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Charge More!

by pashley
posted 12-04-2013 03:19 PM


50 replies so far

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Puzzleman

331 posts in 1597 days


#1 posted 12-04-2013 05:28 PM

I agree with your post wholeheartedly. This applies to smaller items as well as larger items like your desk. It is all in the customer’s perspective. If you can’t sell your product at a fair price, don’t lower the price, change your customer base. If you get too busy and can’t get all of your work done, you must be in demand. When in demand, you can get a higher price.

-- Jim Beachler, Chief Puzzler, http://www.hollowwoodworks.com

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Knothead62

2364 posts in 1614 days


#2 posted 12-05-2013 12:56 AM

I saw a demo by a master wood turner. When asked about his fee, he stated that he charges $1.00 per minute on the turning plus cost of material.

View Loren's profile (online now)

Loren

7550 posts in 2301 days


#3 posted 12-05-2013 01:13 AM

You didn’t say whether the customer accepted the higher price.

There’s the rub.

-- http://lawoodworking.com

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404 - Not Found

2544 posts in 1622 days


#4 posted 12-05-2013 01:48 AM

Is it moral to charge someone more because they have electric gates?

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AandCstyle

1316 posts in 910 days


#5 posted 12-05-2013 02:20 AM

I was in the pharmacy business and the drug manufacturers priced their new products to be just less than competitive therapies. For example, if the standard treatment for you-name-it-osis was $10,000 the drug company might charge $9,000 for their product. It then was an easy sale in that their product was 10% cheaper than the standard therapy. The cost of production is irrelevant.

In your case, the cost of new office furniture is astounding as you have learned. You need to price just less than comparable products. Take a look at this USED Gunlocke desk. Unfortunately, I didn’t find any prices listed for new items, but this starts to give a basis for comparison.

-- Art

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pashley

1023 posts in 2371 days


#6 posted 12-05-2013 03:58 PM

Loren: Yes, I did get the job.

The Lumberjock I think you would have a point if the customer didn’t have a choice – for instance, if his basement was flooding, and I demanded a higher price then I would for the average Joe in the same situtation. However, this customer is at his leisure, and can shop around, and I have that pressure that he may go somewhere else to keep in mind when I set the price.
AandCstyle
My brother works in the pharmaceutical business – the markup on drugs would make your eyes explode. This is why you are seeing drive through pharmacies, and Rite-Aids popping up all over the place like dandelions – because there is a lot of money in it.

Regarding comparisons for this desk – I looked at 12’ conference tables made by the Amish, and their filing cabinets as well – which is comparable work to what I’m doing – and they were high as well. They even up charged for QSWO by a lot. If you look at this Amish conference table,
select the QSWO option, you come up with $7290 – and that’s not even including the three large cabinet drawers I’m making for him. My price was more, of course, but if you add in even just two two-drawer small filing cabinets, you add another $2k. I came in under that.

-- Have a blessed day! http://newmissionworkshop.com

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pashley

1023 posts in 2371 days


#7 posted 12-05-2013 04:03 PM

By the way, here is a rendering of the project – the desk goes against the back wall and touches both side walls, 12’ x 3’ x 1”

-- Have a blessed day! http://newmissionworkshop.com

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Loren

7550 posts in 2301 days


#8 posted 12-05-2013 04:50 PM

Learning how to bid jobs is one of the trickiest things
in professional woodworking.

In the end for casework I don’t think there’s any substitute for
acquiring the specialized machinery that assists in getting more
boxes made faster. A one-off built in is not a very big
job in the bigger scheme of things, but in bidding on
longer runs of cabinets the client liking us or being charmed
by the other work we’ve done lessens in value because
they will often be getting several bids. While they will
look at price and a small minority of clients will go with
the highest bid (and slickest presentation), they are not
that common. On the other hand, many clients rightly
are not sure about hiring a lowball bidder. Stories of
take-the-money-and-run cabinet guys are common
and of course some cheaper vendors are barely competent
and wiser clients understand this.

-- http://lawoodworking.com

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Clint Searl

1450 posts in 1014 days


#9 posted 12-05-2013 05:45 PM

You have to resolve the ethical issues yourself. If the customer accepts a bid that you adhere to, then shame on him if he pays “too much.”

-- Clint Searl....Ya can no more do what ya don't know how than ya can git back from where ya ain't been

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CessnaPilotBarry

890 posts in 763 days


#10 posted 12-05-2013 08:54 PM

Is it moral to charge someone more because they have electric gates?

What the market will bear…

-- It's all good, if it's wood...

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Mainiac Matt

3991 posts in 981 days


#11 posted 12-05-2013 09:05 PM

Does anyone esle find it ironic that the Amish conference table is sold on the internet :^)

-- Pine is fine, but Oak's no joke!

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GOOD LUCK TO ALL

418 posts in 381 days


#12 posted 12-05-2013 09:13 PM

Is it moral to charge someone more because they have electric gates?

Question is, do you charge less because they don’t?

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mporter

237 posts in 1231 days


#13 posted 12-05-2013 09:17 PM

I am confused, how in the heck did you come up with 2K in materials? Especially if part of it is made by plywood.

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Mainiac Matt

3991 posts in 981 days


#14 posted 12-05-2013 09:26 PM

I wish I could get the sales crew where I work to buy into this…. as they routinely under price (IMO) short order custom jobs.

One of our competitors is the BIL of our old sales manager, and the guy is a 65 year old dynamo of energy who knows our industry and region like no one else. We jokingly call him the Grand Poobah!

He can look at a job and snap his fingers and tell you what it “should” cost….. as in, what the market will bare.

On large volume repeat business, he goes in very competitively and then focuses on efficiency.

On low volume, infrequently run business, he goes in high and doesn’t blink an eye for one second of hesitation if he loses the job.

Excellent sales guys can smell money and quickly and intuitively “qualify” their leads. If it’s not worth their time, they politely pass it on to the next guy.

Your time is money… and you can’t waste it where there isn’t any.

Unfortunately, most small businessmen are desperate these days.

-- Pine is fine, but Oak's no joke!

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Monte Pittman

14158 posts in 991 days


#15 posted 12-05-2013 09:53 PM

I am bringing up my prices to meet the local market. I am not sure that I would charge more just because I think that the client can pay more. Maybe part of that is that I am in a small market and I am not faced with high-end buyers regularly. Nest year I am hoping to get into our largest store featuring custom furniture. My opinion might change then.

-- Mother Nature created it, I just assemble it.

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404 - Not Found

2544 posts in 1622 days


#16 posted 12-05-2013 09:54 PM

Electric gates. They are the new doric columns on properties announcing how successful the occupants are. They are here anyway.

So going back to the shopnotes blog

The upshot? You need to consider all the work and material you put into a piece or project, yes, but you also need to consider the the customer you are selling to as well.

Well we know Pashley, that you make some very nice Mission/A&C pieces. If you had a showroom full of your pieces for sale, a $5,000 desk would be $5,000 to anyone who came in, whether they arrived in a beat up Toyota Starlet or a Bentley Continental. In this instance, there is no need to ‘consider the customer you are selling to’. So why should this apply to a commission?

Don’t get me wrong, if a furniture maker has put the time into acquiring the skills and knowledge to make custom pieces, invested in a workshop, worked to gain a reputation and they’re in demand, then let them charge whatever they like. I agree with you about looking at what others charge to get a feel for how much a piece could be costed at, but needing to consider the customer you are selling to as well?

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joeyinsouthaustin

1255 posts in 725 days


#17 posted 12-05-2013 10:20 PM

Add to it this idea to go with the muffler analogy: As you charge more, and deliver on the quality it affects your reputation. In a good way! Many people with “electric gates”, as it was said, like to use price as a marker. Once you can afford true quality, the question becomes, “whose quality” At this point many markers start being used to accentuate your purchases, including trends, uniqueness, and even price. I started in high end and have been raising my prices ever since. I always thought I was on a “tight rope” but it turns out to be a ramp. I just moved higher into the high end… and into circles I didn’t know was out there. The caveat is you have to supply high quality at all times, and you have to be able to communicate expectations about the product, installations, and timelines very clearly. You have to be able to provide it at the service levels expected, and you do run the risk of falling out of favor, if your product is considered trendy. I am glad you did well. With a Pre-finished, after hours installation, I would have charged near 14,000.00 for that desk. It would be solid CT and back-splash, High end guides and filing hardware. etc. Then whittle it down from there.

-- Who is John Galt?

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pashley

1023 posts in 2371 days


#18 posted 12-05-2013 10:45 PM

mporter actually, it’s around $1300 in wood, $400 for hardware, $400 for other costs – the drawers slides alone (these are big, deep drawers) are $300. Three 4’x8’ sheets of QSWO 3/4” plywood is $450. The top is in the $250 range. Make sense?
The Lumberjock…
said, ”In this instance, there is no need to ‘consider the customer you are selling to’. So why should this apply to a commission?” Because it IS a commission. That desk you spoke of – I made with my own considerations, not the customers, as in this custom job. If I was making this exact same project for say, a guy’s home den, I’d still likely charge the same price, though I wouldn’t feel as confident that I would get it. My costs and time would likely be the very same as for the commercial client.

joeyinsouthaustin: interesting insight. You are the “top dog” that I spoke of in my ””Three Dogs of Woodworking . It’s where I want to be as well – and I’m getting there. Sure, I would love the money – but you know what I’d like more? People REALLY wanting my pieces. I think it would be great to make pieces that I really love, and people loving them just as much and paying me a lot of money for them. That doesn’t come easy – you have to have the talent, both technically, and in the design area. You have to be able to make yourself known via the Internet or galleries, and yes, have God’s favor too, I’d say.

-- Have a blessed day! http://newmissionworkshop.com

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pashley

1023 posts in 2371 days


#19 posted 12-05-2013 10:52 PM

Interesting note – when I first proposed my price to the guy, he balked, saying he knew it was going to be higher, but not that high. He said he wanted to think about it, he’d get back to me, he’d pay me for my designing time, at the very least. It didn’t look good. So, I replied I was just trying to be fair to myself and him, but what kind of number was he thinking – I was willing to negotiate a bit. Then he emails me the next day and says, “Looks good, let’s go with it.” – at the price I originally quoted. I’m guessing he went home and did some Internet research, and realized my price was good.

Interesting.

-- Have a blessed day! http://newmissionworkshop.com

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joeyinsouthaustin

1255 posts in 725 days


#20 posted 12-05-2013 11:09 PM

It was word of mouth and magazines for me. Also, you can’t do it alone. It was when Interior designers started handing me around that things started really going. I rarely design a piece these days. For me the joy is in execution of the design, innovation in the construction techniques, and also building the business as well. I evolved to a strategy of minimizing internet presence. In the high end realm it can be powerful for your client to view you as their little secret, to tell only whom they want. “you can’t find this guy on the internet” is a great followup to “I had to pay quite a bit for this”. However my high end world is largely curated by the designers themselves, so is different from going the gallery route. It should also be noted that if I didn’t spend the time building up a functioning custom cabinetry operation, I would not get as many custom furniture and other projects, and am able to lean on that cash flow to finance the type of projects that I have done. Remember: If you are doing a $60,000 “sculptural grade” custom project, you have to be able to finance 20k to 40K for as much as 6 to 8 months (depending on the terms) in order to get to the final payoff. It is a good thing you don’t love the money as much as the desire. These people have lawyers, strong expectations, opinions, and free time. They do not fix it up themselves four years down the road it a cabinet pull works loose. They call you back. Also, everyone wants to knock down the “top dog”. Reputation will help to temper the market, and protect you, but I got to this level? I can’t help but feel I took someones place along the way. In good years the money is good, but I think it is essentially what I call “football” money. I am using this period to diversify, and to stratify my operation down under other brand names in order to stay profitable in the case I find myself competing with the inevitable: Someone better than me.

-- Who is John Galt?

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a1Jim

112086 posts in 2230 days


#21 posted 12-05-2013 11:20 PM

In general I find many woodworkers who say they are pros charge to little,or actually lose money just to be in the “woodworking business” which I don’t understand. If your truly in business you need to get paid well,but the folks who are hobbyist that think their in business buy charging the cost of material or less hurt the woodworking market place.
Having been self employed for 40 + years I find higher end customers demand more in quality and customers service than that of the average customer. So in short if your product meets the standards of a higher end customer and you can provide the service they want then get paid well,of course more than the average customer will pay,because your giving more. A couple other factors are high end customers are skeptical of your product if you charge less than then other skilled artisans, also high end customers are greater liabilities then the nice average customer.If they don’t like your product (even for no good reason) they may not pay you or bring you into litigation just because they have the deep pockets to win in court. So I would definitely charge more for the Roll Royce muffler.

-- http://artisticwoodstudio.com Custom furniture

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mporter

237 posts in 1231 days


#22 posted 12-05-2013 11:37 PM

Nope it doesn’t make since. If you are paying that for your wood then you are getting ripped off big time. In fact let me sell you some wood!!

Full extension drawer slides with a 300lb limit are 13 a pair all day long.

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404 - Not Found

2544 posts in 1622 days


#23 posted 12-06-2013 01:27 AM

Very insightful Joey.

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pashley

1023 posts in 2371 days


#24 posted 12-06-2013 02:45 AM

mporter If you can tell me where you can get full 28” heavy duty slides for that price, let me know. I could only find them at $25 a pair…and I’m not using cheap Chinese junk for my customer.

The QSWO i’m buying is 5/4, 6” wide, my pick. It’s $6.25 in my area per BF. The QSWO 4×8 sheet is $150, and I need three sheets. In my area, this is the price.

-- Have a blessed day! http://newmissionworkshop.com

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mporter

237 posts in 1231 days


#25 posted 12-06-2013 02:56 AM

My god man, in my area QSWO is $2 a Bdft for 4 side square stuff. QSWO ply is 65 a sheet for great stuff.

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GaryL

1077 posts in 1484 days


#26 posted 12-06-2013 03:02 AM

mporter….where are you?
You have no profile, no projects, no blogs…......
The prices that pashley quoted are the same in my area. And my ply prices that I get are wholesale.
If you can get QSWO for $2 bd.ft. , can you share your source. I would love to order some.

-- Gary; Marysville, MI...Involve your children in your projects as much as possible, the return is priceless.

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mporter

237 posts in 1231 days


#27 posted 12-06-2013 03:13 AM

Mid Missouri. Do yourself a favor and befriend a sawyer. I get mine form the source. I tell him what thickness and how wide and he gets me it in a month-kiln dried. A always keep about 1500 bdft on hand. Large orders I get much cheaper than 2 a bdft. He pays .23 cents a bdft right now.

The slides I quoted are 24 inch but right now on amazon the 28 inch ones are 9 dollars a pair and they are good ones. Just look around.

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Dark_Lightning

1714 posts in 1762 days


#28 posted 12-06-2013 03:18 AM

I saw your muffler story in the link, and have the following observation- the Rolls Royce owner EXPECTS to pay more for the muffler, simply because it is a Rolls. No, that doesn’t make it right, but there you are. I almost did some wainscot work for a some people about 20 years ago (they had big bucks, but ground me the whole way, and I ended up not doing the job), and then they wanted a pull out tray for their kid’s computer keyboard and mouse. I explained that anything I did would be at least an order of magnitude more than it was worth and sent them to IKEA. That’s where they were, price/quality wise.

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UpstateNYdude

443 posts in 636 days


#29 posted 12-06-2013 03:41 AM

Supply and demand, he wants a desk and pashley can supply it to him for his price, if the guy agrees why are we having this discussion. I say charge whatever the hell you can squeeze out of their pockets, if he didn’t like the price he can sure as hell go find someone else.

So sick of people bitching about real wood furniture being expensive, go buy IKEA and see how long that shit lasts. My parents have a beautiful 1830’s solid mahogany secretary that still looks just as beautiful today almost 200 years later good luck finding that build quality in anything other then a professional woodworkers shop.

mporter – not all of us have the luxury of knowing someone with a mill or having one close by just because your lucky enough to have one down the road doesn’t mean that everyone does, or that they’ll charge the same.

-- Nick, “Discovering the truth about ourselves is a lifetime's work, but it's worth the effort.” ― Fred Rogers, Be My Neighbor

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mporter

237 posts in 1231 days


#30 posted 12-06-2013 03:56 AM

OK- then you can go to the middleman and save a crap ton of money that way. Don’t blame me because I know where to get a deal. Upstate you can be lazy and pay full price like a fool or spend a little time and save some serious money.

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UpstateNYdude

443 posts in 636 days


#31 posted 12-06-2013 05:00 AM

I’m assuming this guy came to pashley because he is pretty good at what he does, the middle man might charge less but build an inferior product…as they say you get what you pay for.

And how am I lazy because I don’t have a sawyer near me? It’s not a question of time, my geographic location doesn’t make it possible, all the sawyers or mills around me charge just as much as any of the lumber yards (trust me I’ve been to all I can find in a 50 mile radius). As I said before not all of us are fortunate enough to know or have a sawyer near us that sells at discounted prices or I imagine that’s where everyone would buy from, so I’d pump the brakes on calling anyone lazy or a fool.

-- Nick, “Discovering the truth about ourselves is a lifetime's work, but it's worth the effort.” ― Fred Rogers, Be My Neighbor

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Tony_S

427 posts in 1736 days


#32 posted 12-06-2013 11:51 AM

mporter

I’m curious what direct experience you have in high end custom furniture and associated high end clientele?
I’m guessing from previous posts and threads, very little to none.
You stated in a previous thread that you would sell a 36’ bathroom Vanity for $150.00, and you’d be “damn happy to get it”.
Not the same world, nor clientele.
If I build a $50 000.00 staircase for a client, the cost of the material ‘almost’ becomes irrelevant. I buy the best materials available on the market and charge accordingly.
If I’m building a 3-4000.00 dollar chair for a client, I really don’t care if the walnut I made it from cost $6 dollars a bd/ft or $5.
I shop for consistent, top quality material, hardware, and customer service. No different than what I sell.

-- "The trouble with people idiot-proofing things, is the resulting evolution of the idiot."

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joeyinsouthaustin

1255 posts in 725 days


#33 posted 12-06-2013 01:37 PM

Well put Tony_S My per foot price for a vanity is substantially more than mporter’s price for the whole thing. The markup included for overhead, insurance, and warranty alone would pay for a one persons shop entire project with profit. Mporter- you are blessed to be in part of the country that has fairly low prices all around, and to be able to make the friend you have. I can not wait that long, and board feet wise, it would be difficult to supply my shop from one supplier. Also.. if something went bad between us, where would I get my wood?? I need someone in the middle, and am willing to pay for it. I am certain your set up is very good for you. Also to further understand the client that can pay that price, I don’t generally get to choose my hardware. If they are picking me as a “brand name” believe me they are picking the hardware by brand name as well. Remember they have free time. A1Jim: you put it very well. If things turn bad, they turn really bad. This is another reason I am happy to have the designer as a mediator. It spreads the risk, and I am taking the execution end. I feel bad sometimes for the purveyors of taste.. mine is a much more quantitative world, they can keep the qualitative all day and often end up as the first target. If you can’t execute very precisely than you can easily make a lower margin than you can in lower end work. But when you do it right, you bank, and in a market like this, they still have money to spend, but are much more “needy” about it. You also don’t necessarily get to choose where you are. As a example of this my little brother is a Rolex watch builder, he does not get to live in norther Idaho or central Missouri. He has to live in a major area where the money is… and there are four better than all the rest. Such is life. Pashely: thanks for starting another thread for us “heady” philosophers who tend to think to much, and drink too much coffee. :)

-- Who is John Galt?

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pashley

1023 posts in 2371 days


#34 posted 12-06-2013 02:04 PM

Drink too much coffee? Sir, you’ve inhaled too much sawdust!

-- Have a blessed day! http://newmissionworkshop.com

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rhett

699 posts in 2320 days


#35 posted 12-06-2013 03:37 PM

A $10,000 furniture commission may be large to a woodworker, but it is a drop in the bucket for the affluent who can afford it. There is a substantial difference between people who chose to afford quality and people who are wealthy.

You want to know why a Rolls Royce is so expensive? So you can’t afford one.

Leaving money on the table during a deal, only hurts the maker.

-- It's only wood.

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casual1carpenter

353 posts in 1129 days


#36 posted 12-06-2013 03:58 PM

Pashley, one of the posters on your newmissionworkshop link hit the nail directly on the head. ”Perceived Value”, as hard as it might be for some to understand there are people who will respond about their financial status that they are comfortable. Those people do not need to look at prices because money is sort of irrelevant. While it is true that they do not want to be scammed if they perceive the value they will be happy to pay what is reasonable in their world to get that value. You offered the customer the ability to obtain precisely the desk unit and dimensions to fit their desires and space along with the high level of quality construction that stands out in your project posts.

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joeyinsouthaustin

1255 posts in 725 days


#37 posted 12-06-2013 06:05 PM

pashley You may be right…. come to think of it the last two outdoor living spaces were all Ipe’. ;)

-- Who is John Galt?

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pashley

1023 posts in 2371 days


#38 posted 12-06-2013 09:14 PM

casual1carpenter: Yes, and perceived value was only something I recently could put my finger on; I sensed it, but couldn’t put it in words.

joeyinsouthaustin: It’s my understanding that Ipe sawdust is toxic? Ugh. Amazing wood though. Those outdoor living spaces ought to be around a long while!

-- Have a blessed day! http://newmissionworkshop.com

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KayBee

1007 posts in 1899 days


#39 posted 12-06-2013 09:15 PM

I used to be a high end cabinet maker. Different world, no time to look for the best deal on lumber. Many times they just wanted ‘the best’ and ‘custom.’ Part of ‘the best’ is materials that most people don’t use or can’t get. Ever have to find a 10,000 bf of figured hickory, already dry? Don’t think a single local sawyer can do that.

You have to know what your time is worth, literally, per hour. And where you are most productive making money. That will tell you that spending half a day chasing saving $100 on parts/lumber just cost you $300 on lost productivity.

-- Karen - a little bit of stupid goes a long way

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pashley

1023 posts in 2371 days


#40 posted 12-06-2013 09:28 PM

KayBee 10k BF of figured hickory? Wow, you must have been busy! I agree, you do have to know what your time is worth per hour – or, what you will accept. To do that, you have to keep accurate track of time spent on each project, and do the math.

-- Have a blessed day! http://newmissionworkshop.com

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iain1mm

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#41 posted 12-06-2013 11:20 PM

This is a hugely interesting thread as pricing is one of the hardest things to get right in my experience. You never quite know what your competitors would be charging for the same product and level of service so it often boils down to a finger in the air approach (ie. What you think the market will bear). My business back in about june time started operating on the “I am really busy so I will charge a good bit more than I normally would” model. This has resulted in me being committed to working 14 plus hours a day until the end of January at least.( I am starting to wish I had charged more.) It is for me very hard to price things at a level I cannot afford myself but the reality is that I can’t afford me unless I charge more, if that makes sense!

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joeyinsouthaustin

1255 posts in 725 days


#42 posted 12-06-2013 11:23 PM

It makes sense.

-- Who is John Galt?

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JAAune

796 posts in 970 days


#43 posted 12-06-2013 11:25 PM

I definitely need to charge more however my company is just now starting to get close to the circle of wealthy people around here. I’ve been more focused on landing jobs that help build an impressive portfolio even if they only provide a small profit. Up to now most of my clients have been well-to-do but not fabulously wealthy. If all goes well I should be able to follow this advice in the near future once the portfolio is built up and it’s shown to the right people.

On the topic of wood supplier, I use a large company in Chicago for most of the lumber plus some hardwoods obtained from a local sawyer. I could probably have gotten really cheap wood from him since he seems to let me set the prices but I chose not to do so. Since he obviously worked hard milling, stacking and drying his lumber and I get to pick the best of his stock, I see no reason not to give him fair market value for his wood. The savings I get is just enough to offset the time it takes me to fetch the wood.

Once I’m fully established I will expect clients to pay me well for my work and in turn, I’ll make sure my suppliers and subcontractors are getting good wages too.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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pashley

1023 posts in 2371 days


#44 posted 12-07-2013 03:05 AM

iain1mm: It is for me very hard to price things at a level I cannot afford myself but the reality is that I can’t afford me unless I charge more, if that makes sense!

But you have to look at it from the client’s perspective. No, you might not pay $2500 for a coffee table, but some guy in L.A. that’s pulling down $300k a year would.

JAAune: ”...my company is just now starting to get close to the circle of wealthy people around here. I’ve been more focused on landing jobs that help build an impressive portfolio even if they only provide a small profit.”

That concerns me on two levels: One, you are in business to make a decent profit. People understand that, and in my estimation don’t mind paying for something, so long as they get what they want. Second, what are you going to say to these wealthy clients who wants a desk just like the one you sold to the Jones at “a small profit”, but now want to charge them 25% more? I get the building of a portfolio, but not sure I would do so at the cost of profit.

-- Have a blessed day! http://newmissionworkshop.com

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JAAune

796 posts in 970 days


#45 posted 12-07-2013 06:39 PM

Those are understandable concerns but I think they’re covered.

For starters, my business has only been active for one year. Since I have plenty of experience but no portfolio for the type of work I wanted to do I chose to jump start it rather than wait 5 years. After one year we will have 4 significant commissions to display on the portfolio along with several smaller projects that are still very nice.

We did make profit though, it just took some overtime to pull it off. The profit wasn’t high enough to meet our eventual target goals because I designed in some value-added work the client didn’t originally request (but they loved it anyway) and some of the operations were completely new to me. Adding premium LED lighting and curved crown molding to one project added way more time and cost than I’d originally estimated. Both were new adventures and now I have the experience to handle the estimates better the next time (and do the work faster).

All things considered, hitting profit after one year of operation seems good to me. From what I’m told, new businesses rarely achieve that.

When we get to the wealthier clientele we don’t plan to do remakes, I’ll push the designs even further into the realm of high end and the pricing will adjust significantly. It’ll be hard for people to compare these to our earlier projects. Apples and oranges.

If a client ever does request a copy of an earlier project that’ll actually be very profitable even with just a small markup. I estimate 25% of the time going into a project consists of design, jig-fabrication, material sourcing and or CNC programming. We keep decent documentation so remakes generally take 25% less time to build than the originals. If we build a project a 3rd time we can often get the time down to 50%.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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REO

614 posts in 727 days


#46 posted 12-07-2013 07:52 PM

so your talking case goods. I do turnings. I am fast and accurate. I have overhead but I am not extravagant. So far in my short 40 plus years of work I have nailed the large majority of my bids. I was in one of the forums where a fellow asked for some turnings. They were simple. I watched for a while as the “Artists” weighed in. One suggested that with shop time, overhead, taking the time to listen to the wood so that he was sure he could provide only the best product he would charge 20 dollars each piece. The material for each amounted to les than 20 cents, and a good turner should have been able to kick them out in less than five minutes a piece. For an initial batch we settled on 100 at 2.00 each. The fellow eventually hoped he could use thousands.They took me about a minute a piece on the lathe and probably amortizing the setup and prep over the run a minute and a half over all per piece. A nice little job with a good return potential. Had I bid higher he may never have made the change to wood from metal tubing. One thing that has to be remembered is the future. For some now it may be their badge of affluence to over pay for something but it may not always be that way. It seem as the economy becomes more difficult people like to brag about how much they are able to “waste” rather than save on purchases. It seems that people want to emulate extravagance. I don’t think that this will always be the case. Be ready for the “U” turn.

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joeyinsouthaustin

1255 posts in 725 days


#47 posted 12-07-2013 10:29 PM

Interesting update having to do with this thread and the charge more market. It was a joke about the Ipe’ dust going to my head. However it may be fun to note, that one of the clients has decided they now don’t like the look of the Ipe. And that it was the designers choice all along, and they now blame him. Fortunately, in part due to well written proposals, we are off the hook, and they will be paying us to remove the Ipe, and to re do it in Alder. Yes I know, warnings and discussions have already been politely offered about using alder in exterior applications. but these are the kinds of things that happen. (I may get to do this one a third time!) They are just chocking it up as an expensive mistake. I wish I could make mistakes like that!

-- Who is John Galt?

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joeyinsouthaustin

1255 posts in 725 days


#48 posted 12-07-2013 10:34 PM

ReoI don’t think that this will always be the case. Be ready for the “U” turn.” Good point. That is what I meant when I call this “Football money” as in the span of a footballers career. Even if the market stays good, your product, specialty, or you may fall out of favor, or others surpass you.

-- Who is John Galt?

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JAAune

796 posts in 970 days


#49 posted 12-07-2013 11:56 PM

The high end market can certainly be tricky though I have met at least one furniture maker who’s built up a client list that keeps him steadily employed and will probably do so for the remainder of his career.

I’ve developed a three-prong approach that will hopefully insulate my company from the worst of the market shifts. Basically we’re marketing to three completely different clienteles. Chances are that they won’t all go bust at the exact same time.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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Wiltjason

55 posts in 615 days


#50 posted 12-08-2013 12:36 AM

I knew a guy that was a mechanic in a small town.one day a guy came in from out of town and his alternator was shot. My friend told him that he didnt have a new one or a rebuilt one in stock but if he gave him alittle time he would rebuild his. The guy agreed and my friend took his off and rebuilt it and only charged him 20$ for the parts + labor and sent him on his way. The next week the guy stopped by on his way home and thanked him for helping him and told him when he got to the city he bought a rebuilt one feom a parts store and had it put on. My friend asked ” what did you pay for the alternator? ” and the guy said 300$. My friend said ” why would you do that? I rebuilt your so its the same as the one you bought?” The guy answered ” since you charged me so little i just assumed it was a patch job and that the more expensive one was better” from that day on my friend charges 300$ to rebuild a alternator !

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