understand how your version of reality differs from everyone else's reality.
WheatCues
Banned
SirBanksALot said:
Nice try !!!
I'll give you the last 3 if you want to test me out !!!!
Everyone knows my caliber of play and not very many disrespect my game because they know I CAN back it up !!!! just like my cuemaking.....
p.s. if you learned how to play better position then you wouldn't have to Banks-Alot !!!
- Eddie Wheat
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Since this thread is probably gonna get pulled soon, boy it's hot here in California today.
I feel guilty in using AC b/c it's still bearable with a fan.
I try to avoid cutting woods in days like this so I just cut phenolic and micarta rings.
I feel guilty in using AC b/c it's still bearable with a fan.
I try to avoid cutting woods in days like this so I just cut phenolic and micarta rings.
WheatCues
Banned
JimL said:
That's because I maintain a neutral position.... it gives me balance, and it allows me to foresee the hidden agenda in alot of the retorts...
Like I said before, I govern myself accordingly and do NOT hold grudges normally, and if I feel the need to goto extremes it's not a far stretch in either direction....
- Eddie Wheat
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Really?
You sir are the worst antagonist in any of these threads.(Just a neutral observation)
WheatCues said:That's because I maintain a neutral position.... it gives me balance, and it allows me to foresee the hidden agenda in alot of the retorts...
Like I said before, I govern myself accordingly and do NOT hold grudges normally, and if I feel the need to goto extremes it's not a far stretch in either direction....
- Eddie Wheat
You sir are the worst antagonist in any of these threads.(Just a neutral observation)