How to start Pen Making Business in India – Investment, Profits, ROI
How to start Pen Making Business in India?
Students, Teachers, Businessmen, corporate jobholders, almost everyone uses a pen for their studies, business and job workings respectively. The demand for a pen is already out there in the market. It is available at almost every retail store and stationery shop, and that too in huge stocks, ranging from an Rs.5 pen to the expensive ones. The best part about this business is that your product would not be sold in fewer stocks but in huge stocks to the necessary chains.
From schools to colleges, to offices, and even small shops everyone has a need to use a pen for noting down their study work, important matters, and even business dealings. This tells us the demand that is out there in the market for businesses that deal with Pen manufacturing business.
For Pen manufacturing business, the manufacturing process goes in bulk as the orders that are batched, and later on dispatched are usually in huge stocks and numbers. This means that the raw materials that are required in the process of manufacturing would be huge, thus thereby providing the businesses the opportunity to purchase raw materials at a lower cost in return for materials in bulk.
In this business you have a choice to manufacture a pen that would be having a price above the average pen, making it seem like an expensive pen used on special occasions, or else a normal and an economic rate that would be preferred by students and many individuals who would usually spend Rs.5 or Rs.10 while purchasing a pen, you can select either of the markets, depending on the choice you would face the competition and production cost.
Licenses Required for Pen Making Business
- VAT Registration
- Firm Registration
- Current Bank Account
- Trade Mark
- GST Registration
- rade License
- Business Pan Card
- Service Tax
Raw Materials required for Pen Making Business
For pen Making business, the raw materials and the number of raw materials required would vary on the type of pen you plan to manufacture. These raw materials should be stocked in huge numbers if your manufacturing target is more than average, hence you should stock them accordingly.
- Metal Tip
- Plastic adapter
- Pen Cap
- Colour (For Ink)
- Carbon black (For Ink)
- Binder (If you make your own Ink)
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Equipment Required for Pen Making Business
For Equipment, you do not require frequent funds or working capital, as most of them are a one-time investment for Pen Making business. In pen manufacturing, the equipment or the machines that are used in the process are usually for the metal tip and the ink. Various Equipment and machines required for Pen Making business are as follows.
- Drilled Nozzle Plate
- Ink cartridges
- Centrifuging Machines
- Ink Filling Machines
- Weighing scale
- Stamping Machines
- Miscellaneous Equipment
- Cleaning tools
- Packaging material
In Pen Making Business, the total cost of production is generally lower when compared to other industries. The reason behind this is that the raw materials are purchased in bulk, thus at a lower cost, making the end process less costly. The investment required would depend on the type of pen that you are planning to manufacture. In our case, we are assuming the investment for a pen that would cost around Rs.5 to Rs. 10 in the market.
|Small Scale||40000 to 1 Lakh|
|Medium or Large Scale||2 to 10 lakhs|
Expected Profits from Pen Making Business
With the investment and the raw materials cost being low, you can expect to earn a good profit from Pen making business. However, this would also depend on the price that you plan to sell your pen in the market. If the price is too low, then there won’t be much profit as profits from pens are only earned after they are sold in bulk. Taking an average of the number, the expected profits from Pen making small-scale business is around 30000 to 80000 Rs per month.
If we talk about a Pen making business that is well-settled and performing really well on a medium or a large-scale, with a good brand name and market, they can earn more than 1.5 lakhs per month.
The Manpower required for Pen Making Business
In Pen making business, technically you do not require much of manpower, as the manufacturing process of a pen is simple once learned and experienced. However, the bulk of raw materials required and the bulk of pens manufactured would require good accounting for making a note of everything and staying on track.
- Considering the above condition, in a small scale-based Pen making business, the necessary manpower that you should go for would be around; 1 to 3 skilled workers.
- A medium or a large-scale Pen making business would mean more handling of the manufacturing process, and hence the manpower required would be more, thus for Pen making business on a medium level, the required manpower would be around 4 to 7 workers.
Profit Margin for Pen Making Business
As we already know, in Pen making business the profits earned are not from single sales but by considering the sales of bulk. Hence, the margin is quite less here, yet on average, the profit margin for a good pen making business would be around 10% to 25%
Local shops: Local shops do not hold many products, or rather, they do not store varieties of products in their shops, they sell the ones that are fast-moving in their locality. But they would be willing to support your new business, and hence you can make your first sales through them.
Retailers: Most retailers do stock pens, but only the well-known brands, however, you can try your luck with them by offering some unique features about your brand.
Stationaries: This is your major target, stationeries have all types of pens stored in their shops, from Rs.5 Pen to a costly one. They would purchase in bulk from you.
Online Retail Stores: You can display your pen through all the E-commerce websites and earn quick profits through a wider audience.
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