Hey everyone, first post here.
I recently opened custom furniture business. I run a one-man shop, part-time from my garage, and have put in a few quotes recently however I'm struggling with being "comfortable" with my price in terms of what others might charge in my market. To determine my rate I use the following method:
materials + labor ($35/hr) + overhead (20% of labor) + profit margin(40-50%) = minimum sale price
The major thing is when I get a price I'm comfortable in saying I need that much to make a the job worth it to me, but what I don't know is if I'm over valuing my time and the finished piece. So what I end up doing is checking places like Etsy, Crate & Barrell, Pottery Barn, West Elm and Restoration Hardware. Understanding that Etsy varies drastically on the same piece and the other higher end retailers can still be cheaper than me due to their volume. So I'm still left slightly uncertain.
I would appreciate any advice you have on researching your local market when pricing out a job. Also if you have a standard shop rate what that typically is as well as your standard profit margins. I originally was at 20% but after researching further I had seen a few places online talk about 30% and some even 40-50% to really help grow the business at a decent rate.
I also read that if you get every job you bid on then your price is too low. I'm just struggling to see if I don't get any jobs, does that mean my prices too high or my potential clients expectations unrealistic.
For context, I'm primarily focused on custom furniture and cabinets on occasion in and around the Cincinnati, OH area.
Thanks in advance for your help.