Are you a hobbyist or a businessperson thinking about selling your woodworking projects? You need to first learn how to price your woodworking projects properly.
If you have a background in accounting, you probably know what’s involved in pricing a project: materials, labor, overheads, and markup.
For the rest of the people, pricing a woodworking project is not an easy task. You need to understand the exact costs in making a woodworking project and then some.
So, what exactly is involved in pricing a woodworking project? How to sell woodworking projects? Where can I sell woodworking projects? You will know the answers to all these questions here in this blog post.
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How to Price Woodworking Projects?
Pricing of a woodworking project requires an understanding of the effort, time, and cost involved in a given project.
Let’s take a look at some of the factors that you should consider when pricing a project.
- Estimate Material Costs
- Estimate Labor Costs
- Determine Overhead Costs
- Identify Selling Costs
- Establish Markup and Profit Margins
The items above are important factors in determining a proper price for your woodwork. Don’t short change yourself but also you need to understand how this will all play out in the market.
If your product is too expensive, regardless of your pricing methodology, your sales will suffer.
Let’s dig in below and review more details about how to price your woodworking project.
1. Estimate Material Costs
Every woodworking project starts with the materials. You should consider the wood and other parts that were used in making a project. Materials make up about 40 percent of the project pricing. So, you need to select the material carefully.
If the material is too expensive, the total cost will be unaffordable for most people. Unless you are selling luxury woodwork items to the rich customer segment, you should not go for expensive material.
Selecting cheap materials is also not recommended. Cheap quality wood would not last long. Your reputation as a seller will suffer if you sell low-quality products. You should always try to buy the best quality material at a reasonable rate.
In case you are making a custom wood project, you should inform your customer in advance about the cost of materials. Consider giving a choice to your customer to pick a material. This will ensure that the product cost is affordable for the customer.
2. Estimating Labor Costs
To estimate the labor costs involved in making a woodwork project, you need to consider tasks involved in making a project. After you have listed down the tasks involved in making a project, you should next estimate the total time spent in completing each task.
Assigning a time to different tasks will result in a more accurate estimate of the costs. You will know the exact activities required to make a project, and assign costs to each activity accordingly.
3. Determine Overhead Costs
After you have estimated the material and labor costs, you should next determine the overhead costs. The overhead costs include expenses such as utility bills, tool maintenance cost, website cost, marketing cost, and rent. You must consider these costs when pricing a woodworking project.
Find out the annual overhead cost and spread the cost over the number of hours you work on woodworking projects each year. A simple example will let you understand how this is done.
Consider that you have worked 500 hours in a year. Your annual overhead costs amount to $1,000. In this case, the overhead cost amount to $2 per hour. You should multiply this number by the number of hours spent on a project. For instance, if a project took 50 hours to complete, you should add $100 as an overhead cost to the total price of the project.
4. Identify Selling Costs
Selling costs should also be included in the project cost. If you are selling online, the selling costs include the cost of the website, annual hosting and domain expenses, and digital marketing costs. All of these costs should be added to the price of a project.
To assign selling costs to the price, you should first find out the monthly marketing expenses. Next, you should divide the monthly marketing expenses by the total number of products you market in a given month.
Suppose that your monthly marketing cost amount to $300 and you market 5 woodwork projects during a given month. In this case, you should add $60 to each woodwork project.
5. Establish Markup/Profit
Markup refers to the profit you want to make from each woodwork project. The industry average for woodworking projects 15 percent. But you can charge any markup that you think is reasonable for your project.
The markup for luxury projects is generally high. But if you sell ordinary wood furniture and items, the markup should be lower.
You add the markup to the cost of the project. For instance, if the cost of the project is $1,000 and you want a markup or 20 percent, the selling price should be $1,500.
To sum up, the price of woodworking projects should reflect the material cost, labor cost, overhead cost, and selling cost. The price should also include the markup or profit you think is suitable for your project. You should set a price that adequately covers the cost and gives you adequate profit. Moreover, the price should be competitive and affordable for your target market.
You can watch the following video to know more about how to price woodworking projects.
How to Sell Woodworking Projects?
You can sell your woodworking projects through a variety of mediums.
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Let’s take a look at some of the places where you can sell woodworking projects.
- Retail Sales
- Consignment Sales
- Establish a Brick and Mortar Store
- Fairs and Expositions
- Online Sales
Below is more details for each of the options we laid out to sell you woodworking projects.
1. Retail Sales
You can ask your local retail store that sells woodworking items to give a space for your woodworking crafts. The requirements for selling the products through a retail store vary. Moreover, retail stores also charge some fee for selling the goods through their store. Most stores charge between 10 to 20 percent commission.
Most retailers require that you sign a lease for space. The lease duration varies ranging from six to twelve months.
Take time to find out the total traffic to a store in a week. This will help you know whether the cost of putting up your products for sale in the retail store is worth it.
2. Consignment Sales
Consignment sales are another option to sell your woodworking products. The selling strategy is similar to renting a retail space. But you don’t have to lease the space. On the flip side, you do have to share a portion of sales revenues with the retailer. Generally, you have to pay between 30 and 50 percent of the sales price to the retailer.
The advantage of this method is that you don’t have to pay anything. You can also offset the higher commission on consignment sales by charging a higher fee for your products.
3. Establish a Brick and Mortar Retail Store
Establishing a brick and mortar retail store is an expensive option for selling your woodwork project. But this option gives you the flexibility to promote and price your products. You also don’t have to pay any commission fee to retailers. You can also rent retail spaces to others to cut down the costs.
4. Fairs and Expositions
Consider buying a pavilion to display your artwork at the fairs and expo. You can present a variety of wood products for sale to the audience. Make your display attractive for the visitors. For instance, you can add flowers on a wooden vase or fill a bowl with fruit. Anything that showcases your woodwork talent and also makes a pleasant impression will do.
You should display your most eye-catching products to attract attention. Don’t forget to mark the price of each product. If you don’t display images, people will think that the product is too expensive.
Moreover, you should also interact with your customers without appearing intrusive. Once they arrive at your display booth, you should inform them about your project. Tell them about the quality of the wood. Inform them how the wood was made and what makes it so special. Try to create engagement by asking and answering questions.
Consider creating a sample of photos of items that are not on display. You should allow visitors to browse the catalog. Take photos of your products from different angles so that they can visualize your woodwork projects.
You should also consider giving your business cards, brochures, and fliers to your customers. Encourage them to visit your store or website for more information about your woodwork projects.
5. Online Sales for Your Woodwork
The best way to sell your woodcraft is online. You can sell your products online through different online sources. Here are some of the sources where you can promote and sell your products online.
You can create a website to sell your products online. Consider buying a domain and creating a website for selling your woodcraft.
Create an ‘About Us’ page where you should write a summary of your woodworking projects. You should write about any certifications you have completed in woodworking. Tell a story about what sparked your passion in the field. People love to hear from experts who are passionate about what they are doing.
When listing products online, make sure that you take close-up pictures of the products. You should take pictures from different angles. This will give online visitors a better idea about your woodworking products offered for sale online.
Make sure to read about the payment process and refund policies. You should make the contact information visible on the site.
Facebook is a social media behemoth. The site has millions of active users from all over the world. A large number of active users make it a gold mine for sellers.
Over the past few years, Facebook had taken initiative to bring buyers and sellers together through the platform. Facebook users can put up items for sale in the FB marketplace area. The marketplace is tied to an online FB profile that increases the perceived security of the sellers.
You can also promote your woodworking projects through the Facebook ad. You can target the ads based on specific demography. Moreover, you can also target your ads to be displayed in a specific location.
The main benefit of using Facebook as a selling platform is that it’s free to use. You can post woodworking items and promote them online for free. But you have to pay a significant sum if you want to promote the items through Facebook Ads.
Instagram is yet another great online platform where you can sell your woodworking products online. The social media platform has a billion user accounts. A large number of active users make this an excellent platform to promote your work of art.
You should take good quality images of your products. You can use the in-built filters to edit your photos. Enter a short description of the product including the materials used, price, and size of the item.
An important step when selling your products through Instagram is to use the hashtag ‘#’ symbol. As you enter the hashtag symbol, you will see a list of relevant tags. Choose tags that best describe your woodworking project. Your photo will appear when users search using the given hashtag.
An example of a post description with hashtag include: For Sale! Buy this artistic maple wood chairs at a discount today!#sellingstuff #woodworking #woodchairs #woodencreations.
You should also mention how potential buyers can contact you. You should direct the online users to your website that contains a full list of projects. Tell them to message you through the Instagram profile to receive a discount on the listed price.
Consider posting your products online during times of high traffic. Statistics show that the best time to post photos on Instagram is during lunch hours and evenings. You can schedule pictures to be posted automatically during peak hours.
Etsy is the go-to source for the hobbyist who wants to sell their work of art online. Established in 2005, the site attracts a lot of buyers. A survey by Statista.com shows that nearly 2.1 million people sold goods through the online platform in 2018. Goods worth billions of dollars are sold through the online platform every year.
You can easily set up an account and start selling your woodcraft products online on Etsy. You should consider listing all your products online.
To promote your listings, you can advertise through the promoted listings on the platform. You have to bid on keywords and if your bid is higher than others, your post will be displayed on the screen. You will have to pay only when users click on your ads. However, you should note that you have to pay the fee regardless of whether users purchase goods on your website.
You can also promote your Etsy posts for free. But this will require some effort on your part. You can promote the posts by forwarding them on other social media platforms including Twitter, Facebook, Pinterest, and Instagram.
Craiglist is another great online platform to sell your woodcraft online. Established in 1995, the online platform is also a popular online marketplace for selling woodcraft. Millions of people visit the site daily. You can post as many as you like free of cost.
The user interface of the site is easy to learn. You can set up an account and start posting projects within no time. The key is to have a good listing with lots of high-quality photos. You can upload up to 12 photos of a product on the site. Consider taking posting images to the limit to increase the odds of making sales.
6. Amazon Handmade
Amazon is yet another great online platform to sell your woodcraft online. Amazon Handmade launched in 2015 makes it easy to sell your woodwork handcrafts online. To add products, you have to register for a free account. Once the account is set up you can start posting your products online.
A great thing about selling through Amazon Handmade is that you don’t have to worry about shipping. Amazon will handle shipping for you if you pay for the Amazon Prime service.
The cost posting on Amazon Handmade service is more as compared to Etsy. Apart from the fee, you also have to pay about 12 percent in commission. But the benefit is that you have excess to a larger local customer base.
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There you have it. The above are the most popular places to sell your woodcrafts. You should assess each option to find out which will allow you to earn the most from your creative art. It may be that multiple options will be best for selling woodcraft. The advantage of considering multiple options for selling woodworking products online is that you can capture maximum possible sales.
The final piece of advice for pricing and selling your woodcraft is that you should document everything. You need to track the time and costs involved in every project. You should also track down the sales made on a different platform.
Keeping records will ensure that you don’t remain in the dark about expenses and revenues from your woodcrafts. You can assess the documents to know exactly what you must charge to make a profit. Looking at the sales records will let you know the commission that must be paid to the retailers.
When you are working on your various projects, please don’t use the wrong tools. You absolutely need to use the best benchtop belt sander to smooth down all your finished surfaces. Do not go cheap on your sander because this is key to a high-quality product!.