Pricing furniture

[andrew whicker]

Ladies and Gents,

Is there a book / reference that any of used to price your furniture?

I'm going to do quite a bit of walking / calling / browsing the internet for customer prices of custom pieces. I'm trying to sell to interior designers and open to both commercial and residential. More interested in commercial, but we'll see how the future pans out.

I'm an engineer full time, so I like calculating things, but my problem is:

1) What takes me 4 hours will take a pro 1 hour
2) I don't have an established brand, the pro does

Hard to calculate these things. Maybe find similar pieces around my market and drop the price by 10%? Another thing I've been toying with is taking materials + consummables + a new tool that I want = price since I'm just starting out.

I know this question has been asked a million times, I apologize for re hashing. However, the only thing that came up in searching were conversations about etching and sandblasting.

Cheers and thanks,

Andy

[John Lanciani]

I suspect that you're going to be very disappointed if you are truly just starting out and trying to target interior designers as your primary customers, especially for commercial work. Interior designers want established suppliers with known product offerings, quality and lead times. They're not likely to risk their reputation on a new guy, and certainly not for a 10% savings. Do you have a portfolio? Have you done commercial work? Are you equipped and do you have the time, finances, and resources to break into the market? Lots of questions that you need to answer honestly to yourself to try what you are proposing.

[Prashun Patel]

What takes a Pro 4 hours to make 1 of takes a machine or cheap labor 1 hour to make 4 of.

You'll have the strongest brand locally. My only profitable sales have been to find buyers who happen to value my story or my style (or their familial relationship to me ;)), or to make things where there is a huge disparity between effort and market price so i can still make good $$ by underselling relative to established brands/makers (e.g., large, slab tables.)

[Yonak Hawkins]

This sort of question gets asked a lot and there are many different philosophies on pricing. Your specific question made me think of a different tack :

Take something you'd like to make to an Interior Designer and ask what they would pay for it. (You may also get some advice on how to make it differently or what might be more popular.)

They will, likely, give you an extra low price but maybe not. If the price they give wouldn't be worthwhile for you, increase your price to the lowest price to where it would be worthwhile. If you find you could make it for that, make and sell a few. After awhile, begin to raise your prices. You'll know when you've gone too far because your sales will fall off significantly.

(I realize my answer is a perfect example of how such a question involves many open ended variables.)

[Thomas Pratt]

As my old boss used to say about pricing; "If you are in the business and you don't get a 'no' now and then - you are not asking enough."

[andrew whicker]

Thanks for all the replies.

I will be chatting with some interior designers soon. Also consignments.

Does anyone use a certain business book / reference to come up with ideas on how to present and price? A good book for furniture / architecture styles throughout the ages?

I will be clear with the customer that I am capable of only small orders / a few pieces and that my timeline might be drawn out. There is a lot of interest in the 'local' artist and I have heard interest in custom pieces. The problem is when the 'walk the walk or talk the talk' comes into play: i.e. my cost vs customer's perceived value.

I built a rather 'cheap' table for a coffee shop recently instead of focusing on the perfection quality that takes so long to achieve. I'm trying to find myself and where I want to go. I think as long as I'm not hurting the customer, losing money (defined as materials + consummables for my first few pieces), or taking too long that I should be able to find my spot in the economy.

I am nervous though. : )

Overall, I think people that build furniture think their work is never good enough. I think in reality, customers are stoked to see what you built.

Cheers,

Here's my 'quickie' that I put together. About $75 in materials, let's say $20 in consummables (hard to measure). I gave it to the coffee shop (good friends) because I wanted to see how it worked, what people thought of it, and get some professional photos of it. I had the poplar lying around and steel is cheap. Trying to get some pro photos this week. Anyway, I'd sell this for $300. What do you think?

Link:
https://www.instagram.com/p/BMQIjLTjc4x/?taken-by=blueriderdesign

[andrew whicker]

What are the expectations of interior designers?

Should I have printed brochure / portfolio when I arrive?

[Andrew Hughes]

Before you quit your job or invest any money's check out this video.
Its kinda rude but there is some truth to it.
I like the table it looks robust.
Good luck
https://youtu.be/VBi4zroEj1w

[David Davies]

Andy,
How many hours do you have in the table?

[andrew whicker]

AJ,

Thanks, I'll check out the video. I'm not quitting my job anytime soon : )

I work remotely, 4 days a week. Trying to use this to my advantage.

David,

I have between 8 - 10 hrs, but I'm getting faster with every piece. Nicer tools make a difference too.

(I sanded off the saw marks you see in the photo)

[jack duren]

Commercial and residential cabinetry have nothing to do with furniture..............

[mark mcfarlane]

I like the table a lot. Very nice design in the steel. I don't know your market but it's probably worth more than $300 where I live IF you could place it in the right shop. Andrew, is the leg design an original, done by you? Did you coat it, or is it going to rust?

[Matt Day]

$300 for the table doesn't make financial sense. You said $100 in materials and 8-10 hours labor. So you're paying yourself $20/hr. That doesn't take into account overhead (taxes, insurance, electricity, heating/cooling, tool wear and maintenance, etc.) which adds up.

Read the other threads about making your hobby your business. You have insurance and taxes and small business etc setup right?

There isn't a secret book to price your stuff (but if you find one let me know!). It depends on the market in your area. Supply/demand

I don't think undercutting is going to be the way to go but I don't know your market. My eyes opened a couple weeks ago when I took a tour of a shop here in CLE that specializes in reclaimed furniture. The place was huge and sold stuff for big bucks. Think practically production line live edge tables, trendy bar stuff, etc. huge CNC's the works. Made me a little sad to see it.

It's also going to be stressful to do try and pull off a full time job and furniture making. I know when I was working (I'm a stay at home dad now) my phone kept me working a lot when i was not at work - emails, phone calls, fires to put out. What other commitments do you have? Family, wife, other hobbies? Be conscious of turning a fun passion into work.

Do some homework here. Lots of information to go through.

[andrew whicker]

Mark,

Thanks! I also wonder if I could sell it for more. I need to try selling it for more and seeing what happens. I can always lower, but can't raise : )

Matt,

I don't have insurance yet, but I have the license and the LLC.

I agree I'm working for cheap right now. Again, hard to tell how slow I am. My job is more or less one that I work 8 hours a day then go home. There are times when it is around the clock, but those aren't often.

I'll keep browsing and thank you everyone for your help!

Cheers,

[Ryan Mooney]

One important thing to consider is your market and your products position and presentation to that market. What you appear to be targeting are higher end thus higher net worth individuals (or organizations). This is imho fairly practical because as a sole proprietor its difficult to compete directly on value (To Prashtun's comment "takes a machine or cheap labor 1 hour to make 4 of" although that might well be 40 or 400). The downside is that they are a somewhat more particular market.

In order to capture those users you have to figure out how to appeal to them. Part of this is product but a lot of it is marketing, and the marketing is entirely non-obvious if you're not invested in it (frankly I'm mostly baffled by large parts of it.. but progress can be made).

Here are a couple of resources I've found somewhat useful in understanding why some people in that demographic (and indeed why people in ~most~ demographics to a greater or lesser extent) buy what they buy.

Priceless: The Myth of Fair Value (and How to Take Advantage of It)
https://www.amazon.com/gp/product/0809078813/

https://en.wikipedia.org/wiki/Veblen_good

I've had a number of people also recommend:
https://www.amazon.com/Marketing-Affluent-Thomas-Stanley/dp/0070610479
But I found it to be somewhat less useful, amusing but not as directly applicable as the above (generally the amz reviews were fairly accurate imho). YMMV of course.

This isn't a silver pricing bullet, and I don't think one of those exists. Indeed pricing is only one facet of product placement, a rather important one but story and presentation also play a significant role.

Good luck on

[John T Barker]

You could try these:
https://www.amazon.com/Woodworkers-Guide-Pricing-Popular-Woodworking/dp/1558707379/ref=sr_1_1?s=books&ie=UTF8&qid=1478731836&sr=1-1&keywords=pricing+your+work

https://www.amazon.com/Product-Creative-Resources-exercises-generate-ebook/dp/B01DOC12PM/ref=sr_1_2?s=books&ie=UTF8&qid=1478731887&sr=1-2&keywords=pricing+your+work

I worked for a pretty good 18th century furniture making shop years ago and went off on my own after six years with them. I made the things they did and was able to use their pricing as guidelines, as well as grab a few of their customers. I dropped my prices a few bucks to reflect my low overhead and expenses. I am in a pretty historic area so 18th century furniture sells easily here though it may not sell everywhere. Designers can help you with that but like furniture makers designers may often specialize in certain styles. What I did was call one and buy her lunch and got as much information as I could. We had an established relationship from my days with the company I had worked for so I knew she would be a could source for learning a few things. Designers look for you to sell them merchandise at a discount so they can bring it to their customer at a marked up price. They may have you meet the customer but will look for you to not talk price, at least not one they haven't approved. The designer should be doing some kind of work to earn the markup, in other words relieving you of some of what you need to do to sell a piece (advertising, for example.)

I've acquired a number of books on furniture that are used as means to give customers ideas of what I can make. When I worked for the company I mentioned it was customary for me to use books to sell from so it became necessary to get to know them real well so I could grab a book as soon as a person started talking "Philadelphia chair" or the like. Books cover topics like time periods, geographical areas, countries, etc. You should find a lot out there; online, book shops, library, etc. You should also get photographs and samples of as much as you can. The more you can make the better chance you have to show someone something similar to what they want.

I'm sure you have a sense of the economy of your area, this will help you get an idea of pricing. Pricing your pieces too low will always be frustrating but often has to be done. If you've made a $15,000 Chippendale Highboy but you live in the back woods of West Virginia you may be hanging on to it for a long time. Research definitely needs to be done to find what else is sold in your area and for how much. The designers can help with that and doing leg work to visit craft shows and stores will do this as well. In this day and age I've seen that many people means often do not buy quality goods. I often make an analogy to cars; some people will buy a nice Toyota while the person with the same money needs to buy a Mercedes. I was real happy to find a barn sale that goes on once a month near me and seemed the perfect place to sell some woodwork (my plan was to build the pieces at a lower quality than my normal at a reduced price) until I looked at their prices. Their prices were so low I didn't see how I could make any profit with them. A number of drives through your area may yield venues like this, hopefully better than this one.

[Michael Zerance]

What are the expectations of interior designers?

Should I have printed brochure / portfolio when I arrive?

Skip the printed brochure, they can scream amateur if not done well.

A web presence is key for someone starting out. That can be as simple as a Facebook page but a simple website with a portfolio would be better.

A decent business card shows that you are serious and invested in what you are doing. Sure, they will probably throw it away when you walk out the door but a handshake followed up with a business card provides a professional first impression.

Follow up meetings with an email that contains your contact information and links to your Facebook page and/or website.

[Michael Zerance]

I'm an engineer full time, so I like calculating things, but my problem is:

1) What takes me 4 hours will take a pro 1 hour
2) I don't have an established brand, the pro does

Hard to calculate these things. Maybe find similar pieces around my market and drop the price by 10%? Another thing I've been toying with is taking materials + consummables + a new tool that I want = price since I'm just starting out.

I recommend not arbitrarily pricing your products based on what other people are charging for similar items; their costs are different from your costs and you have no idea if they are making money or not. Pricing is unique to the business and product, based on actual operating and manufacturing costs.

Your price should be calculated from your actual material costs, labor costs, overhead, and profit. If it takes you 4 hours to make an item, you need to charge for 4 hours. Once calculated, if you don't feel that you can sell your product for the calculated price, you will need to determine how you can lower your price by decreasing production time, making several at one time, or buying materials in bulk.

You will have an easier time justifying your price if it's calculated from real numbers and you will have more confidence presenting and backing up your price to customers.

[Michael Zerance]

I can always lower, but can't raise : )


Set a higher "list" or "msrp" price, then offer it at an "introductory" or "sale" price.

[Ted Diehl]

Having worked in the Real Estate business, you might spend a little time calling on "Home Stagers". Not the small players but the big players in your area. They are always looking for some unique piece to stage a home. To find the big players chat up one of the successful realtors in your area (the ones with the most signs in your neighborhood. I hope this helps....

[andrew whicker]

I have to say, you're all awesome! Thanks for all the advice.

I have a lot of business to think about. I have a meeting with a Park City, UT interior designer. Here come the big bucks : )

Ted,
I will talk with some real estate agents, that's an excellent idea.

Mike,

Thanks and I agree with you on calculating 'proper' costs. I'll try my best. Art is weird. It'd be a lot easier to price if I was competing with Ikea.

John,

That sounds great. I hope you're doing well. I have quite a few books, I'm ordering a few 'encyclopedia' books on the overall history of furniture. You can never have enough ideas. Do you get any magazines? Dwell is really good, imo. I also like mid century, so I picked up a magazine specifically for that era. Good to get ideas.

Ryan,

I have no idea how to do 'market research' other than walking thru stores, etc. AND (I live near SLC) we have Park City, which is sort of viewed as an endless supply of wealthy visitors. Obviously, we have some very wealthy families living in SLC just like any other city. Also, we have the added complication of LDS vs non-LDS families. I'm not sure yet how that will impact business. I've talked to quite a few people and most think it is unfairly negative to think LDS stops a non-LDS person from doing good business.

But really, thanks for all the replies.

Andy

[Matt Hardy]

Hey Andrew. Thanks for the thread. I also live in SLC and I am thinking of doing something very similar although I am probably a year or two away.I am just getting my shop up and working as documented here at SMC. It is nice to meet others on here from Utah. To me in this SLC market I would think you could get double for that table all day. People are always looking for something unique and not sold at RC Willey. It would be a conversation piece and most would be proud to say I had this custom made and you may not be able to get another one. Nice work!

[jack duren]

A lot of things can be calculated except labor. This is where only experience can really help.....

[John T Barker]

A lot of things can be calculated except labor. This is where only experience can really help.....

I think most professions have labor costs that are standardized. Furnituremaking will vary based on shop size, overhead costs,etc.,but I think it is not hard to determine a number when factors are worked out.

[Michael Zerance]

I think most professions have labor costs that are standardized. Furnituremaking will vary based on shop size, overhead costs,etc.,but I think it is not hard to determine a number when factors are worked out.

I may have misinterpreted but I think Jack was referring to time, not labor costs. If that is the case, I agree with both of you; labor costs are pretty simple to calculate but accurately determining how long a project will take to fabricate requires experience.