You just spent 40 hours building a white oak dining table. The lumber cost you $900, the finish another $120, and you quoted the client $2,200 because that "felt right." After self-employment tax, sandpaper, router bits, and the electricity to run your dust collector for a week, your real hourly wage works out to less than you'd make assembling furniture for someone else. If that math stings, you're not alone — undercharging is the single most common reason talented woodworkers burn out and close up shop.
Pricing custom woodwork isn't about guessing what the market will bear. It's about building every quote from your true costs — materials, labor, shop overhead, and profit — so each commission leaves you healthier than it found you. Here's how to do it.
Start With Every Material Dollar, Not Just the Lumber
Most makers dramatically underestimate material costs because they only count the big receipt from the lumberyard. Your materials line should capture everything that goes into (or gets used up by) the piece.
Count the obvious and the invisible
For each project, tally:
- Lumber and sheet goods, priced per board foot for the species and grade you actually use — including the 20–30% waste factor from milling rough stock down to finished dimensions.
- Hardware: hinges, drawer slides, pulls, screws, fasteners, and specialty connectors. On a dresser or built-in, this easily runs into the hundreds.
- Finishing supplies: stain, oil, polyurethane, lacquer, sandpaper through every grit, tack cloths, and applicators. Finish materials routinely cost 5–10% of the lumber bill.
- Consumables: saw blades, router bits, drill bits, glue, biscuits, dowels, and sanding belts wear out per project. Assign a per-project share rather than eating the cost.
- Packaging and delivery: blankets, shrink wrap, cardboard, fuel, and vehicle wear if you deliver and install.
A good habit is keeping a running materials log per job — a simple spreadsheet or notebook page per commission — so nothing slips through. When you review past jobs, you'll almost always find a category you forgot to charge for. Add it to your quoting checklist so the next quote captures it.
Mark materials up, don't pass them through at cost
Sourcing, selecting, transporting, storing, and warranting materials is work, and it carries risk: boards warp, shipments arrive damaged, and prices move between quote and purchase. Passing lumber through at cost means absorbing all of that risk for free.
A 15–25% markup on materials is standard for custom shops. That covers procurement time, storage, waste beyond your estimate, and the occasional board you have to replace at your own expense. On specialty or hard-to-source species where you spend real time hunting down stock, charging toward the higher end is entirely fair — the client is paying for your supply chain, not just the wood.
Set a Shop Rate That Reflects Reality
Your labor rate is not "what feels fair" or "what the guy on YouTube charges." It's a number you derive from your costs and the income you need.
Calculate your overhead per hour
Add up a full year of shop overhead: rent or the home-shop allocation, electricity, heat, dust collection bags and filters, tool maintenance and replacement, insurance, vehicle costs, phone, software, accounting fees, and marketing. Divide that total by your realistic billable hours — not 2,080. Between quoting, milling, finishing downtime, admin, deliveries, and the weeks when no commission is in the shop, most solo makers bill 800–1,200 hours a year.
If your annual overhead is $18,000 and you bill 1,000 hours, every hour in the shop must carry $18 of overhead before you earn a cent. That figure belongs in every quote, whether you show it as a line item or fold it into your hourly rate.
Pick a labor rate, then add overhead and profit
A practical structure looks like this:
- Base labor rate: what your skill commands — many established custom furniture makers charge $50–$100+ per hour depending on region and reputation. Beginners often start around $25–$40 while building a portfolio, and raise rates as demand grows.
- Overhead recovery: your per-hour overhead figure from above.
- Profit margin: 10–20% on top of costs, which funds tool upgrades, slow months, and business growth. Profit is not optional; it's what keeps the shop open.
So a maker with a $45 base rate, $18/hour overhead, and a 15% profit target quotes labor at roughly $72 per hour. When clients balk, remember: that rate is what the business mathematically requires, not a negotiating position.
Stop using "materials times three" as your only method
The old shortcut — material cost × 3 = price — is better than guessing, and it works okay for small, repeatable items like cutting boards where labor is predictable. But it breaks badly on custom furniture. A live-edge slab table with $400 in lumber and 50 hours of labor would price at $1,200 — a catastrophic undercharge. A small walnut box with $150 in figured stock and 6 hours of work would price at $450, which may overshoot the market. Use multipliers only as a sanity check against your built-up quote, never as the quote itself.
Quote Like a Professional, Not a Hobbyist
How you present the price matters almost as much as the number. Clients pay more — and argue less — when the quote looks considered and complete.
Itemize enough to justify the total
You don't need to reveal your hourly rate or margin, but do break the quote into credible categories: materials, craftsmanship/labor, finish, delivery and installation. An itemized quote signals that the price was calculated rather than invented, and it gives the client specific things to adjust ("could we use red oak instead of white oak?") instead of asking for a blanket discount.
Take a real deposit
Custom work is unsellable to anyone else if the client vanishes, so never start cutting without money down. A 50% non-refundable deposit is the industry standard for commissioned furniture, with the balance due on delivery or before installation. The deposit should at minimum cover all materials plus a slice of labor — that way a cancellation costs you time, not cash out of pocket.
Put it in writing: a simple one-page agreement covering the design, dimensions, materials, finish, price, deposit, timeline, and what happens if the client changes the scope mid-build. Scope changes get a written change order with added cost, every time. "While you're at it" is where margins go to die.
Track time honestly, including the hidden hours
Client communication, design revisions, lumber runs, finishing downtime between coats, and delivery all count as project time. Makers who only log "hours at the bench" routinely undercount by 25–40%. Track everything for a few jobs and you'll likely discover your real hourly output is far lower than you assumed — which is exactly the information you need to raise your next quote with confidence.
Don't Forget the Tax Bill Hiding Inside Every Quote
As a self-employed maker, roughly 15.3% of your net profit goes to self-employment tax (Social Security and Medicare) before income tax even enters the picture. A $5,000 table with $3,000 in true costs leaves $2,000 in profit — and over $300 of that belongs to self-employment tax alone.
Three habits keep taxes from ambushing you:
- Pay quarterly estimated taxes. The IRS expects self-employed workers to pay as they earn, four times a year. Set aside 25–30% of each client payment in a separate account the day it arrives, and you will never scramble in April.
- Deduct everything legitimate. Lumber, hardware, finishes, consumables, tool purchases (often fully deductible the year you buy them under Section 179 up to generous limits), shop rent, utilities, vehicle mileage for deliveries and lumber runs, insurance, and your accounting software all reduce taxable income on Schedule C.
- Keep business money separate. A dedicated business checking account turns tax time from an archaeological dig into a straightforward export. Every materials run on a personal card is a deduction you're likely to forget.
If material reimbursements flow through your invoices, remember that client payments for materials are gross income to you, and the lumberyard receipts are your offsetting expense. Report both; the net is what matters, but the IRS wants to see the full picture.
Common Pricing Mistakes That Quietly Kill Woodworking Businesses
Watch for these patterns in your own quotes:
- Charging hobbyist rates to "get your name out." Discount work attracts discount clients who refer more discount clients. One or two portfolio pieces at a fair-but-friendly price is a strategy; a year of them is a slow shutdown.
- Eating design time. If a client wants three design revisions and two wood samples, that's billable work. Consider a modest paid design consultation, credited toward the project if they proceed — it filters out tire-kickers instantly.
- Ignoring finishing time. Sanding, finishing, and curing often consume 20–30% of total project hours. Quotes built on "build time" alone systematically underprice every piece.
- Forgetting delivery and installation. A dining table delivered 60 miles away and carried up two flights of stairs is a half-day job with real risk. Price it as its own line item.
- Never raising rates. If your books fill more than two months out, your prices are too low. Raise them 10–15% and watch: demand almost always holds, and your per-hour earnings finally match your skill.
Review Your Numbers Every Quarter
Pricing is not a one-time decision. Lumber prices swing with the market, insurance renews higher, and your skills — and therefore your value — improve with every build. Once a quarter, pull your completed jobs and check: effective hourly rate earned, material markup captured, and profit margin kept. If any of them drift below target, adjust the next quotes before the shortfall compounds.
Good records make this review painless. When every commission has its own materials log, time entries, and final invoice in one place, spotting the leak takes minutes instead of a weekend. That discipline is also what makes tax season, loan applications, and insurance renewals straightforward — lenders and accountants trust makers whose books reconcile.
Keep Your Shop's Books as Sharp as Your Chisels
Accurate pricing starts with accurate records: per-job material logs, honest time tracking, overhead tallies, and clean separation of business and personal money. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.
