# Got the old "R U crazy $600 for a bookcase I can buy one for that"



## TThomas (Dec 16, 2008)

Bummer…I am currently doing and estimate for a repeat client to redo a 12 1/2×19 room/den new sheet rock ect ect….they wanted a stained oak book case that was 7×3….I wasn't going to do anything real fancy, plywood sides and back 1×2 face frame with 1×2 faces on the shelve with a little arc and legs at the bottom. the materials ran like $296 and I figured it would take me about 12 hours to get everything and put it together stain it and put 4 coats of finish on it…...Am I wrong in trying to make $24/hr…....if so I need to let someone else build it..and truth be told I will probable have more then 12 hrs in it. I'm not real fast at the wood working end of things.

So am I way to high on this project???

If so, I honestly want to know….........
Thanks for your help


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## Kirk (Apr 20, 2007)

Todd,

No, $24/hr isn't bad at all. People get what they pay for.

I would think it would cost 3 times what you are charging for hand built.

Just a thought.


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## TThomas (Dec 16, 2008)

I thought so to … I kind of figured the whole project and repeat client into it…...but I think they got a little mad and thought I was trying to take advantage of them…...oh well we will see how it goes.


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## dbhost (Jul 20, 2009)

A young lady friend of LOML had a nice built in done like you are talking about, but with a bit more detail work. Similar size too, (7×4 actually, 18" deep), with similar construction. She paid $1,800.00 for it.

From what I can see, your customer is comparing hand built, hardwood and ply construction to MDF crap from Ikea. If they want Ikea / Walmart furnishings in their home so be it, but if they want quality, they are going to have to belly up to the bar as it were… Because from the way I see it, you aren't charging too much. You are charging too little…

Mind you, YMMV depending on your local market conditions. (Supply and demmand, if there are too many guys doing this, and not enough paying customers to go around…)


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## RexMcKinnon (Aug 26, 2009)

If they are insulted then throw some numbers at them. Like the cost of material alone, plus the cost of consumables plus the fact that your target is $24/h. Go to a garage and try to get work done on your car for less than $70/h. If they are reasonable they will come to their senses. If not then you pleaded your case and you should suggest they buy ikea and complete the other work you have to do. I don't think you should drop your pants and take it just because people are unrealistic in thier expectations and want to cry a little bit.


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## LeeBarker (Aug 6, 2010)

I respectfully disagree somewhat with Rex. If they think your price is too high, then you will not do business. A transaction requires two willing parties. They are not willing.

If you try to justify your price by quoting materials cost, you are lowering yourself to their level and gnawing away at your own integrity. It's time to thank them for their past business, be totally friendly and courteous, and walk away as you open yourself up to the next opportunity that is bound to come along.

As for the $24 an hour: How did you get to that figure? There are couple good ways to find a number, and I'd be happy to discuss that with you, but we don't have to clog up the forum if it's of no interest.

Kindly,

Lee


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## HebronLLC (Oct 11, 2009)

Todd,

I think your price is a little low as well. I have found that my prices end up being around what someone could get the same "type"of furniture from Pottery Barn or Crate and Barrel, and I know that my product is better and will last longer. Now living in New Mexico I find that what clients will pay in my part of the country is different from what they will pay somewhere else (fewer people to buy anything). I have also found that providing a detailed bid breakdown helps people understand what it actually costs to build something. My contract includes a page that has a list the price of what I am paying for - sheet goods, solid goods, hardware, materials. Also on that page I list my hourly wage and how long it is estimated to take me (this of course is almost always way under what it will actually take me). After all of this if someone still thinks they can get the same thing for 1/6th of the price then I really don't have a problem letting them go. I can't say I like it when someone thinks I am trying to rip them off, but if you have been honest then what someone thinks of you really doesn't matter.

Keep your chin up.

Aaron


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## richgreer (Dec 25, 2009)

I come at this issue from a different perspective. This sounds like a very basic bookcase. I never like to build something in my shop that i can purchase at the local furniture store. For me, the reason for woodworking is to build something that you cannot get at a store. If you look at my projects, virtually ever one is some type of custom work that would not be available through retail outlets.

Latest example - For our church we wanted a couple of plant stands that were in the same style as our communion table. I call it the "D style". The top is straight across the back with a half circle in front. We also wanted one to be 6" taller than the other because one would set on a step and the other would set on the floor. These would never be available through a retail outlet. I built them.

If you are talking about something plain and simple, the factories are so much more efficient that I, as a woodworker, cannot compete with them. Why try?


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## pvwoodcrafts (Aug 31, 2007)

Yeah I hear that all the time. $24 per hour. You a lucky pup


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## Loren (May 30, 2008)

You need to work on creating rapport and conceptual agreement with
the client before you give a price or make design/build decisions that 
the client isn't aware of - decisions that increase the price you have to
charge while conferring a benefit the client may not understand or
be aware of.

Sometimes it's a good idea to offer the "cheap date" solution and then
the "better way" solution.

For example, lots of the bookshelf can be done in painted MDF for less
money. It can have a fake woodgrain on it, and it won't look that real,
expecially if you're not an expert in faux finishes, but it can be cheaper
for the client.

So you offer that first and then you offer "and here's a really nice way
to do it in solid hardwoods and plywood."

They do consider YOU the expert, so use that, but also find out what's
important to them if you want to do the work and give them options
that can strip their costs down. Often when you do give a bargain-basement
option next to a better one, they'll accept the better option anyway.

People don't actually (mostly) like to feel like they are cheap or are
pennywise and pound foolish.

At the end of the day, custom work is something people buy when they
have no other options these days. They don't roll out of bed and say
"I'd really like to support a woodworker, so I'm going to have all the
work in my house done custom, costs be darned!"

Many cabinets and built-ins are sold to clients who have looked for, and
failed to find, an off-the-shelf solution that fits their space and meet
their needs.


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## Loren (May 30, 2008)

Also, 7' x 3' is pretty big. The clients probably don't realize that. I charge
a bit of "hassle money" for big, hard to move around stuff.

Build your value in the clients eyes, quote the price and if they want to
pay less, take value away. Never reduce your price without taking
something out of the project or rolling it into a larger job for the 
same client. You can say "if you wanted to do the deck and the
bookcase at one time I could find some ways to control the costs
on the bookcase because I'll be over here doing the deck anyway."

... or whatever.

I never tell clients what I pay for materials beyond a general figure
if material costs are high and the work itself is clearly simple. I wouldn't
quote materials costs for a book case, and I don't quote my hourly
rate either. What I do is quote for the build, quote for the finish
if it seems relevant to make it separarate, and quote for the delivery
and installation because in some cases clients may want to pick it up
and screw it to the wall themselves.

When you make the deliver/install fees reasonable, but professional,
you establish the idea that you are running the job in a professional
way that is fair to your client but also to you.

When you're starting out, it is very, very tempting to "buy work" to
build your portfolio and client base. I don't recommend getting jobs
by underbidding. Instead, market more aggressively.


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## reggiek (Jun 12, 2009)

There is some good info above. I just wanted to add that I would avoid anyone that thinks your work is too expensive….whether a previous customer or not. The reason is simple….getting paid. I have found that folks are more argumentative….very hard to satisfy…..and very quick to litigate when a job is started and the customer already has their hackles up about the price….I have never had any difficulties with a customer that sees the benefit of my work (and thus ok with the price)....but one that is already upset about the price would most likely be impossible to make happy - they will nitpick every small detail….and will most likely slow pay (get a deposit of at least the cost of the materials).

I would do as Rich says above….let them buy from Wallyworld…or another Borg store….that way…when it falls apart they only have themselves to blame….just a word of advice.


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## Loren (May 30, 2008)

I don't know why you're investing so much time in finishing the piece
either if the customer isn't asking for a super-durable finish and isn't
willing to pay for it.

4 coats is overkill in many applications. My standard finish is shellac
and wax. It is very fast and looks great. Dust in the finish isn't
a problem either.

Sometimes when clients have moaned about costs I just tell them I
can deliver it for less finish-ready. They can finish it themselves or
hire somebody to do it. This makes them aware of the real costs,
especially if they do it themselves and screw up.

People are perfectly happy to ask you to strip and refinish their dumb
old furniture and gape when they hear the price. I tell them to
strip it themselves and bring it to me for the finishing if they want to
pay less.

Finishing is a real skill but many people, because they have painted
some rooms before, don't think it is. You have to set them straight
if needed.


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## MrWoodworker (Apr 18, 2011)

I have had so many friends with businesses that undercharge. I've successfully convinced 2 of them to get their prices not only in line with the industry they are in as a whole, but also to position themselves as a premiere resource.

One charges about 30% more than the closest competitor and is as busy as he wants to be. Granted, he IS very good at what he does, but he was just as good when he did twice the work for half the money.

Yes, it's scary to turn work away because people think you overcharge, but the jobs you DO land tend to be with much better clients that don't nitpick your work sp much. They tend to have the mindset that if they are paying you so much, you MUST be worth it. So just prove that you are!


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## CharlieM1958 (Nov 7, 2006)

I'd agree with some of what Rex said and some of what Rich said.

I'd explain to the customer that the whole point of having a piece custom made is to get something that is quality built to their exact specifications with regard to both size and design. I'd tell them if they want something basic that can be found at a furniture store, having been mass-produced, they will no doubt save themselves some money.

There is no shame in admitting that you, as an individual craftsman, can't match the sheer efficiency of mass production. What you bring to the table are customization options that no furniture store can match. Ask them which they think will cost more… a suit off the rack, or one custom made by a tailor?


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## childress (Sep 14, 2008)

7' high, 3' wide. That's 6 LF of cabinetry that's completely finished and installed, I would have charged probably $200 per foot! If there was doors and drawers, even more… You're not too high, you're actually too low. Have a cabinet shop come in and give a quote, that might put a little perspective in your customer eyes.

Loren has great advice. I can tell he's a professional, so listen…


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## Puzzleman (May 4, 2010)

What Loren says above is wonderful!!

Only thing I have to add is that is to get an idea of what the customer is expecting before starting. That way you get an idea of where they are starting at. If their number is so low that you can't do it, tell them thanks but no thanks. When doing this most times, the customer wants to know what I would charge and sometimes they do buy.

One of the hardest things to do is to walk away from money. But sometimes we have to fire the customer when their expectations do not fit our reality.

Jim


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## Bertha (Jan 10, 2011)

If I found a craftsman, plumber, or electrician working for $24/hour, they'd be working on several projects for me. Your skills took time to build and you should be compensated for them.


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## DrDirt (Feb 26, 2008)

Great discussion - I think a lot of people look in catalogs and at the furniture marts like Ashley, and have an expectation that you are going to be cheaper than those "big stores with high overhead" because you are working alone in a small shop.
I suspect it is managing expectations - as Rich Greer points out - I would avoid trying to go head to head with Ashley. The big mills get sheet goods at really low prices and have high speed machines and CNC that takes cheaper materials (not crap materials - just 1/2 your cost) and finishes them into product in about 45 minutes+drying time for some catalyzed laquer.


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## jn3Woodworks (Apr 9, 2009)

You're definitely not too high. I'd have no problem quoting that price for the work you're talking about.


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## cabs4less (Nov 2, 2010)

my rate is 30.00 an hour and 35.00 on site and i agree wit loren never belittle your self to get a job they dont like your price chalk it up as a lose by the way i just quated two built in book cases 5' wide 10' tall four doors and four drawers on the lower halfs painted white for 2827.00 she fell out tried to chew me down i thanked her for the op to bid went to leave she called me back and wrote me check


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## DLCW (Feb 18, 2011)

My shop rate is $47/hr and I use a subcontractor for installation work and charge $45/hr for his time on site.

What I've found over the years is to get a feel for whether the customer is kicking tires, price shopping or serious about quality.

I've got a simple approach to bidding cabinets: The main bid is with cheap Chinese import plywood boxes, simple faceframes, doors and drawer faces, one or two color options and I dictate the clear coat. I also tell them this configuration has a 60 day warranty. I then offer upgrade features and show and tell the benefits to them if they upgrade. For example, if they choose prefinished two sides, American maple plywood, I will offer them a lifetime warranty on material and workmanship (except plumbing leaks and breaks and very obvious abuse or misuse). If they upgrade from baltic birch mortise and tenon drawer boxes to solid maple, dovetailed drawer boxes, there is an upgrade amount per drawer and a longer warranty. If they select Blum hardware over run-of-the-mill Borg store hardware, it will cost X per drawer and door but the hardware is warranted for life.

When I offer bids in this manner customers are really appreciative of the options and explanation of what the options do for THEM. When I've gone this route, I've never had a customer order cabinets with Chinese plywood and cheap hardware. They really liked that I had broken it out for them and showed them many options that will make their purchase much more enjoyable and understandable. After that, there is no bickering over pricing. The customer has been educated and seen the light.


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## SCOTSMAN (Aug 1, 2008)

You have to be able to live and hopefully comfortably at the rate you charge. I CANNOT HELP WITH THE PRICE AS i DON'T UNDERSTAND THE POLITICS OF AMERICAN WOODWORKING ,PRICE STRUCTURE, ETC.
I CAN TELL YOU IT SEEMS LIKE AVERY DECENT AND FAIR PRICE FROM WHERE i SEE IT,.iF YOU ARE GOOD AT YOUR JOB YOU SHOULD BE ABLE TO COMMAND THAT PRICE WITHOUT FEELING YOU'VE CHEATED ANYONE.WORKING SLOW OR FAST DOESN'T REALLY OFFER ANYTHING TO IT YOU COULD BE SUPERFAST AND DO WORK WHICH LOOKS LIKE IT'S BEEN MADE IN A RUSH OR REASONABLY SLOW AND MAKE A QUALITY ITEM. MAKING BESPOKE ONE OF SIZES AND PIECES IS NEVER EASY TO CHARGE FOR, THEREFORE YOUR IDEA OF CHARGING THE HOUrly rate is a good idea (sorry I just noticved I am writing capitals my apologies. anyway good luck .We have a lot of cowboy builders here in the uk rip off merchants ,so if the clients have used you before they must have been satisfied before ,or they would not have come back for more.Whatever you do don't overcomprimise your price structure if you feel that your price of 24 bucks is what you need to make then stick to it and always be firm but at the same time polite.it works best God bless you ! We live in hard times ,and I realise your probably a family man just trying to feed and clothe your kids comfortably know one wants to be dirt poor and no one deserves to be rich at the clients expense at the same time.In short I feel you are a good and decent man. Good luck Alistair


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## Bertha (Jan 10, 2011)

These three posts above are dead-on. I make a damn good living but I can't afford custom cabinetry to my liking. Look at some of the stuff here, for goodness sake! I also can't build it to my liking, but that's another issue entirely You don't do anyone any service by devaluing the product. I expect to pay dearly for custom woodworking, that's just how it is. I'll never make any money in woodworking but i surely, sincerely, hope that the few that can…will.


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## TheDane (May 15, 2008)

Todd-I'm not a professional woodworker, but I am in a business that people think has no real cost associated with it (we make computer software), and I get this same kind of garbage all of the time.

When it comes up, I ask them (politely) "Do you work for nothing?"

The point is, I don't work for nothing, and I don't expect anybody else to.

I think the price you quoted is pretty reasonable, especially when you consider the cost of materials and a very reasonable labor rate.

-Gerry


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## SCOTSMAN (Aug 1, 2008)

Good for you Gerry spot on my dear friend spot on the nail. Alistair


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## TheDane (May 15, 2008)

Alistair-I think too many people place no value on someone's work.

We seem to live in a world where we expect everything to be both dirt cheap and superior quality.

-Gerry


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## MikeGager (Jun 15, 2009)

where do you guys come up with your hourly rates? i really dont see woodworking as a job so i have a hard time justifying $24/hour or more in some cases. not saying its wrong just curious how you guys get those numbers


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## SteveMI (May 19, 2009)

My experience is aligned with what Rich mentioned; if the product is available locally and commercially you will only make the customer mad by quoting on it. The best you can do for future business is to give them some suggestions on where to buy a reasonable "widget" like they want. You can end with a comment at the end such as "If you don't find one the right size, options or wood, let me know and we can then discuss a custom one."

Never tell the customer your materials, overhead or labor costs. It is none of their business. Talk a lot about the types of available wood, joinery, finishing methods, choices in hardware and the like.

You cannot compete with the factories, but you can personalize where they can't.

Steve.


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## TThomas (Dec 16, 2008)

wow…everyone…..thanks for all the advise…as far as the hourly rate goes….I'm a remodeler by trade and a woodworker as a side. I would like to incorporate more of the woodworking into what I do, as I really enjoy that part, more of a value add type of thing. I do allot of work on a T&M type of contract with me and 2 helpers, we bill out at $24 per man hour/plus material cost and 12%overhead and profit. We are not the biggest or the best in the area but we do have a very good reputation, I really do care about doing the best job I can each and every time, a little ocd and it cost me from time to time, as we get all of our work from word of mouth.

The Dane I agree fully I just walked away from a full house remodel because the client thought our rates were to high….I explained to him that he could hire his own subs to do most of the work if he wanted and I would come in and do all the finish work…...he thought that was great because he KNOWS he can get guys for $10 all day long. He calls me 2 days later and tells me he has 3 guys to start working on the house. I said great call me when they are done and I will come in to do the finish work…..He said he didn't know what to have them do and they needed someone to tell them and supply them with tools. I told him that I already had guys like that and they are $24 per hour….......I didn't get the work, didn't want it at this point but I have heard he has fired 2 others already and the house is all torn apart….....

Loren we need to talk more…...DCLW…good advise thanks…..

Once again thanks to everyone…..I will move forward with the information from here…


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## allmyfingers (Feb 26, 2011)

first, never charge by the hour, only by the job. nobody's business how long it takes you. we always quote labor plus materials so there is no misunderstanding. if they want it cheaper, they should opt for lower cost materials. if they want a cheap job, let 'em go. maintain your standards and you will be rewarded.


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## DLCW (Feb 18, 2011)

Mike,

Hourly rates are figured based on a number of factors. You need to figure out your operating costs (insurance, utilities, advertising, mortgage, etc.). Then you have to figure out how many hours a week/month/year you can reasonable expect to be working on paying jobs. Note I didn't say how many hours you will be working on the business as there are many hours you work that you don't get to directly charge a customer for.

Once you figure out all your expenses, you need to figure out how much you want to be able to "take home" for each hour of time you put into a customer project. From this, you can figure out what your hourly rate should be set at.

My rate of $47/hr provides me a comfortable living when business is steady. When things are slow, I need to get creative about how I am going to attract new customers or get existing customers to make purchases.

But I DO NOT drop my hourly rate. Once you do that, you set the precedence to customers that you are willing to do anything to get work from them. If you are good and will provide a very high quality product along with great service, reasonable people will expect to pay for that.

If someone is going to make the statement that they can buy the same thing a Wallyworld or Came-apart for a lot less, educate them as to what they will get at those places and what they will get from you. They will probably still go to those stores but at least they have a little more knowledge about their purchase decision and know what is likely to happen a few weeks or months down the road.

I've found after 11 years that it is really an education game with customers. If you have a person come to you asking for custom furniture/cabinets and the first thing they say is "we are on a really tight budget", do them and yourself a favor and send them to the store where their money can be stretched a little further. These folks are not the typical customer profile for a custom woodworker. A customer profile for a custom woodworker is first asking about value, quality, service, warranty, etc. These people are more concerned with getting fewer items of higher quality then lots of items of cheap quality. If the first shot fired is about price, the battle is already over.


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## DLCW (Feb 18, 2011)

One other thing is - I never provide an hourly rate to a customer. When I provide a bid, it is based on material and labor. The only adjustable variable in the bid is material. The labor is pretty well fixed and is a dollar figure, not number of hours and hourly rate. I've got very sophisticated spreadsheets I've built for estimating different types of projects. These are my internal use only spreadsheets. They've worked great over the years.


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## Puzzleman (May 4, 2010)

Whatever your hourly rate or how you price your job, the most important thing is like stated above: COMMUNICATION with customer from inception to finish about costs, options and whatever.

As a clothing chain says: Our best customer is an informed customer.


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## DrDirt (Feb 26, 2008)

24 an hour is very low - your work is not easier, and the tooling is just as expensive as most mechanics - and you never see shoprates below 50/hour.

Don't know how you acount for overhead.
But if the 24/hour were just your Take home pay from the work. That represents a 48K/year job.

24/hour x 40 hours x 50 weeks. Typical 2 weeks vacation (not working) and never any lapses in work.

then pay the tax man + the self employment tax (employers portion of Social Security) and that rate can be comfortable depending on where in the country you are, and perhaps a spouse with income as well.
But 48K/year Gross - isn't the opulent lifestyle the customer is trying to guilt you with.
They probably sit behind a computer and are paid more than that while they type on Lumberjocks…. ;-)


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## jn3Woodworks (Apr 9, 2009)

Mike Gager: the very first place his pricing comes from is his desire to eat and pay the bills. Woodworking is a job; why do you think cabinets cost so much, even when you buy them from Home Depot?


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## veneerguy (May 11, 2011)

I worked for 24.00hr…..... in 1978 as an apprentice carpenter

Now my shop rate is $55.00. non-negotiable or straight bid


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## CDorsey (Aug 7, 2010)

When customers give me grief on a Estimate, I give them my bidding triangle. Three points: Good, Cheap and Fast.
They can pick 2 of the 3 in any combination, but they cant have all 3.


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## Sawkerf (Dec 31, 2009)

I've run into this many times and have a couple of standard responses.

1. Yes, you might find what you want at (where ever), but you also might not. If you can, you should buy it. If not, I'm the guy you need. They make their stuff in lots of thousands and can pass on economy of scale. I make stuff one at a time. I'm going to give you what YOU want. The best that they can do is get close with one of their standard products.

2. Although I NEVER give away my shop rate, I've had folks make pretty good guesses. When they've squawked, I've suggested that they talk to their payroll people and find out what their employer uses for their internal billing rate (i.e. what it actually costs to keep them on the payroll.) They're almost always surprised at the answer.

3. Yes, I'm a retired engineer, but all those years in management taught me how to NOT lose money. This is a business for me, and if I can't cover my costs and make a bit of profit, I don't want the job.

4. If I like the prospective customer, I'll use Chris's response (above). I've closed a couple of deals with that one. - lol


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## woodspark (May 8, 2010)

I NEVER give a breakdown on my price. Just one figure for the job with a detailed description of materials, dimensions, and what is included, eg, finish, installation, delivery if required…..Not a single client of mine knows what my hourly rate is….A little input from another pro woodworker, one in a distant land!


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## Bertha (Jan 10, 2011)

I'm going to incorporate Chris's triangle into my non-woodworking life! "So baby, you want me to do what?...OK, there are three choices of which you have two…." LOL! Thanks Chris!


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## Earlextech (Jan 13, 2011)

I love the guy that called me up and said "I can get this here waterbed at XXX'S for $145, can you build it custom for me any cheaper?"

I said that I couldn't buy the materials for that price. He hung up.

It's been 10 years and I'm just getting over it now.


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## DrDirt (Feb 26, 2008)

I visit the Ashley home center as well as Nebraska Furniture mart in KC and some of the "Gallery" type places - like Eddie Bauer Home and the Ethan Allen Gallery.
Usually check it out online and get just a rough feel for what a cheapie and a "NICE but still mass produced" unit would run.

The Tables i did were that way and I got a good price and no grief because it was in the range of the "Model" they were basing their expectations on, but also was not available - the 12 foot Oak table I posted - is loosly based on a table they saw at Eddie Baur, however they wanted the extension leaves to go into the ends of the table on a canitlever system, and to start at 9 feet and extend to 12, while Eddie Bauer was 6 feet extending to 8.
So my table was 600 dollars more than the commercial unit because it was bigger and unique.


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## TThomas (Dec 16, 2008)

hey thanks again…this all really helps…....got allot of great advise to put to use.. Earlextech I get that allot as well they will show me something out of a magazine and want it bigger then that for less money…I don't get it….
Puzzleman I agree my communication could probable be a bit better…Chris..like the triangle.


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## stnich (May 24, 2010)

It's nice to sit back and exhort on what we should be making in this world where so many people are losing their homes because the job market is so bad among other factors..
Where I live the competition is so tough that you're lucky just to make it to the interview stage in applying for a job or a project. I have had a decent niche for years but the economy has hit it hard. So now I find myself happy just to have some regular work. Granted $24/hr is a wage from decades ago but put in perspective as someone said
that's almost 50K a year. I can't remember that last time I made that kind of money. I used to build houses for a living and in the bidding process would lose a job to a lower bidder by 1%. $500,000 job 1% =$5,000. Was told time and again that the other guy was lower. Could we compare the specs on the proposal please. "No" he's lower than you I'm giving him the job. I finally got out of it and focused on just doing wood working. Less exposure and far fewer headaches. Now because of our lovely economy and once again the "competition" for work, I'm finding that same scenario "he's lower than you I'm giving him the job" I give up.


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## Sawkerf (Dec 31, 2009)

stnich -

FWIW, you can't think of a billing rate as a "wage". Some of it certainly is, but it also has to include the costs of just being in business in the first place (licenses, insurance, taxes, tools, equipment, etc.) One of the most difficult parts of being self employed is calculating a billing rate that - over a period of time - will cover what it costs (your wages plus overhead) to keep the doors open.

If you can't find ways to do that (e.g. reduce expenses, change your market focus, etc.), giving up is the best possible course of action. Sometimes, radical surgery is the only way to avoid bleeding to death.

I've seen more than one guy set up shop charging $25/hour and think that they'll make a killing. A year or so later, they're broke and wondering what the hell happened.


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## stnich (May 24, 2010)

I think my point is that sometimes you may have to just consider that some work whether it's at the prevailing rate or not is a good thing. It's better than just sitting home (assuming you still have a home) and hoping that things will change for the better. I wouldn't likely bid a job thinking $24/hr but sometimes things happen and that's what you get. It's certainly better than nothing. Since most of us are self employed there's no unemployment to fall back on. The original poster said that he wasn't very fast at woodworking. Why should anyone have to pay the prevailing rate for someone who is not producing very quickly. I have a bad back. I sometimes can't work very quickly and will account for that in my quotes or hourly rates. I'm lucky in that my shop is at home in my basement which helps to keep my overhead low. Nice commute to work by the way.


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## becikeja (Sep 12, 2010)

As I was reading this I kept thinking why charge an hourly rate at all. I agree with allmyfingers that the time it takes is irrelevant. The buyer just wants a cabinet. Let's assume for a second that the buyer can get the exact same quality cabinet from 3 woodworkers (I know everyone has their unique talents, but the buyer doesn't know that at this point he's just price shopping). The 1st. woodworker charges $24/hour and it takes him 12 hours. The 2nd woodworker charges $20/hour and it takes him 14 hours. The 3rd. woodworker charges $28/ hour and it takes him 10 hours. Who has the lowest price? At the end of the day all are within $8 of the final out the door labor cost. Which one would the buyer probably go with??? I say, figure out the cost you can reasonably make the end product for, add in a reasonable profit based on the product not your time, and decide if you want to build it. Some products you may make $50/hour and some $10/hour, it's your decision at the end of the day. Remember be a craftsman not an hourly worker.


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## Sawkerf (Dec 31, 2009)

becikeja -

"..... the time it takes is irrelevant." 
Not in my world. Customers who grudgingly accept six weeks to do a small kitchen would show me the door if I told them six months.

"Some products you may make $50/hour and some $10/hour, it's your decision at the end of the day." 
That's true on a day-to-day basis, but if you don't know your "break-even" rate, the end of the year may find you in deep doo-doo.

"Remember be a craftsman not an hourly worker." 
Nice theory, but totally impractical The greatest craftsmen in the world can't practice their craft for long if they aren't aware of the bottom line and charging enough to cover it.


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## Sawkerf (Dec 31, 2009)

stnich -

You're quite correct although I wouldn't be thinking in terms of a "prevailing" rate. Prevailing rate is based on what everyone is charging. The most important rate is the one that YOU need to charge for the job. If that is at (or below) the "prevailing" rate, you're probably in good shape. If you're above it, you need to know why and either find ways to reduce your costs or convince the customers you're worth the added cost.


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## becikeja (Sep 12, 2010)

Sawkerf, you make some interesting comments. Your assumptions seem to be based on the theory that labor is the primary factor in the value you create. I can tell you for certain that a janitor puts in a lot more labor than a CEO. Last I checked the CEO makes a lot more money. I prefer to be paid on the value I bring, not the labor I provide. However, to be fair I'm not a professional woodworker, just a hobbyist. Perhaps the custom woodworking business is driven by a cost up mentality. It is true you must cover expenses (not sure why you would be in business if you didn't) but by working from cost up you limit yourself to the profit that is available. For me, my business is to make money, as much of it as I can, and I refuse to let my costs dictate how much I can make.


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## Sawkerf (Dec 31, 2009)

Those aren't assumptions, they're hard won knowledge based on spending much of my professional life managing businesses - either my own or someone else's.

Until the early 20th century, labor was cheap and technology was expensive. That has switched over the past 40-50 years, and now labor is the biggest component of a price structure.

My posts in this thread, however, are to get the non-hobbyist folks to know and account for ALL of the costs involved in running their business. I've seen far too many people (including myself a long time ago) think that charging $XX/hour was all it took to get on the gravy train.

Working "from cost up" doesn't limit profit, but it ensures that you don't cruise along fat, dumb, and happy until you hit the wall. All jobs should be bid based on what the traffic will bear. If there's a profit in it, then it's a question of what the customer will bear. If it's below your cost, it becomes a question of what YOU can bear.


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## alanealane (Oct 1, 2007)

Just so y'all know how bad the economy is where I live in MI, I gave a coworker an estimate on a simple 2'x2'x2' pine table for them to put next to their entry door in the house. I calculated an hourly rate of $12/hr, yes you read it right…and came to a total cost of around $130. I was really trying to do her a favor more than make a ton of cash, and I still got booted in favor of a $70 walmart table. I even spent the time to draw up a nice plan in CAD software with a materials list for her to see exactly where my pricing came from. People just don't get it. Pay a little more for a quality little table that will last beyond one's lifetime at a steal of a price, or save a tiny bit of money for a piece of cheap veneered mdf that will fall apart as soon as the relative air humidity goes over 70%...

That's how bad things are around here. You can't even do anyone a mega-favor by practically giving them free labor. Oh well…


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## baller (Nov 14, 2008)

the only way it will get better is when the "herd" realizes that nafta/gatt/globalization is only shipping our jobs overseas and turning our manufacturing facilities into tourist attractions, and that we don't Need any of their mass produced crap…i keep hearing that these days, china makes so many things we Need….most of it i would argue is absolutely not a necessity, but a luxury (or non-luxury in their case)...but yea, that's just a pea in the pod at this point, it's all ass-backwards-upside-down 1984 on super-roids now…prepare for hell on earth


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## Loren (May 30, 2008)

Alane, she's not your market. She's probably not very experienced with
having new furniture fall apart in a couple of years and regretting not
spending more for quality.

It's true that experienced buyers of custom furniture are not very
common, and they tend to be affluent.

In the end, you have to position yourself as a craftsperson in such a
way that people DESIRE your stuff and you have no relevant competition
in your local marketplace. It may be your ability to save your clients
money by using cheaper materials and quicker finishes to crank out 
pieces with the look they want at a lower price than other sources 
at similar quality. Most people price-shopping aren't prepared or willing
to pay for nice woods, so you have to talk to them and see how low
they are willing to lower their expectations in terms of the appearance
of the raw material.

Many people have fairly coarse, uneducated tastes in furniture. Simple
pine stuff loaded up with dark, waxy finishes will please them. Shoe 
polish, for example, can be your friend in building the shapes these
clients want at a price that gets them thinking "I can afford this".

Later you may be able to upgrade some of those customers to buying
stuff made of nicer hardwoods with nicer finishes.


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## Puzzleman (May 4, 2010)

To all the persons complaining about customers not spending the money for your product: When talking about a job or product with a customer, you need to find out not just what kind of item they want, you need to find out what they are thinking about in price. Getting this out in the front of the job, will make things easier for you as if they don't want to spend over $100 or whatever low price, you can suggest to them to try local furniture or department stores. 
This serves two purposes. 1. You don't waste time running the numbers if you know that there is no way you will do the job for that little. 2. People are sometimes surprised that you turn down the job right away. I explain that my products are high quality and therefore are more expensive. sometimes they change their mind and will buy.

The most important part of this is to talk to the customer upfront about their expectations of not just wood, design and quality but also talk about price. I am not saying to shoot them a price right away but get a clue as to what the customer is expecting.


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## Sawkerf (Dec 31, 2009)

You couldn't be more right, Puzzleman. Far too many woodworkers (and others, as well), never really grasp the idea that the paying customers usually have a much different agenda. They (we) really get into fancy joinery and other "craftsman-like" ideas that the folks with the checkbook usually don't care about.

My favorite example of this is dovetailed drawer boxes. As much as I think that they're really neat, attractive, etc, I've NEVER had a customer request them, or want them when I told them the price difference. Only a handful have even known what they are!! - lol

Anyone trying to actually make money at this business needs to work with the customers to determine what THEY perceive as value and will pay for.


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## degoose (Mar 20, 2009)

I just had the brakes on the shop ute done… and the charge was AU$94.00 per hour and the apprentice did the work….go figure….


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## Puzzleman (May 4, 2010)

Sawkerf, You are so right about the dovetail drawers. The rule here is: Whoever has the money is in charge of the order. In my shop, if a customer wants something extra or a change to the product line, I can do that. There will be a charge which is communicated up front. Then the customer makes a decision as to if they want to make the change or not.

In my business field, I am the highest prices of all my competitors. I tell customers they will pay me more than the other guy down the street. I also tell them why my product is worth the extra cost. Not all people buy from me and I am OK with that. Gives me more time to work with the people that do buy from me.

There is nothing wrong with telling a customer that this order is something you can't or won't do.


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## Chipy (Apr 20, 2011)

TheDane is spot on I am sorry to get up on a soap box here but We in this country complain about high prices and shop at Wall mart buying foreign made clothing and god knows what else. We complain to the guy that buys a Honda when its probably made in Ohio "well I only buy domestic cars like Chevy or a Ford" well guess what, most of the parts are made out of this country. We are starting to price out of the market guys that brake their attachments to build handmade stuff !You pay for what you get. A penny wise and a pound foolish and all that crap.Bottom line we talk a good game but are cheap.


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