It is the same for me. Not just during summer with the heat, I've also been facing some health issues, which forces me in and out of the shop often on days I'm working out there, even in the cooler months.
I use a product called CraftyBase to manage my production, track materials, track orders and shipping costs, report COGS, etc. CraftyBase DOES support specifying an hourly rate and time/effort invested in my "manufactures"...however, it actually does NOT include that in my COGS. The COGS is only the materials and supplies costs, not my "hourly rate" (or even my "shop rate" to account for things like electricity, etc.) The hourly rate is there just to help you gauge how much your time costs overall, and whether the time you invest is worth it on some generalized level, but its not actually part of the cost of goods sold.
I was surprised by that at first...but, it does make sense, since the hourly rate is really an arbitrary thing and when it comes to a FINE CRAFT, the price at which you sell is and should be based on how you intrinsically value your time and effort put into each item. I have been making a lot of things these days, not just pens. Some of them (more of them lately due to my health issues) have been small and low-cost (as in COGS) items, that also don't take much time...but, which I can pull off a decent profit margin from. Others require more time and effort to plan a complete product, and a lot more effort to actually craft (for example, I make these turned boxes now that are more than just your average box, with multiple compartments, different types of wood, and interesting finials that required a lot more effort than simply turning a basic round wood box.) These more complex items do get a higher selling price, but not because of the hours invested per-se. I still make kit pens, and since a kit is involved, and I don't have to hand craft metal parts or anything like that, I figure the upper limit on a pen price is probably $175-$200 unless I use some truly amazing or exotic blanks, and I do have a number of really nice (and expensive) blanks that might warrant higher prices. When I am finally able to get into kitless, I intend to put my all into their design and craftsmanship, and hope to be able to sell them at price points that reflect all of that.
I know that you do all hand crafted kitless pens. I know that you put a lot of effort into selecting the right blank, and that you put effort into achieving an optimal finish, etc. Fully hand crafting takes more time than just the time at the lathe...there is more planning time involved than just blank selection, etc. There is more of a personal craft involved as well. I think when it comes to selling a pen like that, you need to consider the care and love you put into your CRAFT, and value yourself and your products accordingly. I think you are selling yourself short with just $175 a pen. Your pens are wonderful. The market can certainly only bear a certain price in the long run, but, I think it is worth figuring out what that price is, and IMO you could push your prices up until you find that point, then back the price off a bit to maintain sales. I don't think this is as much about COGS and hourly rate, as it is figuring out how much other people value your work as well, and selling at the price people are willing to pay. As high as you can get.
FWIW, I do enter time and an hourly rate into CraftyBase. I chose $20/hr. This is more than the federal national minimum wage of $7.25. Why did I choose $20/hr? The federal national minimum wage is WILDLY out of touch with the state of the economy, the rouge amount of inflation we have had since 2021, and the general cost of living increases that most workers in this country are and have been facing. It is kind of a travesty that the federal minimum wage has not increased more, and minimum wage workers are suffering a lot as a result. A wage of $7.25/hr is just wildly out of touch with reality. There are many jobs that do pay a higher minimum wage, thankfully, especially if the labor is "skilled" to some degree or another...and I would certainly consider woodworking to be not just skilled labor, but trade labor and even "artisan" level labor for some people. As such, I do believe that a higher wage is warranted.
Again, though, this hourly rate and the time I invest is not actually factored into my COGS reports from CraftyBase. COGS is supposed to include only "direct" costs, and apparently internal labor costs are not direct (they can, in fact, cover many other things separate from the direct manufacture of product, such as lathe (and other machine) maintenance, shop maintenance and cleanup, etc.) Tracking this is more just to help me understand if I'm working in general, in my shop, for a reasonable wage or not. In the long run, you may work a lot of hours making a lot of stuff, that doesn't necessarily sell right away. It may not even sell in the year you craft it. As such, the actual amount of money available in your yearly revenue, may not be enough to ACTUALY pay yourself whatever arbitrary hourly rate you choose. Once you factor in other business costs, there may be even less to pay yourself an hourly rate. I think this is particularly true in the first few years you start a business, until you become well established and have a following. There are other reasons why an hourly rate is considered an indirect cost, and not included in COGS (which in particular, is used to report your Taxes. There is also COGM, cost of goods manufactured, which DOES include some of the indirect costs, but it is NOT used for your taxes...only internal reporting purposes.)
You might find this article useful:
We show you the easy (and surefire way!) to calculate your Cost of Goods Sold (COGS) accurately and with a minimum of fuss.
craftybase.com
It has other links to other useful articles as well. (I'm not an affiliate of CraftyBase, BTW...its just what I use to help me manage my business, notably COGS.)
