SouthBelleGroveOutdoors Posted March 5, 2018 Report Share Posted March 5, 2018 Hello, I'm new to the forum and have only been pouring soft baits since the new year. Last year I got back into fishing after a long hiatus and found that with my newly acquired hobby of wood turning I could turn my favorite pond lure, a popper. This led to that and then I got into pouring worms. I am looking to pour baits for some of my buddies. I'm not necessarily looking to make money but would like to at least break even for my materials and justify to the wife another mold purchase. What do you guys recommend charging for baits to cover plastic? Since obviously the size of the bait matters, would you base the price on prices in catalogs for the same bait or calculate the amount of plastic used? Another option, which my cousin did with his lead pouring kit, was to have his buddies buy some molds to add to the kit and then everyone had more molds to use. The only difference between that and soft baits is that lead is free depending if you have sources but plastic isn't free. Any other advice is welcomed. Where do you guys get packaging and what type? If you were I, would you start a Facebook page and try to sell more of your creations? TIA Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted March 5, 2018 Report Share Posted March 5, 2018 google fishing lure FET tax, then make a decision. 2 Quote Link to comment Share on other sites More sharing options...
SouthBelleGroveOutdoors Posted March 5, 2018 Author Report Share Posted March 5, 2018 2 hours ago, Baitjunkys said: google fishing lure FET tax, then make a decision. Thanks! I found a link to another thread on this site. So basically don't sell but maybe just have guys pitch in and buy a mold or plastic. If I want to sell and start a Facebook page I should talk to my accountant. BTW, I just bought some of your plastic last week! Quote Link to comment Share on other sites More sharing options...
Fishermanbt Posted March 6, 2018 Report Share Posted March 6, 2018 As stated above the tax man will come a knocking if you start putting yourself out there on social media. Selling to your buddies I doubt would be that big of an issue though. Two ways to consider the issue as I see it. Tell them to pool their money and you order the materials and make them, or just sell to them for cost of materials. Here’s how I break down my rough cost. Mix and pour one cup of each of your favorite baits. Write down how many baits came from each cup. One gallon of plastic w/ shipping costs say $60. 16 cups in a gallon so $60/16cups= $3.75 per cup. Let’s say you got 24 baits from 1 cup so $3.75/24 baits= .16 cents per bait. Of course you need to factor in cost of power/glitter/colorants/oil and so on. So roughly .20 cents per bait. Same with jigs. 100 hooks=$15; 100 keepers= $10. So divide $15/100= .15 cents each and $10/100= .10 cents each keeper. You have .25 cents in each jig w/o cost of power/powder paint and so on. Hope my math is right and this helps you out. 2 Quote Link to comment Share on other sites More sharing options...
Les Young Posted March 6, 2018 Report Share Posted March 6, 2018 (edited) I have buddys that pitch in on plastic & molds & actually help make theirs because they enjoy doing it too & so it doesn't cost me so much. One buddy is in to lead so we just swap things when we need them & that works good too. I give a lot of stuff to the kids too. I could sell all the baits i wanted as i've had 4 pretty big tackle shops try to get me to put them in their stores & numerous individuals try to buy 300 to 500 baits at a time, but when you start being obligated it turns an enjoyable hobby into a job that ends up not being enjoyable anymore. Been there done that in other hobbys. If a person was retired & not able to fish it might be alright, but i have a job thats usually 60 hours a week & thats way more obligation then i want nowadays. lol Now i've ordered things to get into rod building & have several buddys wanting me to build them some rods too. Its never ending .lol Edited March 6, 2018 by Les Young 2 1 Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted March 6, 2018 Report Share Posted March 6, 2018 Simple cost calculator to hobby guys buying 5 gallon buckets. Figure material at 4.00 per pound. Shoot your mold and weight the runner and all. Divide down... if i had a buddy come over to shoot baits with my stuff, for cost of material. I would let him shoot. Weigh all his baits and runners. And charge him 4.00 per pound. 2 Quote Link to comment Share on other sites More sharing options...
MonteSS Posted March 7, 2018 Report Share Posted March 7, 2018 I charge friends by time to make. Not size. Charge $2 a pack for sticks and everyone will be happy. Quote Link to comment Share on other sites More sharing options...
mark poulson Posted March 10, 2018 Report Share Posted March 10, 2018 I give my friends some of the baits I make, and they give me a bottle of wine every once in a while. Seems like a fair trade to me. Quote Link to comment Share on other sites More sharing options...
alsworms Posted March 10, 2018 Report Share Posted March 10, 2018 1 hour ago, mark poulson said: I give my friends some of the baits I make, and they give me a bottle of wine every once in a while. Seems like a fair trade to me. Ditto, except beer was my poison. LOL 1 Quote Link to comment Share on other sites More sharing options...
Untamed Posted October 2, 2018 Report Share Posted October 2, 2018 has anyone on here gone through the process of filing a 637 exemption? It seems that our suppliers should be more than willing to help with required paperwork since it will generate more business for them. Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted October 2, 2018 Report Share Posted October 2, 2018 Well the 637 exemption form is for buying, not selling. 720 is for reporting sales. Im not sure how much help suppliers can be, as you have to fill out the paperwork and get a number yourself. All the supplier wants when there is fet involved is the number. 2 Quote Link to comment Share on other sites More sharing options...
Driftwood Posted October 2, 2018 Report Share Posted October 2, 2018 Unless you want to spend several hours per week doing paperwork... well, you know the rest lol. Quote Link to comment Share on other sites More sharing options...
MonteSS Posted October 3, 2018 Report Share Posted October 3, 2018 Sell them a paper clip and give them a free pack of lures with every clip Quote Link to comment Share on other sites More sharing options...
smallmouthaholic Posted October 3, 2018 Report Share Posted October 3, 2018 3 hours ago, MonteSS said: Sell them a paper clip and give them a free pack of lures with every clip This ridiculous philosophy wouldn't stand up under an investigation/audit. Big brother wants their 10% excise tax on sales Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted October 3, 2018 Report Share Posted October 3, 2018 FTR, even free, promotional or self use baits, are subject to fet tax. 1 Quote Link to comment Share on other sites More sharing options...
Driftwood Posted October 3, 2018 Report Share Posted October 3, 2018 12 minutes ago, Baitjunkys said: FTR, even free, promotional or self use baits, are subject to fet tax. That's right, if you make it, uncle Sam wants his $$$. Quote Link to comment Share on other sites More sharing options...
bryanmc Posted October 3, 2018 Report Share Posted October 3, 2018 Isn't FET based on constructive price which is 60% of retail? If you don't sell ANY baits, there is no constructive price to base the FET on. Now, if you do sell some that would be a different case. Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted October 3, 2018 Report Share Posted October 3, 2018 "The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. Section 4216(a)." "Constructive sale price; background. The basic sale price rules assumes that the manufacturer sells the article in an arm’s length transaction (that is, in a transaction between two unrelated parties) to a wholesale distributor that then sells it to a retailer that resells to consumers. However, if an article is sold other than to a wholesale distributor or at less than a fair market arm’s length price, the law requires that the tax calculation be made on a constructive sale price (CSP) rather than the actual sale price. " "then, the tax is computed on the lower of-- The actual sale price, or The highest price for which the articles are sold by the manufacturer to wholesale distributors." https://www.irs.gov/businesses/small-businesses-self-employed/field-directive-federal-excise-tax-on-the-importation-and-manufacture-of-fishing-and-archery-products#determination Constructive sale price is used for just that, when the item is promotional, given for free, etc. I have never seen any 60% rule. Quote Link to comment Share on other sites More sharing options...
bryanmc Posted October 3, 2018 Report Share Posted October 3, 2018 Using your example (and the definition of a fish stringer), someone who hangs a trout on a stick with a nub at the bottom has manufactured a stringer and whether he sells it or gives it away he owes FET. My understanding of what you were saying is if you manufacture baits for sale you owe FET. If you manufacture baits for sale and give some away as a promotional item, you owe FET. If you never sell anything, there's no FET, but then I'm not an expert... Fish stringers Any device designed or sold for attaching fish through the opercular opening and mouth. Rev. Rul. 88-52 Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted October 3, 2018 Report Share Posted October 3, 2018 (edited) 12 minutes ago, bryanmc said: Using your example (and the definition of a fish stringer), someone who hangs a trout on a stick with a nub at the bottom has manufactured a stringer and whether he sells it or gives it away he owes FET. My understanding of what you were saying is if you manufacture baits for sale you owe FET. If you manufacture baits for sale and give some away as a promotional item, you owe FET. If you never sell anything, there's no FET, but then I'm not an expert... Fish stringers Any device designed or sold for attaching fish through the opercular opening and mouth. Rev. Rul. 88-52 If you are a business, and you give away every product you make, you owe FET tax. Period.. If your a hobby guy with a bs business name and a paypal account selling on facebook. You owe FET tax, As you are presuming your a business. If you are a hobby guy making lures in your garage to fish, I don't interpret the law saying you owe fet tax, and I doubt anyone else will. I don't write the laws, But I promise you, Ignorance is no defense to the IRS, It has been proven many times, were guys try the, "I didn't know that" approach. Ask half the big manufacturers out there how many times they have been hit.. Edited October 3, 2018 by Baitjunkys 1 Quote Link to comment Share on other sites More sharing options...
bryanmc Posted October 3, 2018 Report Share Posted October 3, 2018 I was referring to the hobbyist without a bs business name. Your statement that "FTR, even free, promotional or self use baits, are subject to fet tax." implied that even if you didn't sell anything and made baits solely for yourself you owed FET. We're pretty much on the same page. Quote Link to comment Share on other sites More sharing options...
Baitjunkys Posted October 3, 2018 Report Share Posted October 3, 2018 3 minutes ago, bryanmc said: I was referring to the hobbyist without a bs business name. Your statement that "FTR, even free, promotional or self use baits, are subject to fet tax." implied that even if you didn't sell anything and made baits solely for yourself you owed FET. We're pretty much on the same page. Copy that, Everything I am referencing is to the OP... "Selling soft baits to friends" Quote Link to comment Share on other sites More sharing options...
SpoonMinnow Posted October 4, 2018 Report Share Posted October 4, 2018 Since you're not going to advertise and only want to sell to friends, it shouldn't be a problem. Cash-only leaves no trail nor does leaving no receipt. As far as recouping expenses: AIN'T HAPPENING! Charge what you will for lures, but keep in mind the competition. Anglers must really want your stuff to keep on ordering more. I not, your inventory of supplies will not need replacing any time soon. Competition from the mass producers will usually bury the private small time lure producer unless the product is unique in some way. Good luck in any case. Quote Link to comment Share on other sites More sharing options...
JBuff Posted October 4, 2018 Report Share Posted October 4, 2018 Don't forget you'll also have your State sales tax as well. I've lost track but I believe some states will make you charge sales tax if you ship into their state. Leonard probably knows more about this than I. Quote Link to comment Share on other sites More sharing options...
bryanmc Posted October 5, 2018 Report Share Posted October 5, 2018 On 10/3/2018 at 4:01 PM, Baitjunkys said: I have never seen any 60% rule. Found this on this site of all places.... "Here is the tax code document regarding constructive sales price determination: https://www.gpo.gov/fdsys/pkg/CFR-2006-title26-vol16/pdf/CFR-2006-title26-vol16-sec48-4216b-2.pdf It has a modification at IRS Rev Ruling 81-226 to indicate that 60% is what to use when not regularly selling at wholesale. “Revenue Ruling 81-226, 1981-2 C.B. 213, modifying Revenue Ruling 80-273, 1980-2 C.B. 350, provides that the constructive sale price for computing the manufacturers excise tax imposed by § 4161(a), when the articles are sold at retail by manufacturers who do not sell like articles to wholesale distributors, is 60 percent of the actual selling price.”" Quote Link to comment Share on other sites More sharing options...
