The topic of how you rate your work is dealt with in all woodworking forums. Everyone has a different opinion about how to do it, and rarely are they enough.
When I started building furniture, I was happy to get just a couple of dollars to cover the cost of materials and a little bit to buy a new tool. After all, woodworking was more of a hobby than a means of taking care of my family. Pricing my work this way was a great way to build my experience and expand my tool collection. It had a dark side, I never really deserved what I would call “good money”, at least not enough to compensate 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 craft and I’m not a professional. Why should someone pay the full price for my pieces?”
However, that got me thinking, what was “full price” and how do you decide which full price is for a custom piece of furniture? When I decided to sell my work more seriously, I had to answer that question and find a better way to evaluate my work.
At that time I was still working as a seller for another company and sold flooring. In my sales position, I was paid through commission. The commission was calculated based on the profit margin for each sale. Of course, I started using a percentage surcharge to calculate my prices for mine. Most of the products I sold at work had a 50% premium, so I used this as a benchmark for my pricing.
This worked great when I was building furniture from inexpensive wood like walnut or maple. However, when I made something out of cheaper wood like pine, I earned very little for the time invested. On the other side of the spectrum, the final price was so expensive when I built projects with more expensive exotics that it was difficult to justify the price for my client.
To solve this, I decided to calculate my materials and labor separately and calculate my hours worked by the hour. The challenge was to determine how long it would take me to build each piece. As a furniture maker, I’ve rarely made the same piece twice, and each piece had different levels of difficulty. Making a bed can take 30 hours, the next bed can take a ton of spindles to cut and take 50 hours.
It became obvious; I needed a better yardstick to assess how long the different woodworking process I used to build the furniture would take.
To create this benchmark, I tracked how long it took me to complete the project to complete each task. For example, I determined how long it took to cut the mortise and tenon, grind and apply the finish, etc. Now I know what you think. A mortise lock for a small spindle takes less time to cut out than a mortise lock in a large bed frame leg. What I want is the average. For example, how long do I need to cut out a mortise lock and a matching pin?
If I calculate the time of all mortise locks and tenons that I cut in the last year, I can safely say that I could cut out another one in about the same time. The key to an accurate average is to keep track of your time on as many projects as possible. The more you create, the larger the dataset you have and the more accurately you can estimate the time it takes to create the different projects.
Now my bids are much more accurate and fair for my customers and me. Once I’ve completed my shop drawings, I count all mortise locks and tenons, multiply them by my average time and hourly rate to determine the fee for this part of the project. I do this for all the tasks required to complete the project and add them all together with the material costs. I then came to an exact bid.
Now my only remaining problem with developing this pricing structure was what should be calculated as an hourly rate. I’m sure everyone would love to make over $ 100 an hour, but if you’re not a well-known woodworker, like Sam Maloof, who 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 what you would pay as an hourly rate for your work. Put that number in your formula and compare it. Check out what other furniture manufacturers in your area are asking for similar designs and quality. Then ask yourself. Are you in the stadium Can you justify a higher price with better quality? Can your target market afford what you ask for?
If your price is much lower, you can afford to give yourself a raise. On the other hand, if your price is higher than what the market can offer, you need to determine why. Are your expectations of what you want to pay realistic? In this case, you may need to find better processes to make your creations faster. You may need a better set of chisels that stay sharper for longer, reducing the time it takes to sharpen. You may need to look at your work ethic. Do you get distracted by text messages and Facebook notifications while you work? Working efficiently always maximizes your profit and your time.
Adam Savage of the Mythbusters once said: “The only difference between science and turning around is writing the data down.” So make no mistakes, keep an eye on your time and materials, and organize the data to create a benchmark that you can use to accurately evaluate your work.