Why cabinet estimates never show an hourly rate
Cabinet customers buy a kitchen, not hours, so the hourly rate stays on your side of the desk. Many cabinetmakers who have been at it for years have never put an hourly rate on an estimate, because the hours on a custom kitchen are too hard to predict for a client to accept them as a price.
The reasons are cabinet-shop reasons. You can't bill a client for the afternoon spent sending back warped poplar, for a door you ruined, or for sweeping the shop. The rate still matters. It is the floor under the foot price you quote, and the way to see whether a kitchen paid.
What a cabinet shop hour costs: $58.80 in the sample
Every billable hour in the sample shop has to bring in $58.80 before machines and profit. That comes from the year's overhead, mostly shop rent, power with heat and dust collection, and insurance, plus the full cost of three people, divided by the hours they spend building paid work. The formula is explained once in the true hourly rate guide; run your own shop through the free true hourly rate calculator.
In a cabinet shop the unbilled hours move the rate more than rent does. The owner draws kitchens, writes cut lists, orders sheet goods and meets clients, so far fewer of the owner's hours are billed than the cabinetmaker's. Those hours are paid for by the ones that are.
A simple way to see it: if a shop costs $125,000 a year to run and its people build paid work for 2,500 hours, each of those hours has to bring in $50. If the owner spends one more day a week on drawings and sales, billable hours can drop toward 2,100, and the same shop needs about $59.50 an hour. Nothing in the shop got more expensive; fewer hours are carrying it.
Machines sit on top. A spray booth, edge bander or sliding saw has running costs and a replacement cost, so the calculator charges each one per running hour. A painted kitchen that lives in the spray booth pays for the booth; a stained built-in with more hand work does not.
Is cabinet making profitable? What the 20 ft kitchen keeps
The sample kitchen keeps $2,384.41 above full cost and earns about $97 per labour hour against the $58.80 break-even. Because the owner's wage is already inside that full cost, the 24.3% is close to net profit, not gross margin; overhead and profit explains the difference.
We found no reliable industry profit margin for cabinet shops, so we don't quote one. What owners agree on is where profit goes missing: finding out halfway through a kitchen that it was priced too low, and then building the rest of it for little or nothing.
The sample Job Log shows the same thing in numbers: an 8 ft job quoted at 22 hours that took 24, and a 14 ft job quoted at 40 that took 72. The first is normal drift. The second job took 80% more hours than quoted, and at the break-even rate those 32 extra hours cost about $1,880, most or all of the profit on a job that size.
Markup on plywood, slides and bought-in drawer boxes
Markup on cabinet materials pays for ordering, checking and handling them, and it belongs on bought-in parts too. Many small shops buy dovetail drawer boxes in instead of buying the machine, and some send finishing out when the spray booth becomes the bottleneck and kitchens wait in line for paint.
Outsourced parts still cost you ordering, checking and freight, so they carry a markup like sheet goods do. Two finish and species points help set upcharges. One kitchen company added about 10% to the price for a painted finish. And moving a kitchen from maple to walnut often adds only about $1,000 in total material cost with the same build time, so charge that difference plus your markup on it, not a premium on the whole job.
Keep markup and margin apart when you set a target: keeping 25% of the price takes a 33.3% markup on cost. The full table is in markup vs margin.
| A | B | |
|---|---|---|
| 1 | Markup on cost | Margin kept on the price |
| 2 | 15% | 13.0% |
| 3 | 25% | 20.0% |
| 4 | 33.3% | 25.0% |
| 5 | 50% | 33.3% |
Install rates, deposits and paint upcharges some shops use
These come from single sources, not surveys.
| A | B | |
|---|---|---|
| 1 | What | Figure |
| 2 | Installation budget, from a cabinet seller | 40 to 60 dollars per linear foot |
| 3 | Installation billing at some custom shops | Hourly, on top of a delivered price |
| 4 | Paint upcharge on one kitchen | about 10% |
| 5 | Deposit some shops take on a large kitchen | 60% |
At $50 a foot, installing a 30 ft kitchen comes to fifteen hundred dollars. Billing install by the hour instead means a crooked wall or an out-of-level floor costs the client, not the shop. Either way, quote it on its own line so the cabinet price stays comparable.
A big kitchen and a two-month wait for the rest
Big deposits protect margin because cabinet jobs are paid in lumps months apart. On a $50,000 kitchen, a 60% deposit is $30,000 up front, and the balance may take two to three months to come in, so the first cheque has to fund sheet goods, hardware, drawer boxes and wages until then. A 30% deposit on the same job can leave the shop paying for the whole kitchen out of pocket before the client pays again.
How often quotes turn into jobs changes what each quote costs, too. A cold lead from a website usually closes far less often than a referral or a builder you already work with, so every set of drawings for a cold lead costs more than it looks. That time either sits in your rate or shows up as a design fee credited against the job; the cabinet pricing guide lists it with the other costs quotes miss.