What a 6-foot rotavator should cost you to build, line by line
Most small manufacturers price by looking at the neighbour. Here is how to build the number from the bill of materials instead.
Ask a small implement maker what his rotavator costs him to build and you will usually get a number that is really a memory of what he paid for steel last year, plus a feeling about labour.
That is not a costing. And it is the reason so many firms discover at the end of the season that their best-selling machine was their worst-earning one.
Build the number, do not recall it
A proper BOM-up cost for a 6-foot rotavator resolves into roughly six blocks:
- Rotor assembly — shaft, flanges, blades. The blades alone are a live cost that moves with steel and with the grade you have committed to.
- Gearbox and drive — the largest single bought-out item, and the one where specification differences between a cheap and a good machine are most visible.
- Frame and cover — plate, section, fabrication labour, and the weld time nobody counts properly.
- Bought-out hardware — bearings, seals, PTO shaft, fasteners.
- Finishing — surface preparation and paint, routinely under-costed.
- Overhead absorption — the part almost every small firm leaves out entirely.
It is the last one that decides whether you are actually making money. Direct material and direct labour are visible. Shed rent, power, the owner’s own time, the machine that sat idle for four months of the year — those are real and they belong in the per-unit number.
Why the neighbour’s price is bad information
The firm down the road may have a different steel contract, a different labour structure, older machinery that is fully written off, or a cash-flow problem that is making him quote badly. Copying his price copies his circumstances, and you do not know what they are.
Know your own floor. Then decide what to do about his price — undercut it deliberately, or refuse to, but do it knowing which one you are choosing.
What changes once you have the number
Three things, in our experience:
- Firms stop taking certain orders. The ones that were always losing money become visible.
- Discounting becomes a decision instead of a reflex.
- Conversations with dealers change, because you can hold a price and explain it.