Pricing
Nobody knows their shop rate off the top of their head. But everybody knows what they want to earn and roughly how long they're at the bench — which is the same question with the arithmetic done.
Your shop rate is the single number that decides whether the rest of your costing is honest. Get it wrong and every margin you look at afterwards is fiction, in whichever direction you got it wrong.
Most makers either don't have one, or have one they arrived at by copying somebody. Both are fixable in about fifteen minutes.
Copying another maker. Their rent isn't yours, their equipment isn't yours, their tax isn't yours and their tolerance for a thin month isn't yours. A number that works in Sheffield doesn't transfer to Johannesburg, and a number that works for someone with a paid-off workshop doesn't transfer to someone still paying for a grinder.
Using a local trade rate. The garage down the road charges what it charges because of what a garage costs to run. It has nothing to say about a one-person workshop.
Guessing. Makers who guess, guess low. Almost without exception. The number feels too big when you write it down, so you shave it — and then wonder why the years don't add up.
(what you want to earn in a year, after materials + what the workshop costs you in a year) ÷ hours a year at the bench
Three numbers, and you already know two of them.
After materials, before tax. Not what you'd settle for — what the year needs to produce for this to be worth doing. If that feels uncomfortable to write down, write it down anyway; the discomfort is information.
Rent, power, insurance, software, water, the internet connection, the tooling you replace annually. Everything the workshop costs whether or not you make a knife this month.
And this is where it usually goes wrong.
Bench hours means hours you can log against a knife. Not hours in the workshop, and definitely not hours on the business.
Sourcing steel isn't a bench hour. Photographing finished work isn't. Nor is answering emails, standing at a market, packing parcels, doing your books, or the Sunday you spent tidying.
That work is real and it has to be paid for — which is exactly why it must not go in the denominator. Put it in and you divide by a bigger number, your rate comes out lower, and you have quietly decided that the knives should subsidise the admin. They can't. There aren't enough of them.
Count only the hours where you are making. For most one-person shops that's a good deal less than it feels like.
Same as before — the units don't matter, the shape does.
| Input | Figure |
|---|---|
| What you want to earn, after materials | 30,000 |
| Workshop overheads for the year | 6,000 |
| Bench hours a week | 15 |
| Weeks a year you actually work | 46 |
| Bench hours a year | 690 |
| Shop rate | 52 / hour |
Fifteen hours a week. Not forty — fifteen. That's what most people who make knives alongside something else actually manage, and being honest about it is what makes the rate real.
Forty-six weeks, not fifty-two. You will be ill, you will go away, and December will not go to plan.
Take a knife you've finished and know the hours for. Ten hours at 52 is 520 of labour in that knife, before a gram of steel.
If you sell that knife for 400, the arithmetic has just answered a question you have probably been avoiding.
And here is the part worth sitting with: that doesn't mean the rate is wrong. The instinct is to go back and shave it until the knives look profitable again. That isn't calculating a rate, it's working backwards from a price you already didn't want to question.
If the rate is right and the price is below it, the price is what's wrong.
One thing to watch once the rate is set.
If you fold power and machine wear into the hourly rate, don't also add them as a per-knife charge. Every knife then carries them twice, your figures inflate, and you can't explain the price to a customer because you don't entirely believe it yourself.
Pick a road:
Either is fine. Both at once is not.
Power goes up. Steel goes up. What you want to earn changes. Your bench hours change when life does.
Fifteen minutes, once a year, on the same three numbers. It is the highest return on time available to a one-person workshop, and it's the one thing on the list that nobody ever gets round to.
Temperline does this arithmetic for you — materials, consumables, overhead and your hours — and tells you what a knife actually made you. It's invite-only while it's in beta. The first 50 makers to log one real knife with its real costs keep it free for life.
The knifemaking supply map is free and needs no account — 26 suppliers across five continents, every address checked against a primary source.
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Written by Dylan Laubscher, who makes knives in Durban and built Temperline because he had been guessing too.