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Pricing methods revealed8/10/15
I have 2 cabinet maker friends that revealed some insight into their pricing methods....quick and dirty for bid sets (plan only...no details)
I should say I'm in the Bay Area
$900 to $1100,a foot for lowers and uppers, finished,delivered and installed here in Northeast.
If you quote those prices you prolly won't take any work away from the other 2 cabinet makers .
no one wants to share their methods of pricing?
I price things much easier, if on 8.5 X 11 I print out one complete set and on my desk I have a postage scale...I weigh the pack and charge $12,000 per ounce for frameless and $15,000 per ounce framed
On D sized paper I charge double per ounce
I do pretty good, land approx 8% of all projects we quote....but we don't do any job costing so I can not tell you if we make any money
I met a father & son team at Anaheim trade show.
The father would put together an estimate and the son would figure out what he thought it should cost. They would then add the two numbers together and present it to the client.
Though I do appreciate dark sarcasm from time to time, I just thought others might be willing to reveal some quick and dirty pricing methods...generally for bid sets. They are vague and so should the pricing be.
I developed my own system several years ago, it works well for me. I price per linear inch. Different rate for regular base, drawer stack, sink base, etc. For wall, length X height X the rate. Same for tall cabs. At the end I add a percentage depending upon which finish they have chosen.
...and, so. What is the breakdown? As I see it, we can only gain knowledge from sharing information. Apparently, pricing methods are a close guarded secret. Why? There's enough work to go around.
If you are referring to my reply, you asked for a method and that's what I gave you. When you get into numbers it will vary depending upon where you are. A kitchen in Tennessee for example will cost five times less that what it would in NYC.
Wouldn't a more useful question be something like "How long does it take you to cut out, install slides and assemble a 3 drawer stack cabinet?
A corollary to that question might be:
These are questions that would maybe shed light on the payback for a nested base CNC vs slider and construction hole drill. Another useful question would be what percentage of the job remains after the CNC has done it's part? We know that CNC makes a positive contribution but what problems does it bring to the table that didn't exist before?
This question is like the pricing survey Cabinetmaker Magazine used to trot out annually. As Mike said, prices don't mean anything without factoring in cost of living in your neighborhood.
Same thing goes for job costing. The purpose of job costing is to help you make more money in the future. Unless you have systems of manufacturing that produce predictable repetition it really doesn't matter how long something took to produce in the past. Same thing with pricing. When times are busy you raise your rates.
Better to focus on questions that will help you make more money in the future such as the best way to train, or pass out tasks or monitor status.
Thanks cabmaker, point taken. Mike, also, point taken...though Tennessee and nyc are sorta extreme examples. I did say I'm in the Bay Area. Used to live in Asheville nc. Compared to there labor is almost double..not 5 times. Nevertheless, thanks for not being snarky. I'm just trying to get a feel for what others in a comparable market are doing.
If you want to know market price get bid results for jobs you bid. If you want to know what it costs others its not really relative.
The AWI used to have a cost book that was like a mechanics labor book, complete methods of pricing by operation.
Until you know what it costs your shop to make something you don't know what price to sell for. Using a simplified method like footage ignores some things that need to be accounted for. Assume 12' of base drawer over a door. You could do 3 4' cabinets or 12 one foot cabinets, the labor is drastically more, the footage doesn't change. the square footage of fronts doesn't change. The length of the top doesn't change.
If you are going to unit price you need to spend some time analyzing the difference and know what to add for the deviations
I'll throw this in for good measure. The first thing you've got to figure out is how much overhead you have and divide it it up per month or week or day, ever what... Keep track of every board foot and every sheet of everything that goes in it and see what it looks like you made in the end. One thing for sure, if you're not making enough money it won't take long to figure out that you need to raise prices.
Thanks all. I am trying to determine what others are doing for estimating and stay competitive. The whole argument about whats your overhead, etc doesn't make much sense to me. For instance, If I worked out of a garage in the middle of nowhere, have no license, insurance, and borderline machinery Im probably cheaper than most if I calculate my jobs that way. If I charge close to what others are charging then its beneficial to other shops as I'm not undercutting. I would also be benefitting as I can charge more. I'm specifically interested in how other shops are pricing bid sets with little to no info. Many times the bids I lose go to big cab companies in the mid east or far away. The big boys can of course charge less because they are cranking the parts out. I have a 2 man shop and do about 3-4 kitchens a year, many built-ins, media units, tables, etc. Thanks
Johnson, if you don't understand "the argument of overhead" then you need to. This is business and every business has overhead that has to be covered. If you have very little and price competitive then you keep more money, if you have a lot of overhead you may have to price so high to make any money that you can't stay afloat. It's important.
Here is how I do it. Keep in mind, it takes years and lots of record keeping for ANYONE to develop a fairly accurate estimating scheme... Everything costs money, and you need to know where every dollar is going in your product. It's an ever evolving process. It all starts with overhead. How much does it cost an hour to run your shop? Each shop is different. This is your shop rate. Once you know your shop rate, then you need to keep track of how long it takes you to do certain tasks... building drawers / doors, cutting out cabinet components, assembling them, planing, joining, ripping, driving to and from the job sites, install, finish, design, etc, etc. Again... it takes many jobs to dial this in.
So... here is how I estimate. I need rough dimensions from the client. I calculate lineal feet of base, lineal feet of uppers. These numbers go in the computer. This price is the cost of building a box with a faceframe and doors. I then have line items that I add to these numbers... these include drawers (deep and shallow separate), trash / spice pullouts, lazy susans (or any other add on item in a cabinet), end panels, large plywood panels, island panels, feet of crown molding, feet of toekick, type of finish, install, and a few other items I can't grab off the top of my head. All these numbers get added up then I get two prices. One would be for an overlay kitchen, the other would be for inset. Now for the most important thing... I add for PROFIT, this isn't what I make (all salaries are part of my overhead), it's what the shop makes. This money is used to purchase new equipment, upkeep of old equipment, or weathering the storm come december / january.
Everyone prices differently, because everyone is in a different situation, in different sized shops, creating different products...
time for me to move average here is only 110 a foot for alder face frame finished and installed