Mark up on fabric and COM...is it profits lost?

[Steve at Silverstone Fabrics]

Hello Gang. I closed my shop 5 years ago (yes, I will still do a large commercial job if the right amount of $ there) and I was wondering about the what is the strategy in our industry concerning mark up on fabric.

Back in the day, I would by fabric from one of my wholesalers (Barrow, Peachtree, Dogwood, Greenhouse and others) and double what I paid for it......has the economy and discount fabric stores changed this standard?

COM (customers own material)...what do you do when a customer supplies their own fabric?  Do you just take the "hit" and charge them your standard labor rate? Do you charge them a surcharge?

When I had an active shop (we offered standard reupholstery, custom design, onsite commercial upholstery and we had our own fabric outlet), I would charge a $10/yd surcharge.

Did my customers complain....of course they did. I told them that the profits from the sale of fabric was part of my business plan and if they avoid that part of my plan, then they have forced me to increase my labor charge to cover the loss......I read another post recently and it was perfect. I said something like "take a steak you purchased on sale from the local grocery store to the best steakhouse in town and see what would happen if you asked them to cook the steak you brought and if they would serve it to you" Of course they would show you the front door.

I always felt like if I did not charge a surcharge on COM fabric, I was working for the success of the fabric outlet instead of myself.

What is the current thoughts of having in stock fabrics? Are there sources where you are at? Is it worth you time and money to invest into your own inventory?........Steve

[bobbin]

My business is really more of a sewing service, Sterry.  I have accounts with some wholesalers and can get fabrics for a specific job, but from a "home dec." standpoint I really haven't been asked about what "fabrics I carry".  I find most of the people who seek me out already have their own fabric or simply want me to give them an accurate estimate of the yardage required.  I don't really care, either.  I generally supply notions (welting, zippers, buckram, etc.) and mark those up accordingly. 

I am starting to do work for designers and I let them sell the fabric, hold the customer's hand, and guide them through the selection process.  It's really a lot easier for me to just do the work and charge accordingly for my labor and skill.   I think the internet has really changed the whole direction of the fabric aspect of the industry and I certainly don't have the time/energy to try to keep lines that are "exclusive", current, and reflect popular trends in color/weave/etc..

[sofadoc]

I recently received several new sample books from Greenhouse. They have been my top supplier for many years. All of the new books retailed from the low $50's to the $80's. When the sales rep called me to ask what I thought of them, I told him that he might as well have them picked up. I told him that as far as I was concerned, Greenhouse isn't even a wholesaler anymore. None of my customers is going to pay that kind of money for fabric. Even the mid-$30's is sometimes a tough sell. Of course, the sales rep had the bright idea that I could just sell the fabric at my cost. I suggested that he do the same.
Despite the ever increasing amount of COM, I still manage to sell 50 to 75 yards a month at full retail. Mostly mid-$30 stuff.
I do charge extra for COM jobs. I haven't even been questioned about that practice in over 10 years. Most customers now fully expect to pay more for labor when they furnish the fabric.
I've ranted about this before, but it drives me insane that a customer CAN'T choose from a sample book, but they CAN buy off of a computer screen. I guess it's just something about $5.99yd. that makes the decision process a lot easier.
As for "in-stock" fabrics, I buy a few rolls of Greenhouse's close-out specials just to have around for low budget customers.

[bobbin]

Yes, Sofa., I see the same reaction to fabric prices at my straight job.  Once they start getting into the $50 range/yd. people begin to break into a sweat and the "sell" becomes tougher.  I've recently done some jobs for a big yacht yard that deals with very expensive boats and some of the fabrics I've used have been gorgeous... retailing at over $100/yd..

I know that when I visit the few remaining fabric stores that deal with drapery/upholstery fabric there isn't much that I can afford!

[kodydog]

If I can get my labor price and tell the customer to go on line or to an outlet so they can keep the overall price down, then this helps sell the job. Everybody's happy. If I sell fabric every once in a while then that's a bonus for me.

[bobbin]

I had a local upholsterer do two pcs. for me several years ago (13) and I purchased the fabric from him.  I already had a "color way" in mind and had a nice, large sample of the draperies with me.  I knew I was looking for something very "basic" and picked out  3 or 4 from his sample books.  Naturally, I managed to select some very price-y ones.  I went the one that wasn't "all outdoors" and it's help up well to the usual degradation of pets but is now showing its age.  (Can you say, "slipcover"?).

When he did another pc. for me a few years ago I wanted to use fabric I'd found myself.  I paid him in cash for his upholstery expertise.  Win/win!

[Cheryl]

Sterry --  that little steakhouse ditty has been on my website for years.

Also -- you all might consider that this is a public board .. and discussing such business issues are not wise.  Do you see other businesses discussing their pricing in public?  

Ultimately, we all do business in the way that works for us. But there is no need to give your customers the ammunition to shoot you with (OR someone else).

Happy Mommas Day

[Rich]

Also -- you all might consider that this is a public board .. and discussing such business issues are not wise.  Do you see other businesses discussing their pricing in public? 

If we don't discuss pricing here in "The Business of Upholstery" forum, wouldn't that be severely limiting to the discussion of so many business related topics?
Rich

[baileyuph]

A perspective to share:

The small upholstery business, in a word, can't fight city hall.  Small shops are not a big enough industry to compete with fabric chain retailers, we simply could not move enough or do not move enough fabric out the door to try and look like a serious retailer.  

Times have changed and will continue in the direction already established.  That is, fewer are having items reupholstered and consequently there will be fewer custom upholsters around.  The trend of retail business going "big", or you are out, is here to stay.

This isn't necessarily doom and gloom, for there is still business potential in many nitches in the myriad of items that incorporate upholstery.  However, it does require changes or enhancements in your skill base.

Perhaps paramount to that is the marketing of your abilities.  Actually in terms of running a business, not much has changed.  Those that survive have a keen sense of marketing and adapt to the trends of the times.    

As a start, there have been some good ideas towards that goals, already expressed in this thread and in previous discussions.  Buy closeouts offers opportunity, after all what does the consumer understand the best, I am suggesting price?  

I too, had a problem with this COM issue but made adjustments that now work better than selling the fabric.  My business has, for the most part become a service business.  In summary, as an upholsterer, I do what I do best, charge a fair price, and do not elect to go head to head with larger retailers in upholstery fabrics.  Work with your strengths in anything you do, the outcome usually is more rewarding.  Tantamount to all already said is keep abreast of changing technologies, materials, and equipments.  No one said it was going to be easy, but we can make it interesting and fun.

Actually, I think I enjoy the business today more than the way it was in the past.  It is still dynamic, always changing, and it seems my skills are more unique today, less competition in what i do, that is.  Not a bad position to be in.  

Good luck to you, Steve.

Doyle

[sofadoc]

you all might consider that this is a public board .. and discussing such business issues are not wise.  Do you see other businesses discussing their pricing in public?   

Cheryl;
I agree in theory. But, with so many suppliers offering their goods to EVERYONE online, the area between wholesale and retail gets a little grayer every year.
That was part of my complaint about Greenhouse. As far as I'm concerned, they're just retailing everything, and expecting ME to find customers that are stupid enough to pay TWICE retail.
I have customers bring in fabrics that (originally) came from Barrow, Robert Alan, Kravett, etc.
Not only did they get it at MY wholesale cost, quite often they got free shipping!
I really don't see any business practices that have been discussed here that I wouldn't tell the customer to their face.
You DO make a good point, though. I know that Carr's corner has a seperate board  that isn't accessible by the general public.
I would like to see that here. After all, if we shouldn't discuss business practices here, then we really don't need this forum.
Sometimes, when you convey your thoughts in text form, they sound gruff. Believe me, that is not my intention here. I have always valued your opinion.

[Cheryl]

expecting ME to find customers that are stupid enough to pay TWICE retail.

This is the sort of thing I speak of...  your customers, and mine... are reading this...   Um...  If you're researching someone to do some work for you and read a thread like this...  would you call that guy to  do your work??  I mean... really???

I simply have a different perspective on what should be discussed publicly and pointly that out... thats all. 

As for where you can discuss such things..  thats up to you.  I simply exercised my right to  post my opinion here, and offer a tiny bit of advice.  :-) 

[sofadoc]

  your customers, and mine... are reading this...   Um...  If you're researching someone to do some work for you and read a thread like this...  would you call that guy to  do your work??  I mean... really???

Well, I would hope that if they read my entire post, they would see that I DON'T expect them to be that stupid.
I'm very "up front" and frank with my customers. I tell them when a piece isn't worth re-covering. And I warn them when fabrics in my OWN sample books are ridiculously over-priced.
As for openly discussing the practice of  charging more for COM, they may as well read it here, because they're gonna' hear it when they call me on the phone anyway.

  I simply exercised my right to  post my opinion here, and offer a tiny bit of advice. 

There are  several on this forum that I truly value the opinions of. Yours is definately one of them. 

[Steve at Silverstone Fabrics]

Wow! I did not mean to "let the cat out the bag" but here is why I wrote what I did: "The Business Of Upholstery
Need help with your upholstery business? Thinking of starting an upholstery business? Got suggestions for other folks? Put your comments on this board. ".........I was asked to write it.

The number of consumers that read a message board about the business side of upholstery has got to be so incredibly small that I am positive that what I have written isn't going to put anyone's business in jeopardy.

My intentions are and will continue to be to provide information to others that are looking to start or expand their business......there is no need for a growing upholstery shop owner to reinvent the wheel when they can use this forum.

Thank you for all of your thoughtful responses to my questions. Steve

[gene]

I never talk about specific prices, mark ups,or margins in public. I'll ask "How many hours does it take you...?", but not "What do you charge per hour?".

When I'm asked "What's your gross sales for last year?" My response is, "That information is not available."

Part of my work is handling fabric. I inspect it before I cut it. I cut it in such a way that the patterns match up if there is a pattern. I am very efficient with how I lay out the fabric and how I cut it. This takes time and expertise. Time and expertise is money. I get money for my time and expertise. How I get this money for my time and expertise in handling the fabric is a part of my business plan.

I'm not a used car salesperson. I don't look at customers as chickens to be plucked. I don't mark up fabric BIG TIME for one person because I think I can get away with it and less for another because they have shopped around and know what I'm trying to do. I have my costs pretty much established.

If I wanted to sell used cars that is what I would be doing. Nothing wrong with selling used cars if you like plucking chickens.

I'd rather spend my time working on furniture than trying to squeeze every dollar out of each customer that I can. I think I make more money doing it this way.

I'm not saying anyone on here is doing the squeezing. I'm using the used car salesman thing as a contrast to how I try to do things.

Good topic Steve. Money always hits home with most folks, especially in these current economic times.

gene

[sofadoc]

Gene (another opinion that I value highly) makes a good analogy about the used car salesman.
We all come on here from time to time, and rant about the occasional knucklehead customer that we have to deal with.
BUT, by and large, the average upholstery customer has more "between the ears" than customers of other retail types. If we tried to treat our customers the way a used car salesman does, odds are, we wouldn't be in business for long.
Just the fact that they've considered the option of re-covering in the first place says something about them. That's why I don't even try to talk them into paying insane prices for fabric. 
I agree that we shouldn't discuss specific wholesale pricing on a public forum such as this one. But if a customer wants to find out such a price, they won't have to do very much "clicking" to find it.

The number of consumers that read a message board about the business side of upholstery has got to be so incredibly small that I am positive that what I have written isn't going to put anyone's business in jeopardy.

I tend to agree. In my neck of the woods, I can't even find any upholsterers that read this board.