Thinking of making one for sale, considerations?

[Tony Costa]

I "sold" my first few guitars for cost of material and told the buyers if they thought it was worth more, they were welcome to kick in a little something, you know, for the effort, you know? Nobody offered me total consciousness on my death bed yet, but so far, everyone has made me feel good about the "price" by giving me a few hundred bucks on top of the cost of materials. I have sold a few more for higher prices as well. But I think for the first few you sell, you should do something like 2x(cost of materials) and stick to people you know.

[Bryan Bear]

B-b-but, everyone I know makes guitars.

[Ryan Mazzocco]

B-b-but, everyone I know makes guitars.

Funny. I'm the ONLY one I know that makes guitars.

[Bryan Bear]

Was that a shot? That felt like a shot. . .

Thanks all, for the advice. I intentionally took a step back from the discussion to see what you all would say about the topic in general. There is a lot of good stuff here. At this poi t in my life, I'm not really interested in marketing my product in Amy way. I just want to keep making instruments in my spare time. Getting g them into the hands of someone who will make music with them, keeping them from piling up around the house and offsetting my costs are the three factors that are making me consider this (in descending order of importance). With that in mind, my two avenues for sale would be consignment and word of mouth (chance). If I do consignment, I think I need to have the attitude that it is gone once I hand it over, if any mo eh ever comes back great. With that in mind, the discussions about target price point were helpful. I probably don't want to spend a fortune on premium materials and hardware if I am going to just eat the loss, but there is no point in building a bargain basement instrument either. As I get closer to doing this, I think I will open up an honest conversation with the music shop owner. I'll bring some of my non-standard instruments and see if he thinks one would be a better fit for the clientele. Perhaps he can give me an idea of a price point to shoot for. This all assumes that he doesn't mind taking on consignments of hand made (not used) instruments.

Keep the input comming.

[Perry Ormsby]

You arent interested in marketing your product in any way.

You want to find people to buy your instruments, without marketing yourself in any way.

You want a music store to take on your instruments, and sell them for you and are prepared to offer deep discounts so you dont have to find clients yourself.


Honestly, sounds like you like dipping your toes in the water, but are too afraid of what might happen if you jump in.
As a store owner, why would he take on guitars under a commission agreement, with zero brand recognition, or marketing on your behalf? Every other item in his store has marketing behind it, supported by the manufacturer. To be taken seriously, by the store and its clients, you have to be serious. Act seriously. Otherwise, you will come off as some guy tinkering in his back shed (which is essentially what I am, I just tinker 70 hours a week... but from the outside you dont see that)

I still say, consignment is a bad idea. In your case it's a lot better than it is for me (maybe?), but my experience is that the stores simply are not interested in pushing brands they haven't already paid for. Especially unknowns. An easy way to test their commitment, is after agreeing on a 'price or percentage' for your guitars, drop your price by 10% and ask them if they will buy it on the spot, 30-60 day terms. I already know the answer, but it will show you just how excited they are about your brand (regardless if you think you have a brand or not, you do).

As I expanded the pickup winding side of my business, I knew I had to have a couple stores. I couldnt afford magazine adverts. I offered them two seminars for their clients on pickup design and construction, how to pick the right pickup for your guitar, and what goes into a pickup to make it work. They jumped at it. Their clients get to learn something. Their staff get more knowledge. It shows I stand behind my products. It personalised my business. And every person in attendance had the opportunity to tell all their friends about this cool seminar they went to. That was three years ago. I still get sales because of those two 30 minute talks.

[Ryan Mazzocco]

Was that a shot? That felt like a shot. .

No, that was not a shot. It's the truth, around here anyway. The only people I know that make guitars are people that I have met through this forum. I know one guy here locally that dabbles, but he doesn't make anything from scratch; he buys parts and then puts them together (although I think he is making his own solid bodies now.) Point being that I don't have any "lutherie buddies" besides my dad who recently took an interest from watching me build my first.
sorry to de-rail the thread. As you were....

[Mark Swanson]

It all depends on where you live. Around here it seems like everyone is building instruments.

[Matthew Lau]

What style of guitar are you thinking of making?
Also, what type of musician do you want to play it?

Personally, I'd think of putting it in the hands of a good guitar teacher and having them recommend it to a student. Alternatively, you could try a boutique shop (usually not interested in people who aren't marketing a ton unless they happen to be guitar affectionados like Guitar Solo). It especially helps if you're friends with the owner of a shop (my friend just closed his shop). Lastly, you can be like Greg Smallman or Paul Reed Smith and just hand over a guitar to professionals who go in town.

I wouldn't recommend pricing it at the level of just wood, but your guitars are likely AT LEAST AS GOOD as anything that Martin or Taylor is making. You should consider pricing your guitars accordingly. If they're as good as I think that they are, likely $2000 would be a good entry point (and later be considered cheap).

-Matt

edit: I think that your proposed route is probably the smartest one...especially if you already know the owner. 20% is a very fair commission.

[Perry Ormsby]

Personally, I'd think of putting it in the hands of a good guitar teacher and having them recommend it to a student.

The students dont have money. And you've given away an expensive guitar. If that was $2000 worth, what could you do with $2000 in marketing elsewhere?

Alternatively, you could try a boutique shop (usually not interested in people who aren't marketing a ton unless they happen to be guitar affectionados like Guitar Solo). It especially helps if you're friends with the owner of a shop (my friend just closed his shop).


Lastly, you can be like Greg Smallman or Paul Reed Smith and just hand over a guitar to professionals who go in town.

Every person Ive ever heard of that has done this, ended up wondering what happened to the guitar. Just handing out guitars, when these days the players have really good endorsement type deals, on the 'off chance' they'll play it, seems a bit silly to me.

I wouldn't recommend pricing it at the level of just wood, but your guitars are likely AT LEAST AS GOOD as anything that Martin or Taylor is making. You should consider pricing your guitars accordingly. If they're as good as I think that they are, likely $2000 would be a good entry point (and later be considered cheap).

This!

I think that your proposed route is probably the smartest one...especially if you already know the owner. 20% is a very fair commission.

Its a fair commission from a builders point of view. We've put the hours in, and we dont want to eat into our profit because someone can 'hang a guitar on their wall'. But, you are competing against other manufacturers, that offer much higher returns on investment. Often up to 50%. Which would YOU rather: $800 return, on something you paid $1200 for six months ago (banking $2000), or $400 on something you arent tied to financially (banking $2000 and then cutting a cheque for $1600)???

Four weeks ago I took the last of seven guitars off a retailer that was offered 25% commission. They had the guitars for up to three years. Not a single one sold. Every single one has sold within a day of me advertising them for the same price. It's not that they dont like my work, they have me ghost build their high end stuff under their own brand.

There are people that want hand made instruments. But you need to position yourself so you can be found. Most people enter a store ALREADY KNOWING what it is they want. Add in a retailer than would rather bank the full sale, and you're screwed.

[Matthew Lau]

I have to say that Perry is spot on.

However, I also have to say that it depends on the shop:
Guitar solo has all sorts of not-well-known-to-American builders from Latin America, Japan, Europe, and the United States. Top players come in to try out some of the best guitars that they don't know about.
The 5th string largely has Martins and Gibsons, but the owner and his friends would occasionally sell homebuilt instruments to the indie bluegrass crowd in Berkeley. Sadly, they'll be closing soon.


Perry if you have any advice regarding marketing, I'd love to hear it.
I've seen Brian's work, and I think that he's ready to go pro--you're probably better to advise.

[Perry Ormsby]

Ive actually been working on all the guidelines and tips/techniques that will cover everything I know and do, in regards to marketing, sales, branding, etc etc etc. How to sell, who to sell to, why we are selling to them, how to find them, how they will find you. How to get them so worked up, they jump over each other, or get a tattoo with your brand How to find your perfect client, what to do when they aren't. How to live the dream, and make money. How to be so busy that you can pick and choose your orders. How to have people promoting your brand for you.

I've been working with a couple guys already, with small segments of the whole system.

There will be people that ask why Im doing this, sharing the secrets. Why not? If we all have a niche, then we aren't in competition with each other. It's not us against each other. It's us, combined, against Taylor, Gibson, Fender, PRS, Takamine, Ovation, etc. If only 5% of high end sales came across from the big boys, to the smaller luthiers, it would be like a revolution.

But the only way to do that, is to step into a place where you may feel uncomfortable at first. Uncomfortable because we, as luthiers, have had it drilled into us that there isnt money out there. There is no paycheck at the end of the week. There isnt going to be a lifestyle other than just above the poverty line. I say that's rubbish. We are professionals, in a very technical field, and deserve the same rewards as other professionals... with the bonus being our work is just so much more fun to do

[Matthew Lau]

"We are professionals, in a very technical field, and deserve the same rewards as other professionals... with the bonus being our work is just so much more fun to do "

Well said. I look forward to your words of wisdom.

[Simon Magennis]

Perry has a lot of useful info in this thread http://www.anzlf.com/viewtopic.php?t=5490 over on the anzlf. In particular, about half way down the first page, he mentions that getting in some professional business consultants paid for itself very quickly. Well worth a read.

[Perry Ormsby]

Yes. Absolutely.

My mentors knew nothing about guitars. They could see where I was doing things RIGHT, and basically kicked my butt in other areas. They helped me with fine tuning some things I was already doing well. They suggested the most insane ideas, which i watered down and implemented. I didnt sign them on to earn more, it has certainly been a byproduct though. I signed on so they could help me make a difference in this industry. Id always been paid well in this trade... month long international holidays every year, nice car, etc, but I didnt think I had really reached my full potential.

As an example of how those changes have altered my business?
In one day added $32k to my 2013/2014 financial year profit with zero extra work.
Made me re look at everything I did, and discard the low paying work, and replaced it with high paying work ($100 an hour +). It wasnt the money thing. It was a case of "who do I want to work with, and why".
Introduced a new product which sold out in 6 days, total value = 15 months of mortgage payments (six weeks work)
This also gave me the capital to invest in new machinery and a CNC, plus start developing a new item for guitarists being released next year which will only take 80 hours work, but add six figures to my turnover
Release a new model with some cool perks, total build time is 12 weeks, profit margin would quite literally buy a Ferrari. Sold out in 36 hours. When two guys dropped out for various reasons, I immediately, with no question, refunded their money, and announced the spots for sale. You'll see on my facebook page, one yesterday morning took 3 minutes to sell, The other announced in the early evening took 90 seconds to sell. That suggests the pricing is too cheap. Im not going to change it though, the hourly rate is really good.
The ability to say "no" to people <<< and this one is amazing. I only take on work I would build for fun. Mondays, are THE BEST day of the week, because i have six days of work ahead of me every week (would be seven, but the wife gets a bit upset with that!).

Money, absolutely, does not motivate me. If there was a stash of $50k sitting in a box, and I had to walk a couple miles in the rain to get it, I'd stay home and dry Achieving goals DOES motivate me. Building my brand to where I never though it could ever be, motivates me. Coming up with an idea, implementing it, and watching it take off, making people happy, and having clients so damn excited about working with me they'll do ANYTHING to get on board (or tattoo themselves with my brand!), or having your childhood idols send messages of support and encouragement, is a whole heap of fun. Branding your business in such a way that people pay MORE for your guitars on the second hand market, is amazing.

So, that's why I want to start helping others. Im just so sick and tired of hearing luthiers whinge and complain about the income levels. It's there for the taking. Anything you want, you can have, with the right direction, goals, and a bit of guidance/butt kicking. Ive always done everything different to everyone else (it didnt work for them, why would it work for me?). There are ways to market your business with an almost immediate pay off, for under $50. There are things you can do, that you are already doing, that add an hour to your week, but $$$ in your pocket. There are ways to get your brand out there to your core niche market, for free. There are ways to improve your turnover, or rather, profit levels, for no extra work (or very little extra work), AND gaining the trust and loyalty of musicians that really REALLY value your time and experience.

Like Ive always said, it's not us against each other. We all have our own niches within the same field. It's the big boys we are up against. We are artists, and that IS the most important thing. None of us got into this for the money. We all knew there wasnt going to be a big pay check at the end of the day, and we convince ourselves we can't achieve amazing thngs. And I think that is the problem... we talk ourselves into believing that. It's simply not true.

[Bob Wolfe]

Great read here.

I just joined the forum and have been hobby timing some builds. I sold a couple for charity this summer and decided to take the next step.

I will get acquainted soon but wanted to thank you all for sharing knowledge.

BW

[Bob Wolfe]

I am building a small run to see if I can recover costs while also taking on repair work. My primary consideration is evaluating both the work and the customer. Good work will find the right customer but a bad customer will never find good work. I am too old for the BS.

[Perry Ormsby]

Why not build a run with the intention to triple your costs?

[Bob Wolfe]

Perry, the first one will be my keeper, second will be donated to the Downs Sysndrome Assn fund raiser (marketing), third is sold to a local sports bar with a custom paint to match there logo (marketing) and the 4th will be on the open market. Coming out even or just ahead on costs will not be easy but my name will be out in the community.

Just the word of mouth and FB posts from my current builds has led to 5 different repair jobs, which is also going to help cover costs and reinvest.

[G.S. Monroe]

It's been a while since I last reviewed this thread. I apologize for my poor outlook a few months ago, having a negative attitude never does advance the cause.
I'm still not where I want to be as yet, it's certainly been a struggle, but after my first year I can look back and say I haven't lost money. How many start up ventures are out there where you can set out with absolutely no clue about what you are doing, pay for training, and at the end of the year actually turn a profit, with virtually no initial investment? Granted, my first year's profits are not worth boasting about, but it hasn't been a net loss either. I'm also now in a much stronger position going into the new year than I was 12 months ago. Let me tell you, if I can do this, then you can do this.

12 months ago, I was coming to the end of my unemployment benefits, and had to move back in with my parents. My music experience to start with was playing saxophone in high school over 20 years earlier, and listening to music on the radio. I had virtually no experience in wood working except for framing in a back porch once... My dad had retired, but has a workshop where he built kitchen cabinets and various pieces of furniture. When I moved back in, he told me that I could use the workshop "IF" I could find something I could build and make money at. ROFL!!! After looking the situation over for a few weeks, and not finding much, I came upon the crazy idea of building music instruments. My younger brother had built a custom guitar body for himself a while back, and suggested that there might be a market in guitars. Well, I set out watching as many online videos as I could find. I practiced what I watched. I put a whole lot of time into learning about wood working. My dad helped by playing the part of "shop steward". Point is, I found that there is enough demand, even in this current economy, for hand crafted folk instruments to cover my material costs, training time, and I even managed to sell my "student" instruments. Sure they looked rough at first, quite primitive even, but I focused upon playability and sound. If someone commented on how it looked, I would say "close your eyes... how does it sound"? Yes, I caught a few fortunate breaks, but if there was no money to be made in this craft it wouldn't have mattered anyway. Most here in this forum are years ahead of me in experience in the craft. But it hasn't prevented me from finding my place in the market. If I can grow as much in the coming year as I have over the last year, then I should find myself making a descent living while having fun in the best career I've had in my life.

[David King]

Here are some platitudes I've learned to take seriously after 27 years of this. There are no shortcuts. The work has to get done. The work can be as liberating or tedious as you make it but don't ever pretend that it isn't work.
"Demand" is a misnomer. There is no demand, there is only marketing. No one will beat a path to your door if you don't make the effort to beat a path to theirs first. Everything you do poorly will be held against you and everything you do well will (and should) be taken for granted. One last point (well two) that you should hear over and over again (and that I did my best to ignore because they didn't seem practical); It's not what you know but who you know. And lastly location counts for an awful lot more than it should.
The successful folks I've met along the way generally were really good salespeople, (often in spite of themselves). They had good skills but they knew exactly when to delegate.
You need money to make money. That means you have to be profitable to start with. If you aren't doing more than covering your expenses then your expenses are too high. The result is that you have no money left to reinvest. You can't pay for a top notch web site or a social media presents or old fashioned advertising. That's not going to be sustainable. You can't pay for the better tools that will save you some time and allow you to compete with the guys that already have everything. You won't be able to take the time to work on new products or personal development. I could go on and on. I say I wish there was someone back at the beginning that would have told me a few of these things but I'm pretty certain I wouldn't have listened.
It's way too easy to work really hard and not make money. You need to set yourself a goal for every day. "I need to make "X" amount of money today and everyday and I'm going to do that first and then I can do what I want to do with the rest of my day". Many days I don't hit my earnings mark until after 11 PM which doesn't leave much time for a family or a life. I rarely get to work on the stuff that really interests me. I try to work faster and I try not to give things away but that's also hard. That said I have no idea what else I could do for work so I stick with it and hope for some inspiration along the way.