How To Build Cost Effective?

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Posts: 74
Joined: Sun Sep 09, 2018 12:23 pm
Location: British Columbia, Canada

How To Build Cost Effective?

Post by PSmill »

Special guitar tips seems appropriate for this question. I have been learning and building, on instrument #10 now, getting by on family and friend projects still but that can only go on so long. I have tried to sell a telecaster without success and I'm not sure I have enough confidence in my builds to put an acoustic guitar on the market. I am finishing up a nice ukelele that I plan to list for $600 and see what happens, the materials were about $350, with some really nice curly tasmanian black wood.

Anyways, my question is about how build more cost effectively, it would be nice to produce a marketable product, so it can't be over-priced. This really came from building electric guitars, where the Hardware and electronics can be over $500. I would like to tap into some manner of obtaining wholesale pickups and hardware. I am paying about $1000 Canadian for the materials for a tele, with pretty nice woods and hardware. Knocking $2-300 off the cost of materials would go a long way towards making something marketable. Building 1-2 instruments/year, getting those deals wont' come from bulk purchasing.

Looking for ideas to bring building costs way down!
Stray Feathers
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Re: How To Build Cost Effective?

Post by Stray Feathers »

This is a really good question, and it may be that some brainstorming here could bring together enough small tips to be useful. As an example, for a 12-string I built, I had to order Schaller tuners from Germany (nothing else would work). I went out on a limb and asked if they had courtesy pricing for builders, and first they said no, but then changed their mind - so - it doesn't hurt to ask. (You might have to declare yourself a "business" - even a sole proprietorship - for them to agree). In Canada, for example, does Long & McQuade offer a discount to builders on Grover tuners, or your favourite brand of pickup? I don't know . . . In my wife's picture framing business (recently sold) we gave a 10% discount to all artists, whether "professional" or not - it doesn't hurt to ask. Also, like you, I live in BC, and, for another very small business, I have GST and Provincial Sales Tax numbers, which can save 12% on purchases (I do have to charge those taxes if I sell things). I have not done this for guitars yet (have not sold anything) but it is worth looking into. It may be useful - especially in Canada, where shipping from the US is expensive and slow - to set up a cooperative group of purchasers to combine orders to take advantage of quantity discounts and combined shipping. Sharing names of suppliers who are cost-effective, or who have good specials on from time to time, can help. I sure look forward to seeing if others have suggestions, too. Bruce W.
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Re: How To Build Cost Effective?

Post by jread »

Very good topic. Here's my experience.

I'm working on #19, all acoustics. I've invested a good amount of money into tools, supplies, and materials. There's no way I could have done that without a full time job outside of lutherie.

All of my sales were to friends and acquaintances who knew they were getting a guitar worth much more than I was willing to charge. Depending on their income levels, I negotiated prices. I wanted them to have my guitars as much as they wanted them. My parts list comes in at about $650 with Schaller tuners and hard shell case. Some friends I built for parts money only because I'm like that. Others wanted to support me as a builder and artist and have paid what I considered full price. Everyone I've sold to has been a person I know. I've sold a D28-ish style for $1500, and a Mahogany 00 for $1350. I was happy but those prices are still too low. Our time is money. Many hours of French polish wasn't even factored in.

Right now, I'm torn. My builds are good enough to sell. I see customs of similar quality everywhere for $1850 or more. Do they sell? Who knows. It seems most sales I have heard about are word of mouth. People want one of your builds because they know you or know someone with one of your guitars and want one too. I don't expect to sell to strangers on ebay or off my personal web site. There is a guitar shop in town that sells on consignment and I may put one there one day and see what happens. I've had lots of people ask about custom builds and back away due to price. My 1st answer when they ask how much they cost is that we should sit down and design a build but expect to start about $1250. They usually back out.

As far as answering your question, here's how I try to reduce my costs per build.

Wait for sales. Exotic Wood Zone, RC Tonewoods, and others have pretty big sales occasionally. Load up on bridge blanks, un-sanded fretboards, and overlays when you can get them cheap. I look on ebay for tops and try to get my Adi tops for @$80 delivered. I prefer AA tops with color variations and have had no trouble with tops listed at lower grades. For mahogany, I get that at my local hardwood shop and re-saw which seems about half price from the online sets. That lumber also goes into my necks and blocks. EIR sets I've used were from sales or ebay. Grover tuners from stewmac are fine if you want to trim a hundred bucks. I use them and have no issues with them at all but the Schallers sure are sweet.

My goal is to have a couple of guitars around ready to sell if someone wants a completed build and to fish for custom orders. I'm starting to pick up repair jobs for a little shop money. I also need to do something else besides build guitars once in a while so if I slow down, so be it.
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Re: How To Build Cost Effective?

Post by MaineGeezer »

I think unless you develop a "name" you're unlikely to be able to sell a guitar for what it should sell for. My friend Carter put this guitar on consignment at a local music store for $3,000, which I think was undervaluing the guitar. It was there for a year and didn't sell. He might have done better at a larger store, in a larger city, in a store known for selling high-end guitars.

If he had the name recognition of Martin or Gallagher or Bourgeois it would have helped too.

Appearance is a big factor too. If you can build a guitar that looks as gorgeous as the guitars made by, say, Bruce Petros, people are going to be interested.

And you have to be willing to ask for the price you want. Don't sell yourself short!
Don't believe everything you know.
Anything is possible if you don't know what you are talking about.
When things are bad, try not to make them any worse, because it is quite likely they are bad enough already. - French Foreign Legion
Diane Kauffmds
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Re: How To Build Cost Effective?

Post by Diane Kauffmds »

My story is a bit odd. After building guitar #2, I decided to sell #1 on Ebay since I didn't play it much. I actually made a little money on it. The buyer asked me to build a custom guitar for him. That's how I ended up with an "accidental" business. Now I have several professional players, who depend on me to keep their guitars playing. After another Ebay sale, I was contacted about a restoration from the California buyer, with whom I still do repairs and restorations.

I guess the moral of the story is that you never know from whom r or where your business will come. Sell on Ebay and you might end up with a lifelong customer; it could lead to other things.
Diane Kauffmann
Country Roads Guitars
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Re: How To Build Cost Effective?

Post by JLT »

It helps if you can get a discount, as others have noted. It can also help if, when you place an order, you can tell your supplier that you intend to buy X amount of whatever in the next year, even if you don't order it all at once. They may be more inclined to give you a volume discount based on that. And you can sometimes get a lot of mileage out of doing cost comparisons of supplies, and telling one supplier that you'll be willing to work with them if they can match or beat the price of another supplier. You don't have to be nasty about it, but you should let them know that you have to make decisions based on your own bottom line.

If you're thinking of doing this as a business rather than as a hobby, it's a very different ball game, as John Hall and other full-time luthiers can tell you. When people ask me how much time it takes to make a guitar, I never know how to answer it. I could tell them that it takes about thirty man-hours, more or less depending on how much I have to build "from scratch" including sawing the lumber. But it might take them a couple of months from start to finish to make a guitar, because I don't rush things. I'll glue some braces in place and wait overnight for them to dry. I'll bend a side and let it sit in the form for a couple of weeks to be sure it's stable. I'll finish the guitar and wait a week or two for the finish to cure. So it's obvious that I'm not counting on lutherie as an income source.

It was different when I was sail loft foreman (in this case for a hang-glider manufacturer, but the principle is the same). If there was some stage of the manufacturing process where an interval of idleness was required (like waiting for a component to be made before you could work on it), then that time was always spent in some other stage of the manufacturing process... pre-fabricating other components, for example. When I was making ten or twenty sails or more at a time, that was easier, and I was able to get about 90% efficiency out of my crew... that is 90% of their time was actually spent in sail-making, while the other 10% was taking a bread, going to the bathroom, or whatever. (Most factories run in the 80-85% range.)

But that sort of think is almost impossible in small-scale manufacturing.
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Re: How To Build Cost Effective?

Post by Skarsaune »

How do you make a million dollars in lutherie?

Start with two million!

I sell about half of my builds. This helps reduce the cost of the ones I build for myself, and gives me more repetitions to get better at what I’m doing. Price runs around $1250 and in no way covers my time. Friends and friends of friends, so far. They know I’m not pro - but I build a pretty darn good guitar, and they can get custom features. I have 3 “orders” at the moment.

Guitar maker’s connection used to be a good source of inexpensive parts. Making the parts is a lot of the fun, but I’ll buy kerfing.

Batch up jobs - do a bunch of resaw work one day, make a bunch of neck blanks, etc. This helps.
Diane Kauffmds
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Re: How To Build Cost Effective?

Post by Diane Kauffmds »

Buy in multiples when you're able. Don't buy just one truss rod; buy 10. I do this on almost everything, especially consumables. For instance, you can buy 1/2 or 1 pound of dry hide glue. I buy 5 pounds at a time. So instead of paying $17 for 8 ounces, I pay less than $10 per pound. I'm not shy about asking for bulk discounts.

It's a fact of life that it takes money and it's expensive to start any business. When it came to big ticket purchases (big ticket for me), I looked at the advantages of owning it, vs. not owning it. A drum sander, for instance, reduces my time spent thinning wood, plus it does a better job. Bending sides and binding on a bender is faster and more accurate than doing it by hand (in my case). For me, using a binder produces a more consistent and predictable result on every guitar.

There are alternatives to the big ticket stuff. It took me a while to buy this stuff. I didn't buy everything at once.
Diane Kauffmann
Country Roads Guitars
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Joined: Mon Nov 30, 2020 1:42 pm

Re: How To Build Cost Effective?

Post by AluminumTop »

Go Diane, great advice.
It appears these Luthiers want to make guitars.
I still need to have more made.
The number 1 billet soundboard Dread is in the NAMM museum.
i need number 5-20 built.
Whom wishes the skill building work?
Thanks, All
Going to Anaheim NAMM show?
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Joined: Sun Aug 24, 2014 12:27 pm

Re: How To Build Cost Effective?

Post by bftobin »

When people ask how much I charge, I hand them a calculator. I tell then it's about 120-140 hours to build a guitar. So if they would like to multiply their hourly wage times 120 hours, that's the labor involved, and now we can talk cost of materials. At that point, they start to see what a bargain a guitar can be.

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