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Pricing your work

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Forum topic by kevinruiz posted 07-27-2018 03:35 AM 1419 views 0 times favorited 14 replies Add to Favorites Watch
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kevinruiz

66 posts in 2342 days


07-27-2018 03:35 AM

Topic tags/keywords: question resource walnut carving turning

Does anybody have a formula or a website that could help me price my work. I feel very uncomfortable doing it sometimes. I have not sold many of my pieces but lately have been asked if I would.


14 replies so far

View Rich's profile

Rich

4491 posts in 983 days


#1 posted 07-27-2018 04:38 AM

It’s really a matter of what the market will bear. Beyond that, it’s a crap shoot.

Some say 4X the cost of your materials and I use that sometimes. However, for my residential doors I have a sheet that calculates cost of lumber based on dimensions and bd ft pricing. I add a constant to that, since a door is a door regardless of what it’s made of.

The bottom line is I don’t think you can apply a formula to it. There are too many variables.

-- Knowledge is not skill. Knowledge plus ten thousand times is skill. -- Shinichi Suzuki

View GaryCK's profile

GaryCK

48 posts in 443 days


#2 posted 07-27-2018 11:41 AM

WWGOA suggests the 4X material costs as a starting point.

https://www.wwgoa.com/article/how-to-price-projects/

-- Gary, Wisconsin

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bondogaposis

5414 posts in 2745 days


#3 posted 07-27-2018 12:13 PM

It depends on what you make, but for small items I look at Etsy. I see what similar items are going for and develop a range of prices then try to see where my work falls based on the quality of mine compared to the quality on Etsy. Then knowing the time I put in and the cost of materials I set my price. There is a lot o gut feeling that goes into it.

-- Bondo Gaposis

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jonah

2075 posts in 3692 days


#4 posted 07-27-2018 01:53 PM

Aside from looking for price comparisons for similar work, no website is going to help you. Start with the cost of materials, then compute how much labor you put into it. Multiply hours times an hourly rate. Add that to the materials cost.

Then compare with similar work and see if you’re high, low, or in the middle.

View clin's profile

clin

1035 posts in 1390 days


#5 posted 07-27-2018 03:16 PM

At a minimum you should calculate your cost in materials, consumables, and wear and tear on your equipment. Then add on your labor using a wage that is the minimum you want to be working for. Don’t forget overhead both costs and labor. Time spent ordering and buying materials is part of your labor. If you don’t do this you run the real risk of selling at a loss.

Also, don’t fool yourself that there is no cost to running, for example, your table saw, because you’d have one anyway for your hobby. You’ll still wear out blades and the table saw will need maintenance that much sooner.

This gives you your minimum selling price. Then as said it becomes what the market will bear. Don’t fall into the trap of being embarrassed to charge what you want. Seems a lot of people think this way. Also, don’t think the price has to be low enough that you’d buy it. You make them, so your perspective is that you can make that yourself. But you’re selling to people who wouldn’t make their own.

There’s a saying about the price of goods and services. If you never lose sales because your price is too high, then it means your price is too low.

-- Clin

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Woodknack

12810 posts in 2774 days


#6 posted 07-27-2018 05:15 PM

The drawback to multiplying material cost is your pay rate can jump up and down for the same work. If table A is pine and table B is walnut; your labor will be the same but get paid less for the pine table. And around here, some wood species change price month to month so your prices will be inconsistent. I sell custom products and charge materials + labor + overhead + profit. This puts me in the ballpark of other companies doing the same work. If you are just selling a few pieces on the side for fun, I would probably just charge labor + materials. If it takes you half a day, or 3 days labor, what is that worth to you? + materials. I personally don’t mark up material cost but I don’t pass discounts to the customer, so if I’m getting a 15% discount, that goes in my pocket.

-- Rick M, http://thewoodknack.blogspot.com/

View JCamp's profile

JCamp

981 posts in 944 days


#7 posted 07-27-2018 05:40 PM

What are you trying to build? I’d think pricing for nicknacks that you can sell at a craft show will b largely different than building a house

-- Whatsoever thy hand findeth to do, do it with all thy might

View JAAune's profile

JAAune

1864 posts in 2710 days


#8 posted 07-27-2018 06:05 PM

Factor in overhead, materials, labor, taxes and the desired profit margin. That’s the price. If you can’t get it, either figure out how to build faster or look for a better product/service to market.

-- See my work at http://remmertstudios.com and http://altaredesign.com

View Jeffery Mullen's profile

Jeffery Mullen

355 posts in 3211 days


#9 posted 07-28-2018 10:12 PM

I agree with all the above guys.
what saves me is I have a real nice cabinet shop near by that through s away large waste of oak plywood & other good stuff I can use for my small crafts , also I hunt on the free list on Craig’s List for free wood and or lumber, you would be surprised what people want to get out of their garages and back yards, companies give free pallets away as well when needing 2×4’s for furniture. who said you have to go with new wood from a lumber yard for projects. Most the time my cost is my ware and tare and hard ware & time spent making them, searching for wood and going and getting the wood at very us places. and putting the projects together, my profit is at 80 % when I get free wood and make my projects and sell them . I like this rout as I haven’t much money to go buy expensive wood any ways.

from Lumber Jock Jeff.

-- Jeffery Mullen

View TungOil's profile

TungOil

1261 posts in 888 days


#10 posted 07-29-2018 01:21 AM



... I sell custom products and charge materials + labor + overhead + profit….

- Woodknack


This is the best way to price, with the exception that if the ‘what the market will bear’ price is higher you should go with that instead (which is simply the equivalent of a higher profit multiplier).

-- The optimist says "the glass is half full". The pessimist says "the glass is half empty". The engineer says "the glass is twice as big as it needs to be"

View Charlie H.'s profile (online now)

Charlie H.

360 posts in 1044 days


#11 posted 07-29-2018 02:05 AM

I looked at your projects, you do nice work.
All I can say is if you are going to start selling it is to not give it away.
Doing some kind of materials multiplication to arrive at a selling price seems like a very odd way to price anything to me.
I think you have know the actual hours in a product and the real cost of materials including things like sandpaper, paper towels, and disposable gloves.
Decide what your hourly rate is going to be and charge that rate, plus all material costs with a mark up on it too.
If you can’t sell anything pricing it this way then you can always lower your hourly rate, but at least you will know what you are actually getting.
Of course I have never sold anything and probably never will because I just have to many hours invested in all my projects.

-- Regards, Charlie in Rowlett, TX --------I talk to myself, because sometimes I need expert advice.---------

View splintergroup's profile

splintergroup

2696 posts in 1616 days


#12 posted 07-29-2018 02:27 PM

I sell most of my stuff, but I’m not trying to make a living from it.
I do keep detailed notes on every project. I grab a board, I note the board footage and “bill’ this to the project, scrap and all. I have charges figured for finishes and “tooling” which includes sandpaper, blade/bit wear, power, etc. Odds/ends like hinges are easy since I know what I paid (keep the receipts).

From these totals, I think up a price based on what the local market will pay and this becomes my profit (basically what I’m paid for labor/time). This portion is meager (very meager!) when all is considered, but I know it is where I can increase value for different markets and as my skill and recognition increases.

Since I do operate as a business (actually as a subsidiary of my wife’s glass business), it is all invaluable for tax considerations.

View Noggle's profile

Noggle

2 posts in 3045 days


#13 posted 08-01-2018 07:26 PM

Check out the podcast “Made for Profit”. The have some thoughts on the subject on a couple of their shows. Also, check out the blog www.holzwerk.us. I just did a couple of posts on the topic, too.

View DrDirt's profile

DrDirt

4558 posts in 4136 days


#14 posted 09-06-2018 05:03 PM

Agree with the above, but would add, that you need to factor in what your speed and skill level is, as well as your tooling.

Everything IKEA, or Factory made, isn’t “Junk”....and everything an individual makes in their garage, is not superior craftsmanship.

You need some comparable items. I did some painted kids beds… so I did not look at Big Lots, or Ashley…. but the prices for decent products sold at Pottery Barn. like this:

Key considerations are also timing…. e.g. Someone wanting to furnish their kids bedroom, can just order online and get the product in a very short time.

Skill – - If a “seasoned veteran” who already has all the jigs, and a lot of experience… can make 5 items per week, and you, working evenings/weekends can only make 1 per week… doesn’t mean you charge the same for your time.

In the end – there are rule of thumb formulas… but the market decides what it will pay…. for a lot of stuff you are competing against products made by folks making 7 dollars a day….and a lot of consumers are OK with that, otherwise Nike, Walmart, Harbor Freight and a host of other companies would not exist.

Time/convenience will be key – - you have to find the customer that will chose to work with you instead of using their phone and having the product shipped 2 day via Amazon prime.

-- “The two most important days in your life are the day you are born and the day you find out why.” Mark Twain

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