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Our Pricing Structure for Client Work

Updated: Oct 16, 2020

A few months ago we decided to design a couple projects that could be easily repeatable and batched out relatively quickly. This helps keeps costs low for the customer and we wanted to be able to make multiple sales within the same timeframe – resulting in maximum efficiency of our time (I know this is a super common practice since most of us have full time jobs as well as our woodworking side hustles!!).

The first piece we decided to design to be “batched” was this farmhouse writing desk. We had the measurements, cut types, material amounts, and dry times down to a science!

Farmhouse writing desk to be batched out

After we sold a few of those, we decided to cater to other styles – so we made a modern one! Again, it was a fairly simple design that we made to be super efficient with materials and time. With the modern desk, we decided to allow people to pick a stain color to further customize it to their style! It honestly took no additional time to do a certain stain color over another, so we thought this was overall just value added to the customer at no cost to us.

Besides the fact that we conserved a lot of our time creating and selling these specific tables, it was great advertisement for people that wanted a desk “similar to that farmhouse one, but except like….(blank)” Meaning, we got LOTS of interest in people who wanted to customize the farmhouse/modern desks, which was great for us, because custom builds allow for higher profits and more experience!

We had one of our friends request a custom farmhouse desk, except completely stained dark brown with a drawer in the middle. Perfect! No problem!!

We realized the pricing structure would be a little more in depth on this one since it wasn’t one of our full on batched out products, so we decided to break this one down and get into the numbers of exactly how we priced this project (for this post as well as the YouTube video we did on this topic! See video below).

We built the top the same way we built it for the farmhouse desk, so we knew exactly how long it took us to make (this one just ended up being slightly larger than the farmhouse/modern desktops). From there we used labor estimates from other projects we’ve done in the past with very similar elements.

This is the bid we gave the customer before we even built anything, and this is what we ended up charging for the entire project and what we ended up getting paid for it!:

Top: 1 hour

Legs: 45 minutes – 1 hour

Drawer/Hardware: 1 hour

Sanding: 1 hour

Finishing: (taking into account multiple coats) 1 hour

Total Labor Hours = 5 hours (x $30/hr) = $150 Labor Estimate

As for materials, we weren’t using any hardwoods or adding additional materials for the legs, so we would be able to keep costs fairly low for the client:

Top, drawer, and legs: $30 for lumber

Drawer slides and knob: $15 (Click here to find drawer slides like we used for this project)

Stain, finish, sandpaper, glue, etc.: $10

Material pickup/delivery: $5 (I know this doesn’t exactly fit into this category, but it does cost money and gas to pick up the above materials and to drive to the customer’s delivery address…which can be pretty far sometimes…so it DOES add up!)

Total Materials Estimate = $60

Contingency Cost: $40

We did add in $40 to this bid for “contingency costs”, meaning that we were budgeting for something being more expensive than we expected or something going wrong in the process. We don’t always have something that requires this cost, but when we do, BOY is it nice to have already incorporated that buffer into your original quote!

Labor + Materials + Contingency = $250

We added a 30% markup to this project because that’s where our profit comes from. We get a lot of questions on why we do BOTH labor costs and a markup on all of our projects.

“Aren’t you already making money/profit off of the labor costs?”

And the answer to that is….yes….for now.

However, if you one day want to hire employees (which we do), that labor money will go to them…not you or the business. The markup is what gets distributed back into the business as profit when the build is all said and done. For us…we want to practice how we will one day play so that it’s an easier transition later on.

30% Markup = $75 (We typically do 40%, but we chose to keep in at 30% for this particular customer)

Total Cost Quoted to Customer = $325

Now for what it actually cost us…these are the numbers post-build. There were a couple of things that changed from when we were originally walking through the rough pricing outline. The lumber was $8 more expensive than planned and we opted for a bit nicer looking knob, which cost $2 more. When it came to labor, we ended up making the top and legs a bit faster than anticipated, and we didn’t take the full hour to sand:

Actual Time to Build:

.75 hour for top

.75 hour for legs

1 hour for drawer/hardware

.5 hour for sanding

1 hour for finishing

At $30/hour for 4 hours, total labor costs were $120.

Actual Materials Cost:

$38 for lumber

$17 for drawer slides/knob

$12 for stain, finish, sandpaper, glue, etc.

$5 for materials pickup/delivery

This came to $72 for the total materials cost. All together with labor and materials, the desk came out to $192. Our bid (and what we charged on the invoice) was for $325, so we ended up making $75 more than anticipated, with a total profit of $325-$192 = $133.

With this project, we learned that our skills in batching out similar desks really helped us out in saving some time in building a custom version!

This is the video we made on exactly how we priced this project and even a little bit of the build itself!

This post may contain affiliate links for products we used to create this project! If you’d like to check them out, we do get a small percentage of the sale and they are of no extra cost to you! It all goes towards supporting the content creation of Jennie and Davis. BUT – we do not take tool sponsorships and there were no tool endorsements. Just our honest opinions!

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