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#1
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What do you charge then?
Hi,
If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! Cheers, Sam |
#2
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"Sam Berlyn" wrote in message
... Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! Cheers, Sam IMHO, the answer is "whatever the market will bear". How long it takes you doesn't enter into the price, AFAIC. You can use that to decide whether it's worth your time to do it, but shouldn't have an impact on the price. So, it comes down to what would a handcrafted bookcase made of similar materials and of a similar quality go for on the open market? todd |
#3
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Sam,
Here is my "general guidelines" for pricing. Cost of materials + 20% for handling, example 10 bf oak @ 3.00/bd ft = $30.00 X 1.2 = $36.00 USD Time in shop X hourly rate for example 3 hours @ 40 USD/hr = $120 USD Then I add the two together = $156 for my wholesale price and I double this for my retail price = $312 USD. You will get all sorts of suggestions about rent, cost of tools etc. but for me this system will get you started. -- Rumpty Radial Arm Saw Forum: http://forums.delphiforums.com/woodbutcher/start - - - - - - - - - - - - - - - - - - - - - "Sam Berlyn" wrote in message ... Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! Cheers, Sam |
#4
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On Sat, 4 Dec 2004 19:41:56 -0000, "Sam Berlyn"
wrote: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! Cheers, Sam what are your skills worth, per hour? it may sound like a smartass question, but it's not- the answer varies a lot by location. |
#5
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"Sam Berlyn" wrote in message ... Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. How much do you want to earn? Is the customer willing to pay that? Very simplified, it is material cost plus labor. So lets step through it a bit. Material cost is the cost of wood, of course. You must also factor in glue, screws, dowells, and things you may already have on hand. You may use only a portion of a bottle, but it is still a cost you paid. Experience often tells you how much to factor in. You must also account for waste. You can't ask the customer for extra if you screw up a piece and have to buy more wood, but yoiu will damage some. An allowance is usually factored on all jobs, even those where there is no waste due to your error. Labor will vary. For a business, you must pay either yourself or your worker a wage per hour. Since you are a beginning woodworker, you will earn less per hour. Work it backward. A bookcase is frth $100. Of that, $30 is material, $70 is labor and it takes a skilled experienced craftsman 5 hours. That works out to $14 per hour. Since you are new at this, it may take you 10 hours to complete the project. Your customer may only be willing to pay that same $70, so you can only earn $7 per hour. In a business, you must also factor in time to go get the wood, insurance cost, unilities, sales commissions, supplies, taxes and many other little items |
#6
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how much would you charge?
1. Know your bottom price based on your own determination. This can vary depending circumstances. Sometimes it pays to do something that will lead to other things. 2. Know what you want to get for the job, again based on what it's worth to you. 3. Most importantly, never underestimate what someone is willing to pay. Before you answer the question,"how much do you charge?" Ask,"what are you willing to pay?" Followed with," let me get back to you with a price." |
#7
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On Sat, 4 Dec 2004 19:41:56 -0000, "Sam Berlyn"
wrote: how much would you charge? They usual answer is "not enough" I would think you charge on a per job rate, or is it hourly? If you don't want to starve, you charge hourly, and you choose work where you can do this. Installing junk MDF shelves pays better than veneering and french polishing. The reason is simple - one of them is done "on site" and the client sees you there, sees you working for a few hours, then pays you for your _time_ at a reasonable rate. Skilled benchwork however is unseen, and unseen work isn't valuable. Spend a couple of days making a table and their first response is "It's just like the one I saw for £25 in Ikea". I was recently offered a job by a local kitchen fitting company - fairly well known, reasonably high-end. They saw some work I'd done with inch thick solid oak tops - low budget, but we had the materials for free and it was a good piece of work. Then the guy offered me the same as the rest of his crew - £6/hour. I politely pointed out that shelf stacking in Lidl's supermarket was paying £7, and I'm proud to say I chased him from the workshop with something sharp. Say the materials cost £15 and it took 5 hrs, how much would you charge. There's a saying in the craft market of "three times materials" as a rough rule of thumb. Now obviously this is crazy - woodturning might begin with green local timber for free and just your skill, some simple jewellery work might be an hour setting a £500 stone into a £100 factory-made ring mount. But it's not bad when you can't think of anything better. As a comparison figure, try asking a plumber or electrician how much to change a tap. Even allowing for the callout / workshop difference, you will get a huge hourly rate from them. Why should woodworking be any less ? Unless it's tiny, your materials are more than £15 too. Don't forget the finishes (and the rest of the tin that you waste), the consumables (glasspaper) and the electricity of heating. Ikea's cheapest bookcase is something like £45, and that's just chipboard (I have several, as I can't buy timber for that little) -- Smert' spamionam |
#8
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If you want to lose money on the job, charge 3x the material cost. ie. is it for a family member where profit doesn't matter? If you want to break even on the job, charge 4x the material cost. ie. is it for a friend that asked you to build it as a favor? If you want to make a living doing the job, charge 5x the material cost. ie. is it for a customer? In the case of a 13 yr old, perhaps ask them to help and don't charge them anything...maybe it will stir their inner woodworker. mikey. Sam Berlyn wrote: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? I would think you charge on a per job rate, or is it hourly? Say the materials cost £15 and it took 5 hrs, how much would you charge. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! Cheers, Sam |
#9
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"mikey" wrote in message
If you want to lose money on the job, charge 3x the material cost. ie. is it for a family member where profit doesn't matter? If you want to break even on the job, charge 4x the material cost. ie. is it for a friend that asked you to build it as a favor? If you want to make a living doing the job, charge 5x the material cost. ie. is it for a customer? In the case of a 13 yr old, perhaps ask them to help and don't charge them anything...maybe it will stir their inner woodworker. Actually, and IME, this is pretty close to the truth ... if there is such a thing in this regard. -- www.e-woodshop.net Last update: 11/06/04 |
#10
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Swingman wrote:
"mikey" wrote in message If you want to lose money on the job, charge 3x the material cost. ie. is it for a family member where profit doesn't matter? If you want to break even on the job, charge 4x the material cost. ie. is it for a friend that asked you to build it as a favor? If you want to make a living doing the job, charge 5x the material cost. ie. is it for a customer? In the case of a 13 yr old, perhaps ask them to help and don't charge them anything...maybe it will stir their inner woodworker. Actually, and IME, this is pretty close to the truth ... if there is such a thing in this regard. Even when charging 3X the material cost somebody always comes along and underbids me......... I just have to say to myself..."they are getting what they are paying for" but it sure makes it difficult to earn a living as a wood dorker. Gary |
#11
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"GeeDubb" wrote in message
... Even when charging 3X the material cost somebody always comes along and underbids me......... I just have to say to myself..."they are getting what they are paying for" but it sure makes it difficult to earn a living as a wood dorker. Gary This is why I shake my head wondering after reading all of these responses of cost-based pricing if anyone has been exposed to manufacturing. Prior to embarking on my current career of playing with computers, I worked for 7 years as a design engineer for a manufacturing company in a highly competitive marketplace. I can tell you that the whole concept of pricing your product based on your costs is wrong. The only consideration (as you're seeing) when pricing your product is what the the market bears. As I said in an earlier post in this thread, the only way that relates to your cost is that after subtracting your costs from that price, are you willing to work for that much money? Using a 3X or 5X rule of thumb is OK when you're either unsure of the market or no market has been established, but once you get some market experience, it's pretty meaningless. todd |
#12
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Todd Fatheree wrote:
"GeeDubb" wrote in message ... Even when charging 3X the material cost somebody always comes along and underbids me......... I just have to say to myself..."they are getting what they are paying for" but it sure makes it difficult to earn a living as a wood dorker. Gary This is why I shake my head wondering after reading all of these responses of cost-based pricing if anyone has been exposed to manufacturing. Prior to embarking on my current career of playing with computers, I worked for 7 years as a design engineer for a manufacturing company in a highly competitive marketplace. I can tell you that the whole concept of pricing your product based on your costs is wrong. The only consideration (as you're seeing) when pricing your product is what the the market bears. As I said in an earlier post in this thread, the only way that relates to your cost is that after subtracting your costs from that price, are you willing to work for that much money? Using a 3X or 5X rule of thumb is OK when you're either unsure of the market or no market has been established, but once you get some market experience, it's pretty meaningless. todd I agree. I did say that when I charged an amount equivalent to the 3x material cost I often get underbid and they customer gets what they pay for. I can't count the number of times I've been called back to fix the work of the lower bidder. At this point I charge t/m to fix the job with a 50% estimate up front. All of my work is referrel but even with that I'm usually not the chosen contractor but often the one that fixes the work later. The guy that stated that 3x material cost will result in losing money is still correct in the market I'm in (and most any other market) and I'm not willing to work for that little. It doesn't pay the bills. The past 15 years has seen labor costs drop (Phx, AZ), material prices rise and competition escalate but quality is gone. Unfortunately the economy has become one of disposable products and quality seems to be much less important than cost (i.e., electronics/other from China). Guess this is why I'm currently working two jobs......to pay the bills. Gary |
#13
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"GeeDubb" wrote in message
... I agree. I did say that when I charged an amount equivalent to the 3x material cost I often get underbid and they customer gets what they pay for. I can't count the number of times I've been called back to fix the work of the lower bidder. At this point I charge t/m to fix the job with a 50% estimate up front. All of my work is referrel but even with that I'm usually not the chosen contractor but often the one that fixes the work later. The guy that stated that 3x material cost will result in losing money is still correct in the market I'm in (and most any other market) and I'm not willing to work for that little. It doesn't pay the bills. The past 15 years has seen labor costs drop (Phx, AZ), material prices rise and competition escalate but quality is gone. Unfortunately the economy has become one of disposable products and quality seems to be much less important than cost (i.e., electronics/other from China). Guess this is why I'm currently working two jobs......to pay the bills. Gary I can't disagree with any of that. It's a sad state of affairs, but it's tough fighting the system. The only thing you can do is be flexible and be willing to walk away from it if it (at least as a money-maker) becomes economically infeasible. todd |
#14
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"Todd Fatheree" wrote in message
This is why I shake my head wondering after reading all of these responses of cost-based pricing Keep shaking your head because you missed the point completely. I did not say that was THE way to price, but just how often it turns out to be the case when you go back an figure it up. I can tell you that the whole concept of pricing your product based on your costs is wrong. LOL ... IME, there is as much "wrong" with that statement as there is in using it solely for a business philosophy. -- www.e-woodshop.net Last update: 11/06/04 |
#15
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"Swingman" wrote in message
... "Todd Fatheree" wrote in message This is why I shake my head wondering after reading all of these responses of cost-based pricing Keep shaking your head because you missed the point completely. I did not say that was THE way to price, but just how often it turns out to be the case when you go back an figure it up. And I could give many examples of when it's wrong. I wasn't responding to your post anyway. But I see lots of other posts talking about starting at figuring out your material cost plus some cost of labor to arrive at a price. I can tell you that the whole concept of pricing your product based on your costs is wrong. LOL ... IME, there is as much "wrong" with that statement as there is in using it solely for a business philosophy. Well, it doesn't much matter what you (or I) think. In a capitalist economy, that's the way it works. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. If you want to enlighten us on why that is wrong, feel free. todd |
#16
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"Todd Fatheree" wrote in message Well, it doesn't much matter what you (or I) think. In a capitalist economy, that's the way it works. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. If you want to enlighten us on why that is wrong, feel free. The market will determine the selling price, but if you don't know your costs, you can be in big trouble very fast. I've seen big companies sell products at what the market demands and they no longer exist. If you know your costs, know that selling price is less than cost, you find a new product before it is too late. The market price for some items my company makes has been driven down very low. We decided to no longer participate. Our largest competitor (in that market) had a big grin as they gobbled up most of the business. Two weeks ago they closed the doors. Suddenly, the market does care about our costs and is willing to pay more. |
#17
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"Edwin Pawlowski" wrote in message
news "Todd Fatheree" wrote in message Well, it doesn't much matter what you (or I) think. In a capitalist economy, that's the way it works. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. If you want to enlighten us on why that is wrong, feel free. The market will determine the selling price, but if you don't know your costs, you can be in big trouble very fast. I've seen big companies sell products at what the market demands and they no longer exist. If you know your costs, know that selling price is less than cost, you find a new product before it is too late. The market price for some items my company makes has been driven down very low. We decided to no longer participate. Our largest competitor (in that market) had a big grin as they gobbled up most of the business. Two weeks ago they closed the doors. Suddenly, the market does care about our costs and is willing to pay more. I never said you shouldn't know your costs. In my first post in this thread, I said you had to know your costs to be able to calculate profit to determine if the product is worthwhile for you financially. Hint: the market still doesn't care about your cost. It's reacting to a change in the competitive landscape. If your material cost went up 10% tomorrow, could you just tack on 10% to your price? If you gave your employees a 25% raise could you increase your product price commensurately? I doubt it. If someone else came along next week willing to sell the product for the same price your competitor was selling it at (albeit at a loss), where do you think the market would set the price? Presto, once again the market doesn't care what your costs are. Would the other company be foolish to do so? Probably, but the market doesn't care. todd |
#18
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In the case of a 13 yr old, perhaps ask them to help
and don't charge them anything...maybe it will stir their inner woodworker. for a 13 year old? i would require that the kid actually do the work and supply the materials...i would then supervise him using your tools so he learns, the job gets done, and your tools aren't destroyed...hopefully! if you don't have the time; then point him/her to someone that you think might have the time, etc. guilty conscience bothering you? help the kid anyway. but make sure the kid learns. rich |
#19
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"Todd Fatheree" wrote in message
I never said you shouldn't know your costs. You might not have meant it like it reads, but you clearly said price should not be a _basis_ for cost, and that is simply not true: I can tell you that the whole concept of pricing your product based on your costs is wrong. You ALWAYS use "cost as a basis for price" in some manner, if you want to stay in business that is. AAMOF, "basis" is the operative word here. You had better know PRECISELY how much your widget cost to get to market before you set a price and that _is_ using cost as a "starting point" and "basis" for price. If your widget cost you .50 cents in materials, labor and overhead to market, you damn well better not plan on selling that widget for .50 cents or less if you want to be profitable. After that point a myriad of other economic pricing factors come into play, just a couple being "what the market will bear", competition, and economy of scale. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. Don't give up your day job. -- www.e-woodshop.net Last update: 11/06/04 |
#20
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I would definitely WORRY about letting a 13yo use my power tools. If
he was injured, you can pretty much count on being held liable for the injury. Personally, I would quote him a price based on mateirals and TIME, and then decide how much to charge for your labor (or not charge as the case may be) John On Mon, 06 Dec 2004 08:33:33 GMT, "res055a5" wrote: In the case of a 13 yr old, perhaps ask them to help and don't charge them anything...maybe it will stir their inner woodworker. for a 13 year old? i would require that the kid actually do the work and supply the materials...i would then supervise him using your tools so he learns, the job gets done, and your tools aren't destroyed...hopefully! if you don't have the time; then point him/her to someone that you think might have the time, etc. guilty conscience bothering you? help the kid anyway. but make sure the kid learns. rich |
#21
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#22
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The boy is right - cost is not a basis for pricing in a competitive
marketplace. Knowing and controlling costs is a requirement to make a profit and stay in business over the long run, but is definately not a factor in setting price in a free market. jim "Swingman" wrote in message news "Todd Fatheree" wrote in message I never said you shouldn't know your costs. You might not have meant it like it reads, but you clearly said price should not be a _basis_ for cost, and that is simply not true: I can tell you that the whole concept of pricing your product based on your costs is wrong. You ALWAYS use "cost as a basis for price" in some manner, if you want to stay in business that is. AAMOF, "basis" is the operative word here. You had better know PRECISELY how much your widget cost to get to market before you set a price and that _is_ using cost as a "starting point" and "basis" for price. If your widget cost you .50 cents in materials, labor and overhead to market, you damn well better not plan on selling that widget for .50 cents or less if you want to be profitable. After that point a myriad of other economic pricing factors come into play, just a couple being "what the market will bear", competition, and economy of scale. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. Don't give up your day job. -- www.e-woodshop.net Last update: 11/06/04 |
#23
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"Jim Wheeler" wrote in message
The boy is right - cost is not a basis for pricing in a competitive marketplace. Knowing and controlling costs is a requirement to make a profit and stay in business over the long run, but is definately not a factor in setting price in a free market. Horse****. Are you _still_ self-employed, Jim? How about just one, ubiquitous, example of 'price based on cost' that likely happened a thousand times somewhere in this"competitive market place" of good and services we live in? Ever hear of a "cost plus contract"? The price of the contract is most definitely BASED on ... all together now: COST!. Both you guys need to understand that you're talking esoteric, wannabe MBA voodoo economics when the thread is about one-off woodworking items, so leave the wannabe MBA bull**** to the real MBA bull****ters ... that's about all they excel at. -- www.e-woodshop.net Last update: 11/06/04 |
#24
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Swingman wrote:
"Jim Wheeler" wrote in message The boy is right - cost is not a basis for pricing in a competitive marketplace. Knowing and controlling costs is a requirement to make a profit and stay in business over the long run, but is definately not a factor in setting price in a free market. Horse****. Are you _still_ self-employed, Jim? How about just one, ubiquitous, example of 'price based on cost' that likely happened a thousand times somewhere in this"competitive market place" of good and services we live in? Ever hear of a "cost plus contract"? The price of the contract is most definitely BASED on ... all together now: COST!. Both you guys need to understand that you're talking esoteric, wannabe MBA voodoo economics when the thread is about one-off woodworking items, so leave the wannabe MBA bull**** to the real MBA bull****ters ... that's about all they excel at. MBA = More Bad Administration JMO Gary |
#25
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"Todd Fatheree" wrote in message I never said you shouldn't know your costs. In my first post in this thread, I said you had to know your costs to be able to calculate profit to determine if the product is worthwhile for you financially. Hint: the market still doesn't care about your cost. It's reacting to a change in the competitive landscape. Just what is the competitive landscape for a single bookcase made by 13 year olds? If your material cost went up 10% tomorrow, could you just tack on 10% to your price? If you gave your employees a 25% raise could you increase your product price commensurately? I doubt it. Right now, are costs are changing rapidly on raw mateial. Yes, we tack it on, but a 10% raw mateial cost increase does not justify a selling price increase of 10%. We are passing on actual cost. So far this year material increase is 50%. It MUST be passed on or we go out of business. If someone else came along next week willing to sell the product for the same price your competitor was selling it at (albeit at a loss), where do you think the market would set the price? Presto, once again the market doesn't care what your costs are. Would the other company be foolish to do so? Probably, but the market doesn't care. Correct. I also hope it happens that way as it won't be long before another compeitor is gone. That will change the marketplace if we are the only supplier in the region! We lost a large customer to a competitor. They offered a firm price for a full year that is lower than ours at the time. Factor in the 50% material increase and we laugh every time we see the lost customer's truck picking up product. |
#27
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#28
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No Wayne, wronge end of the stick!
I (Sam Berlyn) am 13. I am asking how much to charge. I have got my own tools and workshed. I am NOT going round weeding and sweeping. and I am NOT going to break other people's tools.. I have my own! Thanks, Sam "Wayne K." wrote in message ... What to charge is why everyperson is not in Business selling a product. It takes a keen eye and particular know-how to understand what the market will bear and how far to push it. This what makes a good business. Not everyone can do it. Many wannabes come along and cheapen it for everyone. I am neither of the above. I just like to make sawdust. In the case of the 13 year old, I would explain the cost of materials, the cost of time and discuss his budget. I would then offer to let him pay in cleaning my yard, weeding raking leaves etc and some minor shop time. A thirteen year old offering to pay you to make him a bookcase has a good jump on the life he will be facing soon. Give him all the guidance he will take. Very interesting thread. Wayne K Columbia MD "J T" wrote in message ... Sat, Dec 4, 2004, 7:41pm (EST+5) (Sam Berlyn) waves and wants to know: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? It would depend. I would think you charge on a per job rate, or is it hourly? It would depend. Say the materials cost £15 and it took 5 hrs, how much would you charge. It would depend. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! What to charge is very rarely a black and white thing. Usually more gray. Materials cost, certainly. Unless you're making something for a close relative, or friend, as a gift. Then it could be optional. Everything else is not engraved in stone. I'll use the US $ sign rather than the pound sign (not on my keyboard). Someone wants a bookcase. Your materials cost $15. Takes 5 hours to make a bookcase. You want to make $5 pe hours, for a total of $40. The customer is happy, you're happy. OK, someone else wants a bookcase. Materials will cost $15 this time too. You tell him/her $40. However, this time the client wants a different design - and this one takes 10 hours to make. You still want your $5 hours labor, but you've already quoted $40. Hmmm, that didn't work out quite right. You get another client, who wants a bookcase, first design. Ah, you say, I know this one. And quote $40. Except this time, you have experience with the design, and cut your work time down to 3 hours rather than 5. Ah, now your're cookin'. But, then no one wants bookcases anymore. Drat. Then you decide to make little boxes (or whatever), and sell all you can make, at $15 each - which covers the $5 materials, and take 3 hours to make. You still want to make your $5 per hour, but if you charge $20, they don't sell well. Then you fid out, if you take them 40 miles down the road, you call sell them at $20, with no problem; but then you've got gas, the time it takes, etc. And, if you go down the road 40 miles in the oppositie direction, they will only sell at $7.50 each. It partly depends on what you make, what materials you are using, where you are selling, what price you are asking. Bottom line, there're just too many variables involved for there to be any hard and fast answers. JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss |
#29
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"Swingman" wrote in message
news "Todd Fatheree" wrote in message I never said you shouldn't know your costs. You might not have meant it like it reads, but you clearly said price should not be a _basis_ for cost, and that is simply not true: I can tell you that the whole concept of pricing your product based on your costs is wrong. You ALWAYS use "cost as a basis for price" in some manner, if you want to stay in business that is. AAMOF, "basis" is the operative word here. You had better know PRECISELY how much your widget cost to get to market before you set a price and that _is_ using cost as a "starting point" and "basis" for price. If your widget cost you .50 cents in materials, labor and overhead to market, you damn well better not plan on selling that widget for .50 cents or less if you want to be profitable. After that point a myriad of other economic pricing factors come into play, just a couple being "what the market will bear", competition, and economy of scale. I think we're caught up in semantics here. What I'm trying to say, contrary to some of the earlier posts, is that figuring out your costs, then adding some arbitrary factor (like 3x) is not a proper way to arrive at a price. The price should be "whatever you can get". Of course you want to know what the cost is (I've done my share of multi-level cost buildups). If you want to say it's a basis insomuch as you want to know it before you determine your price, fine. I'm just saying it's not a number you plug into an equation and out comes your price. The market doesn't give a damn about how much your costs are, so there isn't any point in using that as a starting point to arrive at price. Don't give up your day job. Nice. Because we disagree, I have to be stupid. Let's try to focus back on the original question, which was how much to charge for a bookcase. I recently built a maple & padauk table for an acquaintance. I figured out what my material costs would be before giving him a price, but the price I gave him was one that was based upon what custom-designed furniture went for and what I thought he was willing to pay. todd |
#30
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"Todd Fatheree" wrote in message
Nice. Because we disagree, I have to be stupid. Those are your words, not mine. I've read too many of your posts to believe that. Let's try to focus back on the original question, which was how much to charge for a bookcase. Finally ... we're back 'in context', sans Eco 201 mumbo jumbo, and getting somewhere. I recently built a maple & padauk table for an acquaintance. I figured out what my material costs would be before giving him a price, Hmmmm ... that sounds real familiar. but the price I gave him was one that was based upon what custom-designed furniture went for and what I thought he was willing to pay. IOW, _after_ you figured your "costs", you then practiced the art of being a good businessman in your final pricing. Just for grins ... and be honest now ... just exactly what was the ratio of the price your customer paid to your cost on the maple & padauk table? I'd be willing to bet that it falls very close to one of the cost multipliers remarked upon early in this thread. -- www.e-woodshop.net Last update: 11/06/04 |
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"Swingman" wrote in message
... "Todd Fatheree" wrote in message Nice. Because we disagree, I have to be stupid. Those are your words, not mine. I've read too many of your posts to believe that. Perhaps there is an alternate interpretation of "don't quit your day job" that I'm unfamiliar with. IOW, _after_ you figured your "costs", you then practiced the art of being a good businessman in your final pricing. You have mistakenly assumed somewhere that I said you shouldn't know your costs beforehand. That's not what I said. I said that you don't take that number and calculate your price based on cost plus something. "Cost" is not a variable in the equation that determines "price" in my book. Just for grins ... and be honest now ... just exactly what was the ratio of the price your customer paid to your cost on the maple & padauk table? My original estimate put the material cost at about 40% of the price. (I don't do this for a living, so I'm not real careful about keeping track of costs and I'm sure where things ended up). Had the maple been ebony like he originally wanted, the ratio of material to price would have been a lot higher. todd |
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"Todd Fatheree" wrote in message
"Cost" is not a variable in the equation that determines "price" in my book. snip (I don't do this for a living ... ) snip That's probably a good idea, considering. -- www.e-woodshop.net Last update: 11/06/04 |
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On Sun, 05 Dec 2004 00:16:49 GMT, "mel"
wrote: how much would you charge? 1. Know your bottom price based on your own determination. This can vary depending circumstances. Sometimes it pays to do something that will lead to other things. 2. Know what you want to get for the job, again based on what it's worth to you. 3. Most importantly, never underestimate what someone is willing to pay. Before you answer the question,"how much do you charge?" Ask,"what are you willing to pay?" Followed with," let me get back to you with a price." Figure out what you think it's worth to you, knowing how it's made, then double that. It's really bad business practice to start with a low price- face it, you're not going to compete with WalMart price-wise, so you may as well go for snob appeal. If you can't sell what you've got at the price you've set, it's always easier to drop the price than it is to raise it- and you've got the added advantage of being able to mark it "xx% off" so people think they're getting a deal. Most people undervalue their work. People go nuts for anything handmade- go check out some Amish furniture stores if you doubt that! Aut inveniam viam aut faciam |
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On Mon, 6 Dec 2004 23:41:04 -0500, "Wayne K."
wrote: What to charge is why everyperson is not in Business selling a product. It takes a keen eye and particular know-how to understand what the market will bear and how far to push it. This what makes a good business. Not everyone can do it. Many wannabes come along and cheapen it for everyone. I am neither of the above. I just like to make sawdust. In the case of the 13 year old, I would explain the cost of materials, the cost of time and discuss his budget. I would then offer to let him pay in cleaning my yard, weeding raking leaves etc and some minor shop time. A thirteen year old offering to pay you to make him a bookcase has a good jump on the life he will be facing soon. Give him all the guidance he will take. LMAO! No, it is the 13 yr old *building* the bookcase, not buying it. Very interesting thread. Wayne K Columbia MD "J T" wrote in message ... Sat, Dec 4, 2004, 7:41pm (EST+5) (Sam Berlyn) waves and wants to know: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? It would depend. I would think you charge on a per job rate, or is it hourly? It would depend. Say the materials cost £15 and it took 5 hrs, how much would you charge. It would depend. I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering! What to charge is very rarely a black and white thing. Usually more gray. Materials cost, certainly. Unless you're making something for a close relative, or friend, as a gift. Then it could be optional. Everything else is not engraved in stone. I'll use the US $ sign rather than the pound sign (not on my keyboard). Someone wants a bookcase. Your materials cost $15. Takes 5 hours to make a bookcase. You want to make $5 pe hours, for a total of $40. The customer is happy, you're happy. OK, someone else wants a bookcase. Materials will cost $15 this time too. You tell him/her $40. However, this time the client wants a different design - and this one takes 10 hours to make. You still want your $5 hours labor, but you've already quoted $40. Hmmm, that didn't work out quite right. You get another client, who wants a bookcase, first design. Ah, you say, I know this one. And quote $40. Except this time, you have experience with the design, and cut your work time down to 3 hours rather than 5. Ah, now your're cookin'. But, then no one wants bookcases anymore. Drat. Then you decide to make little boxes (or whatever), and sell all you can make, at $15 each - which covers the $5 materials, and take 3 hours to make. You still want to make your $5 per hour, but if you charge $20, they don't sell well. Then you fid out, if you take them 40 miles down the road, you call sell them at $20, with no problem; but then you've got gas, the time it takes, etc. And, if you go down the road 40 miles in the oppositie direction, they will only sell at $7.50 each. It partly depends on what you make, what materials you are using, where you are selling, what price you are asking. Bottom line, there're just too many variables involved for there to be any hard and fast answers. JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss Aut inveniam viam aut faciam |
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Tue, Dec 7, 2004, 6:48am (EST+5) (Sam=A0Berlyn)
says: Thanks JT for the infomative response, I see what you mean! If you ever figure out a formula that'll work every time, don't tell anyone but me. JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss |
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"Swingman" wrote in message
... "Todd Fatheree" wrote in message "Cost" is not a variable in the equation that determines "price" in my book. snip (I don't do this for a living ... ) snip That's probably a good idea, considering. Any time you want to stop being an ass will be fine. In fact, I've done it for a living. And if you are under the impression that a product is priced at some point other than "whatever you can get", you're sadly mistaken. I'm tired of explaining it, so if you have any more derogatory comments to make, you're on your own. todd |
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"Todd Fatheree" wrote in message ...
"Swingman" wrote in message "Todd Fatheree" wrote in message "Cost" is not a variable in the equation that determines "price" in my book. snip (I don't do this for a living ... ) snip That's probably a good idea, considering. Any time you want to stop being an ass will be fine. In fact, I've done it for a living. Next time you may want to consider changing your ideas about how to price your goods in relation to what it costs to produce them. And if you are under the impression that a product is priced at some point other than "whatever you can get", you're sadly mistaken. I'm tired of explaining it, so if you have any more derogatory comments to make, you're on your own. Hey bubba, don't look now, but _you_ jumped into the thread of your own free will, and apparently with such a **** poor argument to backup your contention that you can only ultimately defend it by name calling. -- www.e-woodshop.net Last update: 11/06/04 |
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"Swingman" wrote in message
... Hey bubba, don't look now, but _you_ jumped into the thread of your own free will, and apparently with such a **** poor argument to backup your contention that you can only ultimately defend it by name calling. I called you an ass for being insulting (twice). Up to then, I made my argument without trying to disparage you, which you had done twice to me. But I don't have to be rude to make my argument, so I apologize for my previous statement. How about we agree to disagree? todd |
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