The topic of how to price your work comes up all over the woodworking
forums. Everybody has a different opinion on how to go about it, and
rarely are they sufficient.
When I first started out building
furniture, I was happy just to get a few dollars to cover the cost of
the materials and have a little left over to buy a new tool. After all,
at that time woodworking was more of a hobby than a means to provide for
my family. Pricing my work in this manner was a great way to build my
experience and to increase my tool collection. It did have a down side, I
never really made what I would call "good money" at least not enough to
compensate for the time I had invested in each project. I justified
this by telling myself "it's just a hobby, I'm still learning the craft,
and I'm not a professional so why would anybody pay full price for my
pieces."
However, that got me thinking, what was "full price" and
how do you decide what full price is for a custom made piece of
furniture? When I decided to get more serious about selling my work, I
had to answer that question and come up with a better way to price my
work.
At the time, I was still working for another company as a
salesperson, selling flooring products. In my sales position, I was paid
by commission. The commission was figured by what the profit margin was
on each sale. Naturally, I started to use a percentage markup, as a way
to figure my pricing for my. Most of the products I sold at work had a
50% markup on them, so I used that as my benchmark for my pricing.
This
worked great when I was building furniture out of a moderately priced
wood, such as walnut or maple. However, when I built something out of a
cheaper wood like pine, I made very little for the time invested. On the
other side of the spectrum, when I built projects using more expensive
exotics, the final price was so expensive, it was hard to justify the
price to my customer.
To solve this I decided to figure my
materials and labor separately, and charge by the hour for my labor. The
challenge I had was determining how long it would take me to build each
piece. As a custom furniture maker, I rarely made the same piece twice,
and each piece had varying degrees of difficulty. One bed could take 30
hours to make, the next bed could have a ton of spindles to cut and
take 50 hours.
It became apparent; I needed a better benchmark to
gauge how long the different woodworking process I used to build the
furniture would take.
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