Strategies for pricing your custom woodwork

The topic of how to price your work appears on all woodworking forums. Everyone has a different opinion on how to do it, and they are rarely enough.

When I started building furniture, I was happy to get a few dollars to cover the cost of materials and have a little to spare to buy a new tool. After all, at that time carpentry was more of a hobby than a means of supporting my family. Pricing my work this way was a great way to build my expertise and grow my collection of tools. It had a downside, I never really made what I would call “good money”, at least not enough to make up for the time I had invested in each project. I justified this by saying to myself “it’s just a hobby, I’m still learning the trade and I’m not a professional, so why would anyone pay full price for my pieces?”

However, that got me thinking, what was the “total price” and how do you decide what the total 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 find a better way to price my work.

At the time, he was still working for another company as a salesman, selling flooring products. In my sales position, I was paid on commission. The commission was calculated according to the profit margin of each sale. Naturally, I started using a percentage margin, as a way to calculate my price. Most of the products I sold at work had a 50% markup, so I used that as a benchmark for my prices.

This worked very well when you were building furniture with a moderately priced wood, such as walnut or maple. However, when I built something with a cheaper wood like pine, I did very little for the time invested. On the other end of the spectrum, when I built projects using more expensive exotics, the final price was so expensive that it was difficult to justify the price to my client.

To solve this, I decided to calculate my materials and labor separately, and charge by the hour for my work. The challenge I had was determining how long each piece would take to build. As a manufacturer of custom furniture, I rarely made the same piece twice, and each piece had varying degrees of difficulty. One bed can take 30 hours to make, the next bed can have a ton of shafts to cut and take 50 hours.

It became apparent; I needed a better benchmark to measure how long the woodworking process that I used to build the furniture would take.

To create this benchmark, I kept track of how long it took me to complete each task while building the project. For example, I timed how long it took to cut the mortise and tenons, sand and finish, etc. Now, I know what you are thinking. A mortise for a small spindle takes less time to cut than a mortise on a large bed frame leg. What I am looking for is the average. For example, how long does it take me to cut a matching mortise and tenon?

If I time all the mortises and tenons I cut in the last year, I think it would be safe to say that I could cut another one in about the same time. The key to having an accurate average is keeping track of your time on as many projects as possible. The more you build, the larger the data set you will have and the more accurate you can estimate the time it takes to build the different projects.

Now my offers are much more accurate and fair for my clients and me. Once I complete my shop drawings, I count all the mortises and tenons, multiplying them by my average time and the hourly shop rate to determine the charge for that part of the project. I do this for all the tasks needed to complete the project, I add them all together with the cost of the material. So I have come up with a precise offer.

Now the only problem left for me in developing this pricing structure was what to charge as an hourly rate. I’m sure everyone would love to make over $ 100 an hour, but if you’re not a well-known carpenter, like Sam Maloof, you can sell a single chair for $ 10,000. You may have to settle for a lower hourly rate. Be honest with yourself and ask yourself how much you would pay as an hourly rate for the type of work you do. Plug that number into your formula and compare it. See what other furniture manufacturers in your area are charging for similar designs and quality. So ask yourself. Are you in the ballpark? Can you justify a higher price with better quality? Can your target market pay what you are charging?

If your price is much lower, then you can afford to give yourself a raise. If, on the other hand, your price is higher than the market can bear, you will have to determine why. Are your expectations of what you want to be paid realistic? If so, you may need to find better processes to build your creations faster. Maybe you need a better set of chisels that stay sharp longer, thus reducing the time spent on sharpening. Maybe you need to analyze your work ethic. Distracted by text messages and Facebook notifications while working? Working efficiently will always maximize your earnings and your time.

Adam Savage of Mythbusters once said, “The only difference between science and play is writing the data.” So don’t waste time, keep track of your time and materials, and organize the data to create a benchmark that you can use to price your work accurately.