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[QUOTE=Michael McBroom]I think the root cause of this phenomenon is fear. The potential customer is fearful that the price will go even higher, or that the item will not be available any time soon again. And helping to fuel that negative emotion is another one: greed. The potential customer probably is thinking the item will only appreciate in value, and that whatever the price s/he pays for it now, it will be worth more in the future.[/QUOTE]


Weeellllll... I am quite sure that I wouldn't classify greed as a negative emotion... but other than that I agree with you. I think fear of loss kicks in first and people think:

"OH @&$@!!! He must be the next up and comer and if I want one, I better get in line NOW!"

And secondarily people have 2 thoughts with respect to the price:

1) "If I buy one today at X it will be worth 5(x) next year."

and

2) For people who instictively know that the market is too high for these items they rationalize it by being a "good investment".. Which goes to show that even after you have a 20 year back log why it is important to continue to promote your brand. You need to keep your secondary market strong too.


The thing I am principally interested in learning is whether this market condition is purely organic, or if it is marketing genius. Obviously, those who are beneficiaries of it have little interest in discussing it (who could blame them). But I really wonder about how this happens.

(none of this is meant to be critisism... if you can get $50k for a guitar... I say more power to you.)

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Brock Poling
Columbus, Ohio
http://www.polingguitars.com

[QUOTE=Brock Poling]
The thing I am principally interested in learning is whether this market condition is purely organic, or if it is marketing genius.[/QUOTE]

I suspect it's a little bit of both.

Best,

Michael

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Live to Play, Play to Live

I think, from a buyers standpoint, that a pricetag makes people pay attention. So, say you're priced the same as everyone else, they assume you've got a middle of the road product. Now, if your price is higher then they get curious about why and look into it. The price is you laying a number down on the table as to how good you think you are. One of two things is going to happen then:

1-They do their research and conclude you make a product good enough to justify that price. Maybe they dig around the webpage a bit longer than they would have or they look up reviews to explain this price and find out you have better features or construction. Business goes up because people get the 'what makes you so good' curiosity about expensive things and once they're in the door...

2-They don't find any proof of why you should be charging so much and they go somewhere else, thinking you're greedy. Business tanks.

I know that Tim Diebert (a guy a really respect as a luthier and just a good lad) said every time he raised his prices his waiting list got longer. But Tim's stuff is, IMO, beyond amazing. He's retired from building (going back to furniture, I hear) but check out timtone.com (if it's still up) if you ever feel like gawking.Bob Garrish38943.9960300926

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Bob Garrish
Former Canonized Purveyor of Fine CNC Luthier Services

Michael McBroom
I for one like your approach. I did visit your web site.
You come off as a fair person, you explain your low
prices. I have no idea what kind of market there is for
10 string guitars I would guess it is a small fraction of what the 6 string market is.
If you are doing this full time, paying your expenses and enjoy it. You must be doing something right.
You also explained your prices will rise. Maybe that is a Marketing genius approach, start out with lower prices, capture more sales. then start raising your prices. Success is measured in different ways.
Best of luck to you.
Tom

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http://www.moriciguitar.com

Tom, either I am mis understanding your posts, or you seem to think that I am only ever talking about money. Geeeeeesh.... that is not even close.

I am talking about "brand", about claiming and owning a piece of the market and building a reputation that allows you to thrive in this space.

Let's face it... if anybody wanted to get rich, building guitars isn't the way to do it. I assume we are all in it for the passion.

But that isn't to say that we shouldn't be savvy business people? Should it?


With respect to price... it is a terrible terrible terrible (and really awful) position to compete on price.      We sell luxury items and you CANNOT ever win in this market by selling cheap. You shouldn't be crazy high either, but don't use price as an attempt to incentivize sales.

If you are selling inexpensive guitars and they are priced that way for some reason other than to drive business, you REALLY need to call attention to it.

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Brock Poling
Columbus, Ohio
http://www.polingguitars.com

MichaelP
Wrote
"Also believe that if you are not experience in most major repairs you are not ready."
(sorry I don't no how to do that box thing)

Im not sure I understand that. I started repairing
instruments to earn the money to be able to build.
In 1971 I started my guitar and mandolin co.(part time)
I had to repair, that is how most builders got there
start. It was called paying your dues.
If there where books and schools on the subject
I didn't Know about them. I did learn a lot repairing.
Today there is so much information available it would
seem you could be a builder without being a repairman.
Just got me curious.

Tom

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http://www.moriciguitar.com

Brock
I intended to give M Mcbroom some support with my post
to him, you respond to me that I attacking you about
money? I am enjoying this discussion with you.
Lets figure out how we are confusing each other.
Of course most of us are driven by the passion to build.
Money and a sound plan is mandatory if we expect to do
this for a living. This is my third attempt to be a
Professional Builder. I quit building instruments
9yrs ago and got serious about making the money I
needed to be secure enough to go through the drought I
can expect as i throw my hat back in the ring.
I believe I know what Im up against, I have given
myself 18 months to sell a guitar.
My goals and yours have to be different.

I am not looking to build more than 18-24 guitars a
year.
I want to remain a one man shop.
If I become well know thats great, my boys can be proud.
I do take commissions, but prefer to build on spec

When I speak of Marketing, Think of all the claims that
there are. This one is better because this and this one is better because that ect. To me that is the sure way
to invite critism and skepticism
I don't make claims my instruments are better than yours or any other hand builder. I want my customers to do that. Before I moved to Montana I lived in the chicago area,In the Late 60's I met Bozo Podunvac (hope I spelled that right) he was a repairman and built on the side.
Leo Kottke made him famous, he moved to california,
built a factory, and I believe even had some built
overseas. Last I heard he lives in florida and is
an independent builder again. And after all that most
musicians I asked never heard of him. Sure made me
change the way I think.
So Brock describe please, what you consider as Thriving
in this business. If it is not making more money than you need to live and be content. What is It.
It's late will have to continue this later.

Tom

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http://www.moriciguitar.com

[QUOTE=Tom Morici] you respond to me that I attacking you about money? I am enjoying this discussion with you.[/QUOTE]

   I don't feel like I was attacked... just misunderstood.

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Brock Poling
Columbus, Ohio
http://www.polingguitars.com

[QUOTE=Tom Morici] When I speak of Marketing, Think of all the claims that there are. This one is better because this and this one is better because that ect. To me that is the sure way to invite critism and skepticism
I don't make claims my instruments are better than yours or any other hand builder. I want my customers to do that.

[snip]

So Brock describe please, what you consider as Thriving
in this business. If it is not making more money than you need to live and be content. What is It.
It's late will have to continue this later.

Tom


[/QUOTE]


I agree. I would avoid using the word "better" whether it is in comparision to another hand builder or to a production brand. "Better" is subjective with respect to the fact that each player has an individual definitation of what this means. That is slippery ground to be sure. Besides it is always poor form to badmouth the competition.

(besides. Look how Epiphone kicked Gibson in the teeth all those years ago.... priceless)   

I would "brand" around other things... perhaps understanding the needs of a particular market segment... perhaps needs that have nothing to do with the guitar, but how they think, their financial condition, etc.

IIRC correctly PeterM is going after the worship market (he is always my example... sorry Peter). I think this is smart. He can cater to this market fairly easily and build a name for himself in these circles. I think most rational people realize that his guitars sound NO better in a worship setting than any other, and visa versa. However, because this is his "niche" he may be more familiar with the common concerns, needs, issues, and price expectations this market has and can have "experience" with this niche. That will give him a clear advantage provided he builds a great looking and great sounding guitar. Clearly he won't get every commission, but all he has to do is max out his production capacity.. which I have to think is very small.


How do I define success? I guess it depends. For me it is building the very best guitars I can, constantly getting better, and finding buyers for everything I can produce. ... but I am not trying to support my family with this effort. If I was I would define success differently.

I think triving involves marketing plus a great operational plan to maximize your production (not necessarily implying CNC.. but "maximumize" within your choice of production methods).

Brock Poling38944.3645717593

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Brock Poling
Columbus, Ohio
http://www.polingguitars.com

[QUOTE=Tom Morici] MichaelP
Wrote
"Also believe that if you are not experience in most major repairs you are not ready."
(sorry I don't no how to do that box thing)

Im not sure I understand that. I started repairing
instruments to earn the money to be able to build.
In 1971 I started my guitar and mandolin co.(part time)
I had to repair, that is how most builders got there
start. It was called paying your dues.
If there where books and schools on the subject
I didn't Know about them. I did learn a lot repairing.
Today there is so much information available it would
seem you could be a builder without being a repairman.
Just got me curious.

Tom

[/QUOTE]

My line of thought on this relates to warranty. If you are selling your work you should be warranting you work. If you are going to warranty your work you had better know how to do the repair because sooner or later Mr. Murphy will come calling.

MichaelP
Thanks for the response, that make sence to me.
Mr murphy use to hide out in my shop, I ran him off.
But he still manages to sneak in once in a while.
I hate him, but he is a good teacher.

Tom

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http://www.moriciguitar.com

Brock
all good points,hard to dispute.
Building romance may be more of what we do than
I was thinking about. Even those that are buying
Martin, Gibson, and Taylor, fall under the romance
factor.
Pricing is the most difficult aspect for me to nail
down. My visitor from a few weeks ago figured I would
be asking around 4,000_ for my current build.
I never said what the price would be I was thinking
3,200_ . So I have to re-think my pricing.
In the early 90's I did the low price thing, just to
get some cash flow. My friend who owned a music store
was my sole dealer. The catch, my name was not on them.
Just a simple cresant Moon. People started calling them
Moon Guitars and Mandolins. It worked for awhile, but
one day when I delivered 3-mandolins, a customer walked
in about 10 minutes Later and asked to see the moon
mandolin.(the other 2 had already been put in the back room)I stood there as my friend sold it for exactly
double of what he had paid me for it.
I was not mad at my friend he was buying these outright
and I felt he had a right to get what ever he could
from them. But I sure felt I was cheating myself.

Tom

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http://www.moriciguitar.com

Most dealer will want a 30% cut off the retail. 100% is excessive but then again that gives you an idea of the fair market value in your area.

Personally I would not sell through a dealer at this point and time. But I don't build many non commissioned instruments anyway, outside of ones I build for shows. They get priced at the rate I would commission build the same thing for.

I do have a cousin in LA. that commissioned a guitar for his self and displays it in a case in his music store. I have gotten a couple commissions from this and paid my cousin finders fee of 10% but that is the closest I would do to a dealership at this timeMichaelP38944.7015972222

I agree with Michael. I would ABSOLUTELY POSITIVELY **** NOT **** sell through any retail story that carried a "big brand" guitar. All of the big brands put quotas on their retailers and they constantly keep the pressure up to "move units". This immediately puts you on bad footing.

Obviously the temptation is there for the store to steer someone from a luthier built guitar to a production built guitar just so it helps them meet their numbers. This can damage your brand -- who knows what they may say about you, or what comparisons they are making to get the customer to pick the production guitar.

... and I have seen this happen first hand. I am not going to divulge the details, but I picked up a hand built guitar in a store and the owner trashed the builder and the guitar in order to put a Gibson in my hands.   

I think the only place I would feel comfortable showcasing my guitars would be a shop that 1) has no "brands" available to them.. 2) Focuses on the luthier or "emerging" shop market. 3) Is so successful that they have no worries hitting thier quotas from the big boys. I would be very very cautious about these deals.

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Brock Poling
Columbus, Ohio
http://www.polingguitars.com

A couple of observations:
Re the "Do one thing well..." idea. The very nature of our endevor requires us to do many things well if we are going to build a saleable instrument. Because of the way musical instruments have been produced & sold for the last 100 + years handmade instruments are ALWAYS compaired to factory built ones. The Martins,Gibsons ect set the visual & aural model for steel string guitars. Thats why buyers expect shiny finishes, standard body shapes & certin sounds. The factory products aren't better or the only good options but for most people are thier only frame of referance.
In a factory situation one person will do a single task or a few related tasks and get very good at it, the next person will do something else to that instrument and so on til it comes to the final set up person & shipper. We on the other hand have to select a design, find and prepare approprate wood, cut out the parts,build the box and so on & need to be good at all the steps including marketing.
Handmade instruments (except for violin family) are the only craft endevor that currently has the problem of being compaired directly with factory products. A hand thrown potter's production is not expected to be like the factory produced cups & plates or plastic kitchenware at Wal-Mart. An individual's paintings or drawings are not expected to match the calender from the gas station.

Re sale through stores:
If a store is buying your instruments outright for resale of course they are going to mark the price up. That mark up is what pays the rent, utilities, wages ect that permits the store to exist so it CAN sell your instruments. The store also has to convince the customer to even try an instrument from someone they have never heard of. In my experiance many folks shop known brands & don't trust thier own senses. You can have a Martin, a Taylor & two local luthier's guitars all priced within $100 of each other and 9 out of 10 shoppers will pick up to try thr Martin and the Taylor ignoring the two hand built instruments.
Selling on consignment is a good option for both the builder and the store. The builder will set the price & get a higher percentage of the sale, the store won't have to put out so much money and accept the risk that involves. My store and many others in this area charge between 15 & 25% of the sale price. I can't think of any store owner who has high end hand built instruments in thier shop who doesn't promote them. If you don't want to sell something it's taking up room you could hang an instrument you do want to sell.

Sorry about the lenght :)

GD

Coincidently Hesh, a little while ago, i was expressing a wish to my wife. I remember telling her exactly this, that i'd like to own a guitar store that would promote and sell custom made guitars EXCLUSIVELY and sell other guitar goodies aside of it. I would have my shop in the backstore so that people that are curious about the craft could have their questions answered. i could then sell my guitars and i would certainly be pleased to sell my friends's instruments also because it would add to the marketing value to have more than just one name bran, the store's name having Custom made guitars in big letters.

I really think that a person like me, with my enthusiasm would succeed in something like this but i have to wait untill our debts are cleared and just thinking about it makes me smile. I can picture myself selling a Woolson soundcraft guitar or a Kragenbrink or a Payne guitar beside a Proulx to name just a few and would be in Heaven because i know i would be selling just perfection to my customers, for me, that would not be a job, it would be the beginning of paradise because i'd get to play them all and hear many talents try them all out!

I know some of you would try to discourage me from that crazy idea but i'm sure it would be worth it and it would help promote our craft. I even thought that we could all open a chain of stores like this, together, we'd be stronger.

I'd really like to hear your thoughts on this, my craft is the best in the world to me and you folks are the finest so your thoughts will be really appreciated!

TIA

Serge

What has ever happened to the Luthier's Showcase? Is it still in the works?

As many of you know I've been both a luthier and a retailer for a long
time now, and as you might suspect, I have a load of observations and
opinions on this topic.

Here's one that doesn't get much discussion, but, trust me, it IS
important.

As an individual luthier (or even a company, in some instances) you're
selling more than just an instrument - you're selling a part of yourself.
It's what we at Gryphon call the "luthier experience." In fact, we’re selling
some of that, too. Among our sales and repair staff, we currently have
four guitar builders working in the shop. And, customers for even the
most standard retail items feel a connection with our sales people.

This connection is ever so much stronger when a customer deals with a
maker, planning, dreaming and eventually obtaining an instrument. We
see a very strong tendency for customers to want to go and work directly
with the maker to get something special. Even with factories like
Collings, we’ve had customers play all the instruments in our shop, then
fly to Austin to order their dream guitars.

It happens more with individual luthiers, of course, and it can present a
financial problem when it does. We have the instrument in stock, and
would like to sell it, but the customer takes off and goes directly to the
maker to get a different one, leaving us with no sale.

I’m sure I don’t have to go on a rant about how our retail culture is driven
by discounting, but I do wnat to remind you that it really is everywhere,
even here. That’s why we as retailers need a substantial discount if we’re
to sell instruments. Most of the time, we need to be able to retail the
instrument for a bit less than it would cost if ordered directly from the
maker. That way, we have an incentive to present to the customer - buy
it here and now, no waiting and a bit of a discount.

I’m surprised by the number of luthiers I’ve met who don’t understand
some very basic business and retail concepts - so at the risk of offending
some of you, let me toss out these:

Retail discount is always described as a percentage of the retail price.
Thus, a 30% discount means that the retailer pays 70%. A discount (or
markup) of 100% can only occur when we sell something we got for free.

If a builder sells through a retail shop, the shop gets a discount that
allows for a profit when they sell the item. If the builder sells the same
item directly for less than the stated “list” price, that constitutes
competition, and because of the “luthier experience” it’s unfair and
cannot be tolerated.

Consignment selling can work well for both parties. The maker gets
more, and because there’s no cash invested, the dealer can work with
smaller percentage.

Buyers want to know that they are “safe” spending their money on an
item. That’s why they often ask how long an instrument has been in our
shop. If it’s been too long, they figure lots of people passed on it and
there must be a good reason. As little sense as that actually makes, it’s a
serious issue. Safety is why they buy name brands that all their friends
will recognize or that they’ve seen in advertising.

_________________
Cheers,

Frank Ford

FRETS.COM
HomeShopTech
FRETS.NET

Hesh, just what i needed to hear, i'm clearing all my debts and then we'll see with the banker....in 4 and 1/2 years from now unless i'd stumble upon a guitar case filled with money!

As a guitar lover, you should see me in a usual guitar store, the grin is priceless. Now imagine me in a store filled with custom made guitars made by all my friends here, customers would have to wear sunglasses because that smile whould lighten up the whole street! .

I'm gonna put these thoughts at work and make a business plan and present all of this to you guys to see if there would be a general interest for your guitars in my future store!

Anyone else?

I have to disagree with Hesh on putting instruments in a music store that also carries major brand names. Sure, a Guitar Center type store won't know what to do with a hand built instrument and the guy who work there are clueless. But, there are a few high quality shops that do know what to do.

The Music Emporium in Lexington MA and Acoustic outfitters in Strattam NH come immediatly to mind. They know their customers and pretty much know who is likely to be interrested in a hand built guitar and who needs to have the Martin or Taylor logo. Sure, a salesman may size up a customer incorrectly from time to time. But, in the long run they know that a sale that makes the customer happy is more likely to be a repeat customer. These stores are successful enough to not worry about quotas from the major brands.

In your area, a trip to Lansing might be in order. Elderly is not just a catalog of cheap guitars. They have custom stuff too and know how to sell it. I was in there a few years ago trying out guitars when a saleskid came up and asked if I wanted any help. I asked a question and didn't know the answer. Instead of trying to bluff me, he went and got his manager who did know the answer and took over the sale. They were so helpful that I felt guilty no buying anything.

Excellent post Frank bye the way I did not mean a 100% profit. I think Tom said that the dealer sold the instrument for near twice what the Tom sells the guitar for direct to a client. Assuming that he gave a discount to the dealer this would indicate a 100% mark-up not profit as over head has to be considered when calculating profit.

I've been toying with the idea of a boutique type store in my area.
The tough thing is knowing if there's a local market for hand-made instruments, and how easily they can easily be marketed through the internet too.

Does the local market justify a retail store with high-dollar rent? That's a BIG question.

I could build a big addition onto my house and operate a store there, but that's kind of expensive too.

It's a big college town, with 5 colleges within a short distance of each other, one an ivy-league university, another a well-known arts college. I know students tend to buy instruments, or rather their parent buy them for their kids. There is no shortage of college kids driving Porsche's etc. around town. But are they more likely to want Taylor than a Heshtone?

There are also tons of hospitals and such with a large number of Baby Boomer Dr's etc. with spare cash. Many who live in the target area, but do any of them play guitar seriously? Who knows?

I suspect that I could sell guitars easily enough, but the handmade, high dollar stuff... it's hard to say with a vastly uneducated consumer market, I don't even know if they're aware of the availability of such instruments, or if they even care about them. Hard to say.

One thing's for sure. You have to market to more than just your local area. An internet presence is a must.Don Williams38945.5189699074

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"I want to know what kind of pickups Vince Gill uses in his Tele, because if I had those, as good of a player as I am, I'm sure I could make it sound like that.
Only badly."