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Thread: Pens - Made in Australia?
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23rd September 2010, 07:29 PM #1
Pens - Made in Australia?
I was just pondering
can I describe my pens as 'made in Australia'?
Now the Trade Practices Act (for our purposes) says:
the goods must be substantially transformed in Australia; and
50% or more of the cost of production or manufacture must have occurred in Australia.
Here's a link to an ACCC flyer on the subject if anybody is interested.
an example:
cost of a dead basic Sierra from Addictive is $7.50 (presumably sourced from Taiwan)
cost of a gidgee blank, also from Addictive is $3.80 (we'll assume this is Aussie)
other costs of production
lathe
skew
roughing gouge
sandpaper
glue
finish
micromesh
drill bit
electricity
labour
etc
Labour would have to be the largest component. But how long does it take to do a pen? First we drill and glue tubes into the blank, then we true up the ends, then we turn the blank to desired shape etc, then we sand then we apply our favourite finish (or in my case two or three times when I stuff it up!)
So what's this all up - about a 1/2 hour? more?
So what is our charge out rate? $20, $40, $60, $80, $100 or more per hour
The other costs of production would have to be worked out on a wear and tear basis or depreciation basis. How many pens could you turn on a lathe? 1,000 or 10,000? Who knows! If 1,000 then $3 per pen for the $3,000 lathe or 80c for the $800 beast. An amount to cover all these sunk costs of between $1 and 50c seems reasonable (maybe)
So the cost of production of our Gidgee Sierra is:
kit 7.50
blank 3.80
costs of production 0.50
labour @$40 per hour 20.00
thus Aust cost is $24.30
OS cost is $ 7.50
total cost $31.80*
Thus I could say "Made in Aus" for this pen
but if I bought a fancier kit ie a Majestic Rollerball Kit (in Rhodium and 22 Kt Gold) from 043Turning for $64.30 then probably not.
It also probably means I'm underselling my labour by a large margin (partners in Law firms can charge over $500 per hour)
*and I sell for $40 (slim profit!)regards
Nick
veni, vidi, tornavi
Without wood it's just ...
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24th September 2010, 01:45 AM #2
i read this earlier and have been pondering all night the answers, but still have not come to any, however you did leave out time sourcing materials as a component
i always tell people that it takes about an hour to complete a single pen, now this is true if you were to make one pen, if you are doing a bit of a run on a single type then your time is reduced considerably
Substantial transformation
The provisions define substantial transformation as:
A fundamental change ... in form, appearance or nature such that the goods existing after the change are new and different goods from those existing before the change.
What does that mean?
It means that simple treatments or processing such as repackaging or mere assembly are not likely to qualify an otherwise imported good for the ‘Made in Country of origin’ claim.
in taking in the above to me we buy components, make extra peices and then assemble the pens, in which case they have undergone a substantial change to what we started with, probably excepting the siera styles which was your example
after all that i don't know that i have help all that much
when i talk to people about my pens i tell them that i purchase the metal components (i don't like the word Kit, sounds cheap, and not everything is supplied) but i make the rest, quite a few say so they are made in Australia, to which i agree whilst pointing out again that i purchase the metal components
i will continue to ponder upon this
MIKNo Result Without Effort
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24th September 2010, 10:07 AM #3
Nick something you have not thought of is
true cost to Addictive as the imported goods so the OS content would be less as Addictive has to add GST and their % margin.
Now if China is sourcing the materials from Australia in the first place ie Brass, steel etc are those components recognised as Aussie or part %.
Now if your using an imported blank in production of the pen or Resin where the materials to make said resin blank are imported
What if the the lathe and tools your using are purchased/built OS you can't say you have made it using Aussie made tools can you.
Dig deeper are you really an Aussie which tribe??
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24th September 2010, 12:58 PM #4
MIK
I'm of the view that they are substantially transformed, even the Sierra's (and similiar types). I suppose you could assemble the sierra with just the tube, any pen probably! Not sure it would be that marketable.
I tend to agree that an hour is probably a more realistic time.
I like your comment that you purchase the metal components - it does sound a lot better then the term 'kit'. I think I'll start using it as well from now on.
Wheelin'
The true cost to Addictive - interesting - I'm not sure Brett would want to give us his cost price. But we could at least take one eleventh off our cost price. which makes the kit $6.82 and the blank $3.45
An imported blank just raises the cost on the other side of the ledger. Homemade blanks from imported resin, colourings etc would probably be aussie made.
The legislation doesn't care where the machinery was made. If it did we would all have to buy Stubbys or Vicmarcs (might see if I can run that argument by Susan so as to get the Stubby). I do have a couple of P&N chisels.
I do have some convict heritage, does that make me an Aussie?
This is making my head hurtregards
Nick
veni, vidi, tornavi
Without wood it's just ...
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24th September 2010, 02:34 PM #5
My reading of the flyer tells me that we have no problem labelling pens "Made in Australia". The substatntial transformation certainly happens in Australia, and the cost of production, (expenditure, labour, overheads) was incurred in Australia. They don't care where the kit or the blank come from for Made in Australia, but they do for Product of Australia.
I think there would an issue labelling them "Product of Australia" if the kit and/or the blank come from overseas. While all or most of the production costs of the pen are incurred in Australia, the origin of "each significant component" (not cost, origin) would probably not apply as the kit would be a significant component. At least half.
Just my reading of it.
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24th September 2010, 03:48 PM #6
I've been wrestling with the whole "Made in Australia" as part of my day job for many years and my reading of it concurs with Rookie. It doesn't matter if the kit was imported from overseas. If you purchased it here in Australia that component of the cost is incurred in Australia. If you directly import the kit or blank yourself then it's a whole different kettle of fish.
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24th September 2010, 10:08 PM #7
if anyone asks me i tell that its handcrafted in australia and the timber turned by myself
it works the folding stuff changes hands
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