After two or three coats have been applied, you may carefully sand to level and smooth the finish. Remove all sanding dust by following up with a vacuum and tack rag. Don't get too aggressive with the first sanding, the finish is still pretty thin and if you are not careful, you will sand through the shellac on the edges and corners.

Steel wool or synthetic wool scouring pads may be used to smooth contoured surfaces and detailed mouldings.























Oil Based Varnish
I like Rust-Oleum Zinnser’s Quick 15 satin sheen varnish because of it’s quick dry (if I need to re-coat with another coat of varnish for extra durability), and great adhesion. Quick 15 is compatible with either standard or de-waxed shellac.  You must sand Quick 15 between coats for proper inter-coat adhesion.  You normally would apply two or three coats of shellac, then sand, apply a coat of Quick 15, sand again, then reapply Quick 15.  Remember to remove the dust after sanding with a vacuum, followed up with a micro fiber tack cloth.

Quick 15 can be recoated in an hour if you are going to apply a second coat.

Why not just use varnish and skip the shellac all together?

Because shellac will not re-wet your wood stain as varnish will.  One of the problems with using oil varnish (or oil urethanes) in conjunction with oil stain, is that you may brush out some of the stain color when applying the varnish.  Since the solvent in shellac is alcohol, and not mineral spirits, it will not re-wet or remove an oil based stain.

Shellac  is water thin and brushes out well, even over itself.  Varnish, when used as a final protective coat over two or three quick drying coats of shellac, doesn't re-wet or soften the shellac itself either.  The shellac / varnish system gives you longer working time, better sheen uniformity and less chance of brush drag as compared to an all varnish or all polyurethane finishing system. 

Except in situations subject to water, I sand thoroughly (then vac and tack rag) prior to the final single coat of varnish, this gives me a good level surface to which I add a final chemically resistant clear coat (varnish), and because I am going over shellac I have good working time (relatively speaking) with either quick or slower drying varnish.
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Shellac, unlike some finishes, doesn't require sanding between coats for proper adhesion. The second coat of shellac will melt into the first without the need to create a surface profile for intercoat adhesion.  Another nice feature of shellac is that it will not re-wet or remove your oil based stain as an oil based sanding sealer  or varnish might.

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Finishing with varnish

I like to use an oil based varnish for my final finish because it is more water and chemically resistant than shellac.  Shellac will dissolve if it is cleaned with a cleaner containing ammonia or alcohol - varnish won't.  Shellac will also develop white water spotting if water is left on the surface for long periods of time.

Note: if you are finishing a surface that will likely get water on it, you may want to put two (or three) coats of varnish over the shellac sealer to be sure that water does not come in contact with the underlying shellac.
hand rubbed satin finish
The Hand Rubbed Satin Finish -part 2
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