Somebody's working cheap!

[Kathy0701]

Wow!  Just submitted a bid for a dealer, and was told mine was more than twice of another bidder!  Holy smokes! 

I sure would like to know who this guy is - if he was any good I could just send all my work over there & sit in the shade with some iced tea :)

If our materials were the same price, the guy is charging like $25 an hour labor.  I suppose I will just wait - I don't think he'll be around for long.

Kathy

[SHHR]

He's either a new guy with no overhead or the dealer is feeding you a line about it so you'll come back and drop your price. Stick to your price, I've got bit too many times re-working an estimate just to get a job. It's not worth it, those are the hardest people to please.
Kyle

[Mojo]

My money is on the dealer feeding you a line.

I had a customer once tell me he got a bid and it was much lower then mine. I told him......" wow........you better jump on it then. "

I gave a lot of my work away in the beginning when I first started but wont anymore. I charge a fair price on all my bids and that is it. I wont allow myself to get beat up on price.

I do caution you Kathy not to get involved or caught up in these bidding wars. Figure out what
you want to charge and then charge it and stand firm. There are people like this dealer who will play all kinds of games to beat your price down.

Stand firm and if they don't want to pay it then to hell with them. I have found that people who beat you up on price also tend to be a royal pain in the butt down the road.

Best of luck.

Chris

[zansongs]

Hi, I'm new here and just getting started upholstering. I was a custom cabinet maker for years and Im currently working as a graphic artist for a large corporation.
No offence but I just had to respond to someone ditzing 25 bucks an hour
I WISH I MADE 25 BUCKS AN HOUR, I didn't make that much working for the cabinet company and I don't make that as a graphic artist either.
Thanks for letting me know that I won't have a problem being competitive if I ever decide to do upholstery for a living.
If 25 bucks an hour is on top of materials and overhead that's plenty for me

[SHHR]

[
No offence but I just had to respond to someone ditzing 25 bucks an hour
I WISH I MADE 25 BUCKS AN HOUR, I didn't make that much working for the cabinet company and I don't make that as a graphic artist either.
Thanks for letting me know that I won't have a problem being competitive if I ever decide to do upholstery for a living.
If 25 bucks an hour is on top of materials and overhead that's plenty for me


[/quote]

  Most shops Include Material + Labor. People will argue this all of the time because most mark up their material. But trust me if someone is only charging $25.00 an hour in today's world and he's a legitimate buisness, he's probably only seeing at the most a third of that on his paycheck.

  For instance when I was a tool maker in a plastic factory, the rate in which I billed out tooling that I either made new or repaired was $75 per hour. No way did I see that much on Friday's paycheck, not even near the third I mentioned before.

I said before (even if this guy does exist) this guy probably has low overhead, which I do too working out of my shop at home. I still keep my shop expenses seperate from my personal ones. Ex: utilities to the shop, insurance, new tools and equipment, taxes. etc. Yes $25 an hour sounds great especially in the area which I live, but in reality If that's all I charged By the time I paid the shop expenses at the end of the month I'd be living on government cheese

[byhammerandhand]

I think you might be underestimating "overhead."    Where are you going to work and what are you going to work with?  Don't forget travel time, time spent on "free estimates,"  time returning phone calls, running out for supplies, tools, & repairs, time to keep your books in order, do a little advertising, have a phone, insurance, heat and cool the shop, keep the lights on,  the other half of the FICA contribution, workman's comp, health insurance, time off for illness and maybe a few days off once in a while.  Oh, and you might need a vehicle big enough to haul things.  Count on a business vehicle's insurance being two- to three-times what you might pay on a personal, non-commercial vehicle.

If 25 bucks an hour is on top of materials and overhead that's plenty for me

[Kathy0701]

Thanks guys! 

When he told me that my price was double the other guy's, I thanked him for the opportunity to bid it.  I'm not going to play the game...I bid as carefully as I can.  I'm willing to bet there was quite a bit of stuff missed in my competitor's bid.  I REALLY wanted to ask who this yahoo was that works for almost nothing, but I bit my tongue and didn't ask!  I'll probably find out somewhere along the line though.

I agree that you work up a bid you think is fair and if it's not what they want, fine.  I am not trying to get rich here, but I am not a charity either.

I know I can't keep the doors open for $25 an hour because I wrote a business plan.  It's amazing the stuff you learn writing one of those, even if it's a big pain.

According to our accountant, it is not unusual for an employer to charge out 3X their employee's wages...so if our new friend was making $20 an hour, his/her boss would most likely be charging out $60.  It's just the way it is.

I just didn't know someone would be willing to work for that kind of money.

Kathy

[JuneC]

My guess is this guy/gal's trying to work their way into a tight market and doesn't really understand all the costs or time involved - ME about 5 years ago.  I learned the hard way.  I got LOTS of work, all of it underbid and now I know better.  It was either change my pricing structure or go under and live off food stamps.  What I didn't know at the time was what competitors were charging.  That info was hard to come by so I guesstimated and got burned multiple times.  Occasionally I still make a mistake, but not nearly as often as I used to.

Stick by your guns.  You know what you're worth and if they want cheap stuff, they can just get it off eBay or from China or from people like you're competing with. 

June

[sofadoc]

The misconception that zansongs has about a shop's hourly rate is EXACTLY why I don't quote hourly rates to my customers. I quote an overall price for a job, but I don't feel that they need to be informed as to just how long that job might take me.
The average customer thinks that $10 per hour is plenty for the type of work that we do.
If you are satisfied with an hourly wage, why own your own business? Let someone else do the worrying.

[Mike8560]

So am i the only one who has called competitor to get an idea of the area pricing I did this when i first started out in NH, and on vacation did the same thing in FL boefore I moved. noy I charge $75 shop rate

[Mike8560]

The misconception that zansongs has about a shop's hourly rate is EXACTLY why I don't quote hourly rates to my customers. I quote an overall price for a job, but I don't feel that they need to be informed as to just how long that job might take me.

some times  I wil wait to call a customer to tell them there job is done as i dont want them to think they got ripped off. other times im a softie though like this afternoon, a old fellow come in and wanted some canvas pieces to cover his Coastguard auxillary signs on his boat and a small pennat flag pole cover. I had some scraps and whipped them out while i was chatting with him in about 5 mins. he was going to pay me but i told him no charge. i got a call form his wife later on thanking me also. Yes down the line ill probly get it back from good karma.

[Eric]

Kathy, you may be hearing the truth. I can tell you of 3 competitors, 1 between you and I, that is charging less and 2 more that may not affect you, but I bump into. Also I have found that the canvas shops doing work for dealer-storage facilities charge the dealer 1/2 what they would charge the customer on the dock. This it seems is so the dealer can mark it up and make money, sending more work to the canvas shop, and not make the canvas look to expensive.
And the people who own the big boats know all about overhead and charging, they make their money by keeping it, and work on getting you not to. Now fisherman and pontoon covers, they just want cheap.
Eric

[mike802]

No offence but I just had to respond to someone ditzing 25 bucks an hour
I WISH I MADE 25 BUCKS AN HOUR

So don't I.  My shop rate is much higher than that, but if that is what I grossed, I would have to pitch in to work here. ;D  If you don't understand the difference between gorse and net you will learn the hard way.

Stick to your guns Kathy, if your competition is real and not independently wealthy he, or she will have to raise prices, or starve. I have had several shop in my area come and go, they set up, charge very low prices and usually fold within a year or too.

[baileyuph]

The basic question related to hourly rate is;  as an employee or as a business operation?

Big difference, a business can't survive on $25 per hour.  In my area, the zoning codes and other laws would shut you down doing a business in a residential area.

So, go lease a mere 700 or 800 sq. ft. building, and hook it up to utilities and run your cost per hour just to hang a sign.  It goes up from there.

If I could go work for $25 per hour as an employee, sell what I have invested, yes I might be better off.  Then, I would even get half of my SS paid for. Now............  oh well,

:)

Doyle

[zansongs]

I totally understand the difference between gross and net.
I may have misunderstood but Kathy said that "if the materials were the same then the guy was charging 25 an hr labor" My point was that if I can get 25 an hour after expenses, that would work for me, and I am aware that an employer may charge over three times what they pay. I am not completely naive as to the mechanics of enterprise. When I built cabinets on my own I usually charged twice what my materials cost and it worked out pretty well...but that may not apply here.
Like I said, I'm new to this and I have a lot to learn