|Posted on April 5, 2015 at 6:35 PM|
Why Does an Upholsterer Charge a Cutting Fee When I Buy My Own Fabric?
This question is fresh off the inbox. It came in the form of a rant. I get the rant, and I embody the antithesis of that rant. But, our policy is "You ask, we answer" so I had to answer. This a longer and more transparent version of my short answer which was, "To offset the revenue they lose when you bring in your own fabric." Boom. Welcome to reality. I hated sending that answer, bursting "Joe's" bubble, but it is generally true.
What Is a Cutting Fee?
A cutting fee is usually some price per yard of fabric required to complete a project. Some upholstery shops charge that fee when a client provides their own fabric (known as 'C.O.M.' or Customer's Own Material).
Joe's apoplexy serves as an illuminating case study. He had received a reupholstery estimate of $750 labor + 20 yards of fabric with the fabric cost based upon his selection. He sourced his own fabric and flipped out when the estimate for reupholstery moved to $1050. Which came to $750 + $15 per yard of fabric x 20 yards ($300) = $1050. He had shopped heavily for the lowest labor rate, and got the rug pulled out from under.
Had Joe known that upholstery shops differ in their pricing approach he may have had an easier time.
Upholstery Shop Pricing Models
1. Labor Only
These shops do not want to mess with fabric. They aren't dealers for any fabric resources and don't offer any preferences. They are most often 'to-the-trade' only shops catering to interior designers and contractors who generally provide their own fabrics anyway. Their labor rates tend to be higher, because it is the only source of revenue offsetting their fixed and variable costs. Many of these shops would not deal with 'Joe', because he is not a regular (read: repeat) account.
2. Labor Plus Retail Priced Fabric
These shops want to sell fabric. The shop Joe went nuts about was one of these. They tend to have lower labor rates because thay anticipate making additional revenue from the fabric sale. Most fabric houses offer a 50% discount to their dealers. So, the fabric revenue can be significant when the fabric is priced at retail. These shops charge cutting fees. They would fold if they didn't, because their low labor rates do not cover their long term fixed costs.
3. Blended Labor Plus Discounted Retail Fabric
These shops want to reupholster furniture. Mostly for homeowners. Their labor rates tend to be between the other types of shops - higher than the fabric sellers and lower than the labor only shops. These shops hope to sell fabric, which they share a portion of their dealer discount with the client to keep the total upholstery cost within reason, but don't tend to charge a cutting fee if the client provides their own fabric. Why? Because they are not discounting their labor to induce a full retail price fabric sale. Their labor rates cover their fixed and variable rates of labor. And their fabric rates cover their fixed and variable costs of offering and assisting with fabric.
What Does This Mean to Joe?
Not much. Unless he bought his fabric at a VERY low price - which is possible. (Buying Discount Upholstery Fabric)
Our labor rate - as a blended labor pricing shop - would have been $1080 for the same project. And would have included pick-up and delivery at no additional charge. He set his sights artificially low based on his assumption that labor-was-labor without any additional considerations. When he changed the scenario by coming back with "I found my own fabric", he got twisted when the price changed and then went hunting for a 'C.O.M.' rate of $750 for his project. We couldn't accomodate him.
But it wasn't Joe's fault entirely. Why reupholstery pricing is such a black-box secret is a mystery to me.
Thanks for reading.