Setting price is usually a tightrope walk – you can fall on the side of charging too little, and not making as much as you could have, or you can fall on the side of charging too much, turning off potential clients for already made items, or putting a bad taste in the mouth of a client that is considering you for a custom job. However, if you do it right, you can walk that tight rope all the way to the other side, and make a good buck, and have a satisfied client.
Recently, I was trying to price out a custom desk and cabinet job; the materials alone were in the neighborhood of $2k. Additionally, I custom designed it, delivered it, and installed it – which involved considerable finish carpentry, as it was butted against three walls.
So how much to price all this at?
There are twelve large drawers, dovetailed in all four corners. Drawers (at least for me) are fussy. The table is 12′ x 3′ x 1″. Cabinet grade plywood. A good size job – but again, how much to charge?
I had a price in mind, off hand. My wife, who works in a Fortune Top Ten place to work, an office environment, thought my number was low. She went online, and did some comparision price work – as best you can for a custom job – and came up with a much larger number – by several thousand. Of course, my eyebrow raised, and I was a bit incredulous – and uncomfortable; I just didn’t feel right charging that much.
I ran my wife’s number by a buddy of mine, who grew up in, and is still in, the same income class as I am, which I would say is in the middle of “middle class”. We are working stiffs, as are our wives. He thought is was also high.
But then I recalled something else my wife said – that her office furniture, which was essentially stamped steel with some wood and fabric embellishment – had cost her company, gulp, $18,000! This was just stock stuff – a desk, a few cabinets – nothing custom.
I explained all this to my friend, and it all became clear – that the number my wife was thinking – would probably be a good price. A custom designed, built, delivered and installed piece of quarter sawn white oak, for a client in Manhattan, of a good size high tech company, which would be paid for by the company. The price made sense.
I was looking at my price all wrong – I wasn’t comparing my work to comparable work, I wasn’t considering the client environment (company versus personal), and perhaps worst of all, I was viewing the price through the prism of my own viewpoint – as if a guy like me was buying it. I wouldn’t consider paying that larger figure if I was buying it, and that was the lesson learned.
When I was a young man, I worked in a muffler and brake shop. Their price structure – for the same muffler – was based on the car. That’s right, the more expensive the car, the more expensive the muffler. Once, a Rolls Royce Silver Cloud came in, and we charged $2k (!) for the muffler! Same muffler on a new corvette, $300; an older Chevy, $79. That might anger you – as it did me at the time – but people that have more usually don’t mind paying more, so places like this know they can get it.
The upshot? You need to consider all the work and material you put into a piece or project, yes, but you also need to consider the the customer you are selling to as well.