# Ways to become comfortable with your pricing



## lblankenship (Aug 25, 2017)

Hey guys,

I recently posted on calculating overhead and talked about how I came up with my price when quoting. I'm now hoping you might be able to offer advice on being comfortable with your pricing.

My pricing is materials, labor, overhead and profit. Let's say 20% profit as my start.

In my previous post there were a lot of good points made, one of which was the price you come up with when quoting is necessarily your sale price but rather the lowest price you could sell it for to still make a profit.

With that in mind I priced out two built in cabinets to go on both sides of a fireplace. They would be 43" wide, 24" deep, 8' high made of 3/4" poplar plywood with a poplar face frame. These would be pretty standard with a base cabinet with two doors and a 1.5" poplar counter. On top of that would be a carcass that would go to the ceiling with a poplar face frame and a couple of adjustable shelves. With the customer providing paint and hardware I have it priced just below $1000.00 for the two of them.

This price includes install as well. However thinking back to what you can charge vs should charge and I'm struggling.

Do you guys do anything to compare pricing for your pieces to your local market? I'm just trying to figure out a reasonable price without underselling my services. I understand everyone has different operating costs so pricing will always vary from person to person but I just think that $1000 for two custom sized built ins is a steal and if I'm able to charge more I will I'd just like to get a baseline of what that is and an idea of why the price is that way. Or I could be totally wrong and $1000 is a fair price, I'm just not entirely sure.

Additionally, I'm from the Cincinnati, OH area for context.

Here is an image of built ins very similar to what I'm bidding on.

http://hammersandhighheels.blogspot.com/2011/05/feature-project-holly-and-brians.html?m=1

Thanks again guys, as always I appreciate your input.


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## TungOil (Jan 16, 2017)

A woman I work with just did something very similar. Painted cabs both sides of fireplace, a bit wider. I believe she paid about $4500 in north jersey , so probably a higher priced market, but there you go.

I think you under priced it at $1000.


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## RichT (Oct 14, 2016)

Yeah, that was a steal. Like Tung said, it depends on the market though.

I usually approach it two ways. I price out all materials and multiply by 4. Then I price it out piecewise. $58 per sq-ft for doors. $150 apiece for drawers. $300 to $450 for carcasses, depending on width. Those figures change sometimes depending on the wood chosen. Interestingly, these tend to be in the same ball park.

Just to provide a concrete number, I'm building a 90" wide walnut vanity right now. It has two 36" units for the sinks, each with two paneled doors and two pull out shelves. The center unit is a 16" bank of three drawers. It's premium throughout. The grain is carefully matched, the paneled end piece (the right side goes up against a wall) is book matched. The drawer fronts for the bank of drawers are cut from a single glued-up board, so the grain flows top to bottom. The doors and drawers are inset with Blum Blumotion hinges and under mount full extension runners. The pull out shelves are on the same Blum runners as the drawers. Everything is dovetailed, even the walnut fronts of the pull out shelves.

Anyway, the quote came out to $2,860, which was accepted by the customer. I have spent just over 27% of that on materials and hardware, so my 4X figure is close.

I don't understand your 20% profit figure. Is that on top of materials, or are you giving yourself an hourly rate on top of materials and then adding 20% to that? That would make more sense. Again, it'll depend on region.

I know there was a long thread on overhead before, but I don't count that. I work out of the garage, so aside from the extra electricity I really don't have any.

*Edit*: I forgot to mention that that price does not include a countertop and I do not do the installs. All I do is build them.


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## pottz (Sep 15, 2015)

yeah your way too cheap,in the los angeles area the install alone would be several hundred dollars.


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## lblankenship (Aug 25, 2017)

Thanks guys, to clarify my margin is 20% of materials, labor and overhead. The labor is what I pay myself. So that 20% is straight profit for the business.

Additionally, I haven't submitted the quote yet. This is for my in-laws and when I asked their budget they told me about $500 a piece which at first I thought was extremely low but my business is brand new and I figured I'd try to price it out anyways. I think I could do it and make my 20% but I also think I should be paid a fair rate. If they would have to pay someone else $2000 - $3000 why should I be expected to do it for $1000? It's also not my intention to push the price as far as I can and hose them.

That's why I'm trying to get an idea of what others would charge so I don't have to tell them to get other quotes. Also it would just help me out as I learn how others price cabinets.

I also am prepared to decline the job if they cant pay me a fair rate or have them get quotes from others as a last resort just so they can have realistic expectations.


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## RichT (Oct 14, 2016)

> Additionally, I haven t submitted the quote yet. This is for my in-laws
> 
> - lblankenship


You didn't mention it was family. I do "Friends & Family" discounts all the time. Build it, put a thousand bucks in your pocket (minus material and expenses) and get lots of photos for your gallery. That'll help sell future work.


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## clin (Sep 3, 2015)

I agree with others $1,000 seems too inexpensive.

As for "fair price' you have to stop thinking that way. What's fair is what a willing (and competent) buyer and seller agree to do. No one is forcing someone to pay you for custom builtin cabinets. You're not selling generators after a hurricane or trying to swindle little old ladies out of their social security.


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## LeeRoyMan (Feb 23, 2019)

I would be around 2,500 each.

Let me give you an out of the box idea to figure your profit "goal".

Figure an amount of money you would like to make a year. (for this example, say 75,000 profit)
Figure 40 hours a week for 52 weeks = 2080 hours
Now figure out of the 2080 you might only book 80% of those hours 1,664 hours.
Now divide the 75,000 by 1664 hours and it comes to 45.07 dollars per hour. This is what you need to make above everything else to hit your 75,000 a year profit goal.

If you can't make this much on every job then you know you won't reach your goal.

Take this amount and play with it and it will give you an idea what you need to charge to meet your goal.
It will at least give you some insight on how much you will make charging what you charge.

As far as what something is worth, figure 500 a foot for floor to ceiling wall units all day long. Every job has circumstance that may change that amount but you have to learn what those things are, per customer.
Lots of factors determine this:
Distance to job
Need to rent a delivery truck
Is the job going up stairs
etc, etc…


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## CWWoodworking (Nov 28, 2017)

> I would be around 2,500 each.
> 
> - LeeRoyMan


Man I wish I liked/knew cabinets.

LeeRoyMan has a good point. Stop thinking small picture and think about what you want to make a year.

Be realistic with yourself. For instance, driving in Cincy is worth A LOT of money to me. You people don't know how to drive.


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## clin (Sep 3, 2015)

I think the part about the in-laws was posted while I was typing an answer. Had I seen that, I would have answered differently. Normally for family I'd do any sort of small job for cost of materials. But if the in-laws are trying to help you by throwing you a bone, I'd take the work AND give them a good discount. In that case, it is reasonable to talk about a fair price.

I agree with you, that $1,000 is pretty low, but I think you're sort of boxed in since they said that was their budget. At this point I'd happily do the work, take the $1,000 and NEVER let them know you think it was well below market value for the job. You get a little coin, they get to feel like they helped you, which they did (just not that much). And if they refer you to anyone else, you're not locked in on price as you can always say you did the job inexpensively for family.


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## RichT (Oct 14, 2016)

> I think the part about the in-laws was posted while I was typing an answer. Had I seen that, I would have answered differently.
> 
> - clin


Anyone would. For family I'd suggest doing it for cheap, but maybe impose on them for something in return. Like referrals, possibly allowing potential clients to come view the work. At least until you're more established that is.


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## Greg66 (May 4, 2019)

I would charge a normal customer (stranger) about $4200. The friend and family price would be $5600. I never do work for friends or family. They always expect a discount and usually cry about the bill.


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## OleGrump (Jun 16, 2017)

Normally, I'd agree that this project is priced low, BUT you have two factors to consider here: 1. This is for family, who are on a budget and you want to help them out. 2.You say your business is brand new. Why not do the project within their budget range, and have business cards visible on one of the cabinets. let 'em know, you'll do the work for their price IF they help you advertise your business. One hand washes the other to your mutual benefit.


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## a1Jim (Aug 9, 2008)

Price is relative to your market place and type of project. If your talking cabinets they always seem to have the most competitive prices but if you're making something that the average woodworker can't make the price goes up considerably, the customer is not just paying for material but you experience and know-how and availability in the market place. A customer can find a 36×36 kitchen cabinet many places but if they are shopping for a round expanding table there are far less people that can handle that kind of build.


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## lblankenship (Aug 25, 2017)

Thanks guys, a lot of good stuff here. My thought is if I start out my business by giving out discounts I'll never be able to get away from it.

Also I've sort of had the view that out of anyone getting a discount family/friends shouldn't. If they really want be to succeed, and understand this is how I want to earn a living, they would pay market price and not just automatically expect a discount.

Originally I was wanting to see what others would price for a job like this which there have been some good answers to that but there's also some focus on the in-laws so let me explain a little more on that whole situation.

They could afford the market price for the built-ins. However, at the same time they want these built ins, they are buying new floors and stair treads (few thousand dollars) new carpet for upstairs (1000-2000), and they also asked me to build a kitchen table for them that is 48" round and 36" high. They also mentioned they would prefer it to be made of walnut. I modeled up the table with 4 angled legs and large through mortise and tenons. They said their budget for the table is around $1500. Which I've already I've determined even with my small profit margin won't be possible with walnut.

Similar to this table : 




So they are spending a lot of money at once and I think that is also why their price is lower. They want to squeeze all these big items in at once for a certain budget which doesn't help me out in that situation. I'm trying to get them to split these builds up a little overtime so I can get properly paid for each.

Additionally in the future they want me to build them a 6-8 person dining table with epoxy as well as a large kitchen island so that's why I'm trying to set the stage now as I know they will be asking for more.

The mother in-law was also talking about chairs and how they looked and the amish wanted $450 a chair for cherry and she thought that was crazy. I told her I thought that was on the cheaper side as chairs take a lot of work to make. But I told her I would quote her on the tables only and she could try to find chairs that she liked to buy separately. If she couldn't find any, we could talk more about me making them. She made it seem like she wasn't going to find chairs she liked so I'm expecting that as well.

So to sum it up, in relation to the in-laws, they make well enough to afford market price. Can they afford it right now with everything else they are doing? Maybe not. But just like anything else in life, if you don't have the money then you save up until you do. I'm in no rush to go build all of these things for them right this moment at a low price just because they want them right now. It'd be different if it was one piece and I was done but this will easily evolve into multiple projects.

Please let me know if I sound unreasonable in thinking this. I'm genuinely looking for an outside perspective and honestly would like to do these projects. I just don't want to do it for little to nothing


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## Gene01 (Jan 5, 2009)

When I was doing commercial cabinet work, the quotes were cost plus 20%. Costs were materials + labor and shop time. Way back then, my labor charge was $15 per hour. Shop time was $10. Transportation and install was at the same hourly labor rate. Building for for large businesses is different than for individuals. But, our rates didn't change. We stayed busy.


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## TungOil (Jan 16, 2017)

Doing this for family changes everything. If you are just starting out, you need to build a portfolio of successful projects that future customers can see and touch. Your in-laws are offering you that opportunity. If it were me, I'd make the stuff basically at cost plus a tiny bit with the clear understanding with the in-laws that you will be bringing future customers to see your work. Consider it marketing materials. That way, everyone wins.


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## a1Jim (Aug 9, 2008)

lblankenship If you're just getting into the business then sometimes a job is better than no job. As you mentioned sometimes you can build a reputation as doing low-cost work,this can be a problem you will probably have to contend with anyway because there are so many people working out of there garage that charge only what material cost or even less because it makes them feel like they are professional woodworkers, of course, they are not because a pro has to make a profit. If you are not desperate for work try and stay close to the market price and let your quality workmanship do your sale work for you, the people who can afford custom work will appreciate that and become regular customers. It seems your in-laws are the customers and on one end of the scale, you're considering what they have to work with money wise with a low price on the cabinets and on the other hand saying you're going to be tough and hang in there on the price of the chairs,maybe this is you finding your way into the business, but may be confusing to customers, perhaps having the customers think why is he so low on the cabinets and so high on the chairs. All said and done if your going to stick with your price, your profit and price should prevail. Pricing work can be challenging even when we have over 30 years in the business.


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