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Forum topic by Chuck1685 posted 12-07-2017 03:14 PM 766 views 0 times favorited 47 replies Add to Favorites Watch
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Chuck1685

28 posts in 924 days


12-07-2017 03:14 PM

Topic tags/keywords: working with contractors

Hello All. I have a few questions when it comes to working with contractors. I should start by saying that I am not new to furniture making, but am new to owning a business. I recently decided to turn my long time hobby into a full time profession. Anyways, I have been getting some requests to build furniture from local contractors who refurbish old homes and build new homes, local to my area. So far they seem to be proposing that I build a few pieces for the homes they will be showing and that if the pieces sell with the home, than I get paid. (They tell me that 80% of the time the pieces sell, but not sure how accurate that number is). If the pieces do not sell then I would be stuck with them. They would have me working with designers and architects to guide in the process. Here are some questions I have. What is a good base to start with as far as pricing? I general charge 40-60$ hour + Material cost for residential custom pieces, but should that price change when dealing with contractors? Also, I was thinking about trying to negotiate so that they pay for material cost up front, and if the piece(s) sell then they can deduct that amount off the total, essentially getting their money back. However, if the piece(s) do not sell then they are out the material cost. I don’t know if this is a good tactic, but it seems to at least be giving me some bit of insurance. If anyone has any experience in dealing with contractors, please feel free to let me know what you think. Thank you all in advance!


47 replies so far

View Gilley23's profile

Gilley23

384 posts in 218 days


#1 posted 12-07-2017 03:20 PM

They’re trying to stage their houses for free…at least for them. They’re proposing that you stage their house for them. Ohh and if the buyer wants the piece, then yay for you, but if not, well then good luck with that.

Hell no. They don’t work for free, so why should you? And there’s no telling how long it’ll take to sell the property.

I would propose that they “rent” the pieces that you build for them. If they sell with the property, then the rental fees will be deducted from the price. That way you get paid and they still potentially get the staging for free.

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jonah

1455 posts in 3135 days


#2 posted 12-07-2017 04:37 PM

There’s no way in hell I’d do what you’re proposing. Most houses do not sell with the staged furniture included, at least in my area. You’re basically banking that the buyer’s taste will be the same as the designer/contractor’s taste, which is exceedingly unlikely. You’re taking all the risk there.

A “rental fee” arrangement is one solution, but honestly, I’d probably not even do that, since you’re likely going to be stuck with them anyway, and all you’d get is a small rental fee to defray the time and material cost of the pieces.

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Chuck1685

28 posts in 924 days


#3 posted 12-07-2017 04:47 PM

What do you guys think about 50% down payment up front of the total bill? If the piece sells then they can deduct the amount from the sale. But if it does not sell they are out the 50%. This would at least cover material cost plus some labor. I also would get the furniture back if it does not sell, so there is still an opportunity to sell it and make some money.

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tncraftsman

88 posts in 2975 days


#4 posted 12-07-2017 04:48 PM

no , no and hell no.

It’s a terrible deal for you. They are taking advantage of you. Like Gilley said, they want to stage their home for free.

I understand it’s tempting, getting your work out to be seen and networking your business.

If you decide to go this route then do whatever you can to get your money upfront before putting your work in their houses.

Renting is a good idea but who is to say they will pay you a monthly fee.

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tncraftsman

88 posts in 2975 days


#5 posted 12-07-2017 04:57 PM

This is tempting but what about this business case:

What happens if none of your wares sell and all get returned in the same month draining all your cash reserves putting you in the red, eliminating your cash for current projects forcing you to buy on credit?


What do you guys think about 50% down payment up front of the total bill? If the piece sells then they can deduct the amount from the sale. But if it does not sell they are out the 50%. This would at least cover material cost plus some labor. I also would get the furniture back if it does not sell, so there is still an opportunity to sell it and make some money.

- Chuck1685


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Chuck1685

28 posts in 924 days


#6 posted 12-07-2017 05:11 PM

tncraftsman

Yea it really isn’t the best deal for me unless they 100% guarantee that my pieces will sell and I have that in writing. But in reality there is never that guarantee. I know its kind of a crap scenario for me, but I am trying to figure out some way to make it beneficial. Right now my business is starving for work, so I have to consider every opportunity. What do you think would be a good solution besides walking away from it all together?

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avsmusic1

172 posts in 521 days


#7 posted 12-07-2017 05:23 PM

Agree w/ others

Do you have a sense for what they will typically be looking for and the level of customization? Are these big subdivisions going up that appeal to second or third time home buyers who already have furniture? Is the ask of you to produce single pieces for a model home with the potential of building multiples thereafter for anyone who wants to buy? I would also think about it from the angle of the person buying the property – if you were buying one of these homes, what would you need to also want to include certain furniture pieces in the deal?

Short answer is I probably wouldn’t give them something for nothing regardless, but it may be worth giving the contractors a heck of a deal if they only needed a couple pieces for a model home with the opportunity to sell to every potential buyer of the 200 parcels.

View Ripper70's profile

Ripper70

613 posts in 745 days


#8 posted 12-07-2017 05:28 PM

I don’t believe that 80% of the homes sell with the furnishings. That number seems too high. Perhaps, if you sell them the piece at full price and agree to buy it back for half price it’d give the realtor more incentive to push harder to sell the furnishings along with the home. I’d even let them sell the pieces for a profit and keep the difference, if they’re able. But to do the work and risk not getting paid for your labor is not the way to go, IMHO.

-- "You know, I'm such a great driver, it's incomprehensible that they took my license away." --Vince Ricardo

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TheFridge

8301 posts in 1322 days


#9 posted 12-07-2017 05:30 PM

Negative ghost rider.

The pattern is full.

-- Shooting down the walls of heartache. Bang bang. I am. The warrior.

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Chuck1685

28 posts in 924 days


#10 posted 12-07-2017 05:32 PM

From the phone conversations I have had, they are mainly looking for items to fit a specific space. For example, a hall table that fits in a little nook or a mobile kitchen island for a small kitchen that tucks away in a specific space out of the way. So it does make it seem like it would be higher likelihood of the item selling with the house in those scenarios. They also said I can pick and choose what items I would like to make. So if they want ten items made I can just choose the ones I think would sell. The issue I neglected to mention is that they did say that I could advertise my products as well with business cards, pamphlets….etc. So there may be some value in that as well.

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Rick_M

10621 posts in 2216 days


#11 posted 12-07-2017 06:07 PM

They smell desperation and opportunity for them. Forget furniture and get work from them doing built in, closets, etc.

-- http://thewoodknack.blogspot.com/

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tncraftsman

88 posts in 2975 days


#12 posted 12-07-2017 06:19 PM

“Yea it really isn’t the best deal for me unless they 100% guarantee that my pieces will sell and I have that in writing”

Do you have the time and resources to fight should they not pay? Can you wait 30,60,90 days to get paid. They won’t pay you until they get paid.

“But in reality there is never that guarantee. I know its kind of a crap scenario for me, but I am trying to figure out some way to make it beneficial. Right now my business is starving for work, so I have to consider every opportunity. What do you think would be a good solution besides walking away from it all together?”

We’ve all been there. In the end it’s your call and a gamble with the odds stacked in the builders favor The pros is you get some advertising to an unqualified market. If it doesn’t work out you are left holding all the cards and if it fails will add to your stress. Yes you get your wares back but you’ll be motivated to sell. Which will mean selling at a discount continuing to undercut your own price

“for items to fit a specific space”

If that’s the case then I’d propose something that is built in which you build and install and bill as a sub.

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tncraftsman

88 posts in 2975 days


#13 posted 12-07-2017 06:19 PM



They smell desperation and opportunity for them. Forget furniture and get work from them doing built in, closets, etc.

- Rick_M

+ 1, yep

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Fresch

93 posts in 1757 days


#14 posted 12-07-2017 06:33 PM

Make them your salesman on commission see how they feel then!

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the_other_ken

29 posts in 2811 days


#15 posted 12-07-2017 06:46 PM

I wouldn’t do it. But if you decide to do this, make sure you get something out of it even if nothing sells.

That is, work on getting some free exposure for you work. Make sure that your business advertising is prominently displayed with the work. This would include business cards and maybe a flyer showing the type of work that you do. I would also advertise (in the house) that this piece is for sale separately and display the price on the piece and that a similar piece can be custom built to fit in their house if they like this piece but want something specific (wood type, different size, etc).

I also like Rick’s idea mentioned above that they need to give you some other paid work (like the built-ins, closets, etc). If they are not willing to give you that work (at your full rate), then they just want to use you for free.

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