I am wondering if anyone knows what a typical markup is for furniture sold in stores. For example, if the msrp on a Stickley night stand is $1250, how much does the store pay for it. I’m not interested in low end furniture.
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Replies
Oftentimes, retail is about double wholesale (except for high volume items which have much lower margins)
How this - I'll make you a night stand, call it 'stickley style' and only charge you $850. Send me an email if your interested!
Chris
I go with Pezzi. 100% markup yields a 50% Gross profit.
Frosty
"I sometimes think we consider the good fortune of the early bird and overlook the bad fortune of the early worm." FDR - 1922
Several years ago I made a small table for a local high end retail store and they marked it up 125%. I was suprised when I walked in and saw the retail price.
I'm told regular price on furniture is 3X wholesale. That allows a 50% off sale and still make enough money to keep the doors open.
Regular retail markup is 3 times wholesale cost, minimum. Good purchases on the oodles of Chinese import crap can yield even higher mark-ups - 4x to 5x. With the high frequency of 'half-off sales', there has to be much more margin than half. Even the newest rookie salesman is empowered to knock off up to 30% to make a sale.
I do not go to 'furniture stores' any more, but I do know that prices for the best brands today are not any higher than they were 25 years ago, since even the 'best' (subjective term) is now made offshore at dramatically lower cost.
For those of us making a living at craft furniture or highly skilled woodworking, competing with the worlds of jobbers, distributors, wholesalers, and such is bewildering at best, and always a losing game. I have found that when a customer compares my work to that crap, I am better just smiling and saying I cannot make a comparison. If they don't 'get' it, they aren't going to 'get' it when I try to explain.
I do find it interesting when those new to the one man shop business try to price things; they think they need to conform to some sort of societal rule on mark-up or pricing. Quite the opposite - they need to make the best product they possibly can, and then charge appropriately for it, with no apologies. And that is only the start to making a living at this craft.
Dave S
http://www.acornwoodworks.com
"For those of us making a living at craft furniture or highly skilled woodworking, competing with the worlds of jobbers, distributors, wholesalers, and such is bewildering at best, and always a losing game. I have found that when a customer compares my work to that crap, I am better just smiling and saying I cannot make a comparison. If they don't 'get' it, they aren't going to 'get' it when I try to explain.I do find it interesting when those new to the one man shop business try to price things; they think they need to conform to some sort of societal rule on mark-up or pricing. Quite the opposite - they need to make the best product they possibly can, and then charge appropriately for it, with no apologies. And that is only the start to making a living at this craft."QFTIf I get any sense from a potential client that they are making any comparisons to retail furniture to box store cabinets then I know its a waste of time. I can't compete on price and that is the first priority for them or even the second I'll be as polite as I can but I don't want to waste their time or mine.I used to manage a retail furniture store and got burnt out on the "game" of pricing in that arena. Tried to do the "fair and honest" pricing but people want to get a deal. Our sales increased when we changed our pricing scheme to allow for a flashy discount. Profit still the same but the discount talks.As a woodworker I do not try to duplicate this. Besides family there are no special deals. I've never said this to a customer who tries to haggle but I often wonder what they would think if their boss called them into the office and wanted to haggle their paycheck.I suppose it could be compared to the upfront salary negotiation in real world employment. For custom work this does seem more reasonable but for an item that I build as a product line I really don't want to get into a scheme that allows for bumping the price down.My feeling is that when you start backing down from your price you have just admitted you had it overpriced to begin with and they "caught you". It is nice to give someone what they want (discount) and you still get what you want (a living) but I personally just really hate haggling. Car shopping is one of my least favorite things to do. Some people love it.
adastra,
My standard response when a customer asks for a lower price is along the lines of, "I can build you a nice desk for less $, just not this desk. What feature do you feel you can do without?" Sometimes, of course, you need to smile and say, "I'm sorry, I don't feel I am the right person to build this for you." Then send them to the competition, haha.
Ray
Yup.A builder does have the option of going with quicker methods of building to cut the billable hours. Fewer details, more sheet goods, fast joinery. But eventually you get to a point that you are doing work that you may not want your name on.This bottom line varies according to economic conditions so its something a lot of quality minded woodworkers struggle with.I think the key is to avoid being perceived as a commodity. This is easier to say than achieve, if I might understate things a bit.
ad,
Amen, and amen. We must prepare to tighten our belts, I have a feeling it will get will get worse before it gets better.
Ray
Ray, you can say that again! I've been doing woodworking for a living for almost 40 years and I can't remember it ever being this bad, not in my neck of the woods anyway...Just one year ago I had 22 kitchens lined up on order, now there's zip.My belt already has 2 new holes in it. Any other ideas?
David Ring
http://www.touchwood.co.il/?id=1&lang=e
David,
Sorry to hear about your slack times. As the song says, "So, pick away on the old banjo, and keep that guitar hummin'. Put more water in the soup, there's better times a'comin'."
Ray
Ray,
I think that's "...keep the guitar strummin'..."
Is that the one that also goes,
"My rooster used to chase the hen, he just kept getting thinner.
I was afraid he'd run himself to death so I brought him in for dinner."
ZoltonIf you see a possum running around in here, kill it. It's not a pet. - Jackie Moon
Zolton,
Yep you're right. Strummin.
There's plenty money in the banks, they say that's where to keep it. Not only wouldn't lend me none, they wouldn't let me see it.
Ray
Ray,
You got it man!
Mary Lou could pull a plow if only I would let her,
She's twice as strong as any ox but looks a little better.
ZoltonIf you see a possum running around in here, kill it. It's not a pet. - Jackie Moon
Eat the rich. Or at least the bankers and politicians!
................................................
Men will never be free until the last king is strangled with the entrails of the last priest.~ Denis Diderot
I'm a woodworking hobbyist. My day job is my own small business as a direct marketing consultant working with pretty large companies.
When I'm asked to send a proposal for an engagement, I send a brief outline of what I'll deliver, my fee and a couple of open dates when I can start. The final sentence always says that I have also offered these open dates to one or two other people, first come, first served.
On the occassion when I would get $$ pushback, I would respond that the dates were gone and it would be six weeks or so until the next date might open up. Did they want me to notify them if a date became open in the meantime. If we talked again, and 99% of the time we do, price was no longer an issue, only dates.
As an earlier poster mentioned, be confident that the value you offer is fair. Don't backpeddle or apologize. I also wouldn't engage in the 'I don't make crap...if you want quality...' conversation. Some folks think they have to ask when it comes to price. By sticking to the tack that you are very busy and you may or may not be able to fit them in, those seeking quality also understand scarcity, they will hire you. Let the others waste someone else's time.
This can be very, very difficult to do when your calendar is empty. Stick to your guns.
Jim
There is no hard and fast rule in retail. THAT is the closest you're going to get to the truth. Each line, each department, each store, makes decisions based on supply and demand. When spring hits, winter clothes go on sale.
The industries we shop from - wood, tools, equipment, are lucky to see a 30% margin. There's competition, and someone else always willing to sell it for less. I got to see a little of retail pricing years ago as a PT student slumming at Target. 50% was a reasonable rule of thumb, but not hard and fast by any means. So in that market, maybe. High end furniture, thats up to the maker and the buyer.
The few things I send to stores, I let them have 20% of the sale. I've had things in shops that wanted 30, and 50. I'm pretty happy with current arrangements, as you might suspect.
Thus far in my experience flooring has got to be the worst market for retail margins that I've run across at least. Often single digits around here. The saving grace is not many people buy 5sf of flooring, so one would hope, at least, that the volume of the sale helps offset the low margins.
Real trucks dont have sparkplugs
Let's not neglect the 'business' folder. I always look for stuff to read there (when was there even a new thread?) and some of you seem like you have a lot to say/discuss.
Brian
Let me tell you a story. Doing a show in a resort area I had a turned bowl in the art gallery for several months. On the day of the show in front of the gallery a friend showed up with a very similar bowl and sat it next to mine. A few minutes latter he ask if I would mark up my bowl to the same price as his, about double what I had on mine so we did within the next hour a woman walked up looked at both, and began to fret over which she should buy. Now have in mind she had looked at mine several times in the gallery over the last several weeks, but did not buy. about 30 min latter she came back and bought both, she could not decide which to buy.
The moral that I learned is not to under price your work. This all boils down to perceived value. You price low people think it is of little value because you said so.
If you really have a buyer in front of you you can haggle a little over price.
That's a great story! Did you thank him for his suggestion?Frosty"I sometimes think we consider the good fortune of the early bird and overlook the bad fortune of the early worm." FDR - 1922
Yap sho didJigSawJohn
I am wondering if anyone knows what a typical markup is for furniture sold in stores. For example, if the msrp on a Stickley night stand is $1250
I nave no idea but my two canopy beds would have been MUCH less inexpensive if I bought them!
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