Cabinets and Pricing

Replies to This Discussion

Permalink Reply by Will Sampson on April 11, 2012 at 8:38am

Andrea, it's generally a lot better to be a bit too high than to be losing money because your prices are too low. Which would you rather be, the shop everybody describes as "they do great work, but it will cost you some" or "if you want it cheap, go to them"? Here's a test of where you stand: If you bid on 10 jobs, how many do you expect to actually win? If your answer is closer to 10, your prices might be too low. If the answer is a very low number, then you might be too high. It really depends on your comfort level. Many shops are happy in the middle, but I know lots of shops that prefer to win only about 20 percent of the jobs they bid because they would rather keep their price and profit per job higher and do fewer jobs rather than doing lots of jobs for little money. In this tight economy with lots of price competition, it is tough to turn down any work, but saying no to unprofitable work allows you to market more to the more profitable sectors of your market. 

Maybe what you need to be doing is working on dealing with price objections and improving your sales skills in that area. One of the favorite lines I heard on this came from a shop in the San Francisco Bay Area that caters to high-end work. When confronted about the price, the owner says, "If you are going to the opera, you can drive in a Hyundai or a Rolls Royce. The question is how do you want to arrive." This gets to the heart of the prestige issue in buying custom cabinetry.

Another issue is how you present the price to the customer. If you just give a big round number for the total job, they don't really understand it. The more you can itemize and show how much value is built into the job, the more they understand the value of the project. Also, in price negotiations, this makes it easier to say, "OK, if the price is too high, what can we take out of the job to make it fit your budget? Maybe you don't want that lazy susan or those custom roll-outs." Then the villain is not you, it's their desire for expensive options. Most of the time they want those options and find the money.

• ▶ Reply

Permalink Reply by Andrea Zolman on April 11, 2012 at 11:11am

thank you Will for your very quick reply,your answer goes along with our thinking.I think it's more of a moral support that you gave me.that's probably what I was hoping for deep down.we are high-end cabinet makers.It's probably just the Area we're in that made me doubt.All the People that we have spoken too or have been or are our Customers have indeed been and are very happy Customers. we do try and work with People and their Budgets. Most of our Customers we got by word of mouth.which to me speaks for itself. I will attach some Pictures of some of our work so you can see for yourself

Attachments:

• Favor Residence - 19 Aug.2011- (1).jpg, 64 KB
• Hogan Residence 27.Sept.2011 - (2).JPG, 2.8 MB
• Favor Residence - 19 Aug.2011- (5).JPG, 1.2 MB

• ▶ Reply

Permalink Reply by Will Sampson on April 11, 2012 at 11:29am

Nice work, Andrea! Hang in there and be sure to invest in the time to educate your customers about the value they are receiving. The only value that matters is what's seen from the customer's perspective. They won't pay for what they don't know or don't understand. This also helps differentiate you in a competitive bid situation. If another shop doesn't explain the details, the customer won't know if that shop really does those things or provides those benefits.

• ▶ Reply

Permalink Reply by Andrea Zolman on April 11, 2012 at 11:55am

thank you again so much Will,I'm sure I'll come back to you with the odd Question here and there. if you ever need any help with anything in German ( I am born and bred German ,only came to the US last year) I'll be happy to help you out too

God bless you

Andrea & Kurt

• ▶ Reply

Permalink Reply by Karl Shikles on July 15, 2012 at 11:05pm

Andrea,

I have found that explaining what goes into quality cabinetry to a customer makes all of the difference in the world.  Most major manufacturers offer 'lifetime' warranties that cover very little in fact.  Explaining that most of the big, corporate manufacturers will back out of their 'warranties' citing misuse on the part of the customer rather than defective manufacturing will get you a long way.  More than anything, however, you must explain in detail that not all cabinetry is made the same.  When customers claim that they can get the 'same' cabinets from Ikea for a third of the price, make sure that they understand that it's a vastly inferior product with cardboard back panels and melamine board carcasses that will rot out from under their expensive counters the first time that it's exposed to moisture, whereas your product features full 3/4" veneer core construction that will last for generations.  Even many of the higher end corporate manufacturers use what amounts to contact paper rather than wood-veneer surfaces on the carcasses.  Also, I would assume that your husband installs his own work.  Explain to the customer how important expert installation of cabinetry is to a space.  Sales reps at corporate manufacturers or home centers will claim that their installers are 'certified masters of their trade' when in fact they are usually amateurs who have purchased a business license and an insurace policy.  I'm starting to ramble, but the one piece of advice that I would offer in this situation is to make them understand that - more than any other construction trade - cabinetry and built-ins depend on the skill and integrity of the cabinet maker and that nothing increases a home's value more than quality kitchens and bathrooms - off which cabinetry is the most important component.  If the customer understands this, then they will usually be willing to pay a premium price.

• ▶ Reply