pricing foam

[gene]

I'm getting more and more requests to replace foam inserts on furniture cushions.

What formula do you use to figure the price to charge for foam and a poly batting wrap.

Example: A customer wants a 25" x 20" x 3" foam insert.

I buy a sheet of 80" x 25" x 3" foam.

Let's say the sheet costs $50.00.

I will be using 1/4 of this sheet for my customer. The cost of foam for this customer is 1/4 of $50.00, or 12.50. I would then take $12.50 x 1.?? which is my percentage markup.

Or, this sheet of foam has 6000 sq. inches. I'll be using 1500 sq. inches. I charge $.?? for each square inch.

I often glue pieces together from different sheets and I don't always know exactly what my cost is for that particular project. I also want to have a consistent formula so I am charging a consistent price level.

I see in QB that I have bought X amount of dollars in foam and I have sales of X amount of dollars in foam. But without a consistent formula I can't tell if I am being consistent in my pricing, which may help me be more competitive.

Thanks for your thoughts,

Gene

[Peppy]

We charge per board foot ($2.40per) and by the yard for batting. We normally don't charge for cutting if they just want foam, but charge a little labour to replace foam in the skin.

Sorry, I don't have the board foot calculation on me but you can find it online I'm sure.

[MinUph]

I use to figure a standard cushion at the price of a sheet 108x4x24. This would cover labor and Dacron along with the foam. Same thing for 5", 6" and so on. I found it simple and easy to work with while making a profit.

[sofadoc]

I usually buy 6 X 24 X 108 sheets of foam. I use a U-Cut slicer to slice them down to whatever thickness I need (this way I don't have to stock a bunch of different thicknesses).
I divide 108 by 6 to determine my base price for a running inch of foam. So my formula for charging the customer is: Base price X length X thickness
Labor for cutting and stuffing, as well as batting are also figured in to my base price.

BTW Gene: This place called me the other day:
http://www.us-foam.com/
Looks like they're in your neck of the woods. They e-mailed me a price list. Their prices seem competitive with what I'm paying around here. They're supposed to send me some samples of foam, but I doubt that I'll switch from my current supplier.
Do you get yours locally?

[fingers]

I spent the better part of a Saturday several months back designing a chart for the sales ladies where I work. It was all based on board feet and included dacron. To my way of thinking it was wayyyy more complicated than using a simple bf formula but the size and cost is right in front of them which ultimately is what they needed.
12x12x1=one board foot(144sq.in.)......12x12x2=two board feet(288 sq.in.) A 'typical' seat cushion might be 25''x 31''x 5'' =3875 square inches........divide by 144'' (one board foot) will get you 26.91 board feet. Find out what your supplier is charging per bf foot and mark up accordingly. Be sure to include a bit extra for all too common waste or the labor required to fabricate pieces.

[DBR1957]

You guys might be undercutting yourselves. I see a lot of L x W x H = sq. in.

L x W x H actually equals cubic inches.  Don't know if that changes your
calculations.

Gene - Don't multiply to get your markup, you actually divide. If you want 30%
markup divide your cost 0.7. 40% markup divide by 0.6.

$100 x 1.3 = $130.00
$100.00 / 0.7 = $142.86
If you give a 30% discount
$142.86 x 70% = $100.00

Besides the actual cost of goods be sure to consider your time measuring, ordering
and cutting. Also the "Cost to carry". Many people forget that every day you have
stock setting around you are losing money. If you buy a full sheet and only sell 1/3
of that sheet and the other 2/3 sets around you eventually loose money.

[bobbin]

I charge by the linear inch, (yeah, really) for foam, with prices based on the thickness and density of the foam required.  Foam prices are all over the place, the prices change so often, and I don't use a lot of it so I don't generally stock it as a regular item.  I charge by the foot for batting (which I do stock).  

I figure the mark up I wish to make on foam (which is usually less than the standard 50% mark up) and then simply do the arithmetic and enter those numbers into my bookkeeping system.  When it's time to tally the order I simply enter in the inches used and voila! the price appears.  

I studied business with a specialty in retail buying and in that context a 50% MU is doubling the wholesale price.  I will charge the entered price until the foam on hand runs out and then recalculate based on current prices.  My customers understand this because I explain it to them.  I am fine with using COM foam, too, but make no guarantees as to quality or "feel", and that is clearly understood before the "deal is done".  

I charge for the time required to cut and glue foam and for batting.  I am neat, meticulous, and organized when it comes to foam layouts and maximizing use of foam is a good way to minimize waste.  I've been doing this a pretty long time now and in marine work there are a lot of arcs and curves and they eat up foam quickly if you don't make the time work out a thoughtful layout.  Additonally, in marine work there is a lot diffeence in need; interior work is difference than exterior work.  Some cockpit cushions must be flotation foam (closed cell) while others should be reticulated foam... so ity depends and so does the price!

[kodydog]

I hate to get all nit picky on you bobbin but wouldn't doubling the wholesale price be 100% mark-up. Anyway I get your point that full retail would be a hard sell. My customers would faint dead away if I charged full price.
 
We buy our foam by the linear inch and should probably sell it the same way but to make things easy, for a chair we figure 1/3 slab, two love seat cushions 2/3 slab and a sofa a whole slab of foam plus markup and labor.

In Genes case 20 inches (that's a small cushion) would be 1/4 slab on a 80" X 25" piece of foam. You can double your price if you want but you better have a fainting couch ready.

[fingers]

Squares, cubes, two dimensional, three........you nailed me on that one. I think the math will get you there just the same. Rememberin' back when I made up this chart it was necessary to base it on something and bf was what my supplier used so it was good enough for me. Like I said it was overly complicated but it has served the sales ladies very well. They're good at grasping colors but not so much with bf and such...

[sofadoc]

You can double your price if you want but you better have a fainting couch ready.

When I'm recovering a couch, I sell the new foam at cost. I only mark up foam when I'm just replacing foam cores for a customer. And yes, I have a fainting couch ready. ;)

[bobbin]

Yes, Kody, many consider doubling wholesale a 100% MU, but for some reason when you're a retail buyer it's considered a 50% MU.  Go figure.

[gene]

Thank you for the great comments. Very helpful.

Here's a thought:

I buy a sheet of foam for $50.00 If a customer needs 1/2 sheet, and I sell it to her for $50.00 plus my markup, then I make money and I have 1/2 sheet of foam left over in my shop that has been paid for.

However, pricing this way seems to not generate very many sales.

If I sell this customer 1/2 sheet for 1/2 my cost, $25 plus my markup, then I get more sales but I have 1/2 sheet of foam in my shop that I paid for. If I do not sell this 1/2 sheet at some point down the road I lost money on the above sale.

I'd like to have a system where I can increase my foam sales and know that I am making money, other than to look on QB at total foam costs and foam sales and hope for the best.

On unusual sizes of foam, 5" thick, for example, I don't sell very much of this so if I bought a sheet and sold only 1/2 sheet, then I would probably be stuck with the other 1/2 sheet.

I see more and more folks looking to replace the foam on their 3 or 4 year old furniture.

sofadoc: http://www.us-foam.com/ is not in my neck of the woods, they are in my ankle of the woods. And they do not seem to sell furniture foam. Maybe they're trying to sell sponges as a replacement for horse hair???

gene

[byhammerandhand]

I probably do 3 or 4 "core evaluations" a month for one of my customers.  In most cases, you can feel the frame underneath your seat.   I have a feeling there is a general lack of quality in foam these days, at least what they're using in the Chinese factories.  Most of these pieces are 2-3 years old.


I overheard the owner at one of my retail customers once say, "We take MSRP, that is 3 times our cost, then we discount 40% off that, so it's like getting 100% markup."     [Um, no not quite]   Fortunately, her husband was the business manager.

[sofadoc]

sofadoc: http://www.us-foam.com/ is not in my neck of the woods, they are in my ankle of the woods. And they do not seem to sell furniture foam.

Yeah, their website says nothing about furniture foam. But they did send me some sample squares of foam, and a price list. Seem like they'd go after the shops in their own back yard before they started calling Texas.
Their prices are pretty good. But for what they want for a 6 X 24 X 82 sheet, I can get a 108" sheet for 10 bucks more.

[DBR1957]

For clarification, I believe "Markup" is applied to the selling price not the wholesale
price.

Wholesale price $100.00 + 100% = $200.00 selling price

$100.00 is 50% of the selling price so the "Markup" is 50%