Five Tips for Starting a Custom Rod Building Business
Many custom rod makers start as hobbyists then convert their hobby into a business. Here are some things to consider if you are thinking about rod building as a business:
- Turn your rod making into a business because you love to build rods. Those that start a rod making business with the goal of making a lot of money are often disappointed. But if you really enjoy building and you are capable of making functional, attractive rods, you can probably make enough money to justify your activity. Many people sell rods to fund the component purchases for rods they build for themselves. You may also be able to use your profits to subsidize your fishing expenses. You may not like your hourly rate if you track how much time you spend on a rod build and reconcile that with what your customers are willing to pay for it, but again, if you love the activity the dollars won’t matter.
- Focus on builds that are optimal for the type of fishing people do in the area where you live. Your first few customers will likely be friends and family, and their fishing friends will become your customers, too. We see a lot of our customers buying the same few blanks over and over because they developed a regional network of customers and dialed in the rod builds for their locale.
- Develop your own signature features. Make your rods distinct so that your custom rod is truly your custom rod. This may be in the way you lay out the rod or do some blank trimming to dial in the action. It may be a unique handle or a certain thread wrap pattern. Do something unique that improves the function or the aesthetic of the rod, or both. The beauty of this is that you get to decide what makes this a (insert your name here) custom built rod.
- Understand and abide by the legal requirements of your business. You should form a legal entity for your business so you can accurately track and report your sales, expenses, and profits. You will need a legal structure to properly pay your taxes. Most rod makers set up a DBA – Doing Business As – which is a sole proprietor structure that is usually established by filing a form with the county where your business will reside and paying a nominal fee to register. Be aware of the tax implications of your business. You will be collecting and submitting sales tax on your revenue. This varies by state and county. You will also be obligated to pay Federal Excise Tax (FET) on every rod you sell. This is charged at 10% of the sale price with a cap of $10 per rod. Include this in your pricing and check the IRS requirements for your filing obligation. The good news is that FET dollars are spent on conservation activities to try to protect and preserve the US fisheries.
A big benefit - when you structure your business as a legal entity you will be able to buy components at wholesale prices from most rod component suppliers. Send them a copy of your company formation document or tax registration and they will enroll you in their wholesale program. Information on our program can be found here.
- Inform customers of your warranty and make good on it. You will have to warrant your work for a reasonable time frame. If the warranty is too short customers may be hesitant to buy, but as the warranty period increases so does the chance you will have to replace a rod. You will have to decide where the sweet spot is for your business. It is demoralizing and time consuming to rebuild a custom rod, even if the blank is replaced under warranty from the manufacturer. I’m in my 11th year in the rod business, and I state with great confidence that the vast majority of broken rods are broken because of mishandling and abuse. Take the time to thoroughly educate your customers in proper handling and use when they pick up their custom rod. This measure of prevention will save you a lot of heartache and give you more time build new rods.
Bonus tip: If you decide to offer a lifetime warranty, make sure you stipulate whether or not it is transferable if the rod changes owners.
Bob Penicka
RODgeeks