Official Luthiers Forum!

Still Jacques-Andre from the Montreal Guitar Show here.

Some luthiers sell only direct. Others have agents or stores.

And some even do both (direct and agent/stores)

Puting yourself into the new luthier guitar buyer shoes... What are the benefits of buying through an agent or a specialty luthier shop?

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Jacques-André Dupont
http://www.guitarjunky.ca
http://www.montrealguitarshow.com

Jacques, I'm one that does both. Here's my perspective.
If you buy directly from a builder:
You get what you want.
You have the ability to talk to the builder directly.
You can really discuss what is best for you as a player for your particular guitar.

If you buy from a shop. (The shops I work with sell my "spec" guitars, I don't takes commission orders from them.)
You might have to settle for what is in stock, BUT, you get to play that particular guitar so there is no mystery of what it will sound like when the build is completed.
You don't really have the opportunity to work with the builder, so your particular needs (those needs which the player might not know anything about) might not be met to their fullest.

Those are my thoughts at the moment. Best, Paul

From my point of view and experiance, A not so well known and smaller out put luthier gains very little by using a retailer as an agent. Here is why; That retail sells more than your guitars. So he or she is going to push the instrument that returns the highest profit margin. Also 30% is the common cut that retailers require and a smaller output shop really can't afford a 30% cut in their margin.

I have done a couple consignment guitars but to tell the truth I lost one of them when the retail shop went chapter 11. I never saw a Penney.

Building on what Michael says you have to build the commission into your cost accounting if you are going to go this way... but...

I am with Paul on this, I believe in both. Selling direct gives you the opportunity to work directly with the players... and that is nice.

But having solid dealer relationships are nice too. If a commission goes bad and the customer can't take final possession you have an outlet for the guitar, and it gives you the freedom to do some "spec" work to build what you want.

I really don't see it as an either/or strategy.

One thing though... if you do sell in both channels you will have to be very careful not to undercut your dealers by being willing to negotiate.. that will kill a relationship fast.

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

What Brock said. 

Never undercut the selling price that any store or agent is setting.  Your direct selling price should match the retail selling price.  If there is conflict, the agent will say "What's the point?!" and quite representing you.  That goes double for any agent you have in your own locality.

There has to be a benefit for everybody.

Buying direct, the customer gets a relationship with the builder and a sense of a custom build.  Same for the builder. 

Buying through an agent, the customer knows exactly what they're getting, its in their hands, and they get it right now, with no extra fees like shipping, etc.  The builder is working with an established client, the agent, so sales should be simplified.  The agent gets whatever the get from working with luthiers.

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Expectation is the source of all misery; comparison the thief of joy.
http://redrivercanoe.ca/

I do both !
If I do business with a dealer /seller -that person & I have a written agreement as to what the dealer & I agree on as for prices and the guitars that are only available through their store.
This way if someone wants one of my guitars & contacts me and I do not have that model in stock i can send that player to the dealer if they have one.
So buying from a builder & a specialty shop can be benificial to both parties.
I sell direct as much as I can-I love the new guitar buyer & maker interface .
MIke
Man I wish I could do the Montreal show in 2008!!!!!

www.collinsguitars.com

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Mike Collins

There are a couple of ways to sell through stores: consignment or direct. If you sell directly to the store they tend to want a larger markup (after all, they're tying up their money) but will then put more effort into the sale for the same reason. Consignments have lower risk for the shop, but lower returns too, and the risk for the builder is much higher.

Many times the shop will be less successful selling an independant luthier's instruments than the builder him/herself would be. We, after all, are 'true beleivers': we know what we're trying to do and can more readily justify the non-standard features. If the shop has a lot of guitars on the wall with nitro finish, and everybody has learned that it's the standard, they might have problems when it comes to my box finished in French polish. Why isn't it as shiny? Wht does it scratch so easiliy? I can explain the benefits of the finish to the customer, and maybe impart some of my own enthusiasm, but that's hard for the shop guys. Nor, I think, will it make a lot of difference whether the instrument is owned or consigned to the shop; it will likely still be more difficult for them to sell.

Be The Brand

[QUOTE=Alan Carruth] There are a couple of ways to sell through stores: consignment or direct. If you sell directly to the store they tend to want a larger markup (after all, they're tying up their money) but will then put more effort into the sale for the same reason. Consignments have lower risk for the shop, but lower returns too, and the risk for the builder is much higher.

Many times the shop will be less successful selling an independant luthier's instruments than the builder him/herself would be. We, after all, are 'true beleivers': we know what we're trying to do and can more readily justify the non-standard features. If the shop has a lot of guitars on the wall with nitro finish, and everybody has learned that it's the standard, they might have problems when it comes to my box finished in French polish. Why isn't it as shiny? Wht does it scratch so easiliy? I can explain the benefits of the finish to the customer, and maybe impart some of my own enthusiasm, but that's hard for the shop guys. Nor, I think, will it make a lot of difference whether the instrument is owned or consigned to the shop; it will likely still be more difficult for them to sell.[/QUOTE]


I would be very wary of consignment deals. My personal opinion is they are dangerous for the independant builder... and here is why:

Your product cost the store NOTHING -- they have very little to gain in helping you sell it (~20%) but a lot to lose if a customer buys your guitar over the Tak, Gibson, Martin, etc. Those product represent a significant capital outlay from the store and they have a quota they have to meet to carry the brand. So one missed opportunity to sell one of these guitars is a bigger loss to them than the "win" they get by selling yours.

I have seen first hand an independant luthier get TRASHED compared to a Tak that was clearly an inferior instrument. It was obvious (to me) that the store owner just needed to move the other guitar.

If the store ONLY sold instruments on consignment that would be one thing, but if they carry the big brands and new instruments I would proceed cautiously.

I think these deals are brand killers.

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

There are a few dealers who have made a lot of money selling instruments on consignment, and they understand the joy of making money on OPM...Other People's Money, or in our case, instruments.   George Gruhn and Stan Jay come to mind, both mainly having made their marks in the vintage biz. But what's been said about manufacturers' quota systems is all too true.   "You sold 50 last year, this year you're taking 75 or you're losing the line..."

When working with a retailer, relationships are the key. You need to trust the retailer and they need to trust you. Their brand is on the line too if you don't support your product. As far as consignment vs. direct dealership, it depends on the risk you are willing to take or the cut in pay you are willing to take.

As a retailer, I can't afford to sell something for higher than you sell it to the public. If I buy it, I need to make 20-30% on the sale so I can keep my doors open. Consignment allows me to cut my profit to 10-15% because I have nothing invested except space. In either case, you need a good contract because of things like what Michael expirenced.

I think working with a retailer can be good for your brand, but relationships are the key.

Yeah Jared I agree... relationships are the key...

but as builders I think we need to evaluate the consignment deals carefully... because unless the store is busy enough to easily meet the quotas the temptation to sell the guitar that pays the bills (and meets contractual obligations) is always there.

George Gruhn, and some of the other guys are clearly the exeption ... I don't think consignment deals should be blindly dismissed... but I think it is something to proceed cautiously on.

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

Great advise Brock!

Having a handmade guitar in a store of factory ones is
difficult for the vendor & the maker!!
The price; and lack of (let me show you why this guitar is so great)!Knowledge of the stores sales people -etc.)(pamphlets,catalogs-etc!)
is not in their best interest!
Plus they may have a hugh selection on the wall from the factories!

I deal with classical & flamenco dealers as a rule.
because that's the guitars I want to make!
Every small bodied steel I make flys out the door !
(i think I'm missing something)
But I make what I love to make and I'm comfortable in that!

Jared is right about the relationship with the dealer!

And Al knows of what he speaks!
All makers(creators) of any art are the best person to describe it's benifits!

Mike






www.collinsguitars.com

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Mike Collins