working out prices

[moggyjnr]

Evening all,

This question has probably already been asked hundreds of times but can't find it on the forum so here goes...

Started making custom pieces wall art, furniture etc.

Getting asked how much things are and I just tend to google it and see if anyone else is selling anything similar.

Does anyone have a rule of thumb when calculating prices or do you just make it up? After all I don't want to be giving it away.

Thanks in advance

Moggy

 

[Zeddedhed]

Working out a price for anything you are making is in theory extremely simple.

1. Cost of Materials.
2. Cost of Labour.
3. Overhead and profit.

Add them together and thats the price.

It gets more complex on items 2 & 3. You need to accurately predict the amount of time spent on the project. This should include time spent sourcing, researching and acquiring materials. Time spent on design, creating cutlists, machine set-ups, sharpening etc. I also include time spent liaising with the client on design revisions etc. If you know how much you want to earn in a year divide that figure by the number of working days you anticipate actually working (subtract time out for holidays, sickness, bank holidays) to give you a day rate.

Then you need to work out your annual overhead. Divide that by the same number of days above and thats your daily overhead. Either add it on to your day rate or add it into the price based on the number of days the project will take.

Finally apply a percentage markup to materials, labour or both to give you a profit.

Add it all together and Bob's yer mothers brother.

 

[blackrodd]

If you cannot see a similar item for sale, for cost comparison,
I would suggest you Make some sample items that you wish to sell, get everything, sizes, colour finish etc to you're liking, Keep methods simple, quick but effective.
Then make 6, at a time as batch work is faster and therefore more profitable to you, keep a check on time and you're labour rate +costs, add to the materials= item price.
Only you know you're costs and acceptable bottom line in returns, most people have different circumstances, rent, etc.
Regards Rodders

 

[moggyjnr]

Thanks guys, I have got myself a new workshop at a bargain price so looking forward to finally being able to let loose on the builds..