"Mac" <[email protected]> wrote in message
news:[email protected]...
> I have read about a formula for pricing your work. Something about the
price
> of lumber times the time spent on the project or something like that.
>
> Can anyone shed some light on this for me?
>
Some people seem to think that pricing work at 3X material cost is
profitable. It may be, but it may not be.
You have to look at material cost plus labor plus overhead to determine a
price. Once your price is established, you have to determine if people are
willing to buy the item at that price. If I can make a widget in 20 minutes
and sell it for $15, but it takes you 2 hours, that does not mean you can
sell it for $90. The market will just not accept that so it is up to you to
find a better product or a better manufacturing method.
Another example. I make a widget out of expensive material that cost $50,
take an hour to make it and sell it for $150. No bad. You make a widget out
of cheap wood that cost $2, take the same hour of labor, but at 3X material,
you will sell it for $6. Not a good idea.
For more details, do a Google search on the subject as it has been discussed
here a few times.
Ed
She doesn't, I cook.
--
Mike G.
Heirloom Woods
www.heirloom-woods.net
"JackD" <[email protected]> wrote in message news:[email protected]...
>
> "Mike G" <[email protected]> wrote in message
> news:[email protected]...
> > It doesn't hurt either when my wife gives me the
> > look when I tell her that "simple little thing" she wants done is going
to
> > cost four hundred dollars (with no labor or overhead figured in).
> >
> > --
> > Mike G.
> > Heirloom Woods
>
> What does she charge you for something like a Thanksgiving dinner?
>
> -Jack
>
>
Follow that formula and you'd end up doing the same job requiring the same
amount of work for prices dependant on the cost of the stock. And that is
without figuring out labor and materials for different finishes on the same
job.
You want to know what a commission is going to cost you and figure your
profit from there get a program like Cutlist Plus, plug in ALL the costs
associated with a job INCLUDING labor charges for various functions required
by the job IE. costs of going to get the materials, shop overhead for when
you are working on the commission, labor for milling, assembly, finishing (I
use different rates for each function since the skill and labor intensity
varies with each), materials like sand paper, screws, brads, glue, and
whatever, all that and what seems like a hundred and one other things. Don't
forget taxes on what you have to buy and any shipping costs for things you
have to mail order.
Once you have that all down you can figure in your profit or build it into
something like the labor rates since that is something that doesn't take any
out of pocket money.
By the time you finish I think you'll be a bit shocked in what it really
cost YOU to do a job for someone.
Note: I use two sets of labor rates. One I call standard and the other
preferred. I use the preferred rate for friends and especially relatives who
are looking of a deal and are "of course give you something for your
trouble". That way when they scream when I tell them what that "something"
equates to in dollars I can show them in black and white what I'd charge
someone off the street. It doesn't hurt either when my wife gives me the
look when I tell her that "simple little thing" she wants done is going to
cost four hundred dollars (with no labor or overhead figured in).
--
Mike G.
Heirloom Woods
www.heirloom-woods.net
"Mac" <[email protected]> wrote in message
news:[email protected]...
> I have read about a formula for pricing your work. Something about the
price
> of lumber times the time spent on the project or something like that.
>
> Can anyone shed some light on this for me?
>
> Thanks, Mac
>
>
"Mac" <[email protected]> wrote in message
news:[email protected]...
> I have read about a formula for pricing your work. Something about the
price
> of lumber times the time spent on the project or something like that.
>
> Can anyone shed some light on this for me?
>
> Thanks, Mac
You know, I don't think this has ever come up before here on the wreck.
Seriously, unless you're making something that's really one-of-a-kind, see
what others are charging for something similar and go from there.
todd
Edwin Pawlowski <[email protected]> wrote in message
news:[email protected]...
>
> "Mac" <[email protected]> wrote in message
> news:[email protected]...
> > I have read about a formula for pricing your work. Something about the
> price
> > of lumber times the time spent on the project or something like that.
> >
> > Can anyone shed some light on this for me?
> >
>
> Some people seem to think that pricing work at 3X material cost is
> profitable. It may be, but it may not be.
>
> You have to look at material cost plus labor plus overhead to determine a
> price. Once your price is established, you have to determine if people
are
> willing to buy the item at that price. If I can make a widget in 20
minutes
> and sell it for $15, but it takes you 2 hours, that does not mean you can
> sell it for $90. The market will just not accept that so it is up to you
to
> find a better product or a better manufacturing method.
>
> Another example. I make a widget out of expensive material that cost $50,
> take an hour to make it and sell it for $150. No bad. You make a widget
out
> of cheap wood that cost $2, take the same hour of labor, but at 3X
material,
> you will sell it for $6. Not a good idea.
>
> For more details, do a Google search on the subject as it has been
discussed
> here a few times.
> Ed
>
> thanks Ed appreciate the advice....Mac
"Mike G" <[email protected]> wrote in message
news:[email protected]...
> It doesn't hurt either when my wife gives me the
> look when I tell her that "simple little thing" she wants done is going to
> cost four hundred dollars (with no labor or overhead figured in).
>
> --
> Mike G.
> Heirloom Woods
What does she charge you for something like a Thanksgiving dinner?
-Jack