# How to price my woodworking (and sell it)



## huff (May 28, 2009)

*How to price your woodworking to make a profit (and sell it)*

How to price my woodworking?
(And sell it) Part 1

So where do you begin to answer such a simple question; or is it that simple?

I've heard this question asked so many times and I've heard so many one liner's for an answer:
• "Know your market"
• "You can only sell it for what the market will bear".
• "I sell it for enough to support my hobby" 
• "It's just a hobby, so what does it matter as long as you at least cover your material cost".
• Cost of materials x 2.
• Cost of materials x 3.
• Cost of materials x 4.
• $150/lineal foot (or whatever price per lineal foot)
• "I don't sell my woodworking", I just make stuff for my friends and family.

So, if you've been in sales and all these one liner's make sense to you, or you're comfortable with how you price your woodworking then no need to read on, but if you have no sales or marketing experience but would like to understand how to price your woodworking and then be able to sell it, I hope my series will give you some insight on pricing and selling your woodworking.

PRICING is going to be different for every woodworker so there will be no magic answer here and I'm sure I'll step on some toes before it's over, so take everything I share with you with a grain of salt, use what information you think will help you and disregard the rest if you don't agree.

Woodworkers range from everything from an occasional hobbyist to the full time Professional woodworker that depends on it for their living and everything in between! It's all those in-between areas that seem to have the biggest problem deciding how they should price their woodworking.

The true hobbyist doesn't "sell" their woodworking, or if they do, they charge enough to cover materials to build something for a friend or family member. So it doesn't matter what they charge and they usually don't worry about it.

One the other end of the scale, the full time professional knows that pricing his or her work is a major factor in operating their business, so most professionals already have a system for pricing in place. But don't kid yourself; I've seen a lot of so called professionals that don't have a clue on how to price their work and make a profit. (That's why so many go out of business or find another career).

And then there's all the other woodworkers in between that slide up or down the scale; they may be the hobbyist that really does want to make a little profit when they sell some of their work or the woodworker that is trying to start a small side line woodworking business and sell his woodworking while still keeping his regular job, but would like to make enough to make it worth while giving up nights and week-ends trying to have a business.

Maybe you really want to start your own woodworking business so you could go full time and replace your regular job with doing woodworking for a living.

First, you'll have to decide where you fall on the scale of what you expect from selling your woodworking and from there you can begin to find your comfort zone.

*You can take all the formulas in the world that could help you price your woodworking and they won't do you a bit of good if when you're finished you're not comfortable with the price you have to quote to your customer.*

Most people only want to sell in their "comfort zone", which means, most want to be nothing more than an order taker, a cashier, and simply go to the bank and deposit money, but not really having to "sell" our product, so we tend to price accordingly. We just want people to walk up and buy our product (everyone!).

So how do we get around this, or deal with this "comfort zone"? How do we get comfortable with the pricing of our woodworking? Everyone deals with it in different ways or uses different excuses, but the easiest way is to know all the facts instead of trying to price things from others opinions or simply guessing on what might be a good price. There's no one simple answer to pricing or selling your woodworking. There are so many things that can affect how we price our work or how and who we can sell our woodworking to that
I would like to take the time and write a complete series on how to help you understand and find your comfort zone for both pricing your woodworking and also how you can sell it. (Pricing and selling go hand in hand).

This may be too long and boring for some to follow along, but I will try to break it down into sections that you can decide if that topic is of interest or not.

We have a tendency to pick the easiest way to price our work and really don't have a clue if we actually make a profit or even if it was worth the time and effort to do the project. We're more concerned if the customer will buy our work then if we actually make a profit when we do.

When all is said and done and the sale is completed, that's when we look at the sale and try to justify in our minds that it was a good price we sold it for and if we made a profit. We end up making excuses why we sold it for what we did or why we couldn't sell it, but not really truly understanding why we ended up pricing it the way we did.

That's why we don't like to compete with places like Wal-Mart, Ikea, the big box stores and the like. Watch the average consumer (yourself included) when you walk into a store like that, you find what you're looking for, you put it in your shopping cart, and off you go to the cash register to pay for it. That's what we want everyone to do with "our" products, unfortunately it usually doesn't work that way for the average woodworker.

My whole career for the past 45 years has been in sales and the last 27 years of that as a full time professional woodworker where I had to determine the selling price, be able to sell it and make a living doing so.

In one sense I was lucky, I didn't start as a hobbyist and then try to figure out how to make it a career, but instead I jumped in with both feet and it was either sink or swim as a woodworking business. (It forces you to take things a little more seriously).

I was fortunate that my wife had a good job and that took care of a lot of the household expenses, but the business was totally a sink or swim situation. It was totally up to me to figure out how to market, price and sell my work!

After a few years in business I realized I was cheating myself and my woodworking because I was still allowing the household budget to cover my butt when I didn't make enough to cover all the expenses involved with running a woodworking business.

It really opened my eyes when my wife was diagnosed with terminal cancer and was no longer able to work. We became a one income family with a ton of medical bills and a child ready to go to collage. There were no more safety nets, it was going to be either make a profit with woodworking or find someway else to make a living.

All said and done; I've enjoyed a wonderful 27 year career as a professional woodworker and wouldn't have changed it for any other. I'm as passionate about my woodworking today as I was when I started.

So I have very little patience when I hear someone whine and complain because they can't make any money doing woodworking.

Pricing your work, knowing how to market your work and getting out there and selling your work all have to go hand in hand.

I realize most woodworker's don't have a background in sales or even comfortable selling at all, so I hope I will be able to give you some food for thought that may help you price your work, be able to actually make a profit and sell your work for the price you should.

If you're sitting here reading this and saying yeh, yeh, yeh, that's all fine and dandy; he has lots of experience in selling, but what's that got to do with pricing my woodworking? It's simple; pricing and selling go hand and hand. 
*
There's a fine line between pricing your work where you can make a profit but still sell it, and pricing your work so you really don't have a problem selling it, but you don't make any money doing so. *

So, with that being said, here are a few things I would like to cover in my upcoming series so you will be able to figure a price for your woodworking and then how to actually sell it.

• I want you to understand why you're pricing your woodworking the way you are and how that may affect your final price.

• Truly understand what your total cost is to build a project to sell (how can you price your product if you have no idea what it cost you to build it? (I'm not talking just material cost).

• Understand what your product is and how will it fit in the market place. (Is there even a market for it)? Just because you build it, doesn't mean they will come.

• Understand who will buy your product. (One important thing to remember, not everyone shops at Walmart.)

• Understand how to reach those that will buy your product
.
• You may have to actually "Sell" your product!

I hope I've created enough curiosity and interest that you will follow along the next few series to see if I can help you with your pricing (and selling) of your woodworking.

Check back tomorrow for part 2.


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## Karson (May 9, 2006)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


John: Looks like this will be very informative.

Thanks for taking on this touchy subject.


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## Puzzleman (May 4, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Looking forward to the rest of the series. Hopefully people will read it. 
I'm sure that I will learn some things.


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## grfrazee (Jul 17, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


You bring up a lot of good points here.

I'm one of those that tends to sell my work for the material cost x3. This is something I picked up from my dad, as that's what he generally sells his stuff for (we both do it as a hobby and sell occasionally to coworkers or friends of friends).

That said, I never expect to make as much selling WW projects as I do in my full-time job. One example is a set of maple legs for a friend's foosball table. The material cost was about $15, and when I told her $50 for the set, she ended up handing my three $20 bills and said to keep it. I would estimate that the project took me a good 6-7 hours, so my time was valued at about minimum wage.

In our "buy it cheap" culture, few people want to spend money on quality products, so finding an acceptable selling point should be hashed out before even starting a project. This is why I try to make the project to suit a client instead of making something and *then* trying to sell it to some random consumer. Sure, you may get less work, but if you're not counting on a steady income, that's not necessarily a bad thing.


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## JGM0658 (Aug 16, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Looks like a good read….


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## firefighterontheside (Apr 26, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


I'm interested. My goal is to make nice stuff for people, save them some money over pottery barn and make a good amount for myself at the same time.


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## Buckethead (Apr 14, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


I like that you warn readers that you might "step on some toes".

Engaging in commerce is stepping on toes. Goods and services providers seek to make money. How much?... More.

Buyers and clients want goods and services at a price. What price? ... Less.

We can all be cordial, and play our own side of the field, while not doing a disservice to our counterparties. But we must accept the reality that we want to earn more, and they want to pay less.

Of course there are "name your price" jobs, but those are few and far between, and many we won't get to recognize as such until after the fact. Too late. 

Be fair to yourself, and be fair to your clients.

A favorite line from the movie "The Joy Luck Club" is this: "You not know what you worth".

Always a big mistake, in life and commerce.


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## mojapitt (Dec 31, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


This is always an interesting topic and one I struggle with constantly.


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## DaleM (Feb 18, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Thanks for tackling this John. This is clearly the toughest part of a woodworking business or even a hobby side-job.


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## OggieOglethorpe (Aug 15, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


"I'm one of those that tends to sell my work for the material cost x3. This is something I picked up from my dad, as that's what he generally sells his stuff for (we both do it as a hobby and sell occasionally to coworkers or friends of friends)."

And it's a silly way to do things.

Think of two copies of the same basic 16w x 24h x 12d wall hanging shelf… One is MDF, primed, edges filled, and painted. The other is rare figured cherry, with a fast, sprayed lacquer finish…

You'd probably spend far more time getting the MDF to look decent, yet the item would sell for far less.

The only way to sell anything with a profit motive is get a realistic rate for the time expended, then add materials, hopefully with a markup that covers the costs of obtaining and carrying the materials. Remember, the materials didn't beam into your shop, you probably spent time selecting, ordering, and/or picking them up. If you can't get the price you need to cover your expenses and make a profit, the job is not commercially viable, and shouldn't be done.

If you're not interested in a profit, you're doing favors, so who cares? Favors are good deeds, and have nothing at all to do with pricing work.


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## doordude (Mar 26, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


John, i hope you have the guts and ability to step on some toe's; and continue thru part two.
i'm pulling for ya!


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Thanks for the encouraging words. I'll post part two in a little while so hope most everyone will follow along.

Jim (Puzzleman); I respect your opinion on marketing and sales more then anyone, so I'm flattered that you are reading this. I hope you will follow along and follow up on anything I missed.

I have 5 parts to this series, so we have a long way to go ( unless I need to add more before it's over) lol.

I'm sure I'll be stepping on toes, but that's exactly what it took for me to take a second look on how I was pricing my work and knowing if I was making a profit. I'm not trying to insult or make anyone mad, but I do have a tendency to be blunt at times.

Barry; I had to laugh when I read your post this morning because what you mentioned about covering all your time when doing a project is exactly what I was thinking about what I might need to mention and stress a little more in my blog.

We have a habit of only thinking of the actual build time and never take into consideration the time spent going to get lumber, stopping to pick-up hardware, finishes or time spent on the computer ordering things. Down time in the shop because we can't do anything else because we're waiting for a finish to dry or picking up and putting things away so we can start another project and most importantly, the time spent marketing and selling our products.

And I really like your comment on; If you're not interested in a profit, then you're doing favors….........and favors are good deeds. You're right, that has nothing to do with pricing our work. We need to keep those seperate. Well said.


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## jimmyb (Mar 21, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


One of the problems I have with pricing per hour is that on a new project we will be slower the first time through (learning curve) then later when we make the same thing quicker after a dozen times. Also the in-experienced WW would be slower than the more experienced.

This would then lead to the inexperienced WW making more money then the master??? No he would have to figure less per hour then the master WW to offset his / her lack of experience. If you were charging straight per hour the first prototype would cost a fortune. Now you have to estimate the true cost of future products based on an estimated time to build. I think 3x or 4x or 5x is just a quick way of trying to estimate ALL costs into one formula.

The 3 times cost is a typical retail markup. What fascinates me is that we would markup a $100 item to $300 (3x or 300% mark up) and then offer a 50% discount and still make a 50% profit. Of course this is called Mark Up and then there is Gross Profit Margin.

If I had a $100 cost item and wanted to maintain a 30% GPM I would sell it for $142 (100 divided by .7 or 30% of the sales price is now profit $142×30% = $42 rounding pennies of course). This one we used in the distribution / industrial field and of course was supposed to cover ALL expense or costs of doing business. Was confusing to me in the beginning but made sense after a while.

I guess we are all looking for a simple formula to help us sell our WW products.


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## krisrimes (Jun 17, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Thanks for taking the time to type this out. Looking forward to following it.


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Jim,

You make a valid point, it does take longer to make a proto type then it will after we work out all the bugs, make templates and jigs and get more experienced and efficient with our woodworking.

If you are planning on building multiple items of the same you have the advantage of building that proto-type and having time to study to determine if you could build it in less time if you had better tools, templates to simplify the tasks, jigs to make it easier and faster and of course the learning curve.

Trust me; 99% of all beginning woodworkers leave out plenty of hours they figure is their learning curve and don't charge for it.

I realized after 27 years working full time as a professional woodworker, I improved my build time for most projects, but unless you become an assembly line, mass-producing something and invest in the equipment to be able to do so, then you can only produce so much in an 8 hour day no matter how much experience you have.

Custom work is always the hardest for a beginning woodworker. Number one, you've never built it before so you have no idea how long it will take, second; you may not have experience in that particular type woodworking at the time and have to learn a new technique or something, and third; you have to quote a price without knowing for sure the material cost or the number of hours it will take.

Like I said in my blog; if you're comfortable with how you price, it's all good. There's no magic answer to how we should price our work.

I hope you will continue to follow along.

Good luck and thanks for posting.


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## OggieOglethorpe (Aug 15, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


"Trust me; 99% of all beginning woodworkers leave out plenty of hours they figure is their learning curve and don't charge for it."

Not just beginners….

I once heard Steve Latta share a story about back in the day when he was employed in a shop (Irion?) that made extremely fine custom items, like $80k armoires, they spent a decent number of unbillable, and possibly unpaid, learning hours figuring out how to make certain parts.


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## Roz (Jan 13, 2008)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


You have made a lot of points that lead to hard to answer questions for me. To be sure you have to know your market.

Im my area I can get a fraction of what my work will bring an hour away. The other part of that is knowing what people are looking for. It seems to me that a successful woodworker needs to find those things people want, look for quality in, and they can do marketed better than the mass produced imported stuff.

I don't have any answers on this topic and usually come away wondering if I was too cheap.


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## DocSavage45 (Aug 14, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Like this post,

I was hired for my house building skills by my brother's business associates to re panel a small room. They had the paneling and nothing else. I had to estimate the materials cost and I had to put a price on my shopping time? Gas? etc.

I had no one else to do the pick up or materials purchase and I was not in business at the time. I charged them what I would pay for the service. We were all happy with the results.

I've worked professionally and privately doing small contracting work. Time overhead and materials should be figured in the IRS does. LOL!

If someone wants a piece refinished, how much can I charge for stripping and preparing the piece? I often tell people they might want to do that part themselves as it is where they might save some money ? Especially if they go to Walmart or IKEA.

Great blog. There are some great books on operating a one man shop and a couple on this topic.


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## jim65 (Feb 8, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Just read number 1 after reading number 2. VERY well written! I have been in sales most my life (industrial machines, renewable energy, information technology) and this stuff applies to all sales. I very much look forward to install number 3! Pack this together in an ebook and sell it! Thanks, this is a fresh reminder even for my day job!


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Terry, I know exactly what you mean by having to travel to find a market for your work.

Living in a small rural farming community there was not a market for the type woodworking I wanted to do, so my only choice was to go where there was. I always figured my travel time when pricing, so distance didn't bother me. (actually I have sold and delivered my work in 13 states up and down the east coast).

I believe my next two parts will help you with knowing if you are selling too cheap and if you're making a profit.

Hope you will follow along.

jim65, Thanks for the kind words. Actually I've just finished my first book; * How to start a woodworking business.*


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## Kentuk55 (Sep 21, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


First, I want to wish the best for you in your battle with that bad "C" status. Secondly, you've got my attention. Everything you've said is right on, imo. Look forward to round 2. In the mean time, Work/Play safe. Keep makin dust.


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## TheWoodenOyster (Feb 6, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


Just read this first one and loved it. Excited to read the rest.

This is literally exactly what I need to read!!!


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 1
> ...


TheWoodenOyster;

Thanks for reading and hope you will follow along throughout the entire series.


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## huff (May 28, 2009)

*How to price your woodworking to make a profit (and sell it)*

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.


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## OggieOglethorpe (Aug 15, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Outstanding write-up!


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## DS (Oct 10, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


This is a very good write up.

It is my experience, though, that making a *profit *is more about how you 'buy' your product than how you 'sell' your product.

By 'buy' I mean what it costs you to produce your product. It becomes a math game based on percentages at that point. Once you've found the market you want to be in, determine the most cost effective way to 'buy' your product. Sometimes that means investing in equipment or specialized tooling that makes the job more cost effective per unit.

Case in point, I supplied a small jewelry item to a wholesale distributer a few years ago that wanted a less than $1 entry point. Based on my first attempt to fill his order, this was not possible. My produced cost was nearly $1.

Then I found three different companies with the specialized capabilities to produce different facets of the job using specialized equipment. I was able to offer my client a $0.47 price point with a cost basis of $0.12. I turned a very tidy profit on his initial 200,000 piece order.

Had I not been able to find a better way to 'buy', I could not have 'sold' at a profit.


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## Karson (May 9, 2006)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


John:
Some great points.


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## JoeLyddon (Apr 22, 2007)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


*John,*

Thank you!

*You really took it from Ground Zero in a very scientific, logical manner…*

Great Job!


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## BritBoxmaker (Feb 1, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Honest, straightforward, sense.

Thanks for this, John.


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## nancyann (Mar 20, 2013)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Just read your blog, it's as if you knew me and what I was selling my crafts for! Thanks for the insight, I'll will be looking for that other market from now on.


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## a1Jim (Aug 9, 2008)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Thanks John this should be of considerable help for folks that ask how to price their products.


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## madts (Dec 30, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Very good blog. Thanks.


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## wormil (Nov 19, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Excellent article. I work in another industry and am often asked by people wanting to break in… 'how much should they charge?' And I give them the same answer about knowing your market and oddly it is people already in the industry who are most resistant to this advice. Some get this idea in their head that it doesn't matter what anyone else charges… you simply add up your costs, tack on your target profit and people will line up at your door. Of course if your product is exceptionally high quality, unique, and you have contacts with money and a reputation then by all means, charge whatever you want. But for the average guy selling average stuff, there is going to be a reasonable pricing range and you'll need to be in it.


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## OggieOglethorpe (Aug 15, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


"Some get this idea in their head that it doesn't matter what anyone else charges… you simply add up your costs, tack on your target profit and people will line up at your door. Of course if your product is exceptionally high quality, unique, and you have contacts with money and a reputation then by all means, charge whatever you want. But for the average guy selling average stuff, there is going to be a reasonable pricing range and you'll need to be in it."

Exactly…

And if you can't get in that range, you need to find out why your production costs are too high to leave a profit, and reduce them, or find a way to get customers to perceive your product as worth the extra cost.


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## kajunkraft (May 7, 2012)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Thank you for this very good article.

I do attempt to sell much of my woodworking production. I am able to very accurately calculate my cost of materials, which is a rather small amount of what becomes the actual selling price. The difference between the cost and selling price is a figure that equates to what I have "earned" for my time. Of course I also try to allocate a certain amount for "shop overhead", which means everything from electricity, sandpaper, etc. Which leaves me even less for my "time". So the question becomes, "What is my time worth"?

Would really like to hear from any of y'all as to what you think our time should be worth.


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## gfadvm (Jan 13, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Thanks for doing this blog. I really need all the help I can get as I haven't had any luck selling my boxes at all. Just haven't found the right venue I guess.


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## mojapitt (Dec 31, 2011)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


I constantly shop for the best prices on things that I need to buy. Even the things that I have a line on, I occasionally recheck to make sure that I am getting the best price. I am always trying to push products to higher markets. I am also trying to improve my products so that I feel justified in pushing the prices.


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Kajunkraft,

That's a really good question, but I guess that depends on each individual and what they feel they need to make to make it worth while.

If you have a full time job and only doing your woodworking business part-time in the evenings and days off, you may not feel the need to make as much per hours as the woodworker that is doing it full time and it's their only income.

*But never sell yourself short; for every hour you're working in your shop (even part time) you are away from your family.*

If you translate it to a full time job working 40 hrs. a week, 50 weeks a year, then if you pay yourself $10.00/hr, that will only amount to $20,000 year gross pay. Having to pay your own taxes, vacation time, sick time or health care doesn't leave you much for a net pay.

Even at $20.00/hr. doesn't translate to that much in today's economy. But again, that has to be the decision for the woodworker and how much he has to rely on that income.


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Monte,

That's exactly how you should be doing it. We have to take it step by step until we find that Comfort Level that we can build and sell a product at a fair price and make a fair profit in doing so.

Constantly checking to keep material cost in line, always looking for better venues to market our product in and working on improving our product is how you will bring it all together. Sounds like you're on the right track.

If you interact with your customers like you do here on Lumber Jocks, I know you'll do really well in your business. Keep up the great work.

We may all be woodworkers, but we should never forget we're in the "People" business. That' s who buys our products!


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## Kentuk55 (Sep 21, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


You are a man of common sense, and I like it


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## huff (May 28, 2009)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Thanks Roger,

I have to refer back to your comment on my first blog entry; * I want to wish the best for you in your battle with that bad "C" status.*

You lost me on that one. lol Maybe I just need another cup of coffee this morning.


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## Kentuk55 (Sep 21, 2010)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


Hey John. I went back to your first blog because I wanted to see what I posted, and after reading it, I don't have a clue what the heck I might have been talking about. The only possible explanation I think would be that I usually open more than one page at a time of projects and such to view, and while I'm reading them, I may have gotten confused between your blog and someone else's. I apologize. It's hard to say how my lil brain works.. lol


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## vonfalken (Feb 29, 2016)

huff said:


> *How to price your woodworking to make a profit (and sell it)*
> 
> How to price my woodworking?
> (And sell it) Part 2
> ...


excellent article…i make small boxes cutting boards chessboards. all out of scrap wood, most of my stuff my wife gives away right after she tells me to clean up my mess…..i have actually sold a few things but being retired its more of a hobby,,,one thing ive learned if you enjoy your work keep at it and youll make a profit


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## huff (May 28, 2009)

*How to price my woodworking (Knowing what it cost to build a project)*

How to price my woodworking?
(And sell it) Part 3

Knowing what it really cost to build your project to sell

Again, like I said in my earlier series, if you're a hobbyist and you really don't sell your work, then no need to follow along, but for what ever reason you are building and wanting to sell some of your woodworking, then this series is real important to read and understand when it comes to pricing your work.

One of the first things you have to realize when you decide you would like to sell some of your woodworking and especially if you want to sell your work and actually make some money doing so, then you need to know the true cost of building your project.

You may not want to think of your woodworking as a business, but once you make the decision to start selling some of your work, then you are a business and you should treat it as such.

There's a lot of gray area between making a little money as a hobby and actually selling your work and being considered a business, part-time or not. I'm not going to get into that, and if you only look at your woodworking as a hobby and you don't think of it as "making money", then again, there is no reason to worry about how much to charge or knowing the true cost to build it.

Here are three ways of figuring your selling price that will be a sure way to "NOT" make a profit if you do not fully understand what the true cost is to manufacture or build your project. If you simply base it on the cost of materials and nothing else, then you are bond to lose out in the end.

1. Simply pulling a figure from the top of your head or out the crack of your butt, because you can roughly guess what the materials will cost and you think you would like to "make this much" or "you really need the job"! Now that's a losing combination all the way around and sorry if I stepped on some toes.

2. Material cost times 2 or 3 or 4 or maybe even 5. How does this work? I really need the job so I better only times materials x 2, or this guy looks like he can afford it so I think I'll times my material cost x 4 or the best one of all; I want a new BMW, so I think I'll times it x 5.


> ?


Bottom line; are you really dealing with any facts or just guessing you are going to make a profit?

3. Pricing by the lineal foot. This way of pricing is usually done by the full time professional cabinet shop, but I have to ask, are they pricing this way because that's how their competition prices their work or simply because it's a fast and easy way to give a quote. All I can say is; if you don't know the true cost of how much it cost to build a certain product by the lineal foot, then at best are shooting in the dark…….and how does that work for custom work?
I could easily add style changes, building techniques and options to at least double the material cost or triple the time to build with most any 24" of cabinet.

From this point on, I'm going to be talking more to the woodworker that is trying to have a side-line business as a woodworker and make some money and to the woodworker that is really considering doing woodworking as a living and trying to decide if they could actually make a living doing so.

I would hope the full time professionals would know their true cost of building a project and their pricing system takes all that in consideration when determining a price, but it's still OK for you to follow along if you would like.

One of the hardest things for a hobbyist to do is to change his/her way of thinking from treating their woodworking as a hobby to treating their woodworking as a business and making a profit.

I'm about to get long winded and cover a lot of stuff. If you start reading this and decide it's not for you because it's too involved and it would take too much of your time to figure all this out, then I understand.

Now is the time for me to be brutally honest and blunt. No pulling punches or worrying if I'm going to hurt someone's feelings. If you want to be lazy or don't want to spend time to really figure out how to figure your cost of building a project and how to price it from there, then I can't help you from here. Now it's time to treat your woodworking like a business or don't bother worrying about how you price things, let's worry about how much it cost you to build it first!.

There are 5 major factors you need to take into consideration to know exactly what it cost you to build a project and how you use that to price your work.

1. Your fixed overhead to run your business (part time or full time , whether doing it at home or in a commercial setting).
2. Your administrative or non-productive overhead to run your business
3. What you would like to pay yourself. 
4. What do you expect as a profit?
5. What is your material cost?

I'm talking as a one person shop, so I won't be talking about employees at this time.

You noticed I put material cost last; that's because the first four can add more to the cost of building a project then you might think. So, let's start with #1.

*Fixed overhead; * Yes I know, as a hobby we let our household budget pay for everything like the mortgage (or rent), lights, water, phone, heat, cooling, insurances, taxes and anything else it takes to run the shop, but you need to change your way of thinking if you are going to treat your woodworking as a business. It's always difficult to separate a business from personal when you operate a business from home.

But even so, you should consider at least a small percentage of your total overhead at home for your business overhead.

I would guess 75% of small businesses run from home are probably not set-up as a legitimate business anyway, so how you handle that is up to you, I'm just saying; if you want to know all the cost in figuring what it cost you to build a project then you should take your overhead into account. If you're a full time woodworker then you already know about overhead.

I'm going to talk about working part time for now, but you still use the same principles when doing this full time.

Just for giggle and grins, let's say your total household overhead is $3,000 a month (including the mortgage, electric, phone, insurances, taxes, internet, etc.) and you only consider 5% of that for business purposes (which is a very modest percentage). That alone is $150 a month. Now let's say you only spend 5 or 6 hours a week working in your shop building things to sell. That's spending about 20 to 25 hours a month working in your shop.

You can do the math, but if you divide 20 or 25 hours you work per month into the $150, you're looking at around $6 - $7/hr. for every hour you're in your shop just to pay that small of an amount towards the overhead. You should be considering that it cost you that much to operate your business from home.

You can run the numbers up and down the flag pole all you want, but the facts are, it cost you something every month to run a business from your house and you should have some kind of a quess-timent what that is! (I know, that's not really a word, but it sounded right).

It's difficult to know exactly what % of your total electric, heat, cooling, phone, etc that you use each month for business purposes when your total utilities are wrapped up in your household budget. Personally, I would ask a CPA what % is allowed as far as tax purposes and figure from there.

As far as a full time woodworker goes, the same principle applies except you have to take your total overhead cost and divide that by the total number of hours you work on the average each month in your business. If you're running a full time woodworking business from home,(160 hours or more a month), you can bet your bottom dollar you are using a lot more than 5% of your total household budget for business purposes.

Again, you should check with a CPA to see what's allowed.

But let's move to the next part; *Administrative overhead*. This is all cost to operate a business that's not considered fixed overhead.

This changes from month to month and would be things like all your office supplies, computer, marketing and advertising cost, legal and accounting fees, expenses to operate and maintain vehicles and equipment for the business.

This list can go on and on and it's really difficult to put hard numbers to it because it changes constantly. Example; some of your advertising and/or marketing may be done on a monthly basis; like hosting for a web-site and then you may have marketing expenses that come along every now a then, like doing a show or advertising something on e-bay or having business cards printed. You can see how this could change on a monthly basis.

I don't know of a magic number to put to all of those expenses, but I found over the years of operating a full time woodworking business, my administrative expenses ran about 20 % of my fixed overhead.

Let's come back to that in a couple minutes.

Next; *what would you like to pay yourself!* Let's be honest here, you wouldn't want to work at a regular job having no idea what you would be paid, so why would you want to build something for someone and have no idea what you will get paid?

Pick a number, any number. Would you like to make minimum wage? Would you rather make $10 or $20/hr. or maybe more? That's totally up to you. One important thing to remember here, it's one thing to make an hourly wage working for a company and it's all together different making that same hourly wage working for yourself and no benefits are included. No taxes taken out, no vacation time, no sick time, no health care benefits etc.

But it is like any other job as far as; you may not pay yourself as much per hour to start with but as you gain experience and get better at what you do, you can raise your pay (give yourself a pay raise!)

Moving on; *Profit!* Every business needs to operate with a profit. If not, a company can not grow or even survive. If you try to do woodworking without figuring a profit then one of two things will happen.

You will never be able to grow or buy a new tool, or upgrade what you have if you don't make a profit in your business. You will be doing exactly the same thing tomorrow as you did today. You will be doing the same thing next year as you are doing today and ten years from now you will still be trying to do with what you have now, or the second thing will occur and that is you will be forced out of woodworking all together.

Again, it's totally up to you what you would like to make as a profit. Did you realize that on a nation wide basis, the average profit margin for a professional cabinet shop is about 15%? That's not a large percentage, but then again, if you have covered all your true expenses and cost, then a clear 15% profit is pretty darn good.

Last, but not least; *Materials.* This is probably one area you already have covered pretty well, but I will say this; take your time when you are figuring materials for a job and double check yourself.

Don't cut your materials too close, it's always better to figure just a little on the high side then to find out you short changed yourself and you have to buy extra materials to finish a job after you've already quoted a price or even worse; you allow yourself to short change the customer because you don't want to spend the extra money to do it right. 
I told you I was going to get long winded! I'm going to stop on this one and the next series we are going to put all these numbers together and see if we can make any sense out it all.

Hope you will come back later today because I'm going to post the next part later in the day. I want this part to be fresh on your minds when I get to the next section, but I want to give you a little time to absorb this first and maybe even take a piece of paper and jot down some of your own figures as far as what you may have as Fixed overhead, Administrative overhead, what you would like to get paid per hour for working and of course profit.

Try to be honest with yourself.


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## jim65 (Feb 8, 2013)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


again, fantastic, thanks!


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## mojapitt (Dec 31, 2011)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


A lot of good information. I already see things I need to change.


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## Cookie1965 (Apr 19, 2013)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Great info.


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## huff (May 28, 2009)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Thanks Jim and Monte,

I'm going to post the 4th in the series this evening so I will be able to post the 5th and final tomorrow and I hope we can all have a round table discussion after that.

I love sharing whatever knowledge I have about woodworking and I've always felt my background in sales was a big help for my woodworking business.

I just hope it will help others in one way or another.


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## MrFid (Mar 9, 2013)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Thanks for writing this. I am learning a lot from this thread, clearly you have a lot to offer! Thanks again!


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## jerrells (Jul 3, 2010)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Thank you so much for putting this information together. Although I have read many bits of information and several books on this subject, this seems to be the most helpful of all.


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## JoeLyddon (Apr 22, 2007)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Yep… The straight scoop…

Great Job!


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## vikingcape (Jan 3, 2013)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


I am liking these. I have been printing them out and rereading them in my shop. I would one day like to sell projects as a side business. Until then I need some practice. Please don't stop this blog, it's completely invaluable!


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## NormG (Mar 5, 2010)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Great info


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## DocSavage45 (Aug 14, 2010)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Saying what should be said.


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## Kentuk55 (Sep 21, 2010)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


You're a man with a level head. Appreciate your time and writing about this. As for me, I'm what Lynyrd Skynyrd sang: "Be a simple…........kind of man"


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## sawdust703 (Jul 6, 2014)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


I agree! this is good information to have at hand! I spend a lot of time in my shop workin' on projects. I just never really put all these figures in perspective! I live in a small community in NW Kansas, a small lumber yard in town, & 4 - 6 hours from any larger city. I try to price my projects by the lumber I buy here in town, & by the hour, but never had a figure to put on other materials. Thank you for the info!!


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## gepatino (Aug 1, 2012)

huff said:


> *How to price my woodworking (Knowing what it cost to build a project)*
> 
> How to price my woodworking?
> (And sell it) Part 3
> ...


Thanks for sharing such useful information.
One question regarding materials: do you add a percentage to be safe that you don't miss anything? 10% would be fine?

Would you mind if I take this posts and use them as a base to write another in spanish? Some local woodworkers were discussing pricing lately and I didn't got anything as clear as this, It could help them too.

Thanks again


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## huff (May 28, 2009)

*Putting all the numbers together (creating a shop labor rate)*

How to price my woodworking?
(And sell it) Part 4

Putting all the numbers together
(Creating a shop labor rate)

Shop labor rate; what is that and why would I want or need to have a shop labor rate?

I'd like to take credit for coming up with this, but I learned this from another woodworker and you might have even heard of him; Marc Adams. He's well known for his woodworking classes that his school teaches, but I was lucky enough to attend one of his seminars years ago and this was exactly the topic he covered.

Establishing a shop labor rate helps you be consistent in pricing your work because you have put all the cost factors together in the beginning and you're dealing with facts and from that point on all you have to do is figure your material cost and the number of hours it will take to build a project.

So lets put together some of the numbers we talked about earlier and see if we can come up with a shop labor rate. Please remember this is only an example and you have to supply the correct numbers that pertain to you and your business.

The shop labor rate is based on the first four categories we talked about in my earlier series; fixed overhead, administrative overhead, your hourly wage and profit.

*I'm not sure how to condense this down to make it short and simple. I feel like I'm rewriting my book where I covered this in great detail. All I can say is if you have any questions or want to know more about it, just drop me a line and I will be glad to discuss everything in more detail.*

So here we go; let's use the figures we talked about earlier and you can add or subtract from there using your own figures;
Fixed overhead; we used a very modest figure of 5% of your total household overhead using a fictional number of $3,000 month for your total which amounted to $150 month for your part of operating your business from the house. Again, you can run these numbers up or down depending on what you feel you use operating a business from home or if you are running a full time woodworking business in a different location then from your home, you have to figure 100% of your fixed overhead.

Administrative overhead; again, I said it was really hard to put a number to this on a monthly basis, but let's use 20% of our fixed overhead as a starting point for this example. That would amount to another $30 month.

Your pay; this is a number that you and you alone have to determine, but let's use $15/hr. for our example here.

Profit; there's a number of ways of figuring this, but I like to figure it up front so I have one basic figure to work with and it's already figured in. Here's one way you can do this.

I'm going to jump ahead a little with our figuring so we can determine a dollar amount for our profit.

Let's take our $150/month for our fixed overhead we used in our example and the $30/month for our administrative overhead and add them together for $180/month. Now let's take the average number of hours you spend working your business and we used 20 -25 hours a month earlier, so we will use that again in our example.

Let's take our $180/month divided by 25 hours a month we work and you will see that it would cost you about $7.20 per hour to cover your fixed and administrative overhead to operate your business.

Now if you take the $7.20/hr. for overhead and let's add what you would like to make per hour and for this example we will say you would like to make $15.00/hr. and add the $7.20/hr for overhead = $22.20/hr. Now if you would like to figure some profit to this, you could add a percentage to our $22.20.

We'll use 15% for our example, which would add about $3.30/hr to our total. This may seem a little confusing right now, but trust me; it will make more sense as we go along.

$22.20 + $3.30/hr. would make your "shop labor rate" $25.50/hr.
You're probably asking why you would want to do all that figuring just to come up with a shop labor rate. Simple, if this is the rate you use every time you price a job you will know exactly how much you will make. You know you would be able to pay all your overhead, pay yourself and also make a profit and that's the key to any business if they want to make any money doing so.

Let's do another example to see if any of this makes sense.

Let's say you have to quote a price to a customer on a project that will take $100.00 in materials and you figure you will have a total of 17 hours invested in getting materials, building, finishing and delivery the project.

2 hours to order and go get materials hardware and finishes
7 hours to build
1 hour to prep for finish
5 hours to finish and do final assembly
2 hours to deliver and set-up

Now, let's use our good ole' multiplier method of figuring our price and let's times our material cost times 4 because we think he can afford that!
$100×4 =$400. Sounds like a money maker there, right?

Now let's use that same scenario using our shop labor rate instead.
Same material cost and same number of hours invested.
17 hours x $25.50/hr (shop labor rate) = $433.50
+ Materials = $100.00
Total = $533.50

Am I over priced? Not if I want to pay all my bills, pay myself and have a little profit for the business.

Facts; Sure you would feel better if you could sell your project for $400 instead of having to try to sell it for $533.50. 
Sure it would make the customer happier if you would build it for $400. In fact; if you times your material cost x 3, look how happy you would make the customer!

So if you charged $300 or $400 you would make enough to cover materials of $100 and all the rest is profit…………….wrong, wrong, wrong! Facts are facts and that is; you may have enough to pay for materials and yourself, but there would not be enough to pay for your total overhead or profit and as a business that is not making money or even being able to stay in business.

This all goes back to what I've been saying from the very beginning; you can treat your woodworking strictly as a hobby and let your other job pay for all the expenses of your woodworking or you start treating your woodworking like a business and price your work to make a profit.

The biggest advantage of using a shop labor rate is consistency and accuracy.
You can feel confident when presenting a price to a customer that you are giving them as fair of a price you can and make a modest profit. If a customer begrudges you that, then you are probably better off by not doing a project for them.

There's are ways of adjusting your selling price other than cheating yourself or your business, so before you get your skivvies in a bunch, let me continue on and we will talk about that a little later.
*
Five Pitfalls that can ruin a woodworking business when it come to pricing their work.*

1. * I'm new in this business,* so I'll price my work real low to get customers and they will refer me to others and I'll build my business from referrals. That's the best way to build my business, Right? 
The part about referrals is correct, but getting referrals because you low-ball a price will do more harm then good. Who do you think they are going to refer you to and what do you think their referral will expect from you? That's right, they will expect the same kind of pricing as you gave your first customer and if your first customer comes back again as a repeat customer he will expect the same again.

That's a very slippery slope and hard to stop once you begin pricing that way.

2.* Friends and Relatives! * It's a lot easier to deal with friends and relatives once you've established yourself as a business, but in the beginning, they can worry you to death and you feel obligated to give them a "special" price. Another words, you work for nothing! 
I'm not about to tell you how you should handle projects that your friends and relatives ask you to do, all I will say is you better be well aware that they can suck all the profit from you and even though they will enjoy and maybe appreciate a project from you, you will be the one left trying to pay bills, replace worn out equipment and lose time from your own family.

3. *Times are tough and I really need this job*, so I'll discount my price to make sure I get it. First mistake; no guarantee you'll get the job just because you priced it making no money. Second mistake; once you get the job, knowing you're not going to make any money, you now have closed the door to being able to actually do a profitable job. Third and most fatal; bad, bad habit to get into, because it becomes easier to sell at a lower price so you begin to use that as an excuse to lower your price each time. I've seen this happen over and over with woodworking businesses. (Ex-woodworking businesses).

4.* Changing your standards of quality so you can build it cheaper and sell it cheaper*. A lot of businesses do this, but very few woodworkers do it for the right reason and even if they start doing it for the right reason, they fall into a bad habit that will destroy them down the road.
Yes, you can offer your customer different levels of quality at different price points. You let your customer decide where they are willing to compromise on quality or service to be able to save some money, but usually what happens is the woodworker starts trying to second guess all of his customers and starts dropping his/her standards every time just so they have a lower price and an easy sale. I've seen this ruin the reputation of a lot of professional woodworkers.

5.* Allowing your competition to set your pricing*. Just because the guy down the street will build a project for a certain price doesn't mean you have to price your work to match his. One of the first things I've always told my customers is; I promise you I am not the cheapest woodworker on the block, but I will be glad to put my quality, craftsmanship and service up against anyone.
If a low price is the only thing you have to offer a customer, then you probably won't last long as a woodworking business.

What's even worse then allowing your competition to set your pricing, is allowing your customer to set the price. How many times have you heard a prospective customer say; I've only got "this much" to spend on a project and even though you know there is no way in hell you could build it for that and make any money, you still try to convince yourself you could build it for "their" price. Oldest Trick in the Book! Even seasoned professionals fall for that one and here is what usually happens when they do that……..refer back to #4 and you will begin to understand how that happens. Trust me; the customer still wants all the quality, craftsmanship and service, just at the price they set and you're trying to figure out how to cut corners so you can afford to build it at their price.

I would suggest you read those five pitfalls again and see if you fall into any of those categories. Don't beat yourself up too bad; we all have at one time or another for whatever reason. What's important is to realize they exist and don't allow yourself to aimlessly fall prey to those fatal mistakes.

The main reason most woodworkers go out of business or change careers is they don't make any money. They may use every excuse in the book; like the economy, tired of dealing with customers that don't appreciate quality, tired of the hassle with schedules or whatever, but most of the time the real reason is they don't make money.

Woodworking is fun as a hobby and money is not involved, but woodworking is not fun when all you're trying to do is make ends meet, pay the bills on time and trying to support the family.

I'm as passionate about woodworking today as I was when I started. Has it been an easy career? Definitely not, but it has been very rewarding to me and my family.

For me, the hardest part was to never compromise my standards and hold true to my pricing, no matter what the economy was doing or how bad I thought I needed a job. I'm so glad I did though, because over the years I've seen a lot of woodworkers go out of business because they either compromised their standards or started lowering their prices just to get any job and usually the only thing they did was prolong the agony of going out of business.

I'll write a summary tomorrow, hope you come back!


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## MrFid (Mar 9, 2013)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Great series! I'll be sure to tune in tomorrow!


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## dustyal (Nov 19, 2008)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


As an accountant I can attest that you are doing a good job of explaining rate setting… and the need for it.

Some examples: Auto repair shop. You will see signs advertising their shop rate. On your bill you will also see charges for other services like hazmat recovery… and shop supplies as a percentage of the bill….

I was happy to hear you made it to the Mason Dixon Woodworkers meeting… I will enjoy catching up with you when things settle out at my house.


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## Acelectric (Mar 17, 2013)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


This is a well written and informative blog series. I appreciate you taking the time to share your knowledge and experience with us. It has helped me to understand why I had trouble making it in business for myself (in another unrelated trade).

The problem I have always had is estimating the number of hours it will take to complete a project. Are you going to address this issue in this series? I know it will vary considerably depending on experience, tooling, and so forth. But if there is some way to at least get close to the number of hours it will take it would be very helpful.


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## mojapitt (Dec 31, 2011)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Excellent job


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## JoeLyddon (Apr 22, 2007)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


A very nice series…

Once and for all…

Thank you!


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## jerrells (Jul 3, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Thank you for posting all of this information. I am a scrollsaw worker (do scrollsaw work) and I am trying t apply this to my work. I have used some of this type of information before and some is a little new. If you have any tweks for scrollsaw, or small crafts in general) I would love to hear from you.

Thanks again.


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## DocSavage45 (Aug 14, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


If it's a business it's a business. You put it into a good argument and cite probable pitfalls. Actually when I started reading about shop efficiency and marketing of woodworking I recognized these business practices in my day job….LOL! Great stuff!


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## shipwright (Sep 27, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Good blog. I'll be watching for the wind-up.


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


I want to thank everyone for reading and following along. I know this has been a long winded series, but there are so many things that tie into pricing our work that we just can't use a "one liner" to have an answer.

And trust me….........I don't have all the answers, but I've always taken my business seriously and I would much rather deal with facts (even if I don't like what I hear) then just guess my way.

I could talk woodworking and business 24/7 because that's my passion, so sometimes I have to realize I need to turn it down a notch or two. lol

I'm finishing up my summary now and will post it in a little while. My problem is; I keep thinking of things I would like to share and I have to find a stopping point!


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## jonsajerk (Jan 13, 2012)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Thank you for sharing your knowledge! I have been full time at a cabinet shop for the last 6-7 yrs and have flirted with this idea for a long time. I always see lots of room for improvement, but I don't know if I have the balls to take the plunge or know if I even see the full picture of the business. Thanks again for sharing, looking forward to the 5th installment.


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Jonsajerk,

I can relate to what you say; but don't worry, I'm not sure any of us see the full picture of business at times.

Over the years I've had to ask myself on numerous ocassions if this was a wise move to go into business for myself (no matter what business), but I always turned back to my business for the answer and decided I just needed to learn more.

It's a never ending learning experience as it is in woodworking itself.

Thanks for following along and hope you can pick up a few ideas to tuck away and use later in your own business.

Good luck.


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## mbs (May 8, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Acelectric - I'm not an expert but you can start by making a 3 point estimate. Try to figure out the best case time (everything goes right, tools are sharp, minimal interuptions…). Then the most likely time (not every goes right but most do), and the worst case (go to the store, restart some pcs, botch the finish…) Keep track of your hours and you will soon converge on the amount of time it will likely take. It will probably be close to the average time you predicted when you consider the re-do's.


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


mbs,

You make a good point; too many times we try to estimate our time way too close and don't allow for anything to go wrong.

There will be plenty of times we will have to "eat" some of our hours, but the closer we can estimate a job correctly allowing for a few bumps in the road, we will have a good price.

I used to use time cards for a couple years, just to track every minute it took to build and finish a project. It was a real eye opener for me, but didn't take me long to get a really good "average" time it took to do each phase.


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## Kentuk55 (Sep 21, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


I too appreciate your effort to educate us on this very intricate subject


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


James101,

I have to agree with you 100%, but my entire series was trying to help woodworkers figure out their "break even point". How to figure their pricing to cover all their cost and make a profit to see if it is even worth building a product.

From there we should be able to grow and expand. I don't care how much "profit" a woodworker makes, but I want them to at least make a profit.

What you're referring to in business is; "leaving money on the table" and we would all hate to do that.

That comes with time; learning your buisness, learning your market and knowing the worth of your product or service in a particular market.

We all have to have a starting point. Sales are difficult enough for the beginning woodworker, but going out and trying to price and sell your work without knowing what it cost to build it in the first place is a crap shoot at best.

We start with knowing our base line; knowing that if we price our work for less, we will be losing money and not be able to pay all the bills involved in making our products.

We have to start with the fundamentals and deal with the facts first, then as we learn to price our work to at least make a profit and get comfortable, we grow from there.

Over the years, I've seen far too many woodworkers start off losing money because they don't even cover their basic cost (and continue to do so) then seeing a woodworkers start off by making a profit, but not making enough profit to please themselves. You have to make a profit first, then grow from there.

Your points are very valid and any woodworker that's been in business very long will understand what we're talking about, but for the beginning "seller" of his/her work, should understand the basics of pricing.

Thanks for following the series.


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## DocSavage45 (Aug 14, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Huff,

Other than waiting for your resources to disappear when should someone "let go?"


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Doc,

Not sure I understand what you're asking?


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## JGM0658 (Aug 16, 2011)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


At some point you have to learn when you can charge more,

The good thing about the shop rate is that as you become better known and in more demand your shop rate increases, e.i. your profit part. For example in stead of getting 15% you start using 20 or 25%.


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## huff (May 28, 2009)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Jorge,

You hit the nail on the head. Not only can you raise your profit margin but also what you would like to pay yourself.

If you're a one man band, then all the money goes into one pot , but you can still pay yourself more and also allow for more profit for the business overall to grow on.

Being able to invest in more tools or better tools for the type woodworking you do also can help your bottom line, so it should be a steady progression over the long run.


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## waho6o9 (May 6, 2011)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


Valid points, thank you for expressing them all.


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## DocSavage45 (Aug 14, 2010)

huff said:


> *Putting all the numbers together (creating a shop labor rate)*
> 
> How to price my woodworking?
> (And sell it) Part 4
> ...


James you are thinking about variables. LOL! I think adding them to the mix may help some to understand the complexities of running a business. I want to say to Huff that again I appreciate you bringing it forward and James for you consideration?

It is first of all a fantasy for some or a dream or a delusion….LOL! My illusion was maybe more of a delusion. Thoughtfulness and the facts you have brought forward may help people to be less deluded. While still maintaining their vision.



I have since having my illusions deluded appreciate this and hind sight helps us walk backwards …LOL!

Thanks AGAIN!


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## huff (May 28, 2009)

*Summary*

How to price my woodworking?
(And sell it) Part 5

*Summary*

As you've probably figured out by now, pricing, marketing and selling your woodworking is not an easy task, but its all part of a woodworking business and something you have to learn and improve upon just like you do with your woodworking skills.

You didn't learn how to build a square box, dovetail a joint, or finish a project overnight, so you have to realize pricing and selling takes time to get comfortable with and know how to improve your skills with time.

If you learn how to price your work consistently and accurately, you make selling a lot easier. It's not because you came up with the lowest price (in fact, you may not like the numbers you come up with) but you will know that you have your price figured accurately, based on facts. There's no way you shouldn't be able to sell with confidence. Confidence, now that should be your comfort zone!

Even though there's so much more to running a successful woodworking business then what I've covered here, I would like to cover just one more thing before we wrap this series up.

* How can we adjust our pricing if we simply use a shop labor rate?*

Now you really will have to treat your woodworking as a business. The main things to remember is do NOT screw with the facts! (Your shop labor rate). Sure you can change your pricing a little by adjusting your numbers a little in your shop labor rate, but keep it honest.

For instance, you may be able to lower your fixed overhead by using less electricity, or eliminating an extra phone line or finding a cheaper heating source for your shop, but again, keep it honest. Don't just lower that figure because you don't like it!
You could also decide to lower your own pay from say $15.00/hr. like we used in the example to something like $12.50/hr. until you feel a little more comfortable with your work and then you can go back and give yourself a pay raise.

You could also lower your profit margin, but never eliminate it!

You can also find little ways to lower your administrative cost, but I still found that it still averaged around 20% of my fixed overhead, so I wouldn't look too hard there.
Basically, that's simply tweaking your numbers and that's something you should do now and then anyway. Usually the longer you're in business, the more things will need to be added, not subtracted, so don't be surprised.

But where your real savings will come into play is like any manufacturing company does.

* Materials and Time Management.*

Materials; Don't be stupid and buy cheap materials, but find sources for your quality materials at a better price.

Here's a quick example of what not to do. We moved from South Carolina to Delaware this past year so I'm new to the area. I had all my suppliers in South Carolina that I could buy the best quality materials at a very reasonable price and even though I can still order on line from some of them, I like to hand pick my lumber and sheet goods and had no clue where to find a supplier here in Delaware.
A neighbor of ours has a cabinet shop behind his house and even though he is fairly new in his business, I thought I would walk over and introduce myself and see if he could tell me a good place to buy my hardwood lumber and sheet goods from. 
His answer was; I'm not sure, I buy most of my stuff from Lowe's. What? He wants to be professional cabinet maker and he's buying his materials from Lowes. Sorry, but I don't think he will last very long in this business.

You'll be amazed on how much you can save on materials if you take the time and find the right suppliers………..Again, do not use cheap quality materials to try to save money, that will only cost you more in the long run.

*Build time;* This is one area that can really change the price of building your project. (It doesn't matter if it's large projects or small).

You will normally become more efficient simply by learning your trade and finding the best techniques to build with. Again, don't compromise your quality, but find ways to keep your build on an even flow through your shop from start to finish. Whether it's a new tool that will save time and improve quality, or a jig that will help with set-up time and allow for more accurate cuts, but find ways to improve and shorten each task.

Quick tip; when I first started my business and didn't have a clue how long it would take to build anything, I actually kept a time card on each piece I built.
I tracked every minute of every phase of the build and finishing. It didn't take long before I knew exactly how long it would take to build a raised panel door or dove tail a drawer or do a cut list and size parts. I did that for over two years and even though I haven't used the time cards in years, I still catch myself glancing at the clock when I start a certain phase of a project and check my time to see if I'm still on track or maybe even become more efficient.

An organized shop can save as much time as anything else you can do. If you're wondering around like a "lost puppy" looking for a tool you misplaced or tripping over a bunch of junk you haven't taken the time to take care of, then you will be wasting a ton of time.

*An organized shop is an efficient shop and a much safer environment to work in. A cluttered, unorganized shop is……….well……………….. a cluttered, unorganized shop!*

And the woodworker that thinks you can never have a big enough shop is usually collecting junk and has nothing to do with actually making a living from all that space.

Too much space can be just as restrictive as too little of a work space if all you do is fill it up with junk that has nothing to do with making money at your woodworking. On the other end of the spectrum, trying to make money when all you're doing is moving things around so you can find room to work can also be a killer of time.

There's a happy medium and you have to find that. You can organize a small space and make it work for you and you can have an extra large shop and it can kill you.

Another way you can save time is repetitive work, building many of the same items and this usually applies to small items, but it can also pertain to cabinetry also. The more you build one item the more efficient you can become making it. Personally, I hated doing that, because I love custom work and always wanted to make something new and different, so I had to learn other ways to save time.

Procrastination can be a killer on time. I've seen so many woodworkers that could take a project from the beginning and build very fast and then all of a sudden they get to a part of the project they either don't like to do or would rather do something else and the projects basically comes to a halt. They may procrastinate about sanding, or dovetailing drawers, or it gets to the finishing stage and they don't like to finish or whatever and all of a sudden the flow of the build stops.

Be aware of bottle necks in production and if something seems to take longer then it should compared to the rest of the build, then work on that to improve so it doesn't hold you up or slow you down the next time

*Time Management* is the key to keeping your cost in check. I don't care if it's wasted time in the shop building, wasting time talking on the phone, wasting time on the computer (oops) or wasting time riding all over creation getting materials and hardware.

Once you understand time and get a good grip on that, you will be surprised how nice it is to use your shop labor rate and figure your true cost and figure your price.

Then when you come face to face with your customer, you can have the confidence to sell your work at the price you would like to and really feel good about it.

*The most important thing to remember here; when all is said and done, some times we just have to put our "big boy pants" on and realize we may not be able to make a certain project and sell it at a certain price! That's a fact every manufacturing company has to deal with every day of their life so don't kid yourself or beat yourself up so bad! *

I didn't mean to rewrite my book here, but I just thought of one more thing I want to mention.

Earlier in my series, I said you couldn't sell to everyone. You have to find your market for your type work and price. Here's a formula I learned years ago and even though it didn't have a thing to do with selling woodworking, it does deal with sales in general and I've found it to be pretty close to our line of work.

*What should you expect your % of closure be in selling your work?*

Another words, if you talk to 100 serious customers, how many do you think you should be able to sell your products to? Here's one way to look at it and break it down so you may not feel so bad if you don't get a sale every time you talk to a perspective customer.
If it's higher then that, that's good, unless it's a lot higher, like I mentioned at the beginning, then you may want to see why. Is it because your prices are too low? Are you giving your work away? And don't get discouraged if your closure rate is less. All these percentages are flexible, but we have a tendency to only think of price for a reason someone doesn't buy from us.

I know that must sound weird; worried about your pricing being too low when everyone wants to worry about their prices being too high, but I've actually lost sales because I was too low with a bid. (They didn't believe I could do it for that price).

If you have any questions, please feel free to drop me a line or we can have an open discussion here on the blog or start a new forum.

*Relax and have fun!* If you enjoy woodworking then you should have just as much fun selling it.

I get as much excitement and enjoyment in pricing and selling my work as I do from designing and building it! Once you put all the figures together and you are dealing with facts, then the rest has to do with attitude.

What did I say in the first part of my series?
*
You can take all the formulas in the world that could help you price your woodworking and they won't do you a bit of good if when you're finished you're not comfortable with the price you have to quote to your customer.*

A customer can tell immediately if you are not comfortable with your pricing and if you don't have confidence in the price you're asking or quoting, so how in the heck can you expect the customer to have any confidence in buying from you?

*SALES;* now that's another story! Maybe another series? You tell me.

I can only hope that everyone enjoys their woodworking as much as I've been able to.

Best of luck to all!

John Hufford
The Hufford Furniture Group (Retired, but still making saw dust!)


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## WannaBBetter (Sep 23, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


First and foremost thank you, very informitave blog. You talked about percent closure, is their a number for that?


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## helluvawreck (Jul 21, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Sounds like some well thought out advice. I know a fair amount about business but I'm not much of a salesman.

helluvawreck aka Charles
http://woodworkingexpo.wordpress.com


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


WannaBBetter,

Thanks for bringing that to my attention! I wrote this summary the other day and I have it all broken down, but somewhere between writing it and posting it here in my summary it vanished! lol.

I'll repost that part of my summary, so I hope everyone will look for my new post, I think it's some helpful information and can't believe a lost it.


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## MrFid (Mar 9, 2013)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


What a great series. Thank you for writing. If you're offering, I know I'd love to hear what you have to say about sales as well, and I am sure others would as well.


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## JoeLyddon (Apr 22, 2007)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Excellent Job!

Thank you.


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Hey everyone,

All of a sudden I'm having a helluvatime (sorry helluvawreck) trying to get this last information posted! lol

Something is not being very Cooperative, but I'm working on it. I guess I'll just end up with Series #6.


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## DocSavage45 (Aug 14, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Thanks for sharing your knowledge and experience. I'd add that if your business gets on the internet you can have people calling years from the posting.

Thought I would do home repair as a way to make some cash. Posted in yellow pages and in a free weekly where others posted services ( was not free to me LOL!) The major market is 44 miles from home. Did a few jobs and bid on others, but each required travel time. Also might not have a specific tool which had to be purchased locally. The bidding was time consuming and costly. The following year I had a quadrupled cost for liability. Stopped then.

Many years later, still receiving phone calls from out of state companies looking for maintenance services, because I'm on the internet!

I'm looking forward to your marketing methods.

Thanks


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## jerrells (Jul 3, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Thanks again for a great post

Percent closure - having been in computer sales for 28 years let me add this. There is NO real number. Track your sales and find your closure rate. Now try different things and see if it increases over time NOT over night. It is a number you should know and you should work toward making it higher. However there is a ceiling - somewhere. It could be 15%, 20% or 35% but it ain't 100%.


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


James101,

I think I've always look at my business differently then most woodworkers. That's why I always liked working with a shop labor rate.

Tracking each job, I soon realized that as long as I figured my hours correctly when I bid a job, then I really didn't worry about how much the other guy charged. Over the years I saw way too many shops under bid jobs just to get it and then have a tough time (if not impossible) being able to even complete it, never mind making a profit.

It didn't take me long to realize that too many cabinet shops allowed themselves to get caught up in price wars trying to under bid the other. I'm surprised you had the opposite problem. Everybody wanted to charge more then you. That's a nice place to be.

My Gross sales changed from year to year, but that depended on the number of jobs sold. You're right when you said we only have so many hours each year to produce our products, so you can basically only make so much as a one man shop.

That's why I never wanted to sell my work short. I felt I couldn't afford to do a job and not make a profit, I didn't have the time to waste.


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## Buckethead (Apr 14, 2013)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


I don't build cabinets. I haven't framed a house in over 2 years (but I have framed hundreds). I have installed millwork and perimeter/floor fixtures in retail remodels.

I fully concur with what James 101 said. I think you might find that most successful companies are not the lowballers. They are figuring the cost of business, inept/unmotivated employees, travel, overhead, materials, administration, sales, accounting, and profit. Not the 7% profit they claim.

I have learned that I can compete with big companies precisely because I'm small, nimble, eager, on site, and have lower overhead.

Give your word, price in completion, keep your word, adjust your pricing for following jobs if needed. Ease your pricing up as you go. Make yourself an integral part of your client's business models as you can. There is money to be made. Good money. Be a good provider of goods and services. Then don't forget to pay yourself (raise your prices as the market bears) (side note: currency is less valuable by the day… you MUST adjust accordingly or you will truly regret it) good clients will take a great service at a rock bottom price forever. They will also pay a better rate for your superior services, especially considering the often astronomical pricing of larger providers.


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## shipwright (Sep 27, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


This has been a great series John.

I'm a retired hobby woodworker now but when I had my shipyard I was building boats where a 5% miscalculation could cost several thousand dollars. I used to quote on a hull, deck and cabin, closed up because that part was pretty much as per the designer's plans but all interior, finishing and rigging etc. was cost plus. That worked out very well but you really needed to know your overhead and costs and even then swallow hard before you gave the quote. All of the points you make are right on the mark as far as I'm concerned and I'm sure will help lots of people on the other end of their woodworking careers.

Thanks.


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


James101 & Buckethead,

I agreee with you; You really need to know your total cost of operating a business before you can even begin to think about how much money you can make.

I find the biggest struggle most woodworkers will encounter is trying to convert from a hobbyist to a business.

Even though they want to sell and make money doing woodworking, they have a hard time letting go of treating their business like a hobby and that's why I wanted to write this series.

I wanted to see if I could help those that want to cross over or are considering starting a woodworking business to be able to better understand how to price their work.

There's so many other factors to make a business successful.

Thanks for your input.


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## OggieOglethorpe (Aug 15, 2012)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Nice job on the series.

I concur with all you've written.


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## brtech (May 26, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Most businesses would add profit to materials as well as labor. That's easy to do, just add your profit margin to your materials costs (15% margin = 1.15 * actual material costs)

Some businesses prorate fixed costs over materials as well as labor. Many of your fixed costs do have something to do with material as well as your labor. It's harder to do this calculation - usually you need enough history to be able to calculate your yearly materials and labor hours so you can compute a multiplier on your materials and labor.

You forgot the maxim that helps me the most when I'm thinking about underpricing an opportunity:
"You can lose a little on each job, but you can't make that up with volume". Underpricing to gain business is, in my experience, roughly never a good idea. You can break even, sometimes, but you can't price to lose. Sometimes your estimate is off, and you do lose, but never go into a job expecting to lose.


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## Earlextech (Jan 13, 2011)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


I agree with everything above - all very good points. I would like to add one more.

After you do all of these calculations and finally figure out what you should be charging for a project - DON'T IGNORE YOUR CALCULATIONS! I have seen many, many custom builders come up with a $15,000 price only to say to themselves, "Nah, they'll never pay that" and lower the price even though their own calculations tell them not to.

Pricing has no reality, not if you want to make money. Don't think about the price and if YOU would pay it. Hopefully you're working for people with more money than you!

Good luck and keep selling!


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Earlextech,

Couldn't have said it any better. I've also seen a lot of shops that ignore their calculations for simply because they wouldn't pay that or they're afraid someone else is going to bid lower, so they convince themselves they have to lower their price knowing they can't make any money doing so.

That also plays directly to what brtech said; "You can lose a little on each job, but you can't make that up with volume".

Reminds me of the story of the farmer in NC that sold produce and wanted to get the jump on the season so drove down to Florida a bought a truck load of watermelons @ 2.00 each.

Came back home a had a special at his produce stand selling watermelons @1.00 each. Needless to say, he sold out very quickly and his friend ask him what he was going to do since he sold all his watermelons.

Guess I'll have to get a bigger truck was his reply!.


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## Hartworks (Jan 9, 2014)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


I see this was written some time ago but I just came across it. Well done…and thank you, you turned the rather confusing and intimidating topic, into an easily digestible and informative series. I have just begun my ventures into actually selling my work, as opposed to giving it away and just dealing with the fact I don't believe I can get what its worth. You hit the nail on the head about not competing with the box stores and finding the right market, thank you for sharing this information, I do believe it will benefit me greatly in the future.

And lets face it, who wants to compete with the box stores, the quality of product (comparatively speaking) available is substandard at best. Go take a look at their cabinet selection and actually look at the build quality, amazingly poor, and folks pay a lot of money for that because its covered with a nice face frame / doors / drawers. My opinion is that if you break it down and show people what they are getting and why it may be a bit more, that corner of the market will yield a great amount of business. You would be surprised how many people will pay for things to be done properly the first time.

Gary


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Gary,

Thanks, glad you enjoyed my blog series on "pricing your woodworking" and i want to wish you the best on your venture.

I did another blog series on; "Marketing and Selling" your woodworking. It may give you some ideas that will help.

Feel free to drop me a line if you have any questions.

Good luck


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## wmixon (May 24, 2014)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Huff,

Great, great, great series. You just gave me some advice on selling adirondacks and this article series was the icing on the cake!

Thanks!

William


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## huff (May 28, 2009)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


William,

Thanks for reading my blog and hope there where a few things in there that will help you price your woodworking so you can make a profit.

Every woodworker struggles with pricing when starting out, but sadly, some never learn how to price their work based on facts of what it cost to build, therefore never making a profit.

Good luck and hope you do well.

Feel free to drop me a line any time if you have any questions.

I also have a blog series on, "Marketing and Selling" that may help you as you progress with building and selling more of your work.


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## romanweel (Dec 27, 2014)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


Brilliant series, huff. Thank you so much for doing it! I just finished this one and the Marketing one, and I must say…you make it all much clearer and less intimidating. I'm on the verge of diving headfirst myself, sink or swim! And I think you've given me a pretty good diving board


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## Umpire20 (Jan 13, 2010)

huff said:


> *Summary*
> 
> How to price my woodworking?
> (And sell it) Part 5
> ...


I came across this blog as a "reference" from Jay's Custom Creations this morning. It truly is a well done piece and quite the eye-opener to me as a hobbyist who is selling my product. Thanks Huff for taking the time & effort to create this.


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## huff (May 28, 2009)

*Correcting mistake to Summary*

I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.

*What should you expect your % of closure be in selling your work? *

Another words, if you talk to 100 serious customers, how many do you think you should be able to sell your products to? Here's one way to look at it and break it down so you may not feel so bad if you don't get a sale every time you talk to a perspective customer.

The first thing I would like to clear up right now is; if you're closing 80% to 90% of your sales now and you're just getting started in your business, don't flatter yourself, your not that good, it's just your prices are too low.

I've heard of guys that have only been in business for a couple years tell me they have a two year waiting list of customers. The only thing that tells me is they are giving their work away and every one is getting in line.

Realistically, you should loose at least 25% of your sales because you're too high priced and let me repeat that; *at least 25% because you're too high priced! * I know that sounds ridiculous, but if you're not, then you're trying to beat the price of every cheap piece of crap on the market. If you're not getting a "gulp" factor now and then from a perspective customer, then you must be too low priced.

You have to also realize that another 10% of your perspective customers aren't going to buy from you no matter what the price is. They may be talking to you about your product, but they just want information, they want conversation, they want to tell you how you should price your work or how you should build it, but they have no intention of buying anything. (This percentage can actually be a lot higher depending on how you're marketing your product).

You can count on another 10% that simply won't like what you're selling. Don't be offended; remember, you can't be everything to everyone all the time.
And the last percentage is one that you have to learn about with time; that is, there is probably 10% you don't want to sell to. There's an old saying that applies to so many things but simply put; "there's always that 10%"! They're jerks, there's no satisfying them, and you're better off not even trying to deal with them. You know the type! Learn to stay clear of them, don't waste your time. That also may sound blunt, but trust me, over the years you will learn about that type customer and they will never be worth the sale.

Let's add up the percentages:

25% =your price is too high (what I call the Gulp factor)! 
10% = won't buy, no matter what your price is! ( you can easily add another 10% to that at time.)
10% = simply don't like your product for whatever reason
10% = you don't want to sell to!
55% = Total; that means if your closure rate is 45%, that would actually be a really great closure rate, but to be realistic for the average woodworker it will be more like 25-30% or less.

And why do I say that? Simple; the one percentage I did not include in that formula is YOU. You alone can have the biggest effect on the percent of sales you close. Now I'm talking more about sales instead of prices, but again, they go hand in hand.

All these percentages are flexible, but we have a tendency to only think of price for a reason someone doesn't buy from us and immediately feel we need to lower our price. So before you jump the gun and over react because someone doesn't buy from you, make sure you look at all the reasons they might not have bought from you.

So that was the part of the summary I left out earlier and hope this will also help.

I keep thinking of things I should cover, but now it starts leaning more towards Sales and Marketing so we'll end for now.

Feel free to drop me a line if you have questions or I'll be glad to discuss here with an open forum for anyone that's interested.


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## shipwright (Sep 27, 2010)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thanks John.
You should edit the last one to include this correction.
Great blog.


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thanks Paul,

Didn't realize I could edit the summary after it had been posted so long. I was having a terrible time getting it to post at all for quite awhile. Not sure if it was on my end or Lumber Jocks, but I finally made it.

I really appreciate your comments because you're another one of the L.J's that I truly enjoy and respect what you have to say on any thread.


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## gfadvm (Jan 13, 2011)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


I'm holding my breath waiting for the sales and marketing installment.


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


gfadvm,

You'll probably have to take a breath or two. lol But thanks for the encouragement.

I was very uncomfortable with selling in the beginning, but found ways to overcome it and now selling seems to be the easiest part of my woodworking.

I'll start putting together some thoughts and see what I can come up with for another series.


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## Buckethead (Apr 14, 2013)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


I have followed this blog through, and it is among my favorites. This might be my favorite installment of the series.

I love talking about value.

It is a subjective topic, as value is always subjective. Two identical pieces will have two different values. Value is based upon what a buyer and seller agree.

I absolutely agree that you should be turning business away due to your prices being a tad too high. There is no shame in starting low to get your foot in the door, but once in the building, you need to have enough capital to grow, improve, diversify, and keep the darling wife in a respectable pair of shoes. All important factors. You won't get there by underbidding the competition in order to gain work.

I have seen labor brokers aka pimps, make quite a bit of money using the undercutting model, but all the crafts persons down the line are unable to progress. It becomes a master/servant relationship. AVOID. Better to be hungry for a week than for the rest of your life.

I also think your proportions are correct. Losing about 1 in 4 jobs to higher pricing seems about right. To lose more by raising prices will actually earn you less money, whereas the same occurs when you underbid.

If you don't like working, overbid… If you like working free… Be the cheapest guy in your field.

All of this requires experience.

It's scary out there…. Not really. I lied. Who wants more competition? Lol!


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## vikingcape (Jan 3, 2013)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Mr. Hufford,

Just wanted to say thanks for all of these. I printed them out and have been rereading them and making notes. This information has been a huge eye opener for me. Maybe one day down the road after I get more practice take as many classes as possible and read all I can, I can do this on the side. But I wanted to thank you in advance


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


* keep the darling wife in a respectable pair of shoes.*

*I have seen labor brokers aka pimps*

* It becomes a master/servant relationship. AVOID. Better to be hungry for a week than for the rest of your life.*

*If you don't like working, overbid… If you like working free… Be the cheapest guy in your field.*

Buckethead;

I like your way with words.


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Kaleb,

Thanks. I'm glad you feel there is some information there that may help you down the road.

I wish I could take credit for all the information, but this has all been passed down to me by other successful woodworkers and businessmen that I found to be very helpful in my business.

I just wanted to share it with other woodworkers with the hope that it would help someone.

You, my friend, made it all worth the time and effort.

BTW; Please call me John or Huff…...........Mr. Hufford was my Dad. LOL (He was really old)

If you have any questions feel free to drop me a line. Be glad to help if I can. (that goes for everyone).


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## Kentuk55 (Sep 21, 2010)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Excellent series John. I'm glad we don't have to pay you fer all this info… LOL Tis well appreciated


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thanks Roger,

I would like to write a series on Sales and Marketing also. I'm working on the outline now, but it will take me awhile to compile everything.

I enjoy sharing with others, I just have to be careful not to talk them to death! lol


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## Chad256 (Mar 27, 2013)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thank you very much for your "free" assistance. You sold yourself short…you could sell this! lol But thank you for helping us out. I love the LJ community because everyone is here to help out the new guy(me). I got on looking to ask some of these very same questions because as I make things whether they are gifts of not I never really know what to charge. I'm working on a project now that I very quickly realized I WAY UNDERBID it. No big deal, the customer get a great deal and I learned in the process and thats what got me looking for just what you wrote. My hat is off to you sir and thank you again…I may be bothering you some in the near future as I attempt to make money from my new-found love of woodworking!


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Chad,

Feel free to drop me a line if you have any questions.


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## Zelbar (Sep 14, 2008)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thanks for all the great information John

I would like to add a couple of things I have found and that have worked for us. I know a lot of you are looking to sell small items on mass. John comes from a point of view of selling custom built items and his advise is great and it applies to all areas of sales. I too sell custom builds but also have a steady business selling smaller items. I find this gives me a regular weekly income but also allows me to make a lot more contacts for my larger or custom built pieces.

So the couple of things I wanted to add for you on mass producers are

*Sell something useful

Be different than your competition and find the right market for you

Don't sell too cheap*

First the sell something useful. When we first started this my wife said "Don't sell dust collectors" We have taken this to heart and with few exception try to build things that people will use on a regular basis. People have an easier time justifying spending $200 on a cutting board they will use everyday than $200 on a wood sculpture to sit on the mantel. It has worked for us a least.

We wanted to be different, the other people at the market were selling items made from pine or barn boards (not that there is anything wrong with that) we took a different direction and made items from woods like Walnut, Cherry and Exotics. It set us apart from the other woodworkers. People could see the difference and it was not long before we were not only greatly outselling the other woodworkers but also selling items for a lot more money each. *You do not need to be the cheapest.* People will pay for good quality. Even if you are selling the same items as some of the other vendors, do it better and you can charge more. This also comes down to where you sell. Find a venue where people are looking for the types of items you have. In the beginning we tested a number of different markets before settling on some that where the general consumer fit with our line up of products. If you selling items for $10.00 each maybe the local flea market would be great but if your selling items for $200 your sales at that same flea market may be disappointing. Find the market for you. Flea markets, Farmers Markets, Wholesale, Craft Fairs, Galleries, etc.

Lastly Price.

Just because your calculations come up with a price does not mean you have to sell at that price, *you CAN sell it for more than that!*

I have a new small item that takes .27 bf of wood. I do them in a variety of woods but if I take the most expensive wood I use on them is $7.00 BF. So $1.89 cost for one of these. Right off the bat I double the price of my wood to cover for waste. Off cuts I can't use, bad parts of the board, screw ups, etc, plus some profit so I figure my cost to be $3.78 for wood. Doing them in batches it takes 20 minutes to cut, shape, sand and finish one of these. At my shop labour rate of $50.00/hour that means $16.50 for labour. Add them together and you get $20.28 each. I started out selling them at $25.00 apiece. They are selling great so I just raised the price to $30.00 each. Over the next month or two I will evaluate how they sell and if it is justified I will raise the price again. If the opposite were true and I found I could only sell these at under my material and shop labour rate I would give them up as a lost cause and find something else more profitable to make with my time

I have done this in the past with items. When first started selling woodworking part time years ago my friends and family were my testing bed. I would build a prototype and ask them what they thought, what changes I should make and what price would they pay for it. While I got some great suggestions on changes, don't ask them what they would pay unless they are exactly your market. On that first item they said no more than $80.00. For the exact same piece today I sell them for twice that much, I sell lots, and I am looking at raising the price again. I just found people that had more money than them to sell to. Also in that time I have found better wood suppliers, and streamlined the building so my cost of building one has gone down, profits have gone up.

Thanks again John for the post. Going to go read your one on Marketing now.


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## huff (May 28, 2009)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Zelbar,

So well put! Most woodworkers are so afraid to charge a fair price for their work and take the time to find the right market to sell it at, that they never realize they may be able to sell for a lot higher prices.

I did exactly what you have done and that was to try a market and if my work sold "too" easy, it was definitely time to raise my prices.

Thanks for the comments and it's a great help for others like yourself, with success in selling to share your ideas that have worked for you. So many woodworkers struggle with pricing and selling their work and it's nice to get input from others.

Thanks again,
John


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## Kentuk55 (Sep 21, 2010)

huff said:


> *Correcting mistake to Summary*
> 
> I'm not sure what happened when I posted my summary, but part of it got left out, so here it is.
> 
> ...


Thank you as well Zelbar. Appreciate your added input.


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