Pricing custom-made furniture can feel overwhelming, especially if you are just starting your woodworking business. Unlike mass-produced furniture, custom pieces require more time, effort, and creativity. If you set your prices too low, you might struggle to cover costs or undervalue your skills. On the other hand, if your prices are too high, you risk losing potential clients to competitors. Striking the right balance is crucial.
In this guide, I’ll walk you through how to price your custom furniture step by step. We’ll cover factors like materials, labor, overhead, and profit margins. I’ll also share some common mistakes to avoid and strategies to ensure your business remains profitable while keeping customers happy. Whether you’re making one-of-a-kind dining tables, handcrafted chairs, or small woodworking gifts, this guide will help you understand how to put a fair and profitable price on your work.
Why Pricing Custom Furniture Matters
Pricing is not just about covering your costs. It is also about communicating value. When someone buys custom furniture, they’re not only paying for wood and screws—they’re paying for:
- Your skill and craftsmanship.
- The uniqueness of a one-of-a-kind piece.
- The time it takes to design, build, and finish.
- The durability and quality that beats mass-produced options.
If you want to make woodworking a sustainable business, you must learn how to price effectively. For inspiration, you can also check this video guide on pricing custom woodworking projects.
Step 1: Calculate the Cost of Materials
The first step in pricing furniture is calculating material costs. This includes the obvious things like wood, but also other supplies such as:
- Hardware (hinges, screws, handles, knobs).
- Glue and adhesives.
- Sandpaper and finishing supplies.
- Paints, stains, or sealants.
Always keep receipts and track the exact cost of each project. For example, if you are making a dining table, you need to account for the lumber, screws, glue, and finish. If you spend $200 on materials, that becomes your base cost.
Pro Tip: Don’t forget about wasted wood or mistakes during cutting. Add at least 10% extra to your material calculation to cover errors.
If you’re looking for inspiration on creative projects, you can explore these ideas: woodworking gift ideas for him and simple woodworking projects for gifts.
Step 2: Factor in Labor Costs
Labor is often the most undervalued part of custom woodworking. Many beginners forget to include their time, which leads to underpricing. Ask yourself:
- How many hours will this project take from start to finish?
- How much is your time worth per hour?
For example, if you spend 20 hours on a project and value your time at $25/hour, that’s $500 in labor. Combined with $200 in materials, your minimum price should already be $700.
Pro Tip: Track your time using a notebook or a time-tracking app. Over time, you’ll get better at estimating how long each type of project takes.
If you’re just starting, you might not feel confident charging $25/hour or more. But remember: you’re providing a skilled service that not everyone can do. Clients are paying for your craftsmanship.
For more guidance, check this video tutorial on estimating woodworking costs.
Step 3: Include Overhead Costs
Overhead refers to all the extra expenses required to run your woodworking business. This includes:
- Rent for your workshop (if you have one).
- Electricity and utilities.
- Tool maintenance and replacements.
- Marketing (website, ads, etc.).
- Insurance and licenses.
Even if you work from a home garage, you still have overhead like electricity and tool wear. A good way to account for overhead is to add 10–20% of your labor cost to each project.
For example, if your labor is $500, add another $50–$100 for overhead.
Step 4: Add Your Profit Margin
You’re not just covering costs—you’re running a business. Profit ensures your business can grow, expand, and survive slow seasons.
Most woodworking businesses aim for 15–30% profit margins. To calculate this, take your total cost (materials + labor + overhead) and add your margin.
Example:
- Materials: $200
- Labor: $500
- Overhead: $100
- Total Cost = $800
Now add 20% profit: $800 × 0.20 = $160.
Final Price = $960.
If your furniture is unique or in high demand, you can even increase your margin. For example, custom dining tables often sell for thousands of dollars because they’re seen as luxury items.
Step 5: Research Market Rates
Your pricing should also consider what the market is willing to pay. Look at:
- Local furniture stores.
- Competing custom woodworkers.
- Online marketplaces like Etsy.
If your price is far above market rates, you may struggle to find buyers. But if it’s too low, you risk undervaluing your work.
A good approach is to start by matching the market average and then increasing as your reputation grows.
For instance, many woodworkers who make money successfully adjust prices over time as their demand increases.
Step 6: Offer Pricing Options
Clients love flexibility. Instead of giving one flat price, consider offering options:
- Basic package – standard design, minimal finishing.
- Premium package – upgraded wood, advanced finishes.
- Luxury package – custom engraving, high-end materials.
This way, clients can choose based on budget, and you can upsell higher-end services.
You can also learn more about creative ways to present value in this video on woodworking pricing strategies.
Common Mistakes to Avoid When Pricing Furniture
- Not charging for design time – Sketching and planning are part of the job. Include them in your labor hours.
- Forgetting delivery costs – If you deliver furniture, include gas, time, and vehicle expenses.
- Underpricing for friends and family – It’s okay to give discounts, but don’t work for free.
- Not accounting for mistakes – Add a buffer for errors, wasted wood, or unexpected delays.
- Ignoring seasonal demand – Furniture sells more during holidays and wedding seasons. Adjust accordingly.
For example, if you’re making a gift for a carpenter who has everything or gifts for woodworkers under $50, seasonal pricing can help you maximize profits.
How to Communicate Price to Customers
Many woodworkers struggle with explaining why their furniture costs more than store-bought options. Here’s how to handle it:
- Be transparent – Break down costs (materials, labor, overhead).
- Highlight quality – Emphasize durability and craftsmanship.
- Share your process – Customers love to see behind-the-scenes work.
- Offer testimonials – Showcase past clients who value your work.
When clients understand what goes into making a piece, they’re more likely to see the price as fair.
If you want to improve customer interaction, consider joining a couples woodworking class where you’ll learn how others communicate value while working on joint projects.
How to Adjust Prices Over Time
Pricing is not static. Over time, costs rise, your skills improve, and demand may increase. Here’s when to raise prices:
- Material prices go up.
- You have more orders than you can handle.
- Your craftsmanship and reputation improve.
- You move into a new market (e.g., luxury furniture).
Never be afraid to raise your prices. Customers who value quality will continue to buy, and those who only look for the cheapest option are not your target audience.
Building a Profitable Woodworking Business
Pricing is just one part of running a successful woodworking business. You also need to focus on:
- Marketing – Build a website, use social media, and share your work.
- Networking – Connect with interior designers, carpenters, and real estate agents.
- Diversifying income – Sell not only large furniture but also smaller items like woodworking gift ideas for kids or accessories.
This helps you create multiple revenue streams and avoid depending on only big projects.
Final Thoughts
Learning how to price custom-made furniture takes practice. At first, you might second-guess yourself, but over time you’ll find the right balance between fair pricing and profitability. Always remember:
- Track all costs (materials, labor, overhead).
- Add a profit margin.
- Research market prices.
- Adjust over time as your skills and reputation grow.
By following these steps, you’ll ensure your woodworking business remains sustainable and rewarding. Pricing is not just about numbers—it’s about valuing your craft, time, and creativity.
If you’re serious about woodworking, whether as a hobby or business, remember that the value of handmade furniture is not just in the product but also in the story, skill, and dedication behind it.