What do you charge then?

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Fri, Dec 10, 2004, 12:34pm (EST-1) snipped-for-privacy@interoz.com (John) says: Depends on how you quoted the price. If you just quoted $900 for the project, then I agree, you feel into a deal and made $200 more profit than originally anticipated.
In theory, I can agree with that. But, if it came down to practice, I would probably just drop the price anyway. Karma. If I were making my living that way, I'm sure I would stay with the original price, but I don't, so moot point.
However, if you priced it with the material cost broken out seperate from the labor, then the price SHOULD drop by the $200, otherwise you are essentiall STEALING from the customer
Agree. Even so, on a personal level, that's also basically how I'd feel by not passing along the saving in either case. Karma again.
JOAT Remember: Nova is Avon, spelled backwards.
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I picked up some very beautiful quilted maple boards a while back. I paid $2.50 to $3.00 a board foot. I have yet to see any as nice as mine at any price.
So if I make something with it for someone I should charge that much? I don't think so!
I will not likely ever get a deal like that one again. I treasure the stuff and intend to charge what it is worth. I think it muct have been my good Karma to have found it.
What do you think about that?
Loretta
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Fri, Dec 10, 2004, 6:40pm (EST-3) snipped-for-privacy@gmail.com wants to know: I picked up some very beautiful quilted maple boards a while back. I paid $2.50 to $3.00 a board foot. <snip>. I treasure the stuff and intend to charge what it is worth. I think it muct have been my good Karma to have found it. What do you think about that?
I think it's a different situation. You own it, so you're entitled to make a reasonable profit from it. Your customers will expect to pay a realistic price for it.
The other was talking about giving a quote for making a piece of furniture, then finding out the materials cost was lower than originally anticipated. In that case, I think the right thing to do is pass the savings along to the customer.
Different. In your case, you already have the materials. In the other, the materials will be bought for a specific project. You have the tight to charge what you consider right for your property. You don't have the right to charge extra for materials bought for a specific project.
You are going to make a small sacrifice of a few board feet of that to the Woodworking Gods, right? Just let me know when you're sending it, and I'll give the shipping address. Just send it along to me, High Priest of the Woodworking Gods, and I'll take care of all the administrative details. Remember, for safety's sake, don't attempt sacrifices at home.
JOAT Remember: Nova is Avon, spelled backwards.
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I picked up some very beautiful quilted maple boards a while back. I paid $2.50 to $3.00 a board foot. I have yet to see any as nice as mine at any price.
So if I make something with it for someone I should charge that much? I don't think so!
I will not likely ever get a deal like that one again. I treasure the stuff and intend to charge what it is worth. I think it must have been my good Karma to have found it.
What do you think about that?
Loretta
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(Todd Fatheree)

here's something else to consider. a great many of Chilhuly's pieces, especially the ones you see in ceilings and high up, are plastic.

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On a simple, flat, square, good-condition roof, that might apply. I don't think I've ever seen such a roof.
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Holy Cow! $1600 didn't even cover the materials for my roof. At ~$45 per square for 30 year Architectural Shingles, my shingles alone came to about that. You must have a very small roof area to have gotten tear off, felt, shingles, minor repairs and clean up for that.

Honestly, any half way decent roofer ought to be able to lay down a roof without lines and have it come out perfect. As long as the roof is reasonably square to start with. Everything just follows the tabs or is cut in repeating increments as you go across the roof and they lay out to follow the shingle below them.
A favor JT - can you configure your newsreader to put in some sort of character to indicate the text you're including from a previous post? (The way that I inserted the > ahead of your comments). Your posts can become very difficult to follow - especially when you place comments interspersed within a previous poster's comments. That's the way comments should be placed (interspersed), IMHO, but it gets really hard to follow yours without clear indication where the original poster's comments left off and yours begin.
--

-Mike-
snipped-for-privacy@sprintmail.com
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Sat, Dec 11, 2004, 1:50am (EST+5) snipped-for-privacy@sprintmail.com (MikeMarlow) is astounded: Holy Cow! $1600 didn't even cover the materials for my roof. <snip>
My house is 24'X48'. Yours is probably bigger. I live in NC. You probbly don't.
A favor JT - can you configure your newsreader to put in some sort of character to indicate the text you're including from a previous post? (The way that I inserted the > ahead of your comments). <snip>
Well, when I read your post, I don't see any >. My system won't allow anything fancy, it still runs on steam. So, I SNIP, and indent my comments. That's the best I can do, and has been no problem.
JOAT Remember: Nova is Avon, spelled backwards.
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"J T" wrote in message
Todd Fatheree quibbles:

Yep, if you're in business, and want to stay that way, you'd better embrace that principle.

Well, Todd can't have his cake and eat it too. That would be a "cost plus" arrangement which, by definition, uses "cost" as a basis for the final price, something which he insists is wrong.
You gotta laugh at the tortuous twists and turns of supposed modern economic and accounting principles which are, in actuality, designed to hide, not illuminate. They all seem to start with the same mumbo jumbo BS you've heard from the ECO101 adherents in this thread.
And they all have the same quality which triggered your question above, a certain ambiguity that makes it not quite clear what they are getting at.
Pricing your goods in the often one-off world of woodworking is like being a horsetrader in the old days. Those who succeed at it are masters of the art of negotiation and human nature, AND they always use their "cost" as a "basis" and a departure point.
Besides, ultimately there is only one economic principle that overrides everything else in a successful business, be it woodworking or Enron type commerce ... making damn sure that income exceeds expenditures.
Nothing ambiguous about that.
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Just what is the competitive landscape for a single bookcase made by 13 year olds?

Right now, are costs are changing rapidly on raw mateial. Yes, we tack it on, but a 10% raw mateial cost increase does not justify a selling price increase of 10%. We are passing on actual cost. So far this year material increase is 50%. It MUST be passed on or we go out of business.

Correct. I also hope it happens that way as it won't be long before another compeitor is gone. That will change the marketplace if we are the only supplier in the region! We lost a large customer to a competitor. They offered a firm price for a full year that is lower than ours at the time. Factor in the 50% material increase and we laugh every time we see the lost customer's truck picking up product.
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and supply the materials...i would then supervise him using your tools so he learns, the job gets done, and your tools aren't destroyed...hopefully! if you don't have the time; then point him/her to someone that you think might have the time, etc. guilty conscience bothering you? help the kid anyway. but make sure the kid learns. rich
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I would definitely WORRY about letting a 13yo use my power tools. If he was injured, you can pretty much count on being held liable for the injury.
Personally, I would quote him a price based on mateirals and TIME, and then decide how much to charge for your labor (or not charge as the case may be)
John

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Sat, Dec 4, 2004, 7:41pm (EST+5) snipped-for-privacy@hotmail.com (SamBerlyn) waves and wants to know: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? It would depend.
I would think you charge on a per job rate, or is it hourly?
It would depend.
Say the materials cost 15 and it took 5 hrs, how much would you charge.
It would depend.
I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering!
What to charge is very rarely a black and white thing. Usually more gray. Materials cost, certainly. Unless you're making something for a close relative, or friend, as a gift. Then it could be optional. Everything else is not engraved in stone. I'll use the US $ sign rather than the pound sign (not on my keyboard).
Someone wants a bookcase. Your materials cost $15. Takes 5 hours to make a bookcase. You want to make $5 pe hours, for a total of $40. The customer is happy, you're happy.
OK, someone else wants a bookcase. Materials will cost $15 this time too. You tell him/her $40. However, this time the client wants a different design - and this one takes 10 hours to make. You still want your $5 hours labor, but you've already quoted $40. Hmmm, that didn't work out quite right.
You get another client, who wants a bookcase, first design. Ah, you say, I know this one. And quote $40. Except this time, you have experience with the design, and cut your work time down to 3 hours rather than 5. Ah, now your're cookin'.
But, then no one wants bookcases anymore. Drat.
Then you decide to make little boxes (or whatever), and sell all you can make, at $15 each - which covers the $5 materials, and take 3 hours to make. You still want to make your $5 per hour, but if you charge $20, they don't sell well. Then you fid out, if you take them 40 miles down the road, you call sell them at $20, with no problem; but then you've got gas, the time it takes, etc. And, if you go down the road 40 miles in the oppositie direction, they will only sell at $7.50 each. It partly depends on what you make, what materials you are using, where you are selling, what price you are asking.
Bottom line, there're just too many variables involved for there to be any hard and fast answers.
JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss
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What to charge is why everyperson is not in Business selling a product. It takes a keen eye and particular know-how to understand what the market will bear and how far to push it. This what makes a good business. Not everyone can do it. Many wannabes come along and cheapen it for everyone. I am neither of the above. I just like to make sawdust. In the case of the 13 year old, I would explain the cost of materials, the cost of time and discuss his budget. I would then offer to let him pay in cleaning my yard, weeding raking leaves etc and some minor shop time. A thirteen year old offering to pay you to make him a bookcase has a good jump on the life he will be facing soon. Give him all the guidance he will take. Very interesting thread. Wayne K Columbia MD
(Sam Berlyn) waves and wants to know: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? It would depend.
I would think you charge on a per job rate, or is it hourly?
It would depend.
Say the materials cost 15 and it took 5 hrs, how much would you charge.
It would depend.
I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering!
What to charge is very rarely a black and white thing. Usually more gray. Materials cost, certainly. Unless you're making something for a close relative, or friend, as a gift. Then it could be optional. Everything else is not engraved in stone. I'll use the US $ sign rather than the pound sign (not on my keyboard).
Someone wants a bookcase. Your materials cost $15. Takes 5 hours to make a bookcase. You want to make $5 pe hours, for a total of $40. The customer is happy, you're happy.
OK, someone else wants a bookcase. Materials will cost $15 this time too. You tell him/her $40. However, this time the client wants a different design - and this one takes 10 hours to make. You still want your $5 hours labor, but you've already quoted $40. Hmmm, that didn't work out quite right.
You get another client, who wants a bookcase, first design. Ah, you say, I know this one. And quote $40. Except this time, you have experience with the design, and cut your work time down to 3 hours rather than 5. Ah, now your're cookin'.
But, then no one wants bookcases anymore. Drat.
Then you decide to make little boxes (or whatever), and sell all you can make, at $15 each - which covers the $5 materials, and take 3 hours to make. You still want to make your $5 per hour, but if you charge $20, they don't sell well. Then you fid out, if you take them 40 miles down the road, you call sell them at $20, with no problem; but then you've got gas, the time it takes, etc. And, if you go down the road 40 miles in the oppositie direction, they will only sell at $7.50 each. It partly depends on what you make, what materials you are using, where you are selling, what price you are asking.
Bottom line, there're just too many variables involved for there to be any hard and fast answers.
JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss
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No Wayne, wronge end of the stick!
I (Sam Berlyn) am 13. I am asking how much to charge. I have got my own tools and workshed. I am NOT going round weeding and sweeping. and I am NOT going to break other people's tools.. I have my own!
Thanks,
Sam
(Sam Berlyn)

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wrote:

LMAO! No, it is the 13 yr old *building* the bookcase, not buying it. :)

Aut inveniam viam aut faciam
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Thanks JT for the infomative response, I see what you mean!
:)
Sam
(Sam Berlyn) waves and wants to know: Hi, If someone asked me (a 13yr old) to build a bookcase, how much would you charge? It would depend.
I would think you charge on a per job rate, or is it hourly?
It would depend.
Say the materials cost 15 and it took 5 hrs, how much would you charge.
It would depend.
I am not going to start charging, as I am putting it down to experience, just getting them to pay materials, but just wondering!
What to charge is very rarely a black and white thing. Usually more gray. Materials cost, certainly. Unless you're making something for a close relative, or friend, as a gift. Then it could be optional. Everything else is not engraved in stone. I'll use the US $ sign rather than the pound sign (not on my keyboard).
Someone wants a bookcase. Your materials cost $15. Takes 5 hours to make a bookcase. You want to make $5 pe hours, for a total of $40. The customer is happy, you're happy.
OK, someone else wants a bookcase. Materials will cost $15 this time too. You tell him/her $40. However, this time the client wants a different design - and this one takes 10 hours to make. You still want your $5 hours labor, but you've already quoted $40. Hmmm, that didn't work out quite right.
You get another client, who wants a bookcase, first design. Ah, you say, I know this one. And quote $40. Except this time, you have experience with the design, and cut your work time down to 3 hours rather than 5. Ah, now your're cookin'.
But, then no one wants bookcases anymore. Drat.
Then you decide to make little boxes (or whatever), and sell all you can make, at $15 each - which covers the $5 materials, and take 3 hours to make. You still want to make your $5 per hour, but if you charge $20, they don't sell well. Then you fid out, if you take them 40 miles down the road, you call sell them at $20, with no problem; but then you've got gas, the time it takes, etc. And, if you go down the road 40 miles in the oppositie direction, they will only sell at $7.50 each. It partly depends on what you make, what materials you are using, where you are selling, what price you are asking.
Bottom line, there're just too many variables involved for there to be any hard and fast answers.
JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss
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Tue, Dec 7, 2004, 6:48am (EST+5) snipped-for-privacy@hotmail.com (SamBerlyn) says: Thanks JT for the infomative response, I see what you mean!
If you ever figure out a formula that'll work every time, don't tell anyone but me.
JOAT Be who you are and say what you feel, because those who mind dont matter, and those who matter dont mind. - Dr Seuss
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On Sat, 4 Dec 2004 19:41:56 -0000, "Sam Berlyn"

Sam:
What follows is a repost of something that I put up a couple of years ago.
I reckon it still holds true.
It is interesting to me in reading this thread that people confuse cost and price.
You must know your cost.
It does not always have to determine your price.
The price may be a multiplier of the cost, or it might be the perceived value of the item or service - but must always exceed the cost - if you would like to be in business.
In direct response to your query about the thirteen year old person - I would seek to do that for free, in hopes of luring bigger and more profitable fish.
Kindness is a great lure.
Formula is:
M+L+O+P (Materials plus Labor plus Overhead plus Profit)
MATERIALS COST = Cost plus Tax plus Acquisition Cost (going to get it) plus carrying costs if financed. Make sure you do your take-offs cleanly and add for waste.
LABOR COST is a bit more difficult. You need to break the job down into individual operations and make sure that you charge for all of them.
Once you have your number of hours figured you need to figure your shop rate.
Maximum number of hours available for work = 2080 (52 weeks x 40 hours = 2080 hours). Minus vacation time = 2000 (2 weeks x 40 hours = 80 hours). Minus holidays = 1944 (7 days x 8 hours = 56 hours).
Minus non-billable hours = 1555 (20% of 1944 hours = 388.8 hours) (marketing, selling, bidding, bookkeeping, purchasing, emptying spittoons, etc.)
So, you now have 1555 billable hours in which to earn your money for the year.
How much do you want to make a year as your wage (not including profit, that's a different animal)?
Let's use $50,000.00 a year just for fun.
Labor Cost per billable hour = 32.15 ($50,000 / 1555 billable hours $32.15 per hour).
OVERHEAD COST = All the costs of doing business. Some of what I put here should go into a thing called Labor Burden but screw it, I'm putting it here, which works if you're a one man shop.
Shop Cost = 3.86 (We'll include heat and electric, etc. in here, $500.00 per month x 12 months / 1555 billable hours = $3.86 per hour). Machinery Cost = 1.29 (Acquisition, repair, maintenance,depreciation, $2000.00 per year / 1555 billable hours = $1.29 per hour). Truck Cost = 2.22 (34.5 cents per mile x 10,000 miles per year / 1555 billable hours = $2.22 per hour). Office Cost = 1.16 (Space, furniture, computer, supplies, etc.$150.00 per month x 12 months / 1555 billable hours per year = $1.16 per hour). Insurance = .64 (Contractor's Liability, building, etc., $1000.00 per year / 1555 billable hours = $.64 per hour). Health Insurance = 1.93 ($250.00 per month x 12 months / 1555 billable hours = $1.93 per hour). Professional Services = .64 (Accountants and lawyers, $1000.00 per year / 1555 billable hours = $.64 per hour). Other = .5 (All sorts of consumables and other stuff that can't be directly billed to a job, $.50 x 1555 per billable hour = $.50 per hour).
Total Overhead per billable hour = $12.24.
Labor Cost plus Overhead Cost = $44.39 (Labor @ $32.15 plus Overhead @ $12.24 = $44.39)
PROFIT is not how much you make as wages, it's how much the business makes.
A rough split on the cost of jobs is 1/4 material and 3/4 labor (Labor Cost plus Overhead Cost).
If your yearly billing for labor plus overhead is $69,026.00 ( $44.39 per billable hour x 1555 billable hours = $69,026.00). Then your yearly materials cost should be about $23,009.00 ($69,026.00 / 3 $23,009.00).
Annual Sales = $92,035.00 (Does not include profit, yet, Labor @
$69,026.00 plus Materials @ $23,009 = $92,035.00 per year).
Profit = 8.88 (15% of gross annual sales, $92,035.00 x 15% $13805.00 / 1555 billable hours = $8.88 per hour).
SHOP RATE = 53.27 (Labor Cost plus Overhead Cost @ $44.39 plus Profit
@ $8.88 = $53.27 per hour). ANNUAL SALES = $105,840.00 (Labor Cost plus Overhead Cost plus Materials Cost plus Profit).
QUARTERLY SALES = $26,460.00.
MONTHLY SALES = $8820.00.
WEEKLY SALES = $2035.00
Every time I start thinking like this it makes me want to go back to working for somebody else.
I'll probably catch hell for this because no accountant would ever group things together the way I have. Also, they don't, as a rule, make as much use of the WAG method as I have for cost estimating. They like GAP, I like WAG (they be rich - I be poor). I guess my point is: If I'd had someone present things to me in this way when I started, I probably wouldn't have started at all but, at some point you have to start thinking this way, preferably with the aid of a real accountant, or you won't really be in business, you'll just have a very expensive, very time consuming hobby. And, for you guys who think that 15% is a gaudy figure, yeah, so do I.
Regards, Tom.
"People funny. Life a funny thing." Sonny Liston
Thomas J.Watson - Cabinetmaker (ret.) tjwatson1ATcomcastDOTnet (real email) http://home.comcast.net/~tjwatson1
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This is a keeper. Best explanation to date. I see I'm not charging enough!
Thanks Tom Gary
Tom Watson wrote:

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