Q.
Every so often someone asks the question “What should I charge?” only to have everyone reply in virtual unison: “It depends”. Now, at last, there is some documentation on just why “It depends”. Check out the October 2001 issue of Cabinetmaker magazine. In it there is an article where they priced out several different projects by twenty shops around the country. The results are a real eye opener.
For example: A clear alder kitchen was bid at $16,500 from an outfit in Indiana. The identical job came in at over fifty grand from a company in Washington State. A mahogany library got a low bid of $9,600 and a high bid of $41,000. A church lecterns bid ranged from $470 to $4,500. An oak kitchen went from $5,300 to $22,000. In each case, all bids were pretty evenly spaced between the high and the low.
Forum Responses
I think these comparison studies would be far more useful if they could somehow include an index of what it costs to live where you build these cabinets.
My shop is in Seattle. I ran an employment ad several times last year, offering $1000 a week to start. One applicant (I think from Oklahoma) concluded that life was better where he was, at $10 an hour. As I recall, he could buy the house he was living in for around $40,000. A similar house in my town would cost $400,000.
You need to know your costs and know what you want to make on the job. Then you'll be profitable. It does take some effort. But could you ever imagine being a general contractor and bidding jobs the way you do now? If not, it's time for you to change the way you price your work.
For instance, if one cabinetmaker works alone with low end tools and high piece pricing for wood stock, while doing excellent detailed work, he may have to charge an extremely high price. Then there's the longer time to fabricate along with his possibly inflated hourly labor rate for being a "craftsman".
Another cabinetmaker may purchase stock P2S by the multiple MBF and reduce his cost of stock, have several presets and higher capability tooling. He can run the cabinetry more efficiently through the shop, saving much more money on individual jobs still working to the blueprints. Doing more jobs to make the same profit margin with more employees. An example may be commercial hot glue capability rather than white glue and clamps... a few minutes or all day?
From this I can do the math and figure the average time per door, drawer and case, etc and apply it to future bids. I have established a similar method for materials. Keeping track of time this way has more advantages than for bidding. It can determine equipment upgrades, outsourcing and keeping an eye on employees (it shouldn't take 5 hours to build one drawer). This has helped me a great deal - some estimates have come within 3 hours of actual time taken.
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