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Pricing
http://mowrystrings.luthiersforum.com/forum/viewtopic.php?f=10101&t=52230		 Page 1 of 2
Author:  DaleP [ Wed Jul 31, 2019 5:21 am ]
Post subject:  Pricing
How do you price your instruments? I'm not talking repair work, but the price of a new instrument?
Author:  jfmckenna [ Wed Jul 31, 2019 7:06 am ]
Post subject:  Re: Pricing
I have a base price which is basically a salary for 50 hours of work that is fair to me for building the guitar. Then everything else is on top of that. The customer gets to pick the type of wood, quality of the top, tuners, guitar case and so on.
Author:  Colin North [ Wed Jul 31, 2019 9:39 am ]
Post subject:  Re: Pricing
Much the same as jfmckenna, but I do charge a premium for the parts, especially with expensive and tricky to bent B & S sets.
Author:  Bryan Bear [ Wed Jul 31, 2019 4:27 pm ]
Post subject:  Re: Pricing
50 hours is way faster than my (admittedly slow) pace. This is one reason I don't sell my instruments. If I factor in my time I would be paying myself $1/hr; it feels cheaper to just give them away. . .

I often wonder how much time you all are spending to make a typical guitar. Not that I want to try and speed up the process since this is my relaxation time, but I can't help but wonder how slow I really am.
Author:  Marcus [ Wed Jul 31, 2019 4:33 pm ]
Post subject:  Re: Pricing
I wonder how much time it takes me to make a guitar, too. I've never had the patience to track that.
Author:  Hans Mattes [ Wed Jul 31, 2019 4:55 pm ]
Post subject:  Re: Pricing
I'm impressed with the idea of a 50 hour guitar. I've tried to keep track of my time and something around 200 hours (usually spread over 2 or 3 months) seems like my best estimate. If I were trying to reduce the time, I could build in batches (maybe 3 or 4 in a batch) and could standardize the designs -- but then it would seem like a job. I enjoy building guitars as a hobby; I doubt if I would enjoy it as a job. So I collect them, store them, and, when the occasion presents itself, give them away.
Author:  jfmckenna [ Wed Jul 31, 2019 5:40 pm ]
Post subject:  Re: Pricing
I usually end up going over 50 hours. But if you are tooled up well with thickness sanders, band saws, planers, jigs and so on you can get it done. I also will do thinks like set up a saw and make 10 neck blanks. I have several tops joined and ready for use, and so on... I have built a guitar in a week before.


Now finishing... Well that takes forever but in small increments. So I bill out 50 hours and do my best to make it. There is an incentive for doing so. That 50 hours is spread out over 3 months mostly do to finishing.

If I didn't do stupid things like scratch the top with a finger nail, chip out the binding and so on then I could easily finish in 50 hours. I figure I won't charge a customer for my stupidity. If I ever reach Master status then I will make less mistakes and they will pay much more Muhahahahhaha.
Author:  Toonces [ Wed Jul 31, 2019 9:18 pm ]
Post subject:  Re: Pricing
When first starting out and you don't have an established "brand" or reputation, then you want to price them about what they are worth - maybe a bit less. You answer that question by analyzing how your instruments compare in terms of quality to the big names like Martin and Taylor and also to the small shops like Collings, Santa Cruz?

The harsh reality is that only a few luthiers are matching the quality of a Goodall, Collings, or Santa Cruz. Many of those small shop guitars start around $4 to $5k for a basic guitar.

There definitely is an understanding that a handbuilt guitar from a novice builder may have some issues and that is okay as long as they aren't structural. I personally feel that until you can match an all solid wood guitar from Taylor or Martin then you need to keep the price under $1500. Once you work looks "professional" then you can start asking for quite a bit more (up to $5k depending on how impressive your work is aesthetically and tonally). Anything more than $5k and you will be competing with used guitars from well-known builders.


For individuals looking to "get into" lutherie as a business (full or part-time) is to be careful with how your work is perceived. Reputation is everything in this business. My advice is to stay under the radar and just recoup your investment plus a bit for labor - once you work is high quality, then try introducing your "brand" at around $3k. Working with a good dealer is a good way to do this. Stay there for a year or two and then go up to $4k. Rinse, repeat until you're at $5k. After that, increase your cost only when you have a decently long waiting list.
Author:  B. Howard [ Thu Aug 01, 2019 6:09 am ]
Post subject:  Re: Pricing
My pricing for estimates & invoicing a new build is as follows.

Materials are listed and priced individually, marked up accordingly.

Labor. A basic acoustic guitar is billed 20 hours of construction time, electric guitars vary a bit by construction details but fall into 12-20 hours. These numbers are for very basic guitars... adding wood bindings/purflings, sound ports or other complexities can take this much higher. Also highly figured woods may require more labor to work....

Finish. This is a separate line item as it can actually double the cost of a build and most customers do not understand this at first so having it as a separate item illustrates how this can affect price. $500 is the minimum here and is for a full fill, full gloss, clear UV cured finish. Stains, bursts colors etc drive this up quick. On an upcoming electric build I have scheduled the cost of the finishing is the biggest cost on the invoice, almost double the construction labor!

Inlay work. This is another separate line item calculated at time and materials as again it is gingerbread like this that can really affect pricing. Having these things plainly visible to the client on an invoice or estimate makes the decision making process easier for you and the customer.

So how much to bill for your labor is the real question... and that depends. Depends on your location, how long you have been building, the quality of your work and probably the phase of the moon.... Meaning this can vary widely. When I relocated last year I moved 120 miles, I had to lower my labor pricing structure across the board about 15% to not price myself out of work in my new locale. So your current market will be a big factor here. Also the first few years you will likely struggle to get much above actual production costs for your guitars until you get some reputation going or at least pay enough "dues" in the biz. About 10 years seems to be the benchmark here IME.
Author:  Greg Maxwell [ Thu Aug 01, 2019 7:30 am ]
Post subject:  Re: Pricing
I teach a two-week build class, 80 hours of instruction plus Saturdays available if needed. The guitar is an OM style, all solid wood, wood bindings with BWB top and back purflings, five piece laminated neck (which I preglue but the student bandsaws and carves), a herringbone rosette, mortise and tenon neck joint, and with the top voiced and tuned. Guitar is in the green, ready for finish. 80 hours is barely enough time to complete the class. Admittedly this time frame is with the student doing much of the work, and I could do a lot of it faster myself.

A couple of years ago I was commissioned to build two guitars by a terminal cancer patient who wanted to give the guitars to his sons before his passing. I temporarily shut down all repair work and made the two guitars in twelve weeks. These were custom instruments with segmented rosettes and special inlays, among other things. That was the first time I had an opportunity to build full time with no other work interruptions, so it gave me a good idea of the time I had in a high end build.

I start with a base price. Then I add for upgrades such as custom rosettes, fancy back and side woods, cutaways, bevels, inlays, etc. I charge the customer for my actual costs for materials for any upgrades, plus labor.
Author:  Terence Kennedy [ Thu Aug 01, 2019 9:35 am ]
Post subject:  Re: Pricing
Toonces’ reply mirrors my experience. Aligning with a well respected high end store can have enormous advantages.

Knowing the market they can tell you whether your stuff is even worthy of hanging on their wall and if not what to do to make it better. They can help with realistic pricing so when you do hang stuff it sells, and their endorsement in their marketing can give credibility.

If respected local musicians hang out at the store you have a captive audience to critique your work and suggest improvements.

Your guitars will be hanging next to Goodall, Collings, Bourgeois, Martin, etc. instruments affording quick comparison for customers. Your tone and playability may be just the ticket for the right person especially if the price is right.

The exposure obtained can generate commissions.

Unfortunately stores like this seem to be on the decline at least in our area. Around here selling high end guitars is getting considerably tougher.
Author:  SnowManSnow [ Fri Aug 02, 2019 6:58 pm ]
Post subject:  Re: Pricing
I’m a hobby builder, but I do sell a few. I’m always clear with expectations from the beginning. Honestly I’m just in it for the love of building so I MAY make a few hundred bucks after materials to move me on to the next.
Terrible business model, but a pretty good hobby model:)


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Author:  rlrhett [ Sat Aug 03, 2019 9:48 am ]
Post subject:  Re: Pricing
I don’t mean this in a snarky way at all, but you should price the guitar at what people are willing to pay not what you think is fair.

I’ve just sold the last one I’m going to for a while. The last two weren’t fun, and this will never be a living. But over the last twenty years of building I’ve sold a few, and this is what I’ve found: people have wildly varying ideas of what they are willing to pay for a custom guitar.

Some people’s reference is an entry level $1,000 Taylor. They figure that a no name guitar from you should be less. Others see a $3,500 Martin as the benchmark, and expect to pay a little extra for the custom features. Others think that compared to a $10,000 Trenier or a $20,000 Manzer a $6,500 guitar is eminently reasonable. All those people are looking at the exact same guitar from you.

None of that had anything to do with how much time I put in or my material costs. That is irrelevant to the customer. It only matters to me and my business plan. That is a totally different discussion for another thread. Suffice it to say that to support me and my family I would have to make and sell an unreasonable number of guitars (18+/year) at an unlikely price ($4,500+). That is why I realize this would never be a viable business.

So my advice is talk to the potential customer and find out what their expectations are first. Then price accordingly.


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Author:  SteveSmith [ Sat Aug 03, 2019 10:04 am ]
Post subject:  Re: Pricing
I build what I want and several are for sale. Prices are labor rate times the approximately 100 hours each build takes plus material costs with a small markup. Generally works out to around $3500 with a few inlays, Waverlys and a K&K installed. Mine are take it or leave it, I don't care if I sell them or not so not a good business model for someone trying to earn a living. Every once in a while I'll give one away to someone that I think is deserving.
Author:  doncaparker [ Sat Aug 03, 2019 10:19 am ]
Post subject:  Re: Pricing
I can’t speak for others, but compared to my current day job, the notion of me trying to make a living wage from building guitars just does not add up. This will always be a hobby for me. It might be a hobby that yields a bit of money at some point. But I will never be able to, and will never expect to, live off the money that comes from this hobby.

And that acknowledgment leads to a lot of freedom. I can build what I want. I can do what I think is right in terms of building the best guitars I can make. And when it comes time to sell what I make (my skills are not there yet), the market will determine what they are worth. Selling for less than I think is right will, at worst, bruise my ego, rather than make my family suffer from lack of money to live on. And then I will move on and build them better.

I know there are folks on the OLF who are in this as a breadwinning endeavor. Godspeed to those who make a go of it. I just can’t see it for me, and I suspect many people who sit down and do the math would reach the same conclusion.

Repair work is a different story, and probably much more viable as a business plan for making a living wage.
Author:  B. Howard [ Sat Aug 03, 2019 12:30 pm ]
Post subject:  Re: Pricing
Very few in this trade actually make their sole livelihood from building guitars. Most of us do other guitar related things. I sell 4 guitars a year on average and they are sold before I even touch the wood with deposits made and contracts signed. I would starve if that's all I did... So I repair, restore, do a little finishing for a select few, sell some parts and instruments retail and this allows me to derive a modest living entirely from guitars on my own terms and hours. That last part is worth more than all the money I could ever make..... To be free to do what I like when I like, that is why I do this. If I wanted money I'd still be running a full on custom millwork and cabinet operation as that paid much better. But I had to deal with everyone else's schedules, their problems and mess ups became my headaches.

Nope personally I dig what I do and how I do it and my low stress lifestyle is something I can never invoice for. So there is more to it than the bottom line for me.
Author:  jfmckenna [ Sat Aug 03, 2019 3:40 pm ]
Post subject:  Re: Pricing
Even as a hobby builder you will get to a point, or at least I did, where you feel as though you deserve to make at least a living wage for your work or else just forget about it. The first 20 or so guitars I lost money on. I'm over 60 guitars now and simply will not do it for free anymore. I've never had someone come to me and say they want me to build them a Martin or a Taylor so I don't try and build Martin's or Taylors. I don't try to match their fit and finish, I don't try and match their tone, there styling and so on. It's not what any of my customers want. They want something unique and that is what they are going to get. So I disagree that one should not consider selling guitars until they match the big factories in terms of looks instead one should focus on being unique and find the customers who want that. Of course I am speaking from someone who has the luxury of a day job too.
Author:  jshelton [ Sat Aug 03, 2019 5:49 pm ]
Post subject:  Re: Pricing
jfmckenna wrote:
The first 20 or so guitars I lost money on.

Well I can't say I've ever lost money on a guitar since I've always considered my time to have no value at all. My wife and I have been building for about 50 years. Somewhere between 400-500 guitars with varying success. After the first 20 years or so we realized our price was too low so we raised it substantially...had no effect on our sales at all. In the early years we made most of our living from repairs and guitar lessons. Now we're old (70's) and we only build 4-5 guitars a year but I feel like we've learned something about building since the guitars are not hard to sell (we don't accept commissions) even though the price is beyond anything we ever dreamed of.
Author:  meddlingfool [ Sat Aug 03, 2019 7:45 pm ]
Post subject:  Re: Pricing
I am scared of raising my price. They're not worth anything at all if nobody buys them.
Author:  James Orr [ Sat Aug 03, 2019 9:50 pm ]
Post subject:  Re: Pricing
Another way to understand what Toonces is saying is just have an understanding of where you are developmentally, and where that falls in the market.

I don’t build for others and don’t have plans to, but I might if someone asked me, understood my pace, and doing so would help me land one of LuthierTool’s neck angle jigs. [WINKING FACE] If I were to use myself as an example, I certainly believe I bring something to the table, but I also understand I’m no Simon Fay. So why would I price myself as if I were?


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Author:  Greg Maxwell [ Sun Aug 04, 2019 7:33 am ]
Post subject:  Re: Pricing
I agree with Brian. You can't put a value on working at your own pace and on your own terms. I build and sell 2-4 guitars a year, mostly commissioned, but I always have a build going regardless. Setup, repair, and restorations pay the bills for the most part. And I teach acoustic guitar building, repair, and voicing classes which also supplement income and add diversity to my life and shop time. I've owned several fast-paced and financially successful businesses, and I'm done with that rat race. Like Brian, I could be making a lot more money doing other things, but I love the freedom I have making a modest living while doing guitar-related stuff.

Fact: There are more builders than there are customers. There are more repair customers than there are skilled repairmen and repairwomen. It doesn't take a genius to figure out which direction to make a priority when attempting to make a full-time living in lutherie.

My price is my price. $4500 base price plus upgrades plus special materials and parts. It took a number of years to work out a price point that worked for the right customers and also paid me enough to keep doing it. Too low is as bad as too high. I do take time and effort to educate customers as to why high quality handmade guitars are worth more than their factory counterparts. Never in a million years would I consider letting a customer pick my price for me! That's a hobby approach, not a professional's model. And more power to the hobbyists, but I'm a full time business owner.
Author:  gregorio [ Sun Aug 04, 2019 9:02 am ]
Post subject:  Re: Pricing
Greg Maxwell wrote:
Fact: There are more builders than there are customers. There are more repair customers than there are skilled repairmen and repairwomen. It doesn't take a genius to figure out which direction to make a priority when attempting to make a full-time living in lutherie.


Is this really true? Do you mean more guitars than there are customers?
I have no problem believing the second statement, as the big and small companies pump out millions of guitars.

Strikes me as odd, maybe i would be shocked to learn the truth then... :o
Author:  Clay S. [ Sun Aug 04, 2019 9:41 am ]
Post subject:  Re: Pricing
If you are a repair person who builds 2 - 4 guitars a year you don't have the same pressure to sell as someone who is building full time. As a hobby builder I am in the same boat, and can sell them, keep them, or even give them away if I so desire (are they then "PRICELESS"? :lol: ). The hobbyist doesn't have to let the customer set the price, but the full time professional builder has to respond to the market. As Ed said " They're not worth anything at all if nobody buys them".
It is surprising how many prominent builders were originally hobbyists or middle aged before they built their first guitar (Hernandez (46)y Aguado (44), Fleta (57), Bouchet (48). Even Jose Romanillos was 38 before he became a full time guitar maker. Ervin Somogyi was in his early thirties.
Author:  jfmckenna [ Sun Aug 04, 2019 12:29 pm ]
Post subject:  Re: Pricing
jshelton wrote:
jfmckenna wrote:
The first 20 or so guitars I lost money on.

Well I can't say I've ever lost money on a guitar since I've always considered my time to have no value at all. My wife and I have been building for about 50 years. Somewhere between 400-500 guitars with varying success. After the first 20 years or so we realized our price was too low so we raised it substantially...had no effect on our sales at all. In the early years we made most of our living from repairs and guitar lessons. Now we're old (70's) and we only build 4-5 guitars a year but I feel like we've learned something about building since the guitars are not hard to sell (we don't accept commissions) even though the price is beyond anything we ever dreamed of.

That's very cool. Congrats on your success. 4-500 guitars? You have a wealth of knowledge I am sure.
Author:  jshelton [ Sun Aug 04, 2019 1:23 pm ]
Post subject:  Re: Pricing
jfmckenna wrote:
That's very cool. Congrats on your success. 4-500 guitars? You have a wealth of knowledge I am sure.

I've learned more about guitar building in the last few years than I ever thought possible. Largely due to the generous sharing of knowledge on lists like this one. Any success we've had building only proves that even a bumbling idiot like me can eventually learn a few things. One thing I have done quite well over the years is make every mistake in the book.
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