How do you ppprice your labor?

[poppy79424]

I have been pricing labor by the piece, but my prices have gone up a bit since I have done some research and found some other shops pricing online. I was charging $450-$500 on a sofa, 400 on a love seat, $350 on a recliner, $300 on a wingback or living room chair. I have raised my prices at least $50. I charge retail on material, my prices is 1/2 that usually. Of course extra for new foam for the cushions, nail heads, spring repair, wood repair, wood refinishing, etc...,, I dont know exactly how to charge for dacron though.

[kodydog]

Like you, we charge for items that are exclusive to that piece of furniture. Wood repair, spring work, etc. For other miscellaneous supplies we average into the cost of each piece. Items like Dacron, staples, button twine, etc. A chair for instance, on average takes a certain amount of supplies. The Same with a sofa and a love seat.
Items like webbing and spring up twine are included in the extra cost of spring work.

Just curious Poppy. Do you pay your employees by the piece or by the hour. The reason I ask is I was once offered a job that payed by the piece. I would earn 1/2 of the labor for each piece I did. As I considered this employment opportunity I thought, my wages will depend strictly on what the business owner charges for the work. Then I thought what if he charges below the average market price? This would mean my wages would also be below the average market price. So I asked the guy what he charged for a wing chair. $350. This meant I'd make $175. I did a little quick math and discovered I'd be making 13 to 15 $ an hour. When I told him I generally make closer to $20 he said, wow, you would really have to hump it to make that much here. At the same time I was thinking you don't charge enough. I concluded that paying by the piece must be tough for a business owner to balance paying their employees a fair wage and giving their customer a fair price.

[poppy79424]

I pay my employees by the hour. I tried commission several years ago. I was tired of some employees walking around looking at the ceiling so I put them all on commission. I thought my probllems were solved untill I started getting comebacks and customers unhappy with our work. This didn't work for me. I have a reputation to uphold. I used to advertise a lot, but not much anymore. Word of mouth took hold and people come in constantly saying " I heard Y'all are the best. I asked 2-3 people and they all said to come here" No matter what I charge, the charges include the best job we can do. I pay most of my employees between $15-$20 per hour. I have one that has been with me since 1976 and another since 1978. The rest over 10 yrs except I have a few that have been there 2-3 yrs. The art to being a good boss is Getting people to do  what you want them to do and them wanting  to do it. Always do what you say your going to do and don't make promises you cant keep.

[sofadoc]

........I was once offered a job that payed by the piece. I would earn 1/2 of the labor for each piece I did. As I considered this employment opportunity I thought, my wages will depend strictly on what the business owner charges for the work.......... So I asked the guy what he charged for a wing chair. $350. This meant I'd make $175.

I knew a shop owner that paid like that (half labor). When customers balked at the overall price, he would simply discount the labor, and make it up on material sales (since he didn't have to share the material profits with the upholsterer). So he was using his employee's salary as a negotiating tool. Basically giving away money that wasn't his to give.

This talk about paying by the piece or by the hour always makes me think of my barber. He still has the old fashioned downtown barber shop. He charges $12 for a haircut. It usually takes him 45 minutes, even if the client only has a half dozen hairs on his entire head. The girls in the beauty shops can get it done in 10 minutes, and make $15. I usually end up going to one of them. The old man's shop usually has 2 or 3 geezers ahead of me, and I just can't kill half a day for a haircut.

[crosjn]

I know I'm bumping an old thread but one of my first business partners told me to try and obtain a 4x multiple on job costs to get the sales price.  For a service business, that works out pretty well.  If you are doing the work yourself, you should figure what it costs to hire an upholsterer in your area and pretend your paying him to do the work instead of yourself.

For COM jobs, I've met several shop owners who charge a COM fee per yard.  They explain to their clients that they roll out the fabric, inspect for damage & flaws, and are always taking a risk (customer's fabric in your shop becomes a liability to you)...  That justifies the fee.  $7/$8 per yard is a reasonable fee but can range from $5-$10.  Basically, it covers what you lost by not selling them the fabric.  You can also bury this fee in the labor cost if you know up front it's a COM job but most times you don't.

As for commercial jobs, LOVE THEM.  After 10 dining chairs or 10 whatevers, the shop efficiency goes through the roof.  We get a lot of hotel jobs.

[kodydog]

As for commercial jobs, LOVE THEM.  After 10 dining chairs or 10 whatevers, the shop efficiency goes through the roof.  We get a lot of hotel jobs.

That's interesting Crosin, when you quote for a Hotel do you keep this change in efficiency in mind. I'm saying do you charge the normal rate for the first 10 chairs and a discounted rate for the chairs following or do you charge the same rate for all the chairs and put the profit in your pocket. No mater how much schmoozing I do I haven't done a hotel job in years and am pretty sure its because the competition always under bids me. Maybe I'm not thinking right.

[crosjn]

That's interesting Crosin, when you quote for a Hotel do you keep this change in efficiency in mind. I'm saying do you charge the normal rate for the first 10 chairs and a discounted rate for the chairs following or do you charge the same rate for all the chairs and put the profit in your pocket. No mater how much schmoozing I do I haven't done a hotel job in years and am pretty sure its because the competition always under bids me. Maybe I'm not thinking right.

My bid price reflects the efficiency, and specifically to your point I price all the items in the job as if I'm efficient.  It follows the old advice that you never pass your problems on to your clients.  That I'm inefficient to start is my problem.  I never think "Am I loosing money on one piece?"  I always think "am I making money on the project?"  I've been running the shop for 12yrs and we do usually 2-3 big jobs (like $80k+) a year so we've got some experience.  A 2-man crew can strip, tack up and finish (stuff cushions) in just about 2hrs once we're moving.  (We cut and sew everything in advance but I know the costs involved in that pretty well too.)   

To tackle big jobs, I think in mass.  I get a sample piece.  I sometimes offer to do the sample for free in fact because it teaches me a lot about how to bid.  I break it down into phases, cutting, sewing, tacking, touch up.  (That's actually the division of labor in our shop too.)  I then tackle each phase as fast as possible but completing each phase before moving on.  That tells me what each laborer can do (cutting is a little different because when we cut a big job we're rolling out multiple layers and using a bigger electric cutter, but I generally assume $1/per piece to cut is about right...)  Tracking each task and not trying to multitask makes it very clear to me what each phase costs.

The reason I don't jump around like I normally would is that you loose a lot of efficiency moving around the shop, stopping and starting, etc...  Even simple things like setting down the stapler and walking over to the sewing machine to sit down... 

If you spend the time up front to shmooze / form relationships, do you go back after you aren't awarded the job and ask why you weren't?  Commercial work involves a lot of factors - insurance, trust, confidence, price, previous history, etc...  I find once I'm the embedded vendor, price is usually not the deciding factor.

[baileyuph]

I find once I'm the embedded vendor, price is usually not the deciding factor.




Often, that is what happens.  Consumers like to know who they are dealing with and what to expect.

Doyle