Why would one cabinetmaker bid one-third as much as another for an identical project

A contemporary frameless style kitchen from the annual FDMC Pricing Survey

Can the same custom kitchen really cost three times as much from one shop as another? The answer is a resounding yes, based on one project bid submitted for the annual FDMC Pricing Survey.
Hear Will Sampson present results of the latest FDMC Pricing Survey on February 15. Register>>
Two kitchen projects reported in that survey – one a contemporary frameless style project sponsored by CNC Factory, the other a beaded inset face-frame design, project sponsored by Drawer Box Specialties – attracted the most bids of any projects in the annual survey.
But while one might think more competitive bidding would bring more competitive pricing, that just isn’t the case. For both projects, the high bids were about three times higher than the low bids. This is akin to a customer taking the same bidding specifications to three different shops and getting bids ranging from under $12,000 to nearly $40,000 for the frameless job and from nearly $25,000 to almost $70,000 for the face-frame project. 
The Project: This paint grade kitchen (soft maple and MDF panels) features beaded face frames (1/4-in. bead) with flush inset doors and drawers. Cabinet interiors are ¾-in. pre-finished maple plywood with ¼-in. prefinished maple plywood backs, except for the glass door section of the hutch cabinet, which has a custom painted interior. Lots of details add to the cost, and a glazed finish tops it off.
Analysis: The most popular project that year, this kitchen had 19 bidders, but that didn’t mean the numbers were close. The original bidder was the highest bid turned in at $67,438, nearly three times the low bid of $24,850. Probably most remarkable are the wide variations in construction hours. The original and highest bidder actually posted one of the lowest hours numbers, while other bidders estimated hours at as much as four times what the original bid reported.

Why such a variance in cabinetry pricing?

We'll see if we can answer that question as I present results for the latest projects in the 2017 FDMC Pricing Survey at Wood Pro Expo on February 15, 2018 at 1 p.m. at the Charlotte, NC, Convention Center. 
I have visited hundreds of shops across the country, studying and reporting on successful business practices, including pricing methods. The FDMC Pricing Survey is the industry’s only tool designed to compare pricing for custom woodworking projects. Over the 15 years since we launched it, this survey has compared hundreds of bids on scores of projects to give a fluid picture of the dynamic factors affecting pricing in the woodworking industry.
During my session, I will give you some of the insights I have distilled from studying pricing in the custom woodworking industry for more than two decades, along with the results of the 2017 FDMC Pricing Survey. I'll focus on some of the key reasons pricing varies so much in this industry even between established, experienced shops. I'll talk about how shops leave money on the table or sacrifice profits to bad estimating.
The full day February 14 Conference Program will open with a keynote presentation by Frey, then break into the Lean and Shop Operations tracks, and conclude with plant tours of CABTEQ and Blum, Inc. 

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About the author
William Sampson

William Sampson is a lifelong woodworker, and he has been an advocate for small-scale entrepreneurs and lean manufacturing since the 1980s. He was the editor of Fine Woodworking magazine in the early 1990s and founded WoodshopBusiness magazine, which he eventually sold and merged with CabinetMaker magazine. He helped found the Cabinet Makers Association in 1998 and was its first executive director. Today, as editorial director of Woodworking Network and FDMC magazine he has more than 20 years experience covering the professional woodworking industry. His popular "In the Shop" tool reviews and videos appear monthly in FDMC.