What's Involved in Starting Up a Moulding Supply Business?

Here are some business issues to think about if you're considering starting to both manufacture and install large volumes of custom trim. April 20, 2007

I am going to need a lot of custom trim. I have been approached by a design group to supply and install trim in a series of 5,000 to 20,000 sf houses in the greater LA area. I will either put in my own moulders or have someone do it for me. I would like some feedback as to the success or problems others have had in this area.

Forum Responses
(Architectural Woodworking Forum)
From contributor L:
There are many shops throughout the country that already have the equipment and experience to produce custom moldings. Get references on several shops in your area. Running a quality custom molding operation takes a lot more than buying a molder. (Profile grinder, balancing, measuring, rip saw, forklift, defect saw, dust collection, compressed air system, lots of power, handling equipment, qualified employees, suppliers, training, space!) Matching curved moldings capability? Time? Can you keep the crew busy? What happens when they find a new installer to do it cheaper? Or buy from a quality molding shop? The last option carries little risk; the first option has many possible pitfalls.

From contributor J:
Just my two cents worth, but most design groups treat trim work as a commodity. That said, all things will have to be equal, i.e. quality, timely installs, variety, etc. The only variable they will consider is price. Thus, can you deliver a quality install in a variety of species and colors in a timely manner, cheaper than the next guy? If you can't, or if you aren't sure, then I would pass. By the way, having done many large homes and not meaning to sound condescending, do you have any idea how long it would take to trim a 20,000 sf home? Trim meaning baseboards, crown, window and door casing, hanging doors, stairs and any built-ins. I would suggest spending your efforts on putting a system in place to make sure the installs go smoothly and leave the manufacturing to those who already have the systems in place.

From contributor S:
What is your business plan, and does it involve molders? You either need to be in the molding business, or buy the moldings from someone who is. Getting into the molding business could be a very good move, but it is a big commitment of resources.

I think that a business that sells moldings along with the installation, and possibly even pre-finish, is a good business model. A natural extension of this would be to provide pre-hung doors also.

Any time you can sell the customer something they are going to buy anyway, and make a good markup, then it is a win - win. I think that most people prefer to limit the number of dealers they have to deal with to obtain the desired results.

The hard part could be keeping up, which might mean that you should outsource the first few jobs while you develop the system, and research molders, etc.

From the original questioner:
Thank you all for your input. We have discussed the points you have raised within the family business. We think it may be a workable idea, but at this point it is just an idea. I would like any more input from others as well.

From contributor M:
My two cents: After 25 years in the business, I've learned that I make more money and take more days off if I buy product and resell it than if I make it in-house. Cuts overhead, headaches, and logistics and I can shop suppliers to my hearts' content.

From contributor B:
Making moulding can be a bit of a cutthroat business. I've heard many stories of contractors, designers, etc. choosing one source over another for a matter of a few pennies a foot.

If you have the financial resources for startup, skill, manpower, time to manufacture and time to deal with the learning curve, then this could be another product line for your business. If you are not going to be fully capable in any of the above mentioned areas, then you would be better off outsourcing to one of the other shops.

The fellows saying that mouldings are a commodity are mostly correct. Most purchasers treat them as a commodity, but in reality there is a wide range of quality differences out there.

From contributor E:
Here is a little wisdom (maybe very little). Setting up a molding operation is another idea that on the surface looks feasible, but look deeper. As an owner of just this type of business, I speak from experience. The money and knowledge needed to manufacture high quality molding is staggering. A mistake with your 100,000 dollar molder and your 2500 per head and tooling can send you quickly to the poor house. Not even getting into the support equipment, which can make any budget scream from the pain. Unless this is really your chosen profession, I would look into buying from an existing outfit. I am quite sure if you tell them about the quantity you want, you will strike a deal. And still have a cut for you.

From contributor C:
I have no disagreement with any of the responses thus far. If this is something you want to try, then I suggest you consider the following:

1. You can purchase a decent used, 5 head, feed through moulder for about 30k. Depending on how far it is from your shop, it will cost between $500 and $2,000 to ship to your door. Usually, a used moulder will come with one set of heads. If you choose this route, I'd recommend searching for a user friendly machine such as the SCMI Superset. It may be slower than the competing models, but you'll probably be producing good parts sooner.

2. No need to purchase a grinder at the start. You can buy the knives from a number of vendors at reasonable prices. We've purchased knives from Template Services, Moulder Services and C.G.G. Schmidtt. If you're worried about damaging knives during a run, purchase four knives and keep a backup pair. If your volume justifies the purchase, then buy a grinder when it makes sense to do so.

3. Don't underestimate the cost of waste removal. At minimum, you will need a 15 HP dust collector that dumps into a container. If you use an 8 bag collector, you'll be replacing bags every 15 minutes.

4. If you don't want to purchase a straight line rip saw (which can be bought at auction for less than 4k), then consider buying moulder blanks (material that is ripped 2 edges, or R2E) from your suppliers. This too will lower your waste removal costs.

5. Make sure your electrical service can handle the load. A 5 head moulder will require roughly 175 amps at 220 volts.

6. Like waste removal, material handling can put a significant dent in your bottom line. Invest considerable thought into this aspect. Keep it simple, keep it safe.

7. Although last, but perhaps should be mentioned first, budget in the cost of training. Fly a trainer to your site, pay him or her whatever he or she wants, and consider the investment a cheap one.

From contributor B:
Having been in the moulding business for 18 years, I have to say the previous posts have covered all the major points. One other option would be to buy a moulder (new or used) big enough to do the largest piece of moulding in the package. Farm out the large runs and have the shop make you a set of knives so you can do short runs when they run short. (They will run short.) You can do all of the stain grade to control the sapwood, etc. This option will get your feet wet and let you get the short runs to the job quickly and cut down on the setup charges for short runs from the big mills. Make sure you spec out lengths you want for different trim. I have seen all 8 and 10 foot delivered for crown! 14s don’t work for a 4 ½” wide door (6’ 8”) casing unless you are using plinth blocks, etc.

From contributor R:
I would also consider the wisdom of getting heavily financially committed to a business that is dependent on one large customer. Builders come and go and huge projects don't always get built out all the way or even part of the way. If you are completely dependent on this customer for revenue on a large scale right out of the chute, you will not have time or capacity to build a broader base in the event that they go away. If they are really a good outfit and you are building a strong relationship, maybe you could get them to invest in the machinery for you and gradually buy it from them to avoid having all of the eggs in your basket alone.