How to price my woodworking?
(And sell it) Part 2
Know your market!
So let’s start with why you’re pricing your woodworking the way you are now. If you’re a hobbyist and you don’t sell your work or you really don’t care how much you make when you do, then there is no reason to read further.
If you’re comfortable with how you price your work or you’re a professional and you already have a system for pricing in place and you like how things are going, then there is no reason to read further.
But if you fall some where in between on that scale I talked about in the first series, then let’s get started to see if I can help you with pricing.
It really doesn’t matter what your background experience is or what you do for a career or how much experience you have in sales. You need to have a starting point and that should be to know what you’re building and what it is you actually plan on selling. So what do I mean by that?
Here’s a question I hear a lot from woodworkers ask; I love woodworking and I want to sell some of my work. What sells?
That’s such a loaded question and there’s no golden answer, no one liner that’s going to help you on that one! What one woodworker may be able to build and sell, another woodworker wouldn’t stand a snowball’s chance in hell of selling! Sorry to be so blunt, but now that I’ve got your attention, let’s clarify that a little.
Just because I can design and sell $5,000 home entertainment centers, doesn’t mean every woodworker out there would or should or could, and just because another woodworker can design and sell $50,000 kitchen cabinets and make a living at it doesn’t mean every woodworker could or should or would and again, if a woodworker can design and sell birdhouses and make a profit at it, doesn’t mean I could or should or would.
You have to “start” with what you have the capabilities to build, what tools and your shop will allow you to build, what you would “like” to build and what you think you would be able to sell once you built it.
The only other thing I want to say about your woodworking before we move on to actually pricing and selling your work is; you better build a quality product! Just because you built it, or you hand crafted it, doesn’t automatically mean that it’s better then anything out there in the stores already for sale. Be honest with yourself, if you’re offering nothing more than some ho-hum product and expecting to be able to sell it for a great profit, then you’re starting out behind the 8 ball from the get-go.
Once you decide what you would like to build and sell, then you have to find a market for it. Here’s where so many woodworkers make a fatal mistake when they start the process of pricing their work.
Let’s see if I can put this in perspective; say you build a beautiful jewelry box. It’s made with some expensive exotic wood with elegant design features and flawless finish. You have hours and hours invested in making this box and you take it to your local flea market or country craft fair to sell it. Nobody there is looking for a $400 jewelry box, so you automatically figure you must have it priced too high.
Hello!!!! That’s known as knowing your market; or in this particular case; it‘s not knowing your market. So instead of finding a market you could sell your jewelry box at, you start thinking about how low of a price you need so you can sell it. You forget about how much it cost or how many hours invested in building it, but focus more on “what the market will bear” and you start pricing your work based on that.
It should not have as much to do with “what the market will bear”, as it has to do with finding the right market for what you build and want to sell.
And it doesn’t matter what you build, whether its bird houses or kitchen cabinets, if you don’t find the right market you will end up letting the wrong factors determine how you price your work.
That’s why we get hung up with customers buying at Wal-Mart, Ikea, Harbor Freight, Lowe’s and the like. We somehow think that “everyone” shops at these places and we have to price our work accordingly or we will never be able to sell our products.
If that’s the customer base you want to sell to, then yes, you will have to figure out how to price your woodworking to compete with their prices………And good luck with that!
Two very important things to remember when it comes to worrying about whether you should or could compete with stores like that.
First; they have the luxury of choice in deciding who they buy their products from and how much they are willing to pay for that product so they can retail it to the average customer. Even if they buy cheap crap from overseas, they are looking for one thing and that’s “price point”! They’re looking for the masses to purchase their products, so price will have to be low………….real low. Quality, Service or even where it’s built or by whom it’s built doesn’t have much to do with it.
Second; if you had the luxury of selling thousands upon thousands of a single item, you could probably find a way to build it and sell it at a lower price. If you had the thousands of outlets to show and sell your products, you could probably sell a lot more at a lower price.
You have to realize this is not the market you should try to compete in and that’s not the average customer base you are going to sell to. If you allow yourself to go down that path, then you have to allow those factors to determine your pricing.
As a woodworker; being your own manufacturer, having to sell just a few items at a time and having to rely on more then just a low price, you have to find a different market all together. It’s a much smaller market and you have to actually work harder to find that customer.
I know most of you will say you already knew that, but I also know that most of you will still think about those stores and worry about their pricing when it comes to trying to price and sell your work; Right?
When I first started my business, one of the things I really enjoyed designing and building was home entertainment centers. That was almost 30 years ago and most of the styles were Armoire type cabinets. (Before wide screen TV’s). Even though there were no Ikea or Rooms-to-Go type stores around at that time, Sears and all your local furniture stores carried that type (mass-produced) entertainment centers and most sold for around $399.95 or less. How in the heck could I compete with that?
I can still remember the first time I came home and told my wife I had sold an entertainment center for over a $1,000.00. It was exciting and I had to realize that just because I was a one man shop, located in a small town in a farming community, not everyone bought their furniture from Sears. I could find customers that where looking to have a piece of furniture custom built and willing to pay for it.
I had to find my market and grow from there. It took time, but I realized that some customers where able and willing to pay $5,000, $10,000 or even $25,000 to have a custom made home entertainment center for their home.
Here’s my point; you can’t sell that type furniture in a Wal-Mart parking lot, or at a flea market or on Craig’s list. I had to find a market for my type woodworking and a price I could afford to build and sell them for and not allow others to dictate my price. I wanted to design, build and sell $1,000.00 entertainment centers for $1,000.00 and not build $1,000.00 entertainment centers to sell at $399.95 because that’s all the market will bear or that’s where I allowed my “comfort zone” to be.
Guess what; I found my real comfort zone was designing, building and selling $5,000 to $10,000 entertainment centers. I quit worrying about the customers that bought their furniture at Sears or the local furniture stores and started thinking about where the rest of the customers shopped for their furniture.
Here’s another example of finding your market. John is also a Lumber Jock and I asked his permission to use his business as an example in my book, so I’m sure he won’t mind me sharing his story here. Let’s talk birdhouses for a moment. Now there is a product you can find in Wal-Mart, Lowe’s, Home Depot and any home and garden shop across the nation. Talk about pricing! How in the heck could you ever build a birdhouse and compete with Wal-Mart or the others? Simple, don’t try competing with them, see if they can compete with you.
Check these birdhouses out!
Do you really think John worries about what Walmart or the lawn and garden departments from the big box stores sell their birdhouse for? I know this is extreme, but I wanted to make a point. The lowest price is not always the answer, but knowing your market and targeting it can work at any price. (Your product has to match your market).
Please visit John @ www.extremebirdhouse.com. He’s a true craftsman and knows how to market his product.
THANKS AGAIN JOHN!
Let’s continue on tomorrow.
-- John @ http://www.thehuffordfurnituregroup.com