List Prices Rising

[jlb]

Unnamed companies, but just about every builder out there, within the last year or 2 seem to have raised list prices at a rate that is larger than can normally be expected.

When compared to the current job market, which is not good, and doesn't look to be getting much better, are builders shooting themselves in the foot here, or is the mandolin market just so hot that these hikes cannot be resisted?

[Randy]

It's the fault of "O Brother Where Art Thou," and "Captain Corelli's Mandolin." Not to mention how this website has been instrumental in driving up the cost. (Tongue planted firmly in cheek.)

[cutbait2]

i wouldn't underestimate the part the cafe has played, otherwise "string music" is enjoying a big bounce from alt country, oh brother, cold mountain, BG, the generally rock like choices on "country" dials, likewise sales of banjo's,geetars,etc are up too, along with prices

Things like O Brother have pushed the demand part of supply and demand. If there is a time when this demand drops, prices will drop. Of course that statement is made with a general assumption about the supply.

[Bradley]

As someone who works in Industrial sales, I see an average 10% increase at least once a year and a bunch of customers that demand price reductions. The only thing that seems to be going down is electronic gadgets(PC's,TV's,etc)

Lets face it the cost of everything is going up at great levels....and we wonder why so many people are up to their necks in debt?

I was talking to a co-worker who lives near Dulles airport in what was a booming tech area in the late 90's. His monthly rent has gone down about 200 dollars per month in the last year.

I'll stick by my statement about mandolins going down in the future but point out there was an "if" in front of it.

[EasyEd]

Hey All,

List prices rising? Maybe so (certainly so with Weber for example) but I thought I detected somewhat of a softening in real prices paid from a year ago (or a bit more) to now. For example I paid (IIRC) $235 for my MIC Kentucky 250 about 16 to 18 months ago. Today it would probably bring $175ish or a tad more. Also while Weber has raised list prices I don't know what it has done to in store prices. I've had one store offer to sell me a new Absaroka for $1300. So...

Take Care! -Ed-

[BigJoe]

Most manufacturers do raise prices from time to time. Some of our products have gone up. Our Master Model did. We have kept the line on the A9 and F9 to help the introductory market. It is not going up faster than inflation and the job market in most parts of the country is quite solid. Unemployment is around 5.5 %, which means some are out of work, but not many. In our area there are plenty of jobs to be had. Many of them are in service and are not high paying jobs and they go unfilled. I guess the demand for work is not the problem, just that many are not willing to work for the wages available or do the kind of work available. That is another issue entirely from the cost of mandolins. We have seen teh economy improve substantially and actually see an increasing demand for the higher priced instruments in every division.

[mandoJeremy]

Exactly BigJoe, we have the highest unemployment rate in the state of NC and one of the highest in the nation at 13.5% but there are always jobs. Everyone just lets their pride get in the way and their "normal" cost of living. By the way, being that I work at a Weber dealer you are only allowed to discount a certain amount and if they raise list prices, they raise dealer cost, which raises the end buyer's price(in store). Also, if you can buy that Absaroka for $1,300.00 someone violated the Weber dealer agreement by $92.00 (going by the old list price before the price increase). I would suggest buying it.

[Michael Lewis]

I received a letter from Calton Cases in Canada stating that prices have gone up 20% due to devaluation of the US Dollar. Things like this certainly effect ultimate prices for my instruments, as they are delivered in these cases. Buying European wood is expensive, but then it always has been relatively so. I'm thankful we have great materials available without being forced to buy exotic woods, however, the best grade of materials are still very expensive even if they are domestic.

[mandoJeremy]

I learned of Calton's price increase today, not to mention that they were very, very rude to me because I was inquiring for a dealership with them at the store I work at...being that there are only 3 dealers in NC. Shall I state again that the lady, after discussing with her partner(Al Williams), was very rude. I contemplated selling my Calton and buying a Pegasus just to get my point across to my own self. That is the first time I have ever heard any company say they weren't taking any dealer apps. Guess they are making enough.....there's an untapped goldmine! Can't someone just change the shape a little and make a fiberglass formed case? We do have some brilliant guys on here so someone needs to get to work! Sorry about getting off subject but I thought it was relevant because you guys better expect to pay more for a Calton.

[jlb]

I was thinking specifically of Weber with this thread. I frequent a store for strings and such when I'm in a pinch, and recently got a set, and I really couldn't believe the dramatic increase in their prices. The owner says he hasn't sold one since the increase. I was most surprised with their lower end. I mean, a Weber flattop was listing for something like 1250. Without mentioning Mid-Missouris, you can get David Freshwater to build you a better mandolin, ship it over from Scotland, UK, and you'll be paying nowhere near this.

The jump in price in the Absaroka was an eye-opener too.

Meanwhile, seems like all of my musician friends who have lost jobs are making less money than before.

Don't mean to pick on Weber, this seems like a systemic move up of late....and I'm not talking just on your boutique class of mandolins which only a select few can afford, because what is another 2 grand to a millionaire, but rates have been going up from the bottom up.

Just seems a little odd to me that at a time where the job market is sketchy, with only remote signs of possible improvement in the near future, that companies would raise the bar at such an extreme.

[doanepoole]

What I can't believe is a builder is listing an unbound, industrial finish f-style at 4300. What I can't believe even more is that people will probably buy them.

Jobs or no jobs, the mandolin market must be hot.

[Big Joe]

I guess I will speak in defense of the builders. First of all, most upper end instruments are not purchased, owned, or played by millionares, but by ordinary people who have a love of that instrument. They will work, save, trade, sacrifice to get thier dream. The same is true for all of us...just not always mandolins. I chose to buy a house that is not very fancy, but meets my needs. It may not be fancy, but it affords me the opportunity to have a nice instrument collection.

As to increased prices for builders, it will always go up. It does not get any cheaper to build as time goes by. It is hard to get good quality workers that can work for what we can afford to pay them. The cost of building is more than just labor. The cost of tuners alone is staggering. Then we have to get the rest of the hardware which includes bridges, tailpieces, tailpiece covers, truss rods, truss rod covers, screw to hold all that stuff on. Then we have glue and other adhesives, sand paper, machinery, tools, forms, buildings, dust removal equipment, dust masks, first aid kits, insurance, lighting, benches to work on, electricity, etc, etc, etc. None of these have gotten any cheaper in the last year. It only increases the cost of doing business. Then everyone wants them to be prettier and prettier which means more labor to take care of little inconsequential things. All of these add to the cost of a finished product. When costs rise to a certain level we must raise prices to account for this. If we did not, we would not continue to be in business. While we do work on a rather small net profit margin, it is important to have that. While I realize it is hard to believe, we are not a non-profit organization .

No one likes price increases...manufacturers included. However, it is important for our customers that we continue to be here to service our product and make sure the customer base is properly taken care of and the knowledge and skills we have are passed to another generation of luthiers and players. This must all be taken into consideration when you think of the price of your mandolin. If you really ever had any idea how many families have to live off that one istrument it would stagger you. Then lets not forget the dealers and the employees they have and the overhead they have. That also is a factor in the end price.

These same considerations are not just for our product, but for anyone who builds instruments. A real concerted effort is made to keep pricing as low as one can and still keep the doors open. The same is really true of the high end builders too. It costs more to build those mandolins than a lesser expensive one. In the end, I am thankful for all the builders and those who make their living doing that no matter the name on the product.

[doanepoole]

While I agree with just about everything Big Joe is talking about above, I'm not sure I can agree with this:

These same considerations are not just for our product, but for anyone who builds instruments. A real concerted effort is made to keep pricing as low as one can and still keep the doors open.

While I'd like to think this is true, there are simply too many examples out there of exorbitant pricing, for example, listing an unbound, bare bones, industrial finish f-style at 4300. I don't blame anyone for doing it, mind you; if someone out there is willing to buy that product at that price, more power to the builder.

[jlb]

I think my point may have been lost. #All I'm really trying to get at is it seems a particularly odd time to be raising list prices.

By the way, a random sampling of models that have recently raised in price (Gibson not included) shows the following increases:

11%
17%
21%

Though I am not an economist, these numbers do not seem to coincide with the rate of inflation, though I assume there is a possibility that they could coincide with rising production costs.

[GTison]

to keep from gibson bashing, or weber bashing, look at appitius, r. wood, other high ends tucker..... (are there others) . seems like alot of them have gone up in the past 2 years anyway. some ALOT. If it's demand a custom builder can only make a limited number. In business you make hay while the sun shines. If prices are good you'll make money. If your brand is in demand make it while you can. because soon the new kid on the block will be in fashion and in demand. I don't think mandolins are immune from market forces. Prices go up. Look at autos. Employment is not bad right now. 5% used to be estimated to be "full employment". always hated to see mando prices go up. they always go up faster than my savings for the mandolin. I found a picture of me playing an F5L at Jimison, AL in about '90. Charlie Derrington of belmont guitars was there with several. I wanted one so bad. at the time you could purchase one for about $2800-3200. Oh well. bla blah blah

List price......I hate those two words. List price is a bunch of manure as is MAP to a degree. Judicious shopping & a decent sense of humor will uncover some great buys.

But don't discount the added value of buying locally when possible, give those folks a shot at your business. For those for which that is not an option, dial the phone, send a few emails & "make an offer".......you might be pleasantly surprised.

Dealers are not rich folks (most anyway) & they need cash flow just like anyone else. When it's time for an instrument to "go"......it's time for it to go..... We as dealer's are constantly left "between a rock & a hard place", welcome to our world...... #


Oh yeah......if you are really serious, pick up the phone & call. I can almost guaranty you'll get your best deal that way.

[cutbait2]

alot of builders are following the gil phenomena. two years ago a F-5 gil was 7500 list, now has at least doubled in price. other good builders are saying why not me too? and if they keep their price low some folks say if the price is low the quality must not be there, so the builders will inch up their prices as long as the orders come in. and theres not an overabundance of high quality used mando's so that also keeps the price up.

[August Watters]

In defense of the small builders, it's worth pointing out that the number of hours that goes into building carved-top and back mandolins is enormous. Thousands of dollars may sound like #lot of money to spend for a decent mandolin, but to a builder a couple of thousand for an A-style is not much more than minimum wage. How many of us are willing to work for minimum wage?

If you've seen prices rise quickly, it's partly because so many builders begin by selling their work at prices way below what they'd need for a living wage -- so as their names become better known, they have to raise prices quickly just to pay the bills. There's always a new builder at the beginning of their career, willing to sell below cost, for the exposure.

As to the manufacturers -- my mind reels at the logistical problems of paying the enormous costs of running a business, based on such a labor-intensive and fragile product. So to those who are suggesting mandolin builders are getting rich: think again! The challenges are enormous, and NO ONE would be doing this, except out of love for the craft and the beautiful instruments produced. The numbers of builders getting rich off of mandolins could probably be counted on one hand -- and for the most part those have paid their dues, enduring many years of selling at dirt-cheap prices.

August
http://www.galleryofstrings.com

[jlb]

Again, and absolutely no offense to anyone, but I think the point may have been lost.

If you're a builder, why choose now to raise your prices, with the current job market.

Some have eluded to the fact that there are low-paying jobs out there that people have too much pride to take...seems like a strong reason not to be raising prices. #Also, even if they take these jobs, low paying jobs buy Johnsons and Kentuckys, not American mandos.

Just doesn't seem like a strategically wise idea at the time...I suppose the answer is just basic...the economy has not had enough of a negative impact on the mandolin market to curb its inflation.

If you're a builder, why choose now to raise your prices, with the current job market.

I'm not a builder, but I think the answer is that if you are selling all you can build at your current price, you probably should raise your prices. # #If you've got finished mandolins sitting around that you can't sell you probably should lower your prices. #

At the same time, each of us owns our resources whether they be time, money, finished mandolins. #I don't like anyone deciding what someone else should do with their resources.

While I sympathize with the arguement about how many hours it takes to build one, that is not relevent as a customer. #I only care if it is the right ration of quality to price. #As a builder, you have to decide if its worth your time to build for what the market price for your quality is.

[cutbait2]

there's nothing to defend, builders have the right to charge whatever they want to, buyers can decide whether or not to spend. i lament the fact Gil's prices have gone up because it will cost me more if i want one but i doubt anyone begrudges him (or anyone) for raising prices, he was just following the market. otherwise i generally agree with August...

[jlb]

I think we should exclude the "waiting list" line of instruments, such as Gilchrists. What I'm talking about is the "standard", for lack of a better term, American instruments. For example, Weber, and I really hate to use them, but they are a convenient example. Locally, when I got the music store, I see alot of Webers on the wall. When I come back, safe odds are those same exact Webers will still be on the wall.

I think its obvious that if you have obtained some sort of Gilchrist type status in the market, you will be charging up the ying-yang.

What I was really talking about here is the rise in prices in your "regular" American mando.

I like Weber myself. If you go to their website they have a section of instruments that are available now. When I looked just prior to posting this, they had seven. I don't know what their annual production is but having seven unsold probably isn't very much of their total output. They are probably selling all they can make. If the same Weber is staying in the local dealer's shop too long, they'll quit ordering and then Weber will need to make a tough choice.

It is a safe bet that if you are a regular on this board you have a special view of mandolins but to think that they don't (or shouldn't) follow the same economic principles that everything else follows is very realistic.