Here's How NOT to Price Woodwork Products
Everyone has their own way of pricing. But the simple fact is some woodworkers can price their work and make a decent living, while others struggle.
SHAWN VAN DYKE
Shawn Van Dyke is a construction business coach based in Knoxville TN helping business owners around the world get results for sustainable and profitable growth. He's pretty active on Instagram, and well worth a follow. Shawn is the man! The amount of knowledge he shares is unreal. Woodworkers can learn a lot from Shawn.
METHOD
His method in the below video is correct... to a point. This method will give you the bare minimum you should be charging. If you are marketing your business and your services correctly, this will allow you the opportunity to charge more, and make a profit, so that you can continue to provide the services you provide.
Here's what Shawn says about his method in the video below:
I don't always get things right. In fact, I mess up all the time. Here's an example of where I got something wrong, but I hope you can learn from my mistake. HOW NOT TO PRICE A SET OF SHAKER TABLES I am not a custom furniture expert. But I was asked by an expert, Freddie Roman - @periodcraftsmen (IG), to price a set of shaker tables for a podcast that he was recording where he was talking about pricing strategies for custom furniture makers. I made this quick video above to show how I would approach pricing these custom shaker tables. Freddie discusses on The Against the Grain Podcast, there's a cost-based pricing strategy and a value or market-based pricing strategy. Cost-based is knowing what the costs are for your product or services and applying the correct markup to yield the appropriate margin you need for your business. This is the approach I took. A cost-based approach is the BASE LINE price you should charge. In that regard, my price may have been correct. But using a value-based pricing structure is more appropriate for this situation. A value-based pricing strategy determines the cost-based price and then includes the value associated with what your brand can demand for that same work. Always, always, always price based on value (as long as that price is above your cost-based price). Although my final price was most likely wrong (too low) for what the market would pay, the method for determining the cost-based price was correct.
CONCLUSION
Like I said earlier, everyone has their own way of pricing. There isn't a single correct way. What do you do to make sure you cover yourself? I'm particularly interested to hear your thoughts on this. Please comment below.
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