Let us do a cost analysis for making something, let us say a light pull with no bought in bits just using offcuts of wood. So question 1. Do you charge for the wood used if it is an offcut? My answer is yes. No wood is free.If I have to pick it up I need to recoup my time and petrol costs and if the wood is stored in the workshop it needs to pay for itself.
Question 2, how long does it take you to make it? My answer is I don't know for sure as I never make one at a time I make loads (usually 100 or so). But I estimate that to cut a piece to size is about 30secs.Drill the holes not including changing drill bits and depending on timber 45 secs. Mount on the lathe and turn being generous 2mins incl sanding. Stick some polish on, let's say friction polish anoth 30secs. and I like to stick some Carnauba wax on too so anoth 15 secs. So time wise we have 5 minutes to make each one complete.
Question 3 how much for abrasives and polishes? Again not sure so I am going to say 10 pence. What figure do we have now just for manufacture?
Well let's say I earn the national minimum wage of £6.50 per hour so that equates to a light pull costing 54 pence in labour add on 10 pence for consumables 64 pence and the cost of the timber. I can get oak at £47 per cu ft, I need 2 X cubic inches for each light pull which equates to 5.4 pence excl VAT. Add on time and mileage of (I'm plucking a figure out of the air here) 10 pence and electricity as an overhead so I will add on 20 pence. So the cost of manufacture of one light pull comes to....84 pence add on 20% for profit and it comes out at £1 (point 8 p but I will call it a pound)
So it costs me £1 to make a light pull not including about 1.5 pence per unit for product liability insurance ( which I am sure everyone who sells any of their stuff will have) In days past we used to estimate 50% labour + 50% materials and then multiply this figure by 4 so I would have to sell my light pulls at £4 each to make the minimum amount of money on this item. Now going back to Graham's comment, if your light pulls are cheaper than £4 each you are doing me out of business.
