Yes, in a run, and not much otherwise. Hardwood for an edge-grain board costs about $13; the shop time costs more. Made ten at a time, a board takes about an hour and keeps a fair margin sold direct; a one-off takes more than twice as long; and wholesale at a kitchen shop's price barely covers the full cost. Margin = (price − cost) ÷ price. In the example below, an edge-grain maple board made in a run of ten costs $42.93 to make and sell and goes for $70.00, a 38.7% margin. A month of four kinds brings $3,868 of sales and about $1,120 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- An edge-grain board in a run of ten: $42.93, $70.00, 38.7%.
- Shop time is most of the cost.
- Runs of ten take less than half the time of one-offs.
- Wholesale barely covers the full cost.
- TaroStack costs each board from what each batch used. More below.
A board, costed
High Desert Woodshop, the made-up woodworking shop in Bend, Oregon, I use in these examples, counts its time at $25 an hour:
| An edge-grain maple board, run of ten | Cost |
|---|---|
| Maple, glue and oil | $14.63 |
| Sleeve and care card | $1.20 |
| Shop time, 1 hour at $25 | $25.00 |
| Card fees, 3% of $70.00 | $2.10 |
| Cost | $42.93 |
Pricing a project from wood and time is in how to price woodworking projects, and a shop's year in woodworking business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Edge-grain maple board | Direct, run of ten | $70.00 | $42.93 | $27.07 | 38.7% |
| Edge-grain maple board | One-off commission | $112.00 | $81.69 | $30.31 | 27.1% |
| Edge-grain maple board | Kitchen shop, wholesale | $42.00 | $40.83 | $1.17 | 2.8% |
| End-grain butcher block | Direct | $180.00 | $145.40 | $34.60 | 19.2% |
The one-off keeps 27.1%, with two and a half hours in it; the wholesale board keeps 2.8%, almost nothing; the end-grain block keeps 19.2%.
A month's numbers
A month for High Desert Woodshop:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Edge-grain maple board, direct | 30 | $2,100 | $812 |
| Edge-grain maple board, one-off commission | 4 | $448 | $121 |
| Edge-grain maple board, kitchen shop | 10 | $420 | $12 |
| End-grain butcher block, direct | 5 | $900 | $173 |
| Month | $3,868 | $1,118 |
Runs of ten bring nearly all the gross profit. The kitchen shop's order would pay only if the boards took half the time, so the shop offered a smaller, simpler board at that price instead. End-grain blocks take four hours each and are made to order. Margin against markup is in markup vs margin.
Get the calculator
Download the cutting board margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one hour a board. Figured maple that costs twice as much, a run of ten that takes twelve hours, and boards that crack in the glue-up change the month.
How TaroStack does it
TaroStack keeps hardwood, glue and finish counted, and costs every batch.
Supplies in their units. Hardwood bought by the board foot is used by the board foot, and glue and oil by the bottle.
Designs as recipes. Each board is a recipe of its supplies, so a batch takes them off stock and is costed from what they cost, and good and rejected pieces are recorded.
Reordering. Supplies come up on a reorder list in days of cover, worked out from how fast they're used.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Supplies on hand | Count the shelf | Stock in its own units |
| What a batch cost | Prices you type | Costed from what you paid |
| Boards that cracked in the glue-up | Not counted | Good and rejected on each batch |
| When to reorder | When it's low | Reorder list in days of cover |
Recipes, units, costing and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.