Learning to Price Kitchen Cabinets

      Customers are asking a furnituremaker to build custom kitchen cabinets. Now, he needs advice on learning how to charge for the new type of product. February 18, 2007

We are in high end markets - Vail, Jackson, Sun Valley, Steamboat, Aspen, and Park City just to name a few and we are being asked to do kitchens. I don’t know the price per foot of a mid to high end kitchen or how to price them. Does anyone have any suggestions?

Forum Responses
(Business and Management Forum)
From contributor S:
I price out each item individually, doors, face frames, drawers, cabinet boxes, toe kicks, crown molding, shelves, misc. moldings, pull outs, sub decks, assembly, profit and overhead factors. Then I cross check that total number against what I believe to be the going rate for reasonably high end stuff per l.f. This is what it costs to build the product.

The place I usually get creamed is that many customers want to spend an infinite amount of time talking and designing and re designing. We often end up building something totally different than what was on the original plans, but the budgets don't seem to keep up with the changes. Meetings, drawings, revised drawings, samples, revised samples, etc. can chew up mounds of time.

From contributor H:
Since you live in Vail I assume you know who your competition is. Draw a kitchen yourself, and price it yourself. Then take your plan to one of your competitors as a customer and get their price.

Then consider what it costs you compared to what you think it costs them. If this is your first kitchen then I can assure you that it will cost you more. They have more experience and their production methods are far different then yours are producing furniture one piece at a time.

Asking someone else what you should charge for your work is no way to run any business. You know what to charge for your furniture right? How did you arrive at those prices? By going to a furniture store? I doubt it.

If your price is the same and you’re the new guy it will be hard to get work in the high end markets. If you’re too cheap you will get no work because people will believe they are not getting the same quality or service.

Consider this also - why are you now being asked to kitchens? Who did them before for these clients? Consider the job but don't jump too quickly. One bad job, especially the first one, could have you at the bank getting a loan to finish the job.

From contributor G:
High end is a relative term. If you price out kitchens at an l.f. charge you will get into trouble fast. A 150K kitchen installed is a lot different than commissioned furniture pieces. Each kitchen should be priced out according to the design. Are you an experienced installer, are you responsible for the tops and are you good at meeting deadlines and customer relations?

From contributor E:
Contributor S is absolutely right about the amount of your time that customers, especially high end customers can use up without you getting any extra money for it. These people thrive on the attention, and just love being able to compare different layouts etc and this stuff will eat huge amounts of time if you let it.

From contributor S:
What you do requires incredible craftsmanship. Guys that are good at doing one of a kind, one at a time furniture are not probably so good at put your head down and build it because the building will be sheet rocked and ready in four days.

The high end kitchen market is really all about having your crew available to build something when the information/decisions finally make it to you and having something else for them to do while you are waiting.

From contributor S:
There are plenty of complaints in this business about garage shops not charging enough and driving down prices for everyone. I for one find it difficult to determine what market value is for truly custom work and would like to know what other people are averaging. Bringing a set of plans for another shop to bid is hardly a dependable way to get information.

With many other products you can do an internet search to find the best price. But with custom woodwork, especially complicated stuff that involves lots of design and communication, it seems that the final cost bears little resemblance to the original proposal. Do you set a fixed number of hours for consultation? Do you set a fixed number of samples? Do you set a fixed number of hours for drafting?

The cost of building the product seems fairly straightforward, but the value to the customer, and market value compared to other shops can be much higher. Some of that could be attributed, as Tim suggests, to simply having the resources available to deliver the product as promised (plenty of people out there who can build a box, door, drawer etc., but delivering on time consistently is a different deal), or maybe you have a unique ability to interpret the desires of these customers. In any case I would be curious to know how other shops are setting prices. Is it simply direct costs of time and materials plus overhead and profit? Is design and consultation just an administrative expense?

Personally, I think that having the resources to do the work, and possessing the skills to deal with customers and design the product are worth far more than the value of the woodwork. But I don't set my prices accordingly and I wonder if anyone else does.

From contributor H:
I see no difference in taking a set of plans to another shop and getting them to quote it or having a client come to you with their plans and the price from another shop. Either way you know what the other guy is charging instead of guessing and asking in a forum. Once you know then you can compare apples for apples and show the client where and how you can do a better job or provide a better service to them.

From contributor S:
I don't see any conflict in bringing plans to another shop to be quoted. I just think the results can be misleading. You often don't know the true cost of a project until all of the change orders have rolled in. I suspect that many shops will give a low bid upfront, and then add tandems and dovetails as an upgrade. Also resort type projects can be heavy with hand hewn and one of a kind things like log style cabinet doors and hand forged hardware. Assigning cost to these upfront can be difficult, and misleading if you ask someone else to bid it for you.

From contributor B:
It's one thing when a customer shops my prices. And quite another when a competing shop comes to me to see what my pricing is, posing as a customer. Imagine taking hours a week doing quotes for other shops? I won't do it to them and I hope they won't do it to me!

From contributor K:
If you really want to build cabinets, I wouldn't worry too much about how much anyone else is charging. You certainly don't want to leave money on the table, but you also don't want to let that be your only concern. You've been in business long enough to know how to figure out what your cost will be. Determine how much profit you want (in your market I'd shoot high) and bid your jobs. You'll figure out pretty quickly where you're coming down in the overall market.

From contributor M:
I recently did a shop comparison, but I paid them for the design time. They had a fee for doing a measure and design, and I got to spend some time with their designer. I got a nice 2D drawing and if anyone got hurt in the deal, it was me. Their "designer" didn't listen to me or my wife, and was just looking to maximize how many cabinets they could put on the wall. I chalked this up as a cost of doing business, to find out how they went through the whole quoting process. It was very educational.

Every business does this kind of market research in some way. Supermarkets actually employ teams of people to go to competitors stores and write down their prices. There is even a market for electronic devices to capture that stuff. You may not like it when it happens to you, but it will. How else are you going to find out what the going rate or the competitor's processes are? You have to research your market to determine if you can be competitive with your pricing structure or if you need to make changes.

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