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Pricing

4/24/15       
African man

I will like you all to share with me how you do you pricing in the business. E.g, kitchen cabinet, wardrobes, entertainment unit, wall paper, upholstery etc .

4/24/15       #2: Pricing ...
Larry

Figure out your costs, add your desired profit, adjust your methods if needed to be competitive.

4/24/15       #3: Pricing ...
David Waldmann  Member

Website: vermonthardwoods.com

Charge as much as you can, but make sure that, at the least, you're making a profit.

4/24/15       #4: Pricing ...
jim

Also track time with basic operations. Face frames, cut out job, assembly etc. If you have a smart phone use the stop watch for tracking time. This will help you when you have your cost calculated and bid projects.

4/25/15       #5: Pricing ...
ZDRAFT.COM Member

This is a very broad question – but what it seems you are asking is “ How are each of the Posters pricing their jobs” .. not “How should YOU be pricing your jobs”
Formulas are reflective of real costs and regional / seasonal factors.
Different shops will use different formulas that are basically evolved by their experience.
Ultimately each shop / business wants to achieve a formula that is efficient, cost effective and meets the profit criteria required by the business to survive.
A couple of years ago a very profitable 40 year old millwork shop in British Columbia area was purchased by a very corporate type of partnership and they tried to formulate pricing via a very technical and analytical process – unlike the original owner who had an informal and variable - price per foot rate.
Two years later the company couldn’t sustain itself because (along with the other 10 reasons ) – the pricing was off and not reflective of changing market conditions.
Pricing is very personal to each company.

4/26/15       #6: Pricing ...
Joe  Member

Website: RodriguezCabinets.com

that is a tough one, so hard to "predict" how long a job will take down to the hour.we use a per foot pricing,needless to say it varies through out the year and per customer/market.
not sure how many people do this, but it almost seems by design for me.during our busy season,we accumulate some over stock on supply.when its slower and the remodel market comes out of hibernation,we typically get beat down on pricing pretty bad.at this point we can "compete" because some of the material needed for those jobs is already covered.in a way it seems unethical because the prior customer has kind of payed for the latter ones....as I have learned lately , the more automation and systems in place , the more predictable your build cost will be....

one thing i have been curious about is ,what the percentage of payroll costs are against the net sales per region...
anyone care to share,i think its a more comprehensive way to approach the OP's question.
in my case,we're about 25%,keeping in mind i still do much of the work and about 80 hours (off the payroll account).about 1/2 and 1/2 office shop time...

4/27/15       #7: Pricing ...
David Waldmann  Member

Website: vermonthardwoods.com

Payroll percentage is a good guide, but you need to clarify what "payroll" means.

Is it Gross Pay? Or is it fully burdened (including payroll taxes, WC insurance, benefits)?

Also, as you've alluded to, no matter how small the shop, there is overhead. In a large shop, the person that only answers the phone wouldn't be considered direct labor (and it's not), but does a one/two man shop recognize that the time spent not on the floor being productive is also not direct labor?

Unless those factors are accounted for in the same way, "payroll" could vary widely in mirror image shops.

4/28/15       #8: Pricing ...
Joe  Member

Website: RodriguezCabinets.com

i would figure every cent spent toward having employees ,even if it means you have to take them out to lunch or cater their meals to keep them...

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