Why guitars cost what they do...

[darren]

Some of you may remember a post i wrote on here a little over a year ago outlining some basic economics of running a small guitar business and why many people's price expectations for boutique or "custom-shop" instruments are totally unrealistic.

Every few months, somebody asks me for a link back to the original post, so i decided to edit, update and re-post it as an editorial piece on the Decibel site.

Why guitars cost what they do: Part I | Decibel Guitars

Part II will be published early next week.

 

[Stealthdjentstic]

Great read, thanks! But luthers like yourself, roter, and sherman are very affordable compared to the jackass's at PRS

 

[darren]

Well, they charge what the market will bear. And judging by the skid of PRS tops a local wood shop picked up for next to nothing from the PRS factory, the market hasn't been willing to bear very much lately.

Their production stuff is actually quite reasonably priced, in my opinion. The custom shop and Private Stock instruments are another story... but if you have the means...

 

[Stealthdjentstic]

I was referring to the custom shop

 

[MaxOfMetal]

People will always want everything for nothing.

 

[darren]

Well, it was partially written to help guitarists understand the economics of the guitar business, but also for small builders (myself included) to help them understand why under-pricing their work is not a good idea. Profit is not evil!

 

[Paulfocused]

Ah, good read. Thanks!
By the way I want one of those Aviators!!

 

[Scar Symmetry]

Well, they charge what the market will bear.

Like any business, business is business, no matter what your business is.

 

[Demiurge]

Great article.

What has to suck, though, is that no matter how many fly-by-nights that come through with undercut prices and ultimately fail because of a lack of understanding of those economics (oh, and also obviously using deposits as seed money and not towards materials themselves), there will be people who always bitch about the high price of a good custom guitar and run to throw their money at the next fly-by-night.

 

[Hollowway]

^^ Totally. There are loads of builders out there that are just poor business people, too. I'm sick of hearing that so'n'so constantly misses his deadlines because "he's just one guy, and can't manage all of the orders that come in." A decent business person would alter their workflow or hire someone else to take a phone call or something. For myself, I'm not against paying >$3000 for a custom instrument, but I sure as Hell am gonna be pissed if it gets screwed up or delayed because the builder has poor customer service/communication/business skills. So that makes me skittish about buying an expensive instrument, because I've been burned twice in situations like those. As you said in the article, what one builder does can adversely affect all small builders.

 

[darren]

This is why i have no current plans to become a "custom shop" or even build guitars to order. As soon as money changes hands, there are expectations for deadlines, update frequency, response times, and so on. Just the process of preparing quotes and discussing specs with customers (not to mention change orders once the build is in progress) takes up tremendous amounts of time and energy that i'd rather spend on more productive pursuits, like actually building guitars.

I'm just not prepared to go there until i've been doing this for a LONG time, and have my workflow down to an exact science where i can reliably forecast production times and delivery dates. Even then, i'm not sure it's worth the potential risk. Life does sometimes get in the way... illness, deaths, other extenuating circumstances and life events can throw small businesses into turmoil, and not everyone wants to share every intimate detail of their life with their customers. I know i don't.

I'd rather produce short runs of instruments i've spec'd out, designed and built, then sell them when they're done... which is exactly what i'm going to do. My business model is this:

I design what i want.
I build what i like.
I take as much time as it takes.
And i only sell completed instruments.​

It's simple and straightforward, customers know what they're getting, and they can get it as soon as their payment clears.

And i get the satisfaction of knowing that every instrument has been conceived, spec'd out and built by me, without compromise, and without the stress of deadlines or keeping up extensive communication with each individual customer. I can truly pour every ounce of energy and passion into building each instrument, instead of trying to manage all the other day-to-day crap that a "custom shop" would have to go through.

Will it limit my business somewhat? Absolutely. But it will allow me to keep the business small and manageable, and have me not go insane or broke in the process, or worse yet, lose the passion for something i love to do, and hope to keep on doing well into my retirement years.

 

[gunshow86de]

So Darren, wanna build me a custom Decibel for under $1,000?

Seriously though; nice, well thought out post.

 

[SargeantVomit]

I'm sick of hearing that so'n'so constantly misses his deadlines because "he's just one guy, and can't manage all of the orders that come in.

This is why people like Carl Thompson charge so much for his instruments, he can make about 10 a year and never has a problem getting 10 orders. He keeps his prices just high enough that he can consistently get about 15 orders a year an still turn down 5. And he now gets close to 10,000 per.

 

[darren]

Part II has been posted:

Why guitars cost what they do: Part II | Decibel Guitars

 

[synrgy]

Just read through both. Great reads. Appreciate all the insight.

 

[yacker]

Definitely well thought out and well written articles. I highly recommend keeping them up for as long as physically possible. It will be a great place where other builders can send potential clients who.....well, fall into the category of needing to read that article.

 

[darren]

Definitely well thought out and well written articles. I highly recommend keeping them up for as long as physically possible. It will be a great place where other builders can send potential clients who.....well, fall into the category of needing to read that article.

Thanks for your support, guys! I know my little editorial rants got a lot of support from both guitarists and luthiers when i originally posted them, so i thought they deserved to be pulled back out and given a home of their own. They'll be on the Decibel Guitars site indefinitely... or at least as long as Decibel is around, which i hope is a good, long time... what else am i gonna do when i win the lottery and retire?

 

[Phlegethon]

what else am i gonna do when i win the lottery and retire?

sit around in a tim hortons drinking double doubles all day?

 

[Customisbetter]

Darren...

Sometimes i find you to be a pissed off negative douche, ill admit.

BUT...

I REALLY appreciate you making these editorials. Myself as well as many other people have forgotten that a custom instrument is NOT just another guitar. It is a high quality, purpose-made TOOL for a working musician. It is designed and built to fit a purpose, not a budget.

I used to not care about custom prices, but as of late i have fallen into the trap set my "semi-custom" shops like Agile and others, not realizing the difference in philosophy.

Excellent job and I will continue reading your postings in the future.

 

[wubisbetter]

Very nice read, I believe this thread must be a sticky, because most people do not actually understand the expenses that a maker must face until they actually get to read such an article.

This would prevent so many "wow this guitar is overpriced" etc. Which is covering up the threads in this cool forum (just recently in the horrible guitar thread)

Thank you mister Darren