I've always made my own trash can pull outs, spice racks, etc. one of my sales reps is making the argument that I need to buy them, and that it comes out cheaper if I value my time. He is a distributer for reva-shelf and I do like their products. I'm thinking about giving it a try. Any thoughts about this?
From a purely business perspective, it depends. Will it reduce the time you spend to get a job out? Can you spend the "saved" time on something that has better yield? If there is plenty of work available, you may be able to complete another kitchen this year.If there isn't a pile of work, you could use the time to promote your products, resulting in more through put. If your shop could use some time spent on reorganization to increase efficiency, better tool arrangements, better jigs, etc.
The flip side is: you just enjoy doing them and don't mind some loss of income to spend some play time.
Many on this forum will argue that the ones they make are better. Maybe, but is the customer willing to pay extra for that better? If not, you are making a donation to them, likely to support your ego. How much support does your ego require?
There are may ways of measuring success, money is only one. But it counts big time when it's time to pay college tuition, or retire.
I think it really depends upon how well set up you are to produce the pcs you could also buy ready made, and if you can make them as good or better, for the same or less $$.
Similar arguement arises for me several times per year. I make pretty much everything in house (doors, dt drawer boxes, trim, most wooden accessories as you describe) and I figure once I price out the product, add my markup - I can usually offer the same thing I make in house, to my customer for the same (or lower) cost. Plus, I am making profit on the raw materials and labour. Not just the markup.
If you can source the same or better cheaper, then it certainly makes sense. That will depend upon so many things (where are you located, delivery times, etc) as well as your shop setup.
All good responses. And all carry a lot of weight. Pat, I agree with you from the economical standpoint but I more agree with Larry that money is only one point of success. I loose some jobs because I can't get to it in the amount of time that the customer needs the cabinets. I could incorporate factory cabinets and get to do more of those jobs and make more money. Some shops around here have done that and it has worked for them. I on the other hand am not interested in that because I like what I do and the satisfaction I get from it.
Pat, I asked the question because I wanted to see how many out there was buying components and how many were building them themselves and what advantages and disadvantages they had found. You say there is only one correct answer, well evidently not because some of these fellows are building their own as well and are reputable cabinet makers. It seems that you are getting frustrated because people are not agreeing with you. I wasn't disagreeing with you just saying that I also agree with Larry that more money is not the only key to success.
There is always a comparative advantage. This is why countries trade with each other. E.G. If Mike makes accessories and cabinets and you make cabinets and accessories but mike can make accesories in an hour each and he can make cabinets in 2 hours each. You on the other hand take 2 hr to make an accessory and 4 hours to make a cabinet. It will still benefit mike to trade accessories to you for cabinets because he can build accessories twice as fast as he can build cabinets.
If you watch the video linked above, it does a very good job of explaining this. And how important it is to the world economy and standard of living of the world.
Think about shops that outsourced verses the ones who do everything in house, who made more money?
You have heard the saying the middle man always make the money? This is a big part of the reason. Especially when you figure in the opportunity cost (cost of the equipment and depreciation and training) involved with this.
I've watched that video before (I believe at your suggestion on a different thread), and just watched it again.
It doesnt prove for a "fact" that's it's the best thing for a given shop to definetly outsource, based on larry and Ajc's posts alone. It might be better for me to make a spice rack and a cabinet for it because I can make more money based on my workload. I'm not going to sit idle so that my supplier can elevate their specialization to the level of spice rack gods!
Also we don't trade goods, we trade money for goods.
Should I let the spice rack gods have all the money?
China buys planes from us because there is a comparative advantage currently, but have you heard of COMAC? Do a Google search and on the 6th or so link down there is a guy from airbus saying comac will be competitive with airbus in twenty years because that's how long it takes to develop such a company. So they won't be buying planes from us for long, maybe they don't believe in comparative advantage?
The idea to get on this is that the pie grows it does not stay the same size.
This chart shows the production per person has risen to 5 times what it was in 2929.
That means by importing Chinese cabinets more people can afford cabinets than before.
This does assume that you have enough work. But to do more volume, "get to the next level" you would have to buy more equipment or hire more people. This would reduce your margin and you would have to make a commitment to paying off that equipment or increased expense of the workers.
Or you can do more volume by outsourcing. And spend time on what you do better whether it be promoting or installation or design. You clearly have an advantage on installation and design over the Chinese.
Even if the Chinese start building airplanes that does not mean the end of comparative advantage it could even flop the other way round as we now export oil meaning that we have an advantage on energy cost and we will start/are doing more manufacturing. Since their people are becoming better educated they may be better at stuff like airplanes.
Unless you don't have enough work you are better off outsourcing some portion of your work to allow you to do more profitable things with your time.
Comac has adopted the 9x9(929,939,...) design numbering system.
It took a ton of creativity to skip the 8x8 when copying Boeings 7x7 numbering system.
We used to make all those kitchen things until Rev shelf started selling decent wood products. Making pullouts for $25k kitchens is a thing of the past. When somebody wants something nice or unique that's when we make a spice drawer pullout or a lazy susan.
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