The good news is the economic recovery is finally reaching the woodworking industry. The bad news is a lot of customers still want rock-bottom recession pricing. What’s a shop to do?
Before trying to answer that question, let’s think about some of the common failings that frequently make pricing custom work a nightmare. Probably one of the biggest is not paying close attention to actual costs in labor and materials. Fluctuating materials costs in particular are creating a few more headaches for shops. Yeah, it’s a pain to keep changing your calculations to reflect changing costs, but you ignore the changes at the sacrifice of your profit margin.
Shops have been historically bad at estimating how long jobs actually will take. The only solution there is to keep good track of historic data. Most shops can’t be bothered with the effort. If that’s your situation, then I guess you can’t be bothered with losing money either.
And finally, another common failing is not having a good grip on either the market for similar work or the true value of the work as seen through the customer’s eyes. Remember, customer-perceived value is the only value that counts. If customers don’t understand the difference between your product and a low-priced competitor’s offering, they surely won’t pay you a higher price.
So, what’s a shop to do? Pay attention to the details, update your cost calculations, and learn to say no to customers who aren’t profitable. You deserve a better price. Go out and get it.
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