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What should I charge?

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Forum topic by nate22 posted 1341 days ago 1205 views 0 times favorited 23 replies Add to Favorites Watch
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nate22

419 posts in 1462 days


1341 days ago

I own my own business and I make and sell bunk beds and loft beds. What I want to know is what would you charge for them. I make my beds out of pine right now and I typically pay between $100 to $150 in materials for them depending on the size. So I just want to know what you guys would charge and how much you would charge for labor. It usually takes between 50 to 80 hours or a week and a half to make one. I’ve been told that I don’t charge enough for them. Any input you guys have would be helpfull.

-- K & N Furniture Middlebury, In.


23 replies so far

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nate22

419 posts in 1462 days


#1 posted 1341 days ago

Here are some more pics.

-- K & N Furniture Middlebury, In.

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crank49

3325 posts in 1557 days


#2 posted 1341 days ago

Pay yourself $25/hr X 60 hr = $1500 + $150 material = $1650
Then figure on doubling that for liability insurance.

Very nice looking work, by the way.

-- Michael :-{| “If you tell a big enough lie and tell it frequently enough, it will be believed.” ― A H

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therookie

887 posts in 1414 days


#3 posted 1341 days ago

That sounds about right. What were you charging nathan

-- http://aewoodworks.webs.com

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GaryL

1074 posts in 1417 days


#4 posted 1340 days ago

You’ll need to add your mark-up on the materials too. I add 10%, but I know some folks get more than that. I use to do 20% but had a few clients balk at this rate, maybe even lost a few jobs. No one has even hesitated about the 10%. Lose a little $ but gain more work.

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

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cabs4less

235 posts in 1349 days


#5 posted 1340 days ago

I have a thirty precent mark up on materials sometime more if the build is complicated now I do cabinets so that might be why i can do that but the customer never knows that they just now the total only but i am not hiding my rates but don’t ask don’t tell I would sell the painted ones for 2000 then more for the natural ones wit furniture check out a badcock or sears website and se what they are selling thiers for dont sell yours for this price because yours is hand built so its worth more but I know wit cabs its a hit or miss I have lost jobs becausse price to high but i have lost money because i bid to low.

-- As Best I Can

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Brandon Hintz

53 posts in 1595 days


#6 posted 1340 days ago

I charge $50.00 an hr for contractors, designers and architects that I work with on a regular basis and 65.00 for anyone else. This is just for my time then I add my materials in plus 15% because I picked them up, then I take 25% of the entire job and add that in as profit and overhead. so based on this they would cost 3965.63 if I was selling to a contractor and 5043.63 if I was selling to an individual. I’m sure most will think this is crazy expensive but thats my method and when I actually mangage to stick to it I make money.

-- Potential is limited only by imagination

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TopamaxSurvivor

14553 posts in 2262 days


#7 posted 1340 days ago

When I started in the 80s i had info that said business overhead averages 15%, add that, plus 10% profit. Figures out to adding 26.5% instead of calculating the 15, adding it and then the 10 and adding it. YUiou baseline should at least include all materials and expendable plus labor at your rate.

-- "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

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nubby

16 posts in 1983 days


#8 posted 1340 days ago

We make porch rockers, adirondack chairs and porch swings. For years I have just taken the price of materials and doubled it. I loose a few sales but we really have more business than we can keep up with. The items we make are very competitive what with all the plastic, and like items being made overseas by cheap labor. But still, I have more than the three of us can keep up with. I keep a rocker in my shop that was mass produced by a competetor that has a shop about 8 miles from here but has his rockers marketed at a local farm co-op as well as 2 furniture stores in town. The reason I have it in my shop….I have customers sit in it and then one of mine. Then I have them look at the way it is warping though made of oak. I’ve never had anyone walk out after that test without placing an order with me.
Maybe I should charge more than just doubling the materials cost.

-- Ben,in Dixie, www.roun-tuit.com

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jim C

1452 posts in 1685 days


#9 posted 1340 days ago

Nubby,
If you have more business than you can keep up with,.............raise your prices. LOL

-- When I was a boy, I was told "anyone can be President", now I'm beginning to believe it!

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rance

4125 posts in 1747 days


#10 posted 1340 days ago

........, then after you do all those fancy smanchy calculations, you compare that to what the market will bear. Unfortunately, sometimes it just doesn’t pay to build a product. Keep in mind also that you are building them like you would ‘custom furniture’. That makes the price go up again compared to a stock item. I’m a little surprised it takes so long to build one. Maybe look at reducing that factor.

-- Backer boards, stop blocks, build oversized, and never buy a hand plane--

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TopamaxSurvivor

14553 posts in 2262 days


#11 posted 1339 days ago

Costs are not controllable for the most part. The costs with the % markups are fairly standard for businesses that make it. The control factor is your labor rate, but you cannot be a race to the bottom against the Chinese ‘cause they will win. You are targeting a shrinking market in this economy in both attitude and disposable income. IMO, that market will continue to shrink for the foreseeable future. It will take at least 20 years for the turn. Things have to get a lot worse before enough people figure it out and put enough pressure in the right places to effect change. If you pay any attention to the media with G20 meeting starting in Korea, nobody is talking about the real issue.

-- "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

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Lee Barker

2163 posts in 1437 days


#12 posted 1339 days ago

You need to be realistic about your fixed costs—business license, insurance, taxes, power, heat, rent,tool maintenance and repair,all that stuff. Make a list, and make it real. Now calculate how many hours you work a month and divide. Now you know what it costs you PER HOUR to work. That must be paid. Add what you want to take home, and you’ve got an hourly rate.

I like all the input on materials markup. As an alternative to that, you can just factor in your time fetch it. Just be sure it’s a real number.

I find your stuff interesting, apparently well and carefully built, and really inviting.

If these new, higher numbers cause you to catch your breath, consider a three-tier product line with a very basic unit at the bottom (designed to fit under a number at the high end of the competitors’ prices) ; the one you really enjoy building the most in the middle, and the tedious, client-interactive custom model on top (premium price).

If this end of the business is a difficult process for you—the selling—make friends with a sales person who will coach you.

-- "...in his brain, which is as dry as the remainder biscuit after a voyage, he hath strange places cramm'd with observation, the which he vents in mangled forms." --Shakespeare, "As You Like It"

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nate22

419 posts in 1462 days


#13 posted 1339 days ago

Thanks for all of your guys inputs. This information really helps. And I can tell you right now I am not chargering nearly enough for my beds. I know thats why I don’t get the business like I should thats at least one reason. Right now I am charging anywhere between $350 to $500 for my beds. But that is going to change in the next couple of weeks. Another problem is I happen to live in one of the worst countys in the U.S. right now. The county I lived in got hit so bad from the recession that people moved away from the area just to find jobs. So nobody is really buying anything which is another reason I need to find a way to sell to diffrerent areas of the country. But I am not charging enough. And I had another business guy tell me one time that if one person doesn’t buy one don’t worry about it the next person will.

-- K & N Furniture Middlebury, In.

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nate22

419 posts in 1462 days


#14 posted 1339 days ago

My next quesition is if I sell to stores how should I charge them. I have thought about tring to get my beds into stores but I’m not sure what to charge them.

-- K & N Furniture Middlebury, In.

View Jamie Speirs's profile

Jamie Speirs

4070 posts in 1443 days


#15 posted 1339 days ago

Nathan,
great subject.
When supplying stores, it is not as much price as when.
Stores try to put off paying suppliers on delivery. Wanting 30, 60 or worse days to pay.
Only a point from someone who has learned that lesson. :(

Jamie

-- Who is the happiest of men? He who values the merits of others, and in their pleasure takes joy, even as though 'twere his own. --Johann Wolfgang von Goethe

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