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  • How do I cost projects for consignment?

    I'm starting to build some simple furniture out of oak and pine that I will be putting in a consignment shop. I'm unsure of the best method to use for costing the furniture. I can calculate my materials and some labor but do not want over-price my products to the shop nor leave money on the table. It appears after doing research on the web that the prices received for the style i'm making are all over the place. Any assistance would be greatly appreciated.

  • #2
    Re: How do I cost projects for consignment?

    I think Woodworkers Journal had an article on how to price projects (could have been Popular Woodworking) about 2 issues ago. You factor in the cost of the materials, time spent and what similar pieces are selling for. I'll send a link if I can track down the issue.

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    • #3
      Re: How do I cost projects for consignment?

      Bob, big question for you first! Are you doing this as a hobby or are you attempting to suppliment or replace lost income? This makes a big difference in how the pricing should be figured.
      info for all: http://www.hoistman.com http://www.freeyabb.com/phpbb/index....wwtoolinfoforu --- "I like long walks, especially when they are taken by people who annoy me."

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      • #4
        Re: How do I cost projects for consignment?

        Right now it is a hobby. I would however, like to make a little money from this. If nothing else I would like the hobby to pay for itself. I used to work part time at the big orange box store (mostly why I have the orange tools). I've changed my full time job which doesn't allow me to work at the big store and so would like to take the time and use it for woodworking. I truly don't anticipate making the woodworking a career but a way to supplement my income. Generally speaking, it seems that it would be difficult to get huge amounts of money for my time. What I was thinking of doing was to calculate the cost of purchasing the wood at regular retail prices and doubling this amount and that is what I would charge. However, some of the furniture will be finished (more time involved) an some won't. I figured as my skills increased and materials decreased (volume wholesale pricing) I would get more money for my time. Does this sound reasonable or a little cracked?

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        • #5
          Re: How do I cost projects for consignment?

          Bob,

          I've spent much of my life "freelancing" my techinical illustration talents. Not the same as woodworking, for sure, but still the same parameters of time and materials apply.

          First off, you've got to determine what you mean by "pay for itself". That can be as simple as recouping the cost of materials and providing some pocket money or it can mean recouping the cost of materials, labor (at a liveable wage), and amortorizing in the cost of your equipment, electricity, and long-term replacement items like blades, bits, filters, fasteners, and finishes.

          With the latter, you are now a full-blown business and in it for money. If you are only going to go for material cost and pocket money, it becomes something like a subsidized hobby. You've got to determine where you want to be and go from there; bearing in mind of course competitive pricing, etc.

          Stuff on consignment is probably a nice way to go, and at first do it as a subsidized hobby, pricing your stuff to recoup materials, plus time at a relatively low rate. If you find your first few things taking off, then you can step up and look at making a profit and possibly moving to some point where you'd rather be "commisioned" for your talents, rather than just producing objects for sale.

          As an illustrator, it's very difficult to recover every dime based on time spent producing the object. I've had projects where I just "didn't want to let it go" until it was perfect. Truth be known, the client would never want to pay for every hour I put into it. So, often the time factor is one of "love" and you then step back and place a "value" that is often less than your time investment. So, some you win and some you lose. With the losers, you try to make it up on a future project, but that rarely happens. The measure of success though (IMO) comes with the "bottom line" accounting at the end of the quarter; and don't forget to measure the most important thing... is your customer happy and will they come back for more?

          CWS
          Last edited by CWSmith; 04-02-2008, 07:52 PM.

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          • #6
            Re: How do I cost projects for consignment?

            Hobby, just what I thought. Bob, I think I would go with the double material cost for unfinished and 3 times for finished. Yes you should go by normal retail cost on the materials too. If this is furniture, you might consider using Poplar instead of Pine, easier to work with and stronger.
            info for all: http://www.hoistman.com http://www.freeyabb.com/phpbb/index....wwtoolinfoforu --- "I like long walks, especially when they are taken by people who annoy me."

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            • #7
              Re: How do I cost projects for consignment?

              My issue with doing consignment is the end price to the customer. Around here consignment shops want to make 40%. After I price the items so that I can earn enough to make the work worthwhile, and the shop adds 40% to that, the end price for the item is such that sales are restricted. Remember that to most furniture customers you are competing with Walmart, they don't realize the difference between the quality of solid wood and cheap particle board junk.
              One positive aspect of doing consignment has been that I require that my name and contact info is displayed on all pieces and that has brought customers to me directly.
              Poplar Branch Wood Crafts

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              • #8
                Re: How do I cost projects for consignment?

                Thank you guys for the information!

                I think it will be good for me to remember that this is a hobby for me. And as such, the most important thing is it should be fun. I'll plan on using this as a way to pick up a few bucks to buy more tools (Can't have too many tools) and more material and if there is a little cash left over that will be great.

                The consignment shop is planning on marking items up by 30%. I think if I make slightly less on an item but sell more it will be better in the long run. I suppose if demand were high (too high where I could keep up) the price could go up accordingly.

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                • #9
                  Re: How do I cost projects for consignment?

                  Originally posted by BobR View Post
                  Thank you guys for the information!

                  I think it will be good for me to remember that this is a hobby for me. And as such, the most important thing is it should be fun. I'll plan on using this as a way to pick up a few bucks to buy more tools (Can't have too many tools) and more material and if there is a little cash left over that will be great.

                  The consignment shop is planning on marking items up by 30%. I think if I make slightly less on an item but sell more it will be better in the long run. I suppose if demand were high (too high where I could keep up) the price could go up accordingly.
                  Sounds like the right idea Bob. If you need this income then consignment is not the best sales route to take. If your hobby can pay for itself and you enjoy doing it then you have it licked!
                  info for all: http://www.hoistman.com http://www.freeyabb.com/phpbb/index....wwtoolinfoforu --- "I like long walks, especially when they are taken by people who annoy me."

                  Comment


                  • #10
                    Re: How do I cost projects for consignment?

                    I wouldn't have any idea how things are in your area, but up here in NY's southern tier, the price of decent furniture is just about out of sight.

                    We recently purchased a new bedroom set as well as some living room tables. The two biggest and most reputable furniture stores in the area were very nice to deal with, but what junk. Most everything is imported and while it all looks nice, the whole furniture world seems to be full of thin veneers, composition board, and spray on stain of the thinest possible measure.

                    You look at the stuff too hard and it can be scratched. I know walking aroudn the showroom you can see a variety of damage ranging from small scratches and dings to outright cracks and sheared corners and edges. I'm not talking about the cheap knock-together stuff either, Our 4-pc bedroom suite was on sale for around $4K and believe me, it looks great... but solids are minimal and the ply veneer is like paper thin.

                    My son was admiring it, but asked why everything today has this stressed and slightly worn, uneven stain effect to it. The answer IMO is that it's the easiest way to produce product out of the cheapest woods and little to no effort has to be given to finding quality stock with beautiful grain.

                    The point is, that even with mediocre skills, a person could probably build better furniture, providing they had a good design plan and even half-way decent equipment. I would think the greatest challenge would be the time and effort you could put into it.

                    One would think, that given the current cost of this kind of furniture, a skilled craftsman could find a niche for himself and still be able to undercut the market price for medium quality furniture. The challenge of course is getting your name and product skills out there.

                    CWS

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                    • #11
                      Re: How do I cost projects for consignment?

                      I'm pretty much in the same situation- want to make some money back from my addiction- but not a living. I look at the final price- less the commission- can I sell the item for that or not. If not, I don't make it. The idea of material x 3 is great- if the end price is within what the market will bear.
                      I find that I could never charge the same in a consignment situation as I could in commission sale.
                      I hope this makes some sense.

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                      • #12
                        Re: How do I cost projects for consignment?

                        Here are a couple of items I built.
                        Attached Files

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