Every year for the past 15 years, I’ve embarked on an annual journey that reminds me of the famous Rod Serling introduction to the classic Twilight Zone television series. Only it would go this way: “You're traveling through another dimension -- a dimension not only of sight and sound but of mind. A journey into a wondrous land whose boundaries are that of imagination. That's a signpost up ahead: your next stop: the Pricing Survey!”
Because the numbers reported in the survey vary so widely, many shops see it as a kind of Twilight Zone story that is fascinating but not exactly of this world. The sad truth is the Pricing Survey is indeed a reflection of the real world and the incredible variances in pricing for custom work in the woodworking industry. Too often the imagination is not in our pages but in the brains of bidders.
One of our lowest bidders in the survey this year acknowledged that there was probably room to raise his prices, but then he deferred, noting how much his customers appreciate the extra value he adds to their homes for the comparatively little they pay him. What?! Shouldn’t they be paying more for that value? But then maybe some other shop will still offer it for less and take the work.
And I am constantly amazed at the huge variations in materials estimated in the survey. My travels around the country show that there are variables in materials costs, but not by that much. I have to believe the wide variances reported in the survey are as much to do with mathematical errors, omissions and simple miscalculations as they are to do with any real differences in costs. But a huge number of shops still don’t regularly analyze finished projects and update data for future bidding. One bidder in the survey noted how some cheaper competitors in his area must not look at the other bids because they often are 20-percent lower. He sees that as 20 percent the low bidder shop is leaving on the table even though he wins the job.
Closer, more competitive pricing benefits us all and helps customers, too. More accurate estimating reduces change orders and other surprises. It breeds confidence in repeat customers. Closer pricing makes other factors such as service and guarantees more valuable in establishing a competitive edge. And closer pricing, helps to deter the cutthroat low-ball bidding that has long been a feature of our industry, especially in a down economy.
And for those who still see pricing as some unfathomable dark mystery, here’s another quote from Rod Serling: “There is nothing in the dark that isn't there when the lights are on.”
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