Manufacturing of stationery items like Pens and Pencils is very popular throughout the world. There are more than hundreds of companies that manufacture millions of pens every year. However, Pen making business is still a hot cake small business that enjoys a growing market demand. With a very small investment, one can start a decent ball pen manufacturing company and earn good ROI
If you are looking to start a pen making business; this article can guide you with vital information
So, In this article, you will learn the following things
- Business Plan for Pen Making Company
- Market Scenario of Pen Industry
- Resources Required for Pen Manufacturing
- Details of Pen Manufacturing
- Profit Margin in Pen Making Business
Let’s us Start with each one of them
Business Plan for Pen Making
The first step in the Pen making business starts with drafting a business plan. By creating a detailed business plan, you will be able to get a basic idea of what it takes to run your business. A typical Pen Manufacturing business plan should include the following items.
- Type of Pens that are manufactured – Gen Pens, Ink Pens, Ball Point or Fountain Pens
- Raw materials for the Manufacturing process
- Machinery required to make pens
- Details of Your Manufacturing Unit
- Investment Details
- Marketing Strategies and USP
- Forecast of Sales
There might be additional details one can add to their business plan depending upon their business objectives. However, these are the most essential things to be jotted down. A well written business plan with facts and figures is halfway to success
Market Scenario of Pen Making Business
The Global pen market is estimated to reach US$20,544 Million by the end of 2030. With rapidly growing technologies, Pen manufacturers success is highly influenced by factors such as the use of new ink technologies, designs, and materials. At the same time, there is also high competition in making pens as economical as possible to capture majority market share
Refillable pens have the largest share in pen making industry. Factors such as cost savings, flexibility in replacing refills and environmental benefits played a major role in their growth
Although there are a wide variety of pen categories; the majority share goes to the ballpoint pens. Due to their economical price, global adoption, and ease of writing, ballpoint pens are preferred by the majority of the audience
The growth of the pen market is also influenced by the growing education sector in a country. Today, Governments are striving to bring education to as remote areas as possible. This has indirectly helped in growing pen manufacturers In addition to the above factors, Pen making industry is seeing a growing interest for eco-friendly pens that are completely plastic-free.
Resources Required for Pen Manufacturing Business
In order to get into pen making business, you need resources like pen making machinery, manufacturing sites, workers, and raw materials. A small scale pen making unit can be started with 15 to 20 Lakhs Investment or Approx. $20,000 to $30,000. With this investment capability, you will be able to run a decent ballpoint pen making unit. Let us go through the details of each resource required for Pen Making
Business License and Registrations
The first major resource for your business is to have a business license. You can register your Pen manufacturing unit in three ways i.e, Sole proprietorship, Private Limited and LLC. Opting for the second two options is beneficial in terms of legality and obtaining loans or finances when compared to Sole proprietorship
If your scale of manufacturing unit falls under micro and medium scale industry then you can check to see if you can avail schemes under MSME category;
Here are the details of permissions and licenses you may need to have for setting up a Pen Manufacturing unit
- Aadhar card details / Social identity proof
- PAN card
- Bank Account details
- MSME License (Optional)
- GST license
- Business Insurance
- Business license
- Trade mark license
- Other applicable licenses from the state government
Pen Making Machine
The pen making machine is the costliest equipment of pen making business. The price of a pen making machine starts from as low as 25,000 to 10,00,000 INR.
The price of the pen making machine mainly depends upon two factors 1) Mode of operation and 2) Production rate per hour
Generally, an automatic or semi-automatic penmaking machine can produce 70 – 80 pens per minute. On the other hand, a manual pen-making machine can produce 10 -20 pens per minute.
If you want to establish a high production capacity pens factory then, always go with automatic machines. However, if you want to just run it as a home-based business with no expectations of high profits then, you can go with a manual pen making machine
Before, getting a pen-making machine you need to consider the following options.
- Mode of Operation
Depending upon budget and desirable production scale, you need to choose between three types of pen machinery; manual, semi-automatic, and automatic. The latter two are the costliest and most efficient machines
- Production scale
- Type of Pen manufactured (Plastic, Metal)
- Service and support
Let us go through each one of them in detail Three types of Pen making machine
Automatic Pen Making Machine
A fully automatic pen making machine is the one that is capable of producing the pens at a large scale with an automated process. In these machines, there is no use of manual intervention; However, the only step required by humans is they have to load the empty pell shell into the machines; later, the machine automatically loads the ink and releases the pens
A fully automatic pen making machine costs about 8 to 20 Lakhs INR or $20,000 – $30,000. The price of the machine largely varies by the type of pen it is capable of producing such as a point pen, click type pen, or use and throw type of pen
Manual Pen Making Machine
These machines are widely used for pen manufacturing. They come at cheaper prices that start with 15,000 INR to 25,000 INR. Most of the use and throw pens are manufactured using this machine.
If you are considering starting a ball pen making business from home with a very low budget, then this machine perfectly suits you.
Normally a manual pen making machine consists of the following items
- Adapter fixer
- Ink filling machine
- Tip fitting machine
- Centrifugal machine
- Name Printing machine
All these items can be operated by a single machine and don’t even require a lot of space. So this is perfect for home based pen making business owners
Specification of Pens Manufactured
When you are deciding to purchase a pen making machine the priority consideration should go to the specification of the pen you desire to make
Generally, there are wide variety of pens around the world, starting from costly fountain pens to simple use and throw plastic pens, each type of pen requires a different set of machines; for example, to make use and throw pens you can easily do them by manual pen machine; However, if you want to make costly pens like Cello, Reynolds, Parker or Mont Blanc, etc., you need to consult an engineer who will design the blueprint of making such pens and customize the machinery according to it.
Pen machine Dealer
Finding an ideal pen making machine manufacturer is also very important in this business; Although there are several local manual pen making machine manufacturers; finding an automatic pen making machine manufacturer is quite difficult
You can use b2b websites like India mart, Alibaba, and exportersindia.com to find out potential manufacturers. With that being said, it is also very important that the manufacturer you select should provide proper training, after-sales support, and scheduled service when required.
Location and Manpower requirements
The Pen manufacturing unit can be started within an area of 1000 Sq.ft; this area is sufficient enough to fit a fully modern automatic pen making machine and also provides an ample space of storing.
It is always better to choose a location that has low rental prices and near to markets and road connectivity
A small scale ball pen making unit can be run with 2 workers, with basic education skills as a requirement. If you are operating a manual ball pen making machine, then a single person is also enough
Sometimes it is still fine you can run an automatic pen making machine plant by single worker also; all they have to do is mostly feed the empty pen shells to the machine; which then, takes care of rest of the pen making process. Finally they have to collect from the outlet and pack them
You need a 3 phase electricity connection to run an automatic pen making manufacturing unit. Most of the automatic pen machines run on 3 phase connection.
However, manual pen making machinery requires normal house hold power connection; which they can run smoothly run on a 2 phase electricity
In addition to the above resources; a pen manufacturing unit also requires packing material such as carton boxes, tapes and weighing balance If you are going to establish your own pen manufacturing brand and looking forward to establish in a large scale; then, you may also need a small office space and accounting material to keep track of the resources being utilized
Pen Manufacturing Process
Although there are different types of manufacturing process involved in pen making; In this topic we are going to see the most established process followed by several small to medium scale pen manufacturers who make ball point pens
Manual way of making ball pens
In the manual process, different equipment’s are used to finally produce a pen. This is mostly suited for making use and throw pens. Here are steps involved in manual ball pen point pens making
In the manual process, different equipment’s are used to finally produce a pen. This is mostly suited for making use and throw pens. Here are the steps involved in manual ball pen point pens making
In the first step, The adapter is fixed to the pen body and gently pressed using a press machine
Next, ink is filled into the pen body using a ink filling machine
Now, a tip is attached to the pen by using a ball pen tip fitting machine. One must be careful at this step, because a slight pressure can damage the total tip and make it useless
Now, the pen is put in a small centrifuge machine in order for the ink to be spread evenly inside the pen so that it makes the ink to flow when writing. In most cases the pen is subjected to centrifugal force for just 1 or 2 minutes
Once it is done the pen is finally mounted on a name printing machine. Which either uses a gold foil or a Silver color foil to print the name or brand on the pen
Profit Margin in Pen Making Business
Pen making business offers a decent profit with a margin rate of 10 – 15% for small business owners. The profitability is highly dependent on your marketing capability, Bulk sales made and the product quality.
A simple calculation is let’s assume it took 1.70 rupees to manufacture a ballpoint pen and you sell the pen for 2.5 rupees per piece at the whole sale rate then, on each piece you will make 0.8 profit. On the other hand, if you sell the same pen for 3 rupees per piece at the retail level then, you will make 1.3 rupees profit on each pen
Now, lets assume you sold a bulk order of 500 pens, with the above calculation, it will cost you 850 rupees to make 500 pens (1.7 per piece) and when you sell them at a wholesale price of 2.5 per piece you will get 1250 rupees. So, you will end up with 400 rupees in profit.
If we assume that you sell the same lot for a retail price of 3 per piece, then you will end up with 650 rupees profit. So for a small business perspective considering the low investment rate and mass production capability pen making business is a fruitful business that provide decent profit margin
Marketing Strategies to be followed in Pen Making Business
Pen industry is a competitive one; there are lots of companies that already have a major share in the industry. To be successful in this business, one must strategically market their products. Here are few useful tips on how to market your pens
- If you are new in the business start to capture low market first, do not go to sell your pens in large stationary outlets as you may have end with less profit margin.
- Focus on selling your pens in stationary shops that are close proximity to schools or colleges or coaching centers
- Ensure the branding of the pen is creative and visually appealing to the users; your customers should remember the name of your brand
- Always go with the quality ink; do not compromise on this in any matter
- Though it might cost you a little extra; always go with quality Nib
- Diversify your pen design atleast once a year to attract more customers
- Get in touch with other grocery companies and talk to them that your pens will be given free with their product purchases.
- Be a sponsor in local events such as marathons, sports or special events; this is a place where you can market your brand with word of mouth
- Ensure to keep your pens within the visibility range in stationery shops; the placing of your pens also plays an important role in sales and marketing
Conclusion Starting a pen making business is an ideal venture that can be started with very less investment and is also praised for its simple manufacturing process; However, if you want to make it a serious business; you should invest a lot in machinery, designing and quality. Plus, you should focus highly on marketing as well as keep an eye on competitors.
That being said, one must not neglect the importance of the environment when you are in business; every year there are tons of plastic waste produced through stationery, especially from pens which is a serious concern that needs to be checked. You can also think about finding alternatives for this issue like producing reusable pens or pens that are made up of wood material etc.,