Rob,
A danger of long posts, we were both posting at the same time and I missed your last to me. You have walked the premise quite a ways from where we started. Business covers such a wide area that it is very hard to say something that applies to all businesses across the board.
I helped estimate and bid construction projects, hard money jobs. There we lived or died by our quote. Unless they changed the job we couldn't change the price. In that instance we did very much bid based on our costs and the profit margin we needed. Times were lean and there were a dozen other companies bidding the job and if we didn't bid tightly we didn't get the project. When times were booming our margins went up very substantially.
Hard times it was survival of the lean, mean, and smart! Not my doing but a company I worked for bid a $40,000 job under $17,300 to "freeze out" another company. I was bringing it in on time for under $25,000 which I thought was pretty impressive for a $40,000 project. Then they went into panic mode trying to do a $40,000 job for less than half the price without taking a bath. The job went way way over time and at least a hundred thousand over the bid.
Cabinets are an interesting area, I knew a man that had a large cabinet shop, cranking out what was considered custom cabinets as they were made to specifications for each job. The assembly methods were production but the result was "custom". Not quite in my book but debating what "custom" is could fill another long thread.
Anyway, when these shops don't have work on order they can't simply shut down and lay off crews or tell them stay home this week, you don't get paid. They keep right on cranking out cabinets and if they can't sell them they dump them off to huge warehouse sales depots at not much over cost, if cost. There is one of those warehouses about a hundred and twenty miles from me. I went there with a friend when he was looking for cabinets for his commercial business. We purchased sixty running feet of hardwood cabinets for $1500 not all that many years ago, maybe five. Guess where I go when I need cabinets? I can buy the same cabinets the local guy sells for five or six thousand for under a thousand. For those kind of savings I can buy the cabinets early and design around them a little.
By the way, I totally agree with doing work in a totally different area at whatever rate you choose to charge. I didn't get the same rate for mechanic work, body work, or designing and installing computer networks. Had I decided to paint a car while I was a system engineer I couldn't have charged $150 an hour to do it. I did paint a couple of cars during that time when I think about it, free.
I never did cheap work in my shop even when it was possible. When people want corners cut they never tell other people this is what they asked for they say, "Look at this garbage that xxx automotive did!" Saw that a few times so never fell into the trap myself. Let me do the job right or tote it down the road. I can't afford to turn out less than my best.
In sales market decides the price. Some things I made over 1000% profit on, some I barely broke even or lost a little on. Then the only thing the business person has to do is determine what to sell in his market. A funny story, I had an AMC Pacer in my auto salvage. Looked like somebody put a football needle in a Ford Pinto and pumped it up. Very few sold but I kept it for one customer that bought hundreds of dollars worth of parts off that car over a few years. Then he wanted to sell me his Pacer for salvage. Thought it was worth a fortune: "Look at all you sold off the one you have!" I had to explain to him that I hadn't sold one part a year off of the little car except to him. He was the market. If I bought his the market was gone. Gone regardless when he sold his to anyone. I gave him a hundred more than the car was worth and crushed both Pacers a few months later just to get them out the way.
Hu