Pricing Bonsai- how are prices determined?

[sorce]

valuing stock

Let a customer value them. As soon as you don't let one guy buy something at the $50 he's willing to spend, you may lose the guy who's willing to spend $500 on something similar.

I think anybody has the possibility to do the right things as far as styling and maintenance for a couple years, but it's easier to screw things up. It also adds a subjective aspect that becomes harder to price, name becomes involved.

I think it's easier to flip newer trees for cheaper, than worked trees for more. Less risk.

Sorce

 

[Forsoothe!]

All business operates exactly the same way: you sell something for more than it costs you. Anything else is not a business.
If you're too high you won't get enough business to continue. You will run out of money. If you charge too much, you won't get enough business to continue, etc. Every industry has a profit margin and you need to be in that range, as Zack says. That's the last factor in the basic process of costing an item. First, you have a shop-rate; £/man-hour. Second, cost of materials; water, soil, ferts, et al, £/application (hip shot = (costs per year of inventory expended) ÷ (square feet of plants occupied) = (rough costs per square foot ). Third, you have an overhead rate per square foot of space that your inventory will occupy; £/year costs of your property (mortgage/rent + insurance + maintenance + taxes) ÷ (square footage) = £/sq ft.

Costs of acquiring plants is equally straightforward: The mileage costs people don't think about is pretty high, they just think about miles per gal. Double that to cover the basic costs of owning a car, too. (In the USA ~56¢/mile)

Collecting a tree; (X)£ x hours ÷ number collected =
(X) miles x (rate) =
Initial Styling, potting, etc.; (X)£ x hours =
Continuing Individual maintenance; (X)£ x hours =
Materials; (X)£ x rate/sq ft =
Overhead; (X)£ x rate/sq ft =
Total Costs =
Markup: (to calculate a 40% profit margin multiply by 1.66) X 1.66 =
(If costs = 60%, then .6 x 1.66 = 100% = 40% markup)
Nobody makes a 40% profit just because that's what you markup at that rate. Business is up and down and all costs not covered by the original estimate have to covered, somewhere. Stock will die, or become unsalable, etc. If a normal company actually made 10% in my industry (plastics) costing this way, we'd be pretty happy.

Now plug in your numbers. How much would you have to pay someone to do this job? How much would you for this for someone else?

 

[Trenthany]

Unfortunately only one picture. Big trunk, 50 years old.
Might be a zero too many at the end, if you compare to the other specimen trees.

Ficus Retusa - ST2016FR

Shop Brussel’s Bonsai for the largest selection of top quality bonsai trees, pots and tools. We have 50 years experience recommending the best bonsai for you, whether you're a bonsai beginner or a bonsai master. We also have a wide variety of pre-assembled kits that make great gifts...

brusselsbonsai.com

Certainly not a 16K tree for me.

I observed a small detail that makes me distrust Brussels website people. On top of a few other posts I’ve seen. That 16k tree is listed as semicascade. In what way is that picture a semi cascade?!?! To be fair to Brussels I’ve heard good things but mostly mentioned from in person visits.

 

[Woocash]

The best way to start is to see what's already out there in your particular market. If someone is selling a tree of the same species and size, age and quality of yours for 100 euros, then you may want to price in that same range or perhaps a little less since you won't be a known quantity in the market.

Thanks. Yes this what I thought. The market does seem blurry at times though. As in, somebody will have on a site an array to choose from all at a similar price bracket, but one or two then could significantly more expensive with seemingly not too much difference except size (which leads me to a different point). Does size matter?

Do you sell more material that is of a smaller size? Or, what is the smallest sort of size you will collect knowing that people will buy?

 

[Woocash]

Let a customer value them. As soon as you don't let one guy buy something at the $50 he's willing to spend, you may lose the guy who's willing to spend $500 on something similar.

I think anybody has the possibility to do the right things as far as styling and maintenance for a couple years, but it's easier to screw things up. It also adds a subjective aspect that becomes harder to price, name becomes involved.

I think it's easier to flip newer trees for cheaper, than worked trees for more. Less risk.

Sorce

What, do you mean literally, “make me an offer” type of thing?

 

[Woocash]

Inter

All business operates exactly the same way: you sell something for more than it costs you. Anything else is not a business.
If you're too high you won't get enough business to continue. You will run out of money. If you charge too much, you won't get enough business to continue, etc. Every industry has a profit margin and you need to be in that range, as Zack says. That's the last factor in the basic process of costing an item. First, you have a shop-rate; £/man-hour. Second, cost of materials; water, soil, ferts, et al, £/application (hip shot = (costs per year of inventory expended) ÷ (square feet of plants occupied) = (rough costs per square foot ). Third, you have an overhead rate per square foot of space that your inventory will occupy; £/year costs of your property (mortgage/rent + insurance + maintenance + taxes) ÷ (square footage) = £/sq ft.

Costs of acquiring plants is equally straightforward: The mileage costs people don't think about is pretty high, they just think about miles per gal. Double that to cover the basic costs of owning a car, too. (In the USA ~56¢/mile)

Collecting a tree; (X)£ x hours ÷ number collected =
(X) miles x (rate) =
Initial Styling, potting, etc.; (X)£ x hours =
Continuing Individual maintenance; (X)£ x hours =
Materials; (X)£ x rate/sq ft =
Overhead; (X)£ x rate/sq ft =
Total Costs =
Markup: (to calculate a 40% profit margin multiply by 1.66) X 1.66 =
(If costs = 60%, then .6 x 1.66 = 100% = 40% markup)
Nobody makes a 40% profit just because that's what you markup at that rate. Business is up and down and all costs not covered by the original estimate have to covered, somewhere. Stock will die, or become unsalable, etc. If a normal company actually made 10% in my industry (plastics) costing this way, we'd be pretty happy.

Now plug in your numbers. How much would you have to pay someone to do this job? How much would you for this for someone else?

Interesting and all valid, but you could end up with the same end figures for a beanpole and a prize winning yamadori if just using an equation. It’s the value of quality or natural beauty which is the elusive aspect I think. How do you value that?

 

[Zach Smith]

Thanks. Yes this what I thought. The market does seem blurry at times though. As in, somebody will have on a site an array to choose from all at a similar price bracket, but one or two then could significantly more expensive with seemingly not too much difference except size (which leads me to a different point). Does size matter?

Do you sell more material that is of a smaller size? Or, what is the smallest sort of size you will collect knowing that people will buy?

Dollar-wise, I sell more large Bald cypresses than anything else. Size does matter. I don't fool around with seedling-size material (whole other market). For collected material, nothing smaller than 1" base. The "sweet spot" for most buyers seems to be around 2" base - a good combination of size, character and price in a finished tree. With regard to letting the customer decide how to value your trees (with all due respect to Sorce), I'd never go that route and especially not with my large BC's. Way too much work in bad weather that isn't always appreciated as such.

 

[Forsoothe!]

Inter

Interesting and all valid, but you could end up with the same end figures for a beanpole and a prize winning yamadori if just using an equation. It’s the value of quality or natural beauty which is the elusive aspect I think. How do you value that?

I offered a formula intended to allow you to understand what makes up a base price for any product. You can't sell things for less than your cost, so you need to know what your raw costs are. The desirability factor is added on top if it hasn't already been accounted for in the number of man-hours invested, as in a ten year old tree having been wired some number of times over ten years verses one merely grown-on for the number of years. As to the really esoteric judgement of a special collected tree, it's worth what someone will pay for it. There is no way to apply a formula to that and whatever else is true, the higher the price, the smaller the pool of prospective buyers. You only make money if you sell a tree, the longer it is in inventory, the bigger the chance it will die before you sell it. These are perishable.

Walter Pall only sells to people who have a lot of money and only want his class of tree. He can't sell a lower price/class of work because that would taint him as someone who sells bargains, therefore we can negotiate a price with him. He doesn't want to play that game. His trees have a price, do you want it or not? When those buyers put his trees on their garden pedestal they make sure their guests know that it's a Walter Pall tree. Of course, that only works as long as Walter continues to create his signature trees, and that requires his worldwide network of suppliers who deal in trees and only provide him with trees that are good WP candidates.

Is a tree that is twice as good worth twice as much? Zack and Walter and Bobby Lane have built markets for what they sell. You don't automatically have a market just because you hang a shingle over your door. As always, there's an inverse correlation between how easy something looks and how much is known about it.

 

[Woocash]

Dollar-wise, I sell more large Bald cypresses than anything else. Size does matter. I don't fool around with seedling-size material (whole other market). For collected material, nothing smaller than 1" base. The "sweet spot" for most buyers seems to be around 2" base - a good combination of size, character and price in a finished tree. With regard to letting the customer decide how to value your trees (with all due respect to Sorce), I'd never go that route and especially not with my large BC's. Way too much work in bad weather that isn't always appreciated as such.

Very true. Thanks for the information. The 2” calliper is interesting as well. I often find myself being drawn to the larger size trunks and then get into the logistics of care and transport and wonder how popular trees of a significant size, say 5”+ would actually be and whether they would be worth the trouble. I suppose increased size will also dramatically drive up courier costs as well, yet another factor in the overall cost. Maybe I’ll start thinking smaller...

 

[chicago1980]

Interesting topic.

I don't have any experience as a seller, only as a buyer. I also am a comparison shopper who gauges my own interests with bonsai purchase.

I never consider the resell value as it's probably = or poorer than my investment into the tree, pot, care.

Also, now that I have started to collect trees from the wild it is an interesting perspective of cost, time, effort, and value.

Supply and demand I would position as the driving factor of prices.

I am interested in what the margins are like in selling Bonsai.

I have heard in many occasions from bonsai professionals and bonsai garden sellers that Bonsai is a difficult market to make a living.

Seems a small group are figuring it out at the moment.

This also reminded me of my conversation with my home insurance agent and my attempt to insure my bonsai.

 

[Don Blackmond]

Very true. Thanks for the information. The 2” calliper is interesting as well. I often find myself being drawn to the larger size trunks and then get into the logistics of care and transport and wonder how popular trees of a significant size, say 5”+ would actually be and whether they would be worth the trouble. I suppose increased size will also dramatically drive up courier costs as well, yet another factor in the overall cost. Maybe I’ll start thinking smaller...

Straight from the ground versus established in a pot means something to most people from a price/value standpoint. A percentage of freshly dug trees don't live so there is a gamble involved and the price generally reflects that. Whereas, the tree you dug and grew for 2 seasons is now a known commodity and less risky; plus you now have 2 seasons of time and materials invested in it. In my opinion, you will make more money by digging trees and spending a couple of years developing them. You can sell them as established trees and maybe even initially styled/wired etc and that will raise your price. On the other hand, if you have access to a lot of trees, then maybe you want to focus on volume and sell them freshly dug for lower cost. My advice is just do it. Pick a spot and start. The market will correct your pricing. You will soon know if your prices are correct. Sell good trees for good prices and demand will run you ragged. Sell bad trees for the wrong price and you will not be selling for long. If I understand your set up, you have access to material for free and all you have to do is dig. What's that worth? Your time. Sell auction style and let the market establish the price, then start selling for fixed prices based on your accumulated knowledge and experience. Odds are that unless you enjoy that process you will discover your time is better spent doing something else.

The OP asked about pricing trees. Well, there is no magical formula that answers the "what's it worth" question. There are many variables that go into pricing. Supply and demand are the obvious starting points, but not the whole picture. Bonsai is a niche market, and high end trees or certain species are niches of the niche, so supply and demand in a timed market don't really tell you value/worth. Age, species, potential, development, pedigree, flaws, location, health, are a few significant factors to consider. Most people consider bonsai trees luxuries and not necessities, so there is no "need" to buy. It comes down to choice, and that means personal preference. To someone, that Brussels' ficus is worth $5k or $10k or $25k or whatever amount they are willing to spend. That is their own personal preference.

My advice is simple. Research, take your time, find what you like, and buy the best you can afford.

 

[BobbyLane]

i tend to look at the market rate of what trees are selling for on websites like kaizen and price accordingly. ive bought many trees from kaizen over the years so have a bit of knowledge of what trees are being sold for. then there's ebay and sites like bonsai4me among other places. ive heard people say stick it on ebay, start the auction at £5 and see whatever people will pay for it, thats what the tree is worth. i do not agree with this, too many variables. one example: you list an item, you dont use the best keywords, so the listing doesnt get viewed as much as it really should, you get one or two people bidding for the tree and it ends up going for much less than its worth. that is a very common scenario in sales of any item.
another example: because you sell it on ebay, where people know they can get a bargain, they also assume your tree should be sold for peanuts, again false. get two or three people bidding who all have the same mindset that they deserve a bargain and again your item sells for much less than it is worth. this is why i do not auction trees.

the other day i put a brand new designer shirt up for auction on ebay, used all the correct keywords in the title and for some bizarre reason only one person bid on the item and got it for far less than it was worth!!!!

 

[Trenthany]

Part of the “art” cost in commercial bonsai is covered in the labor costs. Other parts are covered in the markup which can vary based on quality of material, and how well it is developed before sale. Many other retail businesses use what’s called keystoning which is 100% markup over costs. Judging on bonsai prices from the few nurseries I’ve visited and what I’ve seen online most bonsai retailers don’t use keystoning when setting their prices. Just my observations.

 

[BobbyLane]

if you can look at a piece of material and envision how it will or could look in 5-10 years, 3 or 4 in some cases, then you will find value in all sorts of price ranges. the problem is, most cant see the wood for the trees and their offer is base on what is in front of them now! i dont mind paying top dollar for something i can improve upon and raise its value. that is how i tend to price my trees, a bit of whats there now and the future potential. bonsai trees is not only a hobby but an investment because the tree should be improving from year to year and increasing in value.

 

[Gene Deci]

My bonsai buddy was asked at a show a while back how much he wanted for his tree. He said simply "Not for sale." She said, "Oh come on now. Everything has a price." He said. "I found this tree and I collected it over 15 years ago. I have devotedly cared for it ever since to make it what you see today. It is like a child to me - truly. Not for sale."

Many of us have little money invested in our trees but consider them invaluable anyway. That works the other way also. I don't covet my buddy's tree that much even though it is a wonderful tree. It is his work, not mine.

 

[leatherback]

My bonsai buddy was asked at a show a while back how much he wanted for his tree. He said simply "Not for sale." She said, "Oh come on now. Everything has a price." He said. "I found this tree and I collected it over 15 years ago. I have devotedly cared for it ever since to make it what you see today. It is like a child to me - truly. Not for sale."

Same here. My first tree is not for sale. Just.. Not. Even though it will always remain a mediocre tree.

Pretty much all my trees can be bought. Had it happen several times people were visiting and liked a tree so much that they said: If you ever want to sell, let me know. My response: Make me an offer and we will see. Normally, if the offer is well over what I paid for it, I consider selling. I like to build trees, develop them. Refinement I find hard and I really SHOULD learn how to do it well. But the first few years are more exciting to me..

 

[Trenthany]

Through this whole conversation I’ve realized there are two types of people in this conversation. People that do what they do to make money plus other reasons and those that do it for other reasons only. Whatever the job is you do there are people that want to be owners of a business or are and run the numbers on profitability and those who either don’t have that mindset or have no interest in it. Perhaps the latter merely lack opportunity as well but it’s been an interesting conversation so far for sure.

Look at where the practical repeatable advice comes from and where the experiments come from is another interesting aspect. Creativity or perhaps uniqueness flows from those that aren’t seeing the business side or see it as unfair. Perhaps this is an indicator of an artists viewpoint vs an analytics or engineers viewpoint as well?

I’m going to have to go through the conversation and see if my theory holds true in any of the potential aspects now. Maybe it’s just a matter of time and the “creatives” vs “engineers” or “entrepreneur” vs “employee” are just a matter of time growing and developing trees. I’m sharing it without verifying in the interest of transparency and curiosity. Maybe I’m a fool and it’s all in my head.

But if I’m right how does it effect the trees the differing groups produce?

 

[Woocash]

Straight from the ground versus established in a pot means something to most people from a price/value standpoint. A percentage of freshly dug trees don't live so there is a gamble involved and the price generally reflects that. Whereas, the tree you dug and grew for 2 seasons is now a known commodity and less risky; plus you now have 2 seasons of time and materials invested in it. In my opinion, you will make more money by digging trees and spending a couple of years developing them. You can sell them as established trees and maybe even initially styled/wired etc and that will raise your price. On the other hand, if you have access to a lot of trees, then maybe you want to focus on volume and sell them freshly dug for lower cost. My advice is just do it. Pick a spot and start. The market will correct your pricing. You will soon know if your prices are correct. Sell good trees for good prices and demand will run you ragged. Sell bad trees for the wrong price and you will not be selling for long. If I understand your set up, you have access to material for free and all you have to do is dig. What's that worth? Your time. Sell auction style and let the market establish the price, then start selling for fixed prices based on your accumulated knowledge and experience. Odds are that unless you enjoy that process you will discover your time is better spent doing something else.

The OP asked about pricing trees. Well, there is no magical formula that answers the "what's it worth" question. There are many variables that go into pricing. Supply and demand are the obvious starting points, but not the whole picture. Bonsai is a niche market, and high end trees or certain species are niches of the niche, so supply and demand in a timed market don't really tell you value/worth. Age, species, potential, development, pedigree, flaws, location, health, are a few significant factors to consider. Most people consider bonsai trees luxuries and not necessities, so there is no "need" to buy. It comes down to choice, and that means personal preference. To someone, that Brussels' ficus is worth $5k or $10k or $25k or whatever amount they are willing to spend. That is their own personal preference.

My advice is simple. Research, take your time, find what you like, and buy the best you can afford.

Thank you for the advice, Don. You raise some pretty affirmative thoughts. I had not thought about offering freshly dug trees, but then my experience of collecting and recuperation isn’t high enough yet either, maybe in the future. I like the idea of nurturing them for a while first anyway, to see how they adjust and what options open up after new growth appears. Also, but not to dismiss all your advice, as Bobby says, the auction aspect is a bit too risky for my liking. I can see the benefit if you can get enough of the right eyes looking at the tree, but I’m not even sure if we have a FB auction site for bonsai over here, so it may just have to be eBay and that’s a little too much of a crap shoot for me. I may just have to operate a “suck it and see” scenario at first, testing the water and just valuing my time.

The hunt and capture is so enjoyable, for me. Even if it is just a random little stick on the edge of a field, there‘s a certain thrill to actually gaining permission, then knowing that everything you are looking for in that area becomes fair game. That’s what it is all about. Primarily, I’m looking for personal projects, but I’m also looking to bring in as much income as a part time job over the next few years and scale back on standard employment or working for “the man”. So, when there’s so much material available it makes sense to give it a go.

 

[Woocash]

i tend to look at the market rate of what trees are selling for on websites like kaizen and price accordingly. ive bought many trees from kaizen over the years so have a bit of knowledge of what trees are being sold for. then there's ebay and sites like bonsai4me among other places. ive heard people say stick it on ebay, start the auction at £5 and see whatever people will pay for it, thats what the tree is worth. i do not agree with this, too many variables. one example: you list an item, you dont use the best keywords, so the listing doesnt get viewed as much as it really should, you get one or two people bidding for the tree and it ends up going for much less than its worth. that is a very common scenario in sales of any item.
another example: because you sell it on ebay, where people know they can get a bargain, they also assume your tree should be sold for peanuts, again false. get two or three people bidding who all have the same mindset that they deserve a bargain and again your item sells for much less than it is worth. this is why i do not auction trees.

the other day i put a brand new designer shirt up for auction on ebay, used all the correct keywords in the title and for some bizarre reason only one person bid on the item and got it for far less than it was worth!!!!

Yes I think the Kaizen comparison is always the one that will make most sense. Though, he is scaling back on tree selection, I think? So less to compare (or compete) with. There are a few others I’ve found that deal with raw material, but their stocks are a lot lower than on Kaizen as well. Your eBay points are very good, auctioning trees would be too scary! Thanks.

 

[Don Blackmond]

not to dismiss all your advice, as Bobby says, the auction aspect is a bit too risky for my liking. I can see the benefit if you can get enough of the right eyes looking at the tree, but I’m not even sure if we have a FB auction site for bonsai over here, so it may just have to be eBay and that’s a little too much of a crap shoot for me.

It is a crap shoot. eBay is a fickle market and bonsai enthusiasts are a fickle bunch. I post stuff on eBay from time to time at penny start and no reserve. It sells for whatever price it brings. The more time and/or money you have invested in those items the bigger the risk. It can be gratifying or downright insulting, and anything in between. I have a couple of pots on eBay right now that have been sitting a $.01 and they may end there. Its a fair chase hunt for those looking for pots. Want one?

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The thing with bonsai is you do it because you enjoy it. If you make it a job you probably won't enjoy it. Consider the value of your time. If you think the revenue you receive from the tree sale is the compensation for your time, then you may be disappointed. But if the value you receive is really in the joy of hunting and collecting material, then the revenue is just juice from the meat. If you do it for the money, then be honest and keep track of your time and money invested and compare that with your sales. By the time you prepare for your trip, drive to your site, dig, wrap and haul trees, do root prep and pot them up, water, fertilize and nurture them until established and healthy, you will have a lot of time invested. Even at minimum wage you will need to be very good with selection and collection to earn a positive return on that investment. If you sell on line, then add in the time to prepare, photograph, list and sell, plus the time and materials to properly pack and ship. The reality is you may find its more efficient to just randomly hand out money to people you don't know because you'll save time losing the same amount of money.