Official Luthiers Forum!

It's been a good year for me so far. Right before Christmas, someone bought one of my guitars. (Well yeah I know that was last year, but hang on, I just got the payment today...) He liked it so much he came back a few days later and bought two more. I gave him a discount on the second two. I sell my guitars w/o cases as nearly everything I sell is local, so I don't have to float a case into the price. The first guitar the store mislabeled and sold for 300$ too little. These were all consignment. The customer lives in LA and showed my guitars to a few stores down there, and and a couple of them are interested in carrying my guitars. This is good.
Here's the rub. The stores want the selling price down there to be the same price as up here, and they want it to be the same price this customer paid after the discounts. I told them I felt that the cost of a case and actual shipping costs needed to be added to the selling price of the instrument. They are worried that I would be undercutting them selling direct, but I reason that if a fellow across the street from their store ordered a guitar from me, it would be the cost of guitar+case+shipping he would have to pay anyway. They seemed to lose interest at that idea, but to me it seems quite logical. Otherwise how could I make it work? I can't just eat those costs, I make little enough as it is. Especially as the store that I'd most like to get my guitars into compared my work in fit/finish/tone to Don Mussers work (who they carry) but then don't want it priced much above 2k$.
So, I guess my point is, how do you guys that sell across the border balance the prices between locales?
Thanks for any thoughts...

Ditch the stores and sell your guitars youself.

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I didn't mean to say it, but I meant what I said.
http://www.brackettinstruments.com/

The short answer is that you can't undercut your resellers, ever. There's no incentive to resell anything if you're competing on price with the manufacturer themselves as you can't win.

Don't think of it as upcharging a local, think of it as being fair to your distributors. This sort of thing (and customers wanting wholesale price direct from manufacturers for singles) is why many companies don't sell direct. I think the fair thing to do, if you have resellers, is to only sell at MSRP.

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Bob Garrish
Former Canonized Purveyor of Fine CNC Luthier Services

Sounds logical to me. Sounds like you need to raise your price locally.

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Mike

The only thing nescessary for evil to thrive is for good men to do nothing.

I don't see it the same. A local customer just has the option of supplying his own case and not having to pay shipping. The cost of the guitar remains the same.
I could see how it might make sense to raise my price to enforce a case purchase so that an international purchaser would only feel he was paying for shipping, which I think most people could understand.

I understand your point, and agree with it, in principle. However, and take this with a grain of salt....
It seems to me that if you're going to branch out and sell through other outlets, such as the music stores you've mentioned, you're going to have to learn to work with them. This involves some compromise, and also the ability to step back and see things from their perspective. Just for the record, if I were in their shoes, I would probably be saying the same things. If someone approached you and wanted you to sell their product, but told you they'd be selling it also, but at reduced prices, would you take the deal? I know I wouldn't.
It seems to me that if you want to branch out and try to start selling beyond your local market, you've got to stop thinking locally, and start thinking at least on a national level. That means a consistent price structure all the way around. As for the cost of shipping, I really think you need to factor that in to the price. But I can see where someone who picked their instrument up locally would be able to defer that cost. I'd offer the proposal you mentioned(ie; raise your local price to include a case) to your prospective resellers. If they really want to sell your guitars, they'll most likely compromise and take that deal. My .02.
As a side note, though, if you're pricing your guitars so closely that the cost of shipping will make a great difference in the first place, you're not charging enough. Period.

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Mike

The only thing nescessary for evil to thrive is for good men to do nothing.

When you local music shop buys anything, they pay for shipping .. its not part of the price of the item from the manufacturer. The larger manufaturers dont deal direct either .. they have distributors, or at least in Canada larger ones like Gibson do. So any store that has Gibson on the wall gets it thru the distributor. Everybody gets their cut. Everybody pays shipping along the way, unless you go to the local distributor to pick stuff up.

The issue you have is that you want to be a retailer (direct) and a seller (wholesaler) to stores - if the stores cant sell for the exact same price you do, they wont do it. Why would they ?? Stores buy everyting at a discount rate from MRSP - they want the same from you - as they are buying it wholesale to sell at retail, like every other guitar they buy and put on the wall. Big guys dont sell direct - that would ruin their dealer network - and likely break contracts.

There are high end guitar shops that do the same - they buy at a discount from one man shops - but they buy it - you get your money when you ship it, not when it sells.
Any of us who sell in stores are usually doing consignment - no risk to the store, they sell it and get a smaller profit cut, because they have no skin in the game, as they do with Martin Gibson Taylor ....

The bottom line - cant see how you expect to get the same bucks, plus shipping, from a store, vs selling from your house. No retailer in their right mind would sign up for that.

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Tony Karol
www.karol-guitars.com
"let my passion .. fulfill yours"

No, I wouldn't be getting the same bucks, I'd be paying the store the agreed upon consignment fee, usually 20-25%, as I'm sure you know. But the end consumer is paying the same amount of money, as I see it. So if a customer from across the street from me who already has a case buys a guitar, he pays for a guitar. If he wants a case he goes to a store and gets one. If a customer buys a ready made guitar from a local store, he pays for a guitar at the same price, of which 25% goes to the store. If he wants a case he buys one, all of which goes to the store. If a customer anywhere else buys a guitar, he buys the guitar, and a case (unless he provides one) and shipping. Whether that be Alberta or LA or even Hope. If a store makes the sale they get their 25%, but if I make the sale I keep my 25%. The price of the guitar remains constant.
But maybe I'm not seeing it right.

My 2 cents - I think you shouldn't offer the guitars without a case in any scenario.

Glenn

Ah .. OK ... stick to your guns then .. tell them this is the price, take it or leave it. If they think they can sell it, then so be it. There is a price to pay for buying the guitar then and there ... not ordering, waiting and paying shipping anyway. They are taking it on consignment for petes sake - they arent paying ANYTHING, and have no risk ... and ..

What if it doesnt sell and they dont want it in the store ... it will be your expense to get it back too ...

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Tony Karol
www.karol-guitars.com
"let my passion .. fulfill yours"