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Employees? Kind of...
July 4, 2012
7:01 am
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Zachary Greig
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I'm still fairly new to blacksmithing as it is, and this is fairly confusing to me as to what might be "standard" or "fair" so to speak. I have managed to set up my own (small) shop for blacksmithing mainly blades, and I have a couple of other people who are interested in using my shop to make knives, which I would then sell for them along with my own.

Is there any kind of standard agreement with this? Would it be a basic commission kind of deal or something more considering the fact that I alone am responsible for maintenance/tools/etc that they are making use of?

Thank you in advance for helpful responses. 🙂

Because blacksmithing is totally Metal! /../

July 4, 2012
2:37 pm
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Rob F
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Pretty sure you don't want them as employees, then you are responsible for them in many ways. Some kind of rent set up comes to mind, maybe someone who has worked in a shared space will chime in.

July 4, 2012
4:35 pm
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Zachary Greig
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I asked another guy about this too and he said that a 10% commission on anything they sell is pretty standard as a shop fee. Of course that would include trying to sell their knives as well as my own. Has anyone tried this out?

Because blacksmithing is totally Metal! /../

July 4, 2012
6:48 pm
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Rob F
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10% sales price for all the shop time for them to make and your time to market it for them? Better be some VERY expensive knives. I would think 10% just for selling it for them. NO shop use in that 10%.

July 4, 2012
8:07 pm
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Daryl
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You need to cover your costs, what does your shop cost you? Add up all your costs, rent, power, fuel, consumables, depreciation on tools, etc. figure it out to cost per hour and charge a minimum that for rent and sales of finished product are usually 40-50% commission of retail.

So if your shop costs are $20.00 per hour, the guy makes a blade in 10 hours wants to charge $450.00 for it, the break down is
$200.00 shop time
$180.00 commission @40%
$70.00 is his share minus materials which is at about 15.5% of the selling price.

15.5% is a little low, so he needs to work faster or charge more.

YMMV
But the formula is pretty standard.

July 4, 2012
10:54 pm
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Zachary Greig
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Sweet. That's an awesome break-down/formula. Will need a couple small changes to suit our situation but that answers my questions perfectly.

Thank you all for the help.

Because blacksmithing is totally Metal! /../

July 5, 2012
1:57 pm
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Rob F
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Daryl;15735 wrote: You need to cover your costs, what does your shop cost you? Add up all your costs, rent, power, fuel, consumables, depreciation on tools, etc. figure it out to cost per hour and charge a minimum that for rent and sales of finished product are usually 40-50% commission of retail.

So if your shop costs are $20.00 per hour, the guy makes a blade in 10 hours wants to charge $450.00 for it, the break down is
$200.00 shop time
$180.00 commission @40%
$70.00 is his share minus materials which is at about 15.5% of the selling price.

15.5% is a little low, so he needs to work faster or charge more.

YMMV
But the formula is pretty standard.

Daryl, thanks for the formula, I had to read it twice to be sure I understood the math. Just to clarify the example, shop owner (Zach) gets $380 and blade maker gets $70?

July 5, 2012
8:59 pm
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Daryl
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Yes Rob that is the way I see it, I'm sure there are more qualified people that could answer it better than I. But Zach needs to cover his costs what ever they are, and maybe a bit of profit so he can add more tools. If he is going to sell their work, he needs to pay himself, one for the time he is not producing, two for the expenses of selling. I'm sure they charge for Hotel rooms, meals, and tables at knife shows. What if he doesn't sell after paying for all of that. Zach should hopefully make a bit of profit with the selling, other wise why is he in business.

July 6, 2012
2:52 am
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Rob F
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I agree completely Daryl, I read "his share" in your first post and at first thought that was his share to pay zach, but after rereading realized it was his share of the finished knife. I am used to galerys and such doubling the price you ask to have an item in their store, rarely is it 40% but it does happen for expensive items or ones that they have a proven history of selling fast.

July 6, 2012
3:04 am
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Gene Bland
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While I am all for helping someone out and demoing things so that they can learn something, I would never let someone use my shop for their sales items. I had to aquire all my equipment, tools, etc before I could make any money. I was able to learn techniques by going to hammer-ins and demos that cost money and time. This is the learning curve necessary for a sucessful business.
Who replaces your forge that burns down or the fire pot that gets cracked. Do you let them strike on your $1200.00 anvil or use your $3500.00 plus power hammer? What about the drill bits burned up or punches spalled and bent.
If you want to keep these people as friends tell them NO.:unsure:

July 9, 2012
3:44 am
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Steve H
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Gene Bland;15745 wrote: While I am all for helping someone out and demoing things so that they can learn something, I would never let someone use my shop for their sales items. I had to aquire all my equipment, tools, etc before I could make any money. I was able to learn techniques by going to hammer-ins and demos that cost money and time. This is the learning curve necessary for a sucessful business.
Who replaces your forge that burns down or the fire pot that gets cracked. Do you let them strike on your $1200.00 anvil or use your $3500.00 plus power hammer? What about the drill bits burned up or punches spalled and bent.
If you want to keep these people as friends tell them NO.:unsure:

Well said- People that use my stuff at will and damage it as mentioned are my STUDENTS that pay a premium to come learn at my space. Yeah, tools take a beating and are replaceable. If I'm passing it on in the name of knowledge, I'll pay a little towards getting them on their way but after that, they are on their own. Also- Liability. I finally got covered as should anyone who lets people into their shop. You never know,

They only remember you when you SCREW UP~!!!

July 10, 2012
2:10 am
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Zachary Greig
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I can definitely see the wisdom in those comments. Luckily he does have a lot of his own tools though too (files, a hammer and such) that he uses. Mostly just being able to use the forge, anvil and vice but then if any one of those things broke I would be very screwed.
Could easily fit a second set of everything in there anyways, whether his or mine whenever I'm able to upgrade and if the latter is the case: rent out the older/already beat up tools that wouldn't be a detrimental loss. Of course that would still rely on the renter to be liable for replacing anything that breaks anyways.
Then just do sales and advertising commission, etc. Would be great if he could just get his own stuff.

Because blacksmithing is totally Metal! /../

July 12, 2012
11:31 pm
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Anne Bujold
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I can certainly understand the sentiment that you've worked hard to get to where you are and to have the things you use to make a living at - though I'm in the situation where I don't know where I'd be if it weren't for the generosity of someone who has allowed me to come in, rent space, and use the tools I couldn't yet afford.

I don't think anyone should do something that puts them outside of their comfort zone, and if it is a good deal to you - you like having more of a community in your shop, or there is some other benefit to having those people around - well then that's up to you. What percentage you take should be based on an estimate of what it costs you, but sometimes having more people around can generate more interest in what you're doing... Not a direct financial reward, perhaps?

I think there are very few folks in this endeavor - well, are there any?- who got to where they were trying to go completely on their own, reading books and saving up for one tool at a time? It seems that everyone gets help from someone, somewhere, and to turn around and help others who are trying to go that way is the repayment.
Though liability and people breaking the stuff you use to make a living are certainly issues. Being choosy about who you share space with is certainly smart, as with most areas of life.

Just coming for the other perspective... as someone who has not yet "gotten there," so perhaps I would feel differently if I were on the other side. But I know the generosity of the person that I rent space from is something that I never take for granted; I treat his tools with the utmost respect; I buy my own at every opportunity; and if I ever broke any of his things I would absolutely fix/replace them. And the chance to get started was something I could never put a dollar value on, as cheesy as that may sound.

July 13, 2012
6:35 am
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Lynn Gledhill
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Anne Bujold;15788 wrote: I can certainly understand the sentiment that you've worked hard to get to where you are and to have the things you use to make a living at - though I'm in the situation where I don't know where I'd be if it weren't for the generosity of someone who has allowed me to come in, rent space, and use the tools I couldn't yet afford.

I don't think anyone should do something that puts them outside of their comfort zone, and if it is a good deal to you - you like having more of a community in your shop, or there is some other benefit to having those people around - well then that's up to you. What percentage you take should be based on an estimate of what it costs you, but sometimes having more people around can generate more interest in what you're doing... Not a direct financial reward, perhaps?

I think there are very few folks in this endeavor - well, are there any?- who got to where they were trying to go completely on their own, reading books and saving up for one tool at a time? It seems that everyone gets help from someone, somewhere, and to turn around and help others who are trying to go that way is the repayment.
Though liability and people breaking the stuff you use to make a living are certainly issues. Being choosy about who you share space with is certainly smart, as with most areas of life.

Just coming for the other perspective... as someone who has not yet "gotten there," so perhaps I would feel differently if I were on the other side. But I know the generosity of the person that I rent space from is something that I never take for granted; I treat his tools with the utmost respect; I buy my own at every opportunity; and if I ever broke any of his things I would absolutely fix/replace them. And the chance to get started was something I could never put a dollar value on, as cheesy as that may sound.

Anne, I so agree,

I have a student coming in each week to learn blacksmithing...Seems each time he wants to punch a hole he goes for my 1/8th inch punch... With his skills he could destroy the punch in a heartbeat, and every time he punched a hole I would have to re-forge the punch. When he came in after that, I told him, "Today you will be making a punch, or punches. 'cause you will no longer be using mine...Lastly he was working on making an axe head... I was away and figured that he had the knowledge and skills to be in the shop by himself, without supervision... While away, he broke one pair of tongs and tweaked two other pairs... So, I said, you can make some tongs to replace the ones that you screwed up... When it came time for him to chisel the eye for his axe head, I said,' okay, it's time for you to make a chisel so you can cut the hole for your axe!! He's damn sure not to use my chisels to do the job!!! I do really believe in giving to teach, however, this man pays me $20 for a two hour class... Probably burns $3 worth of propane, has destroyed $50 worth of punches, $125 worth of tongs. Am I making money on this??? The best part for me... I had a boys group over to forge tomahawks from railroad spikes... Had their Dad's along for the muscle... I had my student over to supervise?!::?? I realized as he was guiding these boys thru the project, that damn, he has been learning something!!!:spin::spin::spin:

July 13, 2012
2:53 pm
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Rob F
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I do not think the O.P. was about teaching new people. I read it as people who already know how to make knives and need a space to make their product. In which case if they are using your tools, fuel and time to make money with they should indeed pay their fair share. Teaching is a different game.

July 14, 2012
8:29 am
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Scott Rash
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I agree with all the comments, it just depends on where you're coming from. I have a friend that drops by my shop occasionally because I sparked his interest in smithing; I haven't charged him beyond propane cost, knowing full well that I'm risking tool wear. After a few visits, I gained considerable trust in regard to tool abuse. Because I'm still in the steep part of the blacksmith learning curve, the idea exchange and collaborative thinking outweigh the risks and my shop cost in my opinion. I don't have the skill set or time to do what Steve does - calling my buddy a pupil would be a bit tongue-in-cheek. I taught some basics, and now we're learning together.

Zachary was asking for business advice, and my take on that is also it just depends. Will you make a commission? Do you feel that you need their blades to supplement the blades you can make in order to profit? Are they paying for instruction? If not, an extreme view is that they are your competition! Charge them for all costs plus marketing plus profit! Or, maybe just some shop rent if the collaborative factor is going to slingshot your own ideas. How generous are you and how generous can you afford to be? If I was a busy full-time smith I'd hire them as employees or train them as apprentices, or else not let them in the shop (except on guest days)...sharing shop space is a lot like communal living: it either works for everyone or it doesn't. If it's your shop, it better work for you. Don't allow them to ruin your tools. I paid a minimal amount for my early shop time/instruction, and immediately started buying my own tools. Money-wise, I don't think there is a standard.

July 15, 2012
5:51 am
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Zachary Greig
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Wow, this has turned into a pretty good discussion imo. 🙂

Luckily for me, there's not that chance of helping the competition. The guy is our roommate who happens to have made a few knives before (though from stock removal) who was interested in coming out, learning a thing or two and keeping me company while I was working. Not someone who's really interested in being a full-time bladesmith.

I was just wondering about what a good "official agreement" might be since he's already out there with me (and only while I'm out there) making knives and if I were to take any of his with me to sell or he managed to sell any on his own plus the fact that he is using (some of) my tools.

Also, he has already helped with gas and brought in a bunch of spikes to play with. Good news though, went with something close to what Daryl had said and the other guy agreed. He's also willing to work on specific pieces if I think they will sell easier or if there is a demand for them. 🙂

Because blacksmithing is totally Metal! /../

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