HOW DO I PRICE CABINETS?
When we are in the process of helping our new clients begin their transition of becoming a dealer with our company, the main question that continually comes up is: How much should I price my cabinets out to the customer? In today’s market that is a very complicated question. We have a few dealers that sell their cabinetry at manufactured list price while some sell their cabinets at a 15% markup. Let’s go over some factors to consider when pricing your cabinets.
First let’s begin with you. How much is your time worth, your knowledge and your professionalism, your reliability…what is it worth? Some forget this part and do not give themselves enough credit. You might be worth $10 per hour – you are late every day, you do not know much about the products and you really don’t care about the client, you only care about closing this job and moving on to the next job. That’s what gets you $10 per hour. On the other hand you show up every day on time, you have done your training and know the product extensively, you are licensed bonded and insured and you have built a wonderful relationship with the client. Now your stock has gone up, maybe $200 per hour. Whatever you think you are worth INCLUDE IT.
Second what product are you supplying? The higher the quality the more the price. The client understands this and will be willing to pay it if they are educated on the differences.
Third is the location of the job. Logistics has to be part of your pricing. If not, you will be losing money. The distance you drive, the more traffic you deal with and even the difficulty of entrance to the jobsite must to be thought of.
The last factor for this discussion is risk avoidance. How much risk avoidance do you provide for the client? Backorders, delayed time frame, work done to code, quality control of products, management of subs and staying within budget are all risks that clients have nightmares about. The more risk avoidance you can show, the more you can charge.
So remember, what is your time and effort worth? What are you bringing to the table? If you don’t have the best product or the risk avoidance, you need us at Cabinet Wholesalers behind you getting you the most profit possible.