How to Price Custom Cabinets (Formula + Examples)

To price a custom cabinet, add your materials, labor, and overhead to get the job's cost, then divide by (1 − your target margin) to set the price. For example, a cabinet that costs $700 to make at a 35% target margin should be priced at about $1,077. The hard part isn't the formula — it's capturing every cost consistently on every quote. Here's the method, with an example.

Step 1 : Total your materials

Add up everything the cabinet consumes: sheet goods (carcass, doors, drawer boxes), edge banding, hardware (hinges, slides, pulls), and finish. Include a waste factor on sheet goods — typically 10–20% — because you never yield 100% of a sheet. This materials total is the foundation of your bill of materials.

Example: $220 materials + 15% waste on sheet goods ≈ $250.

Step 2: Cost your labor

Multiply the hours a cabinet takes (design, cut, assemble, finish, install) by your loaded labor rate — wages plus payroll taxes and benefits, not just the hourly wage. If you don't know your loaded rate, that's the first number to nail down.

Example: 5 hours × $70 loaded = $350.

Step 3: Add overhead

Overhead is everything that keeps the doors open but isn't tied to one job: rent, utilities, equipment, software, insurance, admin. The simplest way to allocate it is as a percentage of labor or as a shop rate per hour. A common approach is an overhead rate of 20–40% of labor.

Example: 30% of $350 labor = $105.

Job cost so far: $250 + $350 + $105 = $705.

Step 4: Apply margin (not just markup)

Here's where shops leave money on the table by confusing markup and margin. Markup is added on top of cost; margin is the share of the final price you keep. To hit a target margin, divide — don't just multiply:

Price = Job cost ÷ (1 − target margin)

Example at a 35% target margin: $705 ÷ (1 − 0.35) = $705 ÷ 0.65 ≈ $1,085.

Marking the same $705 up by 35% would give only $952 — an actual margin of about 26%. On volume, that gap is the difference between a healthy shop and a busy one that isn't making money. Industry conditions shift too; the KCMA Trend of Business report is a useful gauge of when to revisit pricing.

Step 5: Sanity-check and quote

Compare the number to recent similar jobs and to what your market bears. Groups like the Cabinet Makers Association are good places to benchmark practices with other custom shops. Then quote it — clearly, and fast, because slow quotes lose jobs.

The real problem: doing this by hand, every time

The formula is simple. Applying it identically across every cabinet, every option, and every estimator is not — which is why spreadsheet quoting quietly leaks margin as a shop grows. This is exactly what a formula-based pricing engine solves: you encode your material costs, labor rates, overhead, and target margin once, and every configuration prices itself the same way — instantly. Customers can even configure and price cabinets online, and the priced order flows straight into production.

If quoting is your bottleneck, see how TimberCloud prices a cabinet using your own numbers.

Frequently asked questions

What's the formula for pricing custom cabinets? Price = (materials + labor + overhead) ÷ (1 − target margin). Total the job's cost, then divide by one minus your target margin. For example, $705 of cost at a 35% margin prices at $705 ÷ 0.65 ≈ $1,085.

What margin should a custom cabinet shop aim for? Many custom shops target a 30–50% gross margin, depending on complexity, market, and efficiency. The key is to price to a margin (a share of the final price) rather than a simple markup on cost, which understates the price you need.

How do I price the labor on a cabinet? Use a loaded labor rate — wages plus payroll taxes and benefits — multiplied by the hours the cabinet takes across design, cutting, assembly, finishing, and installation. Loaded rates are typically well above the base hourly wage.

Why do quotes take so long, and how can I speed them up? Quotes are slow when every price is built by hand in a spreadsheet. Encoding your pricing rules into a configurator or pricing engine lets each configuration price itself instantly and consistently, which cuts quoting time and reduces errors.