Math formula

[kipbass]

I have a few guys at work willing to buy a few bags here and there. I've never owned a business, not looking at starting one either. I need a formula for figuring the price per bait made...I guess that's what I need to figure??

[kipbass]

Well let's see if I can rephrase this.......If I use 4oz of plastic and get x number of baits, how do I figure what it cost me per bait?

[pjmcla]

You need to know the following.  How much does the bait weigh?  How much glitter and how much color per 4oz?  Now how much waste will there be with each shot and how many shots per 4oz?
You are trying to get to a "total cost" per 4 oz. of plastic ,colored and glittered, and how many "finished baits" will that 4oz. make?  IE. Raw material cost.  Now how long did it take you to make the baits and how much are you going to charge per hour for your labor?   IE. Labor cost.
Are you going to charge for the electricity to run the microwave and the vent fans, lights,  air conditioning / heating?  IE. Utility Cost.  What are the disposable supplies cost ( paper towels, Worm oil, zip loc bags, Scents, etc.?  IE. Supplies Cost.  Are you going to amortize your mold,  microwave, fans, pouring cups, etc. across a given number of baits?  IE. Fixed overhead cost allocation.     As the accountant always says;
"It depends".

[Jason]

If you are making baits to sell, the 5 gallon route is the most cost effective way to go.  You can measure your consumption by weight or liquid oz.  You also need to factor in colorant, scent, bags, electricity, waste and your time.  I would compare the cost and quality of your baits to others selling baits and if there is a large discrepancy try and figure out why.

You have to be competitive, but choose who you are competing with.  Are you trying to compete with Academy, Bass Pro, or custom made baits?

Liquid
5 gallons = 640 oz
640 oz of CC cost $176.96
$176.96 / 640 oz = $ .2765 (28 cents per oz)
$.28 x 4oz = $1.12
$1.12 / number of baits = cost per bait (plastic wise)

Weight
5 gallons of CC will weigh close to 41lbs
41lbs x 16oz per pound = 656 oz
$176.96 / 656 oz = $ .2697 (27 cents per oz)
Weigh your bait (a 4" Croaker weighs .5 oz)
Multiply the weight times the cost per ounce (.5 x $.27 = $.14)
The Croaker uses $.14 (14 cents) of plastic.

Using the Croaker as an example, you should be able to get 8 frogs out of 4oz of plastic.  With that said, you won't.  You need to factor in waste as well.  Your waste is going to remain fairly constant.  You will have approximately the same amount of waste if you do 100 frogs vs doing 8.  Why? because you can remelt sprus and plugs.

To minimize waste to almost nothing have a few open pour molds you can finish off a batch with, or save your scraps for the next time you use that color.

Don't forget to factor in colorant.  As a general rule you can very safely assume 1 of our colorant will easily color 5 gallons of plastic.  So you could add $6.99 to your 5 gallon cost and on average knock both of these out.

Glitter is cheap but you need to factor it in.

Your bags, 7x4 buying @ 100ea = $.18

Eyes if they are used.

Shipping of your materials.  This is often overlooked but there is normally a cost associated with you getting your supplies.  This is why you should buy everything from the same place   CCM  

Your time.  I don't sell baits.  We make them for samples, neighbors, family, and personal use.  Outside of that, you need to charge for your time (unless everyone is a really good friend - which may be the case from their perspective since you make baits!).

Hopefully there is something in here that helps.  There are quite a few on here that make and sell baits very successfully.  Maybe they can chime in and correct anything I've got wrong.

Tight lines!

Jason

[TAE73]

Jason pretty much summed it up, sad thing is your not going to get rich doing this. But it sure is fun thing to do!!

[ghostbaits]

Don't forget Uncle Sam!!!!! Excise tax is 10% plus state or local taxes......

You will loose money in the end!!!   

Do it becuase you like it, not for the money or you will be dissapointed quickly!

Jim

[Jason]

Don't forget Uncle Sam!!!!! Excise tax is 10% plus state or local taxes......

You will loose money in the end!!!   

Do it becuase you like it, not for the money or you will be dissapointed quickly!

Jim

Thanks Jim!  I forgot taxes - wishful thinking!!!  They prowl stores and online stores, don't risk it.  I have no idea what the penalty is, but I'm sure it's more than the 10%.   :'(

[pjmcla]

It is 10% ?  For some reason I was thinking it was 12%.

or is it 12% and you get 2% for collecting it to net to 10%.

[Jason]

It is 10%.  The IRS gets paid and you get to collect it.

http://www.irs.gov/publications/p510/ch05.html#en_US_publink1000117228

The proceeds go back into the lakes.

[Joebass]

I just charge $5.00 a bag (6 oz of plastic)to my friends, my friend list is small (4). I do this for fun and to drive other people crazy, I like to put a strange color and bait on my rods and throw some in the bottom of my boat at tourney weigh-ins so when the nosey one's look in they see something wierd. I learned a long time ago that people will grip and comlplain if they don't catch fish on something they suggested and when it dosn't work they bad mouth you. And then the price is to high. Even with my friends if they want a new color that I haven't made or can't find a recipe for I charge $25.00 for the first bag. 

[ghostbaits]

I need friends like yours!!!!!!!!!!!!!!!!!!!!!!!       

Jim

[Mick]

Biggest problem i've found in pricing baits is factoring $/hr in the cost of the bait.

If you can make 100 of the same bait in an hour  then divide that by how much you want to be payed per hour. So if you wanted to pay yourself $25 an hour, each bait would cost 25cents for labour.

But would you decrease the price of a bait if you increased your production rate?

More molds higher production but increased cost in molds

The packaging and labels are possibly the most exspensive part of calculating prices (well least in my case)

In the end i looked at what the big players over here charge for baits and charged similiar rates.

I dont believe in pricing baits at bargain basemnet prices, as it only devalues the bait and my reputation, dont be scared to charge people a reasonable price as what we do isnt just pour/inject plastic into molds we create dreams for fishmen and if you make a quality product people will buy them.
 I am trying to get a customer base that want a customised bait and input into colours etc of the baits they buy, guys like that seem more willing to pay a little more than a dad that wants to take his kids out fishing.

regards mick 

[kipbass]

Well that's welcome list of replies. Like I stated in my first post, there are a few coworkers wanting some bags. I want to charge them enough to cover my cost and a little extra that will allow me to purchase more supplies without taking much from my check book all the time. I pour because I was tired of going to wally world and they never restock anything in the fall(seasonal), and I really enjoy pouring. The newest guy around here making baits and has started selling them in stores is Bass Kandi brand. I don't see how he makes any profit, he sells so cheap. Infact a coworker of mine said $5.50 was too much for my bag of 10 5" sticks, he could buy the Kandi brand a lot cheaper. I asked him did he know the guy?, he stated yes. I then asked him, will he make the bait the way you want, custom made? He bought my bag. I dunno, maybe my price is high. I used colorant, salt, and added garlic to the plastic. It's difficult to measure my time due to I have to allow longer and longer cooling times as I make baits, since the heat doesn't dissipate from the mold quickly.
I do think I'm charging a fair price, I don't feel like I'm short changing myself. Like I said, I just need enough to cover the raw materials and a small amount over to purchase more. I do appreciate everyone's opinion and advice. Thanks for replying.