Fascinating Facts – Pricing Furniture

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One area that I’m always asked about is how to price pieces we build. (My response is that you need to check prices in your area – New York is going to be higher than Sheboygan, Wis.)

GaryYeatonAntiques
Photo courtesy of Gary F. Yeaton Antiques

In doing a bit of research into the Dunlap family of cabinetmakers from New Hampshire, John Dunlap left records about his work. At least forty “Tall Case Chests,” many having bandy legs and a deep ornamental gallery above a cornice, are recorded in the cabinetmaker’s account book. In 1784, his “$54 charge” for such an elaborate piece was equal to 23 days pay.

In the United States as of 2011, the average yearly income per household was $69,821. If you consider a five-day work week, there are 260 work days in a year. That’s an average income per day of $268.54. If we take that number times 23, we get $6,176.50.

If you were to build a Dunlap tall chest, you should be able to sell it for $6,176.50. I can tell you one thing: I wouldn’t dream of selling a Dunlap tall chest for that little!

Build Something Great!

— Glen

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2 thoughts on “Fascinating Facts – Pricing Furniture

  1. Glen,

    Those facts are fascinating! Here are some more.

    According to the US Department of Labor, Bureau of Labor Statistics, the “Employer Cost Index” is running about $1.46 for every $1.00 in wages. That is, when you add on the employment taxes, benefits, wage related insurance, etc. (bean counters commonly refer to it as the burden,) the dollar you give an employee cost ya $1.46. This number varies state to state and by the workers compensation category, but $1.46 is the overall average.

    Apply the Employer Cost Index, and if you wanted to earn the $69,821 per year, you would have to charge at a rate of $101,939 per year to cover the burden. Using 260 work days, that’s $392 per day’s labor.

    23 Days of labor prices out at $9,016.

    But wait, those guys were working a lot more than 8 hours a day. Let’s be kind and say they were working 10 hour days. That’s 230 hours or work, or 23 days at 10 hours.

    Those 230 hours, broken down into 8 hour work days, comes to 28.75 work days for us. Conservatively, I’m going to round that up to 31 days because we need time to fish around Horton, Londonberry, Ball and Ball, etc. to find brasses, source enough maple in the right sizes, calculate and source for our finishing plan, think up and sketch the joinery, moulding profiles, run around picking stuff up, etc.

    So… 31 days at 392 per day comes to $12,152. Just to pay for our time.

    Add to that:
    – Direct Costs for Lumber, Hardware and consumables with shipping and tax.
    – Overhead for space, tools and equipment, utilities, insurance, professional fees, administration, bad debt, etc.
    – Profit – Yes, that’s right, after you pay yourself and cover your overhead, you are entitled to a profit

    A real rough estimate would go something like this

    Sale Price 22,766 (100%)
    ____________________
    Labor 12,152 (see above)
    Materials 3,200 (ballpark, lots of wide stock and lots of brasses)
    Overhead 2,861 (based on 24k/yr ballpark)
    ____________________
    Total Expenses 18,231 (80%)
    ____________________
    Profit 4,535 (20%)

    So if you’re OK with making a $69k wage and 20% profit, $22,766 is the MINIMUM you should charge.

    Now for the value considerations. What’s your brand (reputation) worth? If you’re not sure what this means. Sam Maloof was selling rockers for over $50k. Copies by good makers can be had for $3k – $7k. If you have a brand and a demand for your brand, the $22,766 goes up; if you are new/unknown and asking the client to take a leap of faith, the price goes down.

    Sorry for running so long. I know you have a good handle on this, Glen, but so many woodworkers I talk to simply have no idea what real costs – particularly labor costs – are. They greatly undervalue their time and experience.

    Frank Vucolo

  2. I agree with Frank 100%. Particularly the very last sentence.

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