Interior Insights: Using Pricing Tiers to Simplify the Estimating Process

Jun 17, 2012

Over the years of operating my business, one of the biggest thorns in my side has been estimating jobs. It feels like a delicate dance between two people on completely different ends of the spectrum.

As an owner, I’d like to see a million-dollar bill and, as a paying customer, they want to see the job done for free. Finding a middle ground where the customer feels like they’re paying for and receiving a good value, and you feel like your skills and experience are receiving fair compensation is tough.

I’ve created tiered levels of service as a base guideline for a customer to choose what they’ll be receiving. We have four distinct levels a job will fit into. The lowest price tag is entry-level and stock-replacement-style interiors. This level of service will include base lines of materials that typically fall into the $20-25-a-yard range and steer clear of any upper-level craftsmanship or custom design. We do charge a minimum of $3,500 and this level of service won’t exceed $5,500.

The second tier generally will start with offering mid-level to lower-high-end vinyls and materials. Incorporation of custom design and fabrication also starts to show here. Creating features that previously didn’t exist is the base of this tier’s offering, for example, scratch-building a console and decklid liners. This offering is probably the most-common level completed in our shop.

The common customer primarily has a home-built local show car. Several features will be subbed out to specialists, such as paint and interior, but with the owner being very hands-on throughout the overall build. The price point for work in this tier tends to range between $5,500-8,500. Material line is the largest determining price factor here.

The third pricing tier is geared to the professional shop that has a client with a large investment into their project. Time-wise, this service can easily double the next-lowest tier. Material costs tend to be a minimal jump here in every aspect except seating. If the client chooses an aftermarket seat, the cost will be noticeable, but if they choose a fabricated seat, it’s a large time investment. This is the level where master craftsmanship is being purchased. Every detail needs to be addressed. You’re building to suit the ride, not making due with what’s existing. Every piece, every panel and every detail gets attention.

As an upholstery shop, your value in the business is to unlock the overall value of the entire vehicle. We’re value-adders. A poor job on our end is detrimental to the vehicle’s overall value. A home run here can significantly raise the ease at which a sell occurs and also raise price point to a maximum potential. Typically, we see figures of $8,500-14,500 in this tier.

Finally, we offer the cream-of-the-crop service to our customers that have extremely high-visibility projects with aspirations of widespread recognition. Typically, award-contending cars are placed here. This service level is the lowest percent of overall jobs that come through the doors.

The type of clientele that requires such a high level of service is rare. Every square inch of the ride’s interior must be hand-fabbed and absolutely perfect here, and narcissistic tendencies generally play a large role in the overall job here. That’s not a negative implication, it simply refers to the desire the owner has for the way the project will be received by the public. Ideas and concepts no one has seen before tend to surface at this level.

Each component should be treated as individual art pieces. For instance, the kick panel is a relatively small component that functions as a cover for the base of the front door pillar. Kick panels that tend to be made to tidy up an area and merely blend in are definitely not found in this tier. That small, seemingly insignificant panel needs to be worthy of hanging on a wall to be displayed in a gallery at this level. Treat each individual detail as it may be the last you create. Perfection is the goal, and nothing but the best processes, materials and designs are used for work in this tier. This master craftsmanship commands prices ranging from $12,500-25,000.

The bottom line when it comes to estimating your jobs is to always place the final decision in the customer’s hands. Let them decide exactly how extravagant the final product will be. Upholstery has so many variables, so there’s no one-size-fits-all pricing.

Cheap vinyls can range as low $20 a linear yard while high-end leathers are sold at premium prices by the square inch. That difference in itself can vary more than the complete price of a lower end job. Give your customer the option to choose the type of service and materials that suit their concept of value and final product.

I’m in no way implying you should lower or raise your pricing in accordance with what we charge at my shop, I’m conveying this information to you as it relates to my area of the country, our level of service and demand. Set your prices relative to your demand. I starved my first few years in the industry. Our price point now would have been laughed at had we tried to use it when we started. Well over a decade later, we have customers that actually tell us we’re too cheap. Be proud, but don’t be greedy.