Pricing Survey: Why aren’t prices more
Results of the annual FDMC Pricing Survey hint at why shops struggle with pricing
Given the same bidding specifications for the same jobs, how can prices vary so much from high to low
that the high bid is as much as double,
triple, or even five times the low bid?
That is the fundamental mystery that the
annual FDMC Pricing Survey (this year
sponsored by Keystone Wood Specialties)
continues to probe.
This year’s survey includes common
custom woodworking projects such as
kitchens, a bathroom vanity, and a home
office project. These were real projects
done by real shops that provided the bidding specifications so any shop in North
America could try their hand at pricing
these jobs for comparison purposes. For
more than 20 years, the Pricing Survey
has found startling variations in pricing
custom woodwork. The results this year
continue to reveal the wide ranging pricing that plagues the woodworking industry, causing shop owners and clients alike
to shake their heads and wonder how the
numbers can be so different.
For example, how can a bathroom vanity earn bids ranging from $5,500 to
$12,000, which compare to the $7,000
price the original maker charged?
Granted, this wasn’t the usual vanity,
since it required complex curved work,
but does that really account for the
$6,500 difference from top to bottom?
The original maker laughed at the variations but wasn’t terribly surprised. He
believes it all comes down to what clients
are actually paying for. “When you think
about it what you are really selling is your
work and what it’s worth,” he said.
So, is one maker’s work actually worth
double or triple (or even more multiples)
of what another’s is? Perhaps. But there
are also clearly lots of other pricing fac-
tors at play. Simple math shows up as an
issue in calculating materials. As the in-
ternet and globalization have taken hold,
the cost of specific materials continues to
tighten up. The price of the same brand
and model of hardware or the same
sheet goods really does not vary enough
across North America to account for the
differences in materials costs shown by
respondents to the survey. In the case
of the same vanity, materials costs range
from $2,000 (what the original maker
says his materials cost was) up to $4,000.
Some answers come in the notes. One
bidder admits he substituted cherry for
mahogany because he couldn’t easily
obtain that from his suppliers. But the
board foot price of cherry vs. mahogany
in a small vanity project still doesn’t account for a huge difference in price. We
know some bidders rely on linear foot
measurements rather than taking the
time to make more specific calculations.
That can trip you up in smaller but more
complex jobs such as the curved fronts
required in the vanity project.
Complexity confounds pricing in many
projects. It’s really easy to give quick
“ballpark” estimates of a project based
on a tape measure and a price per foot,