Expect to see some BIG price increases for 2012 [Archive]

Ivan Kelsall

Dec-30-2011, 3:20am

I suppose it's only to be expected Robert. Doesn't it always seem to be the same way,while everybody is currently suffering financially,prices increase - the worst possible time for a price hike.If prices rise too high,maybe it will put some people off from buying imported instruments & that 'US made' instruments will be perceived to be a more logical buy (if the US can keep their prices reasonable).It might also see an increase of people buying 'used' instruments rather than new - not a bad thing considering some of the bargains going in the current 'classifieds'. I suppose also,that it's unreasonable to expect the 'Pac-rim' countries to go on working for relatively low wages all the time either.Whatever we think of those countries & their systems of government,they're entitled to a decent standard of living.I'm sure that if people shop around,there will still be some good bargains to be found,
Ivan

almeriastrings

Dec-30-2011, 3:41am

US made instruments in Europe are already very expensive. With not only currency fluctuations to contend with, but increased paperwork requirements (CITES/Lacey Act related), and other overheads going up everywhere it is only going to get worse.... likewise, the $/£/€ vs Chinese currency is pushing prices and costs up steeply......there have been real bargains around recently, with hard-pressed retailers trying to unload inventory, and at prices that reflect import costs as much as 18 months or more ago. The next batches that come in will be very different, as we are seeing.

Beanzy

Dec-30-2011, 4:41am

As China is in economic slow-down, with the commercial and domestic property market falling and new laws about holding undeveloped land, I'd expect any increase to be a fairly transient reflection of orders placed this spring/ summer. Based on how things stand now as against earlier in 2011 there's going to be some serious mis-matches between prices required by retailers and the actual state of things in 2012. I expect many retailers will be badly caught out once the next wave of cheaper direct imports come in later in the spring. Those with inventory to tide them over will be lucky not to have been caught by the bubble.

almeriastrings

Dec-30-2011, 5:10am

Charlieshafer

Dec-30-2011, 7:41am

I think if you expect to see prices fall again to previous levels you will be disappointed. There may be bargains from people going out of business, but those underlying production costs are only going in one direction....I think some of these instruments have been way under priced for quite a long time.

Total agreement. Raw material commodities have been going higher at a relatively rapid rate for a while now, and skilled labor is getting problematic, even for China. Some of these companies may scurry around looking for cheap labor and places to set factories up, but the result is inevitable, as that costs money, too.

Paradoxically, this will actually be a good and healthy thing for the instrument market, as values have been skewed for quite a while now. In mandolin terms, the upper-middle range builders (say, from 5k-10k) are probably going to be able to give themselves the raises they deserve. In the vintage market, why are some really sweet old Gibson A's going for as little as they are, when you compare them to some rather ordinary imports? Not that there aren't some very nice imports (hey, I've got a couple), but in the supply-and-demand dictated economic world, corrections are due.

In 50 years, it will be interesting to see how many of these Asian imports will be viewed. As legitimate mid-range instruments, or as "Sears" level instruments, nice, serviceable tools, but not the stuff of dreams.

Brent Hutto

Dec-30-2011, 8:22am

It may well be that a decade from now people talk about "Remember when all you had to do was pick up the phone and order a brand new, perfectly playable mandolin that sounded good for four or five hundred dollars?".

There's a pretty good sized market for people who aren't looking for an antique, aren't looking to spend thousands of dollars and aren't looking to take a chance on a second-hand instrument that needs setup work (assuming they could even find someone who does a decent setup).

I reckon this was a brief interlude where those folks have had the option of a $500 Kentucky, The Loar or Eastman mandolin that's ready to play and will provide solid performance on 'most any kind of music they want to play. In a couple year it'll probably be back to either spending twice as much or settling for a mass-produced "mandolin shaped object" for a few hundred bucks.

gregsguitars

Dec-30-2011, 10:06am

Not only are instruments going to go up but shipping and insurance is also going to experience a 5 to 11 % increase according to my shipping reps....bummer!

Mandobar

Dec-30-2011, 10:57am

Actually, production will move yet again to an area of the world where expenses are lower. Despite all this things are still better mandolin-wise than when I started when there was no market between $200 and $2000. I have an Eastman 305 that I was going to sell. I think it best to keep it now.

neil argonaut

Dec-30-2011, 11:34am

The good news is, while improving the sound of your playing through purchasing a more expensive instrument might get pricier, improving it through practicing with the instrument you've got will remain free for the forseeable future. It might help cure some folk of their MAS ;)

Big Joe

Dec-30-2011, 12:12pm

This is an all too familiar pattern. First it was Japan (not really first, but in recent memory... Italy was there before that), then Korea, then China... in the midst of all this has been Indonesia, and several other former third world countries that have had a political climate of some reasonable stability. There are not many more places to go. Europe may have been, but those days are long gone. South America is not going to be any less expensive than the orient, and Africa does not have enough political stability to build an economy built on manufacturing.

My hope would be to see an increase in productivity in all areas of manufacturing in the USA. We certainly have the work force to be able to do the work... if they will. Our economy did not begin to collapse three or four years ago, but when we became a service based work force rather than a production based workforce. We sold our birthright to the Chinese and need to recover it. I have no gripe with the Chinese people. They too need to make a living, but we sacrificed our economy and future for the "easy life".

Scotti Adams

Dec-30-2011, 12:15pm

Wasnt it just a couple of weeks ago when everybody was complaining when Northfield raised their prices? Seems pretty petty now.

Willie Poole

Dec-30-2011, 12:24pm

Not much we can do about it except keep what we have and see if these new instruments dont sell fast maybe the price will come back down...I have enough good instruments to tide me over for a long time....Might even sell a few pretty soon if the prices do go way up on new imports...."A SELLERS MARKET" in used instruments? Looks like it to me....

Willie

Brent Hutto

Dec-30-2011, 12:44pm

Northfield was just the first Chinese instrument to have the big price jump. It's been a good guess that eventually they all would eventually get much dearer. Whether the Big Three (Kentucky, Eastman, The Loar) or Northfield when you've got an aggressively priced product that's constantly backordered or with a waiting list there comes a time when it's only rational for the price to rise to meet the demand.

Dream on if you think this means USA made instruments will now be "more competitive" (i.e. no longer far more expensive). When prices from one set of vendors go up markedly, as surely as day follows night the remaining vendors will be raising their prices as well. Unless there's something different about the tiny little mandolin market compared to the markets for every other consumer product I've ever seen.

foldedpath

Dec-30-2011, 12:44pm

In 50 years, it will be interesting to see how many of these Asian imports will be viewed. As legitimate mid-range instruments, or as "Sears" level instruments, nice, serviceable tools, but not the stuff of dreams.

Just a guess here, but I think that the current output of Gibson and Collings are going to be seen as the mid-range vintage collectibles, just because there are so many of them out there, saturating the market. The top-tier individual luthiers like Gilchrist or Monteleone will probably hold their value at the high end of the vintage market, based on both relative scarcity and famous player association.

That doesn't leave much room for the recent wave of Asian imports to be seen as anything more than decent, playable, but still entry-level mandolins. They'll probably have a similar status to the first wave of Japanese guitars from Ibanez and Yamaha in the 1970's.

That's just my wild guess though, and it depends on the popularity of the instrument in the future. Right now we have a Baby Boomer wave of people who grew up playing acoustic guitar, and who switched (or added) mandolin later in life. That may not last, if the next generations aren't as smitten with the instrument (or fretted instruments in general). If there are fewer mandolin players chasing vintage instruments, then the pricing necessarily drops across the entire range, except for the high-scarcity and historical instruments like signed Loars.

Big Joe

Dec-30-2011, 1:02pm

The domestic mandolin market has not seen any increase since 2004, and actually, some builders have lowered prices a little. Some builders have reduced the amount of product they produce to reflect the market as well. I am not surprised to see Chinese and other countries products rise. I have been expecting that for some time. Recent economic issues and a desire by the Chinese people to actually be rewarded for the work they do will cause a price increase. That is no surprise.

What will the domestic market do? I think they will hang on as best they can without raising prices much to keep production going. The cost of materials has increased over the years, but not substantially in the last couple years. Some of them have wood stocks already available purchased at lower prices. I would not be surprised to see domestic prices rise, but I think it will be a couple years yet. As the import prices increase, there is less excitement to purchase the import and more desire to purchase USA goods. This may bode well for the lower priced USA products. It will not affect the prices of higher end instruments. That is another market all together.

Even the elite products are less now than before the recession. Mandolins that were bringing 30K fell to around 20K and they are slowly moving up, but not substantially. This market is not dependent upon the same criteria the import market is or the entry level market is. While the high end market has seen prices move up slightly over the last couple years, it will likely continue at a slow rate as the economy begins to stabilize and grow.

The mandolin market has been reasonably brisk at the lower end for the last few years. It has been pretty good at the upper end. It has struggled in the mid price mandolins. Those from 3-7K have been the slowest moving unless it had a brand name on it that moves easily. In the last few years we have not been able to keep a mandolin with the Gibson name on it. They moved fast, but the prices were really right. Weber mandolins have moved, not quite as fast, but still moved. Many other good mandolins have moved much slower. We could move upper end mandolins much faster than anything than the entry level and the Gibson instruments.

Whether we like the company or not, Gibson mandolins still move very well. They don't bring the money they did five years ago, but they do move quickly. I guess that is the one really good thing about Gibson. It used to be that you could buy a Gibson and in five years it would sell for as much used (mandolins) as it did list price new. That has not proven to be true the last four years, and I don't know if that will change in the near future, but I would not be surprised to see that pattern return in a few years.

I will also add that guessing any market in the future is best viewed with great skepticism. While I think I have a reasonable handle on the market, anything can happen and only time will tell who is right. I failed to see the market downturn that occurred in 08. I knew there were issues, but I did not see it affecting us the way it did. That is another discussion but not for the cafe. It is too political for here.

Beanzy

Dec-30-2011, 2:36pm

I think Stephen Perry's post #2 sums up the most sensible approach for many retailers. Too many end up holding or discounting inventory which manufacturers & wholesalers sold ahead of or just at the start of a slow-down. The pressures causing the current price increases are historical in China and disappearing fast, the fact is the Chinese economy is slowing, with a 20% drop in property values by year end being considered a controlled decline. Wage claims and salary increases are a product of cost of living increases which the Chinese government is taking serious steps to address. I wouldn't be betting against the Chinese government when it comes to protecting their exports and controlling their competitiveness. If the US market can sustain price increases like those being mooted, then it's in way better shape than any other economy in the world and certainly way better shape than any numbers I've seen would suggest. I'd love that to be the case, because the US economy has a great way of pulling the rest up by the shirt-tails (Although Europe has lost the shirt so can't be helped). If not and we're looking at a tail-end bubble increase caused by historical demand for labour and materials in China, then some retailers once again are about to get stuck with devalued stock. I saw the same thing happen with the European bike market in the early 90's and it took a long time and much technical development to get the momentum under the market again.

Charlieshafer

Dec-30-2011, 3:51pm

Wage claims and salary increases are a product of cost of living increases which the Chinese government is taking serious steps to address. I wouldn't be betting against the Chinese government when it comes to protecting their exports and controlling their competitiveness.

Very true, they're great at manipulating their own market conditions. I'm wondering, though, if the Eastmans and Loars of the Chinese world are too "small potatoes" to worry about. Their production of electronics, among other things, is probably more on their radar. These can be produced with less skilled labor than instrument builders. We're all guessing at the supply of skilled labor in the Chinese economy, though, so supply and demand of labor on that front is probably unknowable. At any rate, I agree with Big Joe on the point that most companies are running out of places to run to in search of cheap labor and political stability.

An interesting and somewhat related piece of news is that many small machine shops, at least around here, are going full-bore, as the production of smaller-batch niche runs are more economical now to have made in the states. The supervision, communication issues, quality control, shipping, and all those other things are tilting the advantage back to this country.

George Nakashima, famous furniture designer/builder, made one of the most intelligent statements when he said, "A nation is built on skills." Fortunately, when it comes to mandolins and guitars, we have the skills. It all comes down to what Folded, as others, have said regarding long-term demand. When all the baby boomers stop buying and start liquidating, will there be enough takers? Who knows... that's why we need the Taylor Swifts of the world playing acoustic instruments. Keep the next generation interested!

P.D. Kirby

Dec-30-2011, 3:58pm

I guess this makes The Mandolin Stores new offering The Lafferty a well played venture. :mandosmiley:

Brent Hutto

Dec-30-2011, 4:01pm

I don't want to disparage anyone's choice of career but high-volume production of carved archtop instruments for the kind of pay that's possible when the finished product sells at retail at $400-$500 is a tough way to earn a living. Yes it certainly takes far more skill than I'll ever possess to carve a mandolin, much less carve them all day every day and have them all end up playable. But if our country's future depends on recapturing the manufacturing of low-cost mandolins then that future looks more like the past than the future to me.

Those dudes turning out Eastman mandolins in China aren't exactly "living the dream" in the same sense as a Hamlett or Dudenbostel building custom instruments. Those guys are getting 20x-50x times the price of these "imports" and still not exactly getting filthy rich doing it. And the mass market, such as it is, for Kentuckys and The Loars would dry up in a hurry if those were doubled or tripled in price (especially given that Gibson, Collings, Weber and a few others already have perfectly good products operating in that couple-thousand-and-up space).

Elliot Luber

Dec-30-2011, 4:13pm

With cheap labor and good wood, I expect to see African instruments make a strong appearance at some point.

JonZ

Dec-30-2011, 4:14pm

mrmando

Dec-30-2011, 4:57pm

With cheap labor and good wood, I expect to see African instruments make a strong appearance at some point.
Yeah, I'm taking up bluegrass kora...

P.D. Kirby

Dec-30-2011, 5:55pm

Judging by the amount of spam e-mail we all get from Nigeria I bet they have an abundance of cheap labor. Maybe some enterprising person will set up shop there. Then we could have a War Lord Master Model. :grin:

almeriastrings

Dec-30-2011, 6:22pm

Also worth noting that while people might be willing to accept an instrument with finish defects and other "issues" when it is $500-$1K provided it sounds and plays well, once the price shoots right up so do buyers expectations with regard to fit and finish....

I can think of at least one brand this could prove difficult for.

John Adrihan

Dec-30-2011, 6:58pm

This is actually a <masked expletive deleted by Moderator> post. The fact is the DEMAND for import Mandolins is on the rise SO the American sellers WANT more money PERIOD. Look at how many buyers on just this forum are buying instruments from the sponsers, just a few months ago this site posted that THE LOAR was the most popular Mandolin selling. It is just supply and demand, ECO 101 GIVE ME A BRAKE. Just like the Northfields raising their price, tbeir selling alot of them so they want profit (are they really worth $3000, lets be honest here now) They ( the PAC RIM MAKERS are not making any more money) YOU import guys just WANT more money. AND GUESS WHAT that is OK. BUT BE HONEST

JonZ

Dec-30-2011, 7:44pm

YOU calling ME an IMPORT GUY?!?!?

rgray

Dec-30-2011, 7:49pm

This is actually a <quoted masked expletive deleted by Moderator> post. The fact is the DEMAND for import Mandolins is on the rise SO the American sellers WANT more money PERIOD. Look at how many buyers on just this forum are buying instruments from the sponsers, just a few months ago this site posted that THE LOAR was the most popular Mandolin selling. It is just supply and demand, ECO 101 GIVE ME A BRAKE. Just like the Northfields raising their price, tbeir selling alot of them so they want profit (are they really worth $3000, lets be honest here now) They ( the PAC RIM MAKERS are not making any more money) YOU import guys just WANT more money. AND GUESS WHAT that is OK. BUT BE HONEST

Totally out of line with absolutely no facts to back up the insulting first line in your post. Seems you think the manufacturers don't realize the laws of supply and demand and then you seem not to realize that there may be one or may layers of business between those manufacturers and dealers - all of which would probably realize the same laws of supply and demand that you indicate are being abused by our American dealers.

Brent Hutto

Dec-30-2011, 7:54pm

All I know is, if I were selling all I could get my hands on of a product for one dollar I'd be foolish not to try charging two dollars and see if I make more money that way. I guarantee you if McDonald's could get ten bucks for a Big Mac they'd be charging ten bucks for a Big Mac tomorrow.

MikeEdgerton

Dec-30-2011, 7:57pm

Lets stay civil, don't get into political hot button issues, and getting around the profanity filter with the creative use of characters is frowned upon.

JonZ

Dec-30-2011, 8:12pm

I apologize for shouting.

roberto216

Dec-30-2011, 8:38pm

I believe Dennis from the Mandolin Store had recently sent out a message warning about the considerable price increases to come on Breedlove instruments. Anyone else see that?

ryevick

Dec-30-2011, 8:44pm

Just a heads up to everyone. Import mandolin prices are going to start climbing at a faster pace. All of the makers/distributors have been fighting to keep prices down this past couple of years but I think that is about over. Expect some instruments to go up significantly (as much as 50%), and others to climb slowly with more frequent small increases. Some domestic instruments will be going up as well. :crying:

How soon is this happening? I'll be there in a couple of weeks ;)

ryevick

Dec-30-2011, 8:48pm

Hmmm... buy a few now... sell later :cool:

gimble01

Dec-30-2011, 9:20pm

I think we may start to see "tiers" by the Mandolin makers. Sort of like the Fender company has, there are so many strats now it's hard to keep up.
Maybe "The Loar" will have different 600 models (squire) up to (the monroe artist model) Lesser grade woods etc. on the lower models with the better appointments on the top models.

mandobassman

Dec-30-2011, 10:49pm

I suppose also,that it's unreasonable to expect the 'Pac-rim' countries to go on working for relatively low wages all the time either.Whatever we think of those countries & their systems of government,they're entitled to a decent standard of living.

You're right about that, but you have to wonder if the workers who built these instruments will really benefit from a price increase or just the management. I don't think the Chinese are all too eager to hand out wage increases.

Stephen Perry

Dec-30-2011, 11:05pm

The cost, regardless of where it originates exactly, ex-works has been rising steadily for Chinese exports. Transportation costs haven't decreased any. Overhead in the US hasn't gone up too much.

I know a couple of importers who kept market share through the recession by not making any money as the costs crept up. Now they're having to raise their prices or go out of business. I'm thinking this has driven some of the price increase. But the scale of some of the increases leaves me thinking that there's a distinct cushion on top of the cost increase ex-works.

We'll just see what happens to demand as the price rises. Certainly I'll change my buying/stocking pattern in response.

Dave Weiss

Dec-31-2011, 12:06am

It occurs to me that the imported mandolins have finally reached the quality level to command a higher price. The imports have long been regarded as "cheap junk", but they keep getting better and have reached a quality level that rivals the "better" American made instruments. We read that daily on this site. Even with a substantial price increase, they will still cost less. The "Pac-Rim" manufacturers have paid their dues and are finally going to be rewarded for their efforts. I don't think this has as much to do with supply and demand as it does getting the most for our hard earned dollars.

Ivan Kelsall

Dec-31-2011, 3:16am

Larry - Despite the Chinese still being a 'Communist' country,they're certainly all too ready to make money where & when they can.When Great Britain handed back Hong Kong to China several years ago,China decided to leave things pretty much as they were,because Hong Kong was like money in the bank to them. Dismantling trade agreements & conditions etc.would have proved possibly disastrous for China - leave well alone & keep taking the money - Communist they maybe,but stupid they ain't !. I can't see any Chinese company NOT wanting to make as much money as they can,providing that they don't price themselves out of their own market niche.
Taking up the point that Almeira raised re.'defects'. I'm sure that the Chinese build all their instruments to be as good as they can be.Yes,there are some superficial deffects on some (i've seen a couple of well known Chinese Mandolins that weren't too good on the cosmetic side),but i can't help feeling that that will always be so in a factory that will still be building 'down to a price' to a great extent. Simply because the prices increase,doesn't mean that the defects will disappear,unfortunately.
How much of any price rise will actually get through to the individual builders,i couldn't guess,other than it probably won't be much. Right now with price hikes imminent,it's going to be the companies / builders who can hold their prices down (to a degree), & maintain their quality & service,that are going to come through. I also hope that 'used' instruments will come to be seen as the bargains they usually are,especially if you take a look at the current list in the 'classifieds'. I've often thought that only the distance apart of sellers & their prospective buyers & the shipping arrangements / costs, keeps more instruments from being sold.Maybe that will change ?,
Ivan;)

Bob Scrutchfield

Dec-31-2011, 4:48am

IMHO it seems to be a simple supply and demand issue. At any given time in the last year almost all of the U.S. dealers of Kentucky, Eastman, and The Loar mandolins have been "out of stock" in their various models. Most of the dealers that are featured here on the Cafe have had wait times to receive their stock. I think a lot of times the ones they did received were already pre-sold to buyers.

It all seems to indicate that there has been a growing number of buyers around the world drawn to purchase the solid wood, carved, pac-rim mandolins made by the well thought of- "big three" builders.
These pac-rim companies have built good reputations over the years and people see their mandolins as very good values at the current price points. I guess they're betting that sales will continue to grow reguardless of the price increases.

John Adrihan

Dec-31-2011, 8:34am

You're right about that, but you have to wonder if the workers who built these instruments will really benefit from a price increase or just the management. I don't think the Chinese are all too eager to hand out wage increases.

That's all im saying - The price increase is not going into the pocket of the guy carving them.

fatt-dad

Dec-31-2011, 8:42am

China doesn't have future workers in the cribs. U.S. does. Eastern Europe does, India does, etc.

Thankfully, i'm not shopping.

f-d

kaybone

Dec-31-2011, 9:02am

With cheap labor and good wood, I expect to see African instruments make a strong appearance at some point.

Yes, and this comment really struck me as a banjo player also! There would be some sort of full circle-cosmic justice to banjos being manufactured in Africa, where they came from to begin with!

. . .will the circle be unbroken, by and by lord, by and by

This thread also makes me glad I pulled the trigger on my 1st Mando a few weeks ago - a beautiful Weber Yellowstone Trad. F.

Folkmusician.com

Dec-31-2011, 12:36pm

The single biggest reason for the difficulty in getting instruments is labor related. There are constant strikes and issues. Not just with the instrument makers, but throughout the chain. I only pay attention to the instrument side, but I am sure it is the wood suppliers, saw mills, the truck drivers hauling the logs, the loggers, the guys supplying the chain saws, etc..

Most of these top import brands have Americans living in China and also guys that fly back and forth on a regular basis. In talking with them, it is not a problem getting instruments made. it is a problem getting good quality instruments made. The labor force is now demanding higher wages (which is perfectly fair) and willing to strike for it.

This has all been coming for a few years now. Surpluses are mostly gone, everyone has been cutting costs and trying to absorb the increases in the cost of doing business and a lot of companies (from factories to retailers) have went under (liquidating inventory and keeping prices down).

Despite what some of you may think, the dealers will be hit hard from these increases. I expect to be.

Anyway, I didn't want to spark off a political/economical debate. Obviously this is based on the economy, but the point is that I have seen the 2012 price lists and talked to a few of the guys in the know about the foreseeable future and am passing the word on. Most of the brands of mandolins will start to see price increases accelerate. Some are kicking off with an immediate LARGE increase, others will be more gradual with small increases spread out over time.

Scott Tichenor

Dec-31-2011, 12:42pm

This is simply economics playing out. It creates competition and change and that's good for the health of the industry. May not fit everyone's business model but putting all the eggs in one basket always carries risk.

Suddenly the concept beind the Lafferty Mandolins is looking like a pretty good decision. Will be interesting to see how it plays out and if others follow suit. Have talked to a few prominent luthiers who think this might prove to be a solid business solution for some builders who are tooled properly and have the capability.

Jeff Budz

Jan-02-2012, 7:43am

I don't think you are going to sell a lot of MD515s for $1499 new - people will go towards the used market or jump up to entry models from US small shops. $1099 is reasonable, I'd like to see the new prices. I've got me a 515 I will sell eventually, perhaps I'll hold on for a while.

rgray

Jan-02-2012, 8:05am

Brent Hutto

Jan-02-2012, 8:09am

Exact models and prices aside, wouldn't both used prices and American-made also increase?

As surely as night follows day.

yankees1

Jan-02-2012, 8:17am

Exact models and prices aside, wouldn't both used prices and American-made also increase? As surely as day follows night! :)

Mandobar

Jan-02-2012, 9:24am

it will take about 18 months, but you will see the prices steadily increase on used instruments. look at the price of used cars. that said, people might be more apt to keep what they have as the price of getting into something else might be prohibitive economically.

bluemtgrass

Jan-02-2012, 11:39am

Seems counterintuative to believe that prices will drastically rise anytime soon. The doom and gloomers are spouting that the world ( read that to include China and the U.S. ) will be entering at a minimum a continuing recession and at worst a full blown depression. Historically, prices drop like the proverbial rock instead of climb.
That said, that type of history obviously doesn't apply to health care premiums like mine that rose 23 percent for 2012 with less coverage and higher deductables. But that's another topic.

:confused:

Mandobar

Jan-02-2012, 12:43pm

Manufacturing costs are driven by labor costs. Labor costs are tied to food prices, health care and other consumer costs. Economics, it's all economics.

More than likely there will be companies that fade away and new companies and product lines will emerge. The timing on Lafferty is well placed. Bravo to Dennis and company.

Mandobart

Jan-02-2012, 1:45pm

Many of us are used to seeing gadget prices continue to drop (TV's, DVD players, computers, etc.) This can make us think that as technology advances the price of things in general should drop. However, this only holds true for common goods in very high demand that virtually everyone needs, buys and replaces periodically. Walmart makes their money more on high volume than on reaching the max price the public will bear for each item. Other companies make their money on a lower volume of higher quality items. Some base their model on providing on-going service. The more an item shifts from necessity to luxury the harder it is to compete in the market, especially given the current world-wide economic downturn.

We should remember that musical instruments, and especially mandolins, are a fairly low demand item (when compared to autos, refrigerators, TV, etc.). The market is fairly limited, and its hard to make a lot on selling volume (although that has been the historic niche of many of the Pac-Rim imports). And contrary to how many of us on this forum feel (myself included) a mandolin, especially another mandolin when I already have a few, is not a necessity. So the people who manufacture these instruments, wherever they are, are trying to balance their product within the standard volume/quality/service and price model and still make money selling a discretionary (vs necessary) item.

I'm glad I just make electricity (for a public power company); no one is going to stop using it and we don't have to make a profit.

OldSausage

Jan-02-2012, 2:32pm

Manufacturing costs are driven by labor costs. Labor costs are tied to food prices, health care and other consumer costs. Economics, it's all economics.

But the selling price is also influenced by the ability and willingness of the market to pay, and a host of other factors. If we were able to predict price fluctuations simply, we could all pay for our mandos with the fortunes we would make on the stock market. My advice is to take any prediction of the future market for any commodity with a pinch of salt, and bear in mind that very unexpected things happen surprisingly often.

Mandobar

Jan-02-2012, 2:42pm

Which is why some companies will not survive this wave. You'll see instruments from other countries of origin (more than likely of lesser quality until they reach the level of QC that the current companies sustain) under new brand names being marketed. But prices will not decrease. There's no way these companies can decrease their costs. When you see computers and tv's decrease it's due to materials costs decreasing. If someone has an idea as to how to use materials costs to make mandolins and retain quality they will become the market leader.

If the market won't pay, then the companies will fold. You can't run a company in the red for long and china's labor force is demanding fair pay, working conditions and health care coverage.

bluemtgrass

Jan-02-2012, 5:23pm

If the market won't pay, then the companies will fold. You can't run a company in the red for long and china's labor force is demanding fair pay, working conditions and health care coverage.

Well..... requesting it maybe. Remember Tianemen Square ? As the saying goes, " Seeing's believing. "

:disbelief:

yankees1

Jan-02-2012, 5:30pm

As the economy improves over the next few years, I think you will see price increases on various products ( including handmade instruments) as prices have been held steady for several years now due to the poor economy.

Dave Weiss

Jan-02-2012, 5:41pm

I doubt that we'll see any of these companies "fold". As hard as this might be for "us" to believe, mandolins probably aren't a huge percentage of their business... They may cut back production, but nobody's gonna lose any sleep over it and we'll keep buying their mandolins. They're matching quality and still lower priced than their American counterparts. I'm happy with what I've got, but if I was starting all over again today, I'd be jumpin' on one of those new Kentuckies (even with the price increase).

Mandobar

Jan-02-2012, 6:17pm

http://www.guardian.co.uk/world/2010/jun/17/china-strikes-economy

I've been reading about this for a while. So, what we are hearing is very true. The news is out there, just not in forefront of our news world.

Only time will tell what the overall impact will be.

Btw, Collings will have no price increase this year.

northfolk

Jan-02-2012, 6:32pm

It seems that most of the mandolins; imports and domestic have taken a slight to major price increase? Possibly due to import tariffs and economic stress in this country? Just about everything has gone up in price lately? Like so many other things, this may be the new normal? ~o):mandosmiley:

Josh Kaplan

Jan-02-2012, 6:59pm

On the flip side, I noticed recently that Larry Hopkins, the southern Indiana luthier (http://www.redmapleshop.com/) who made my mandolin, has lowered the price of his mandolins, guitars, and violins from $2,000 to $1,600. I haven’t asked him, but I assume he is hoping that the price reduction will stimulate more sales.

No financial interest on my part, but he is an innovative builder who has made some great instruments. I hope this turns out to be a good decision for him.

-Josh

Bob Scrutchfield

Jan-02-2012, 9:29pm

I sure didn't know there was a Chinese labor movement going on until I looked it up. I follow the news and have never seen anything about it on any Cable or Network news here. I didn't know they had a minimum wage of $920.00 per month either. I wouldn't have thought they even had a minimum wage. I guess I need to read more and keep up.

http://www.cbsnews.com/8301-503543_162-20006402-503543.html

johnsoba

Jan-02-2012, 9:48pm

Good on 'em!

OldSausage

Jan-02-2012, 10:21pm

Yes, up the workers

almeriastrings

Jan-03-2012, 1:36am

I know someone who works in Germany, at one of the big tonewood suppliers. They sell a lot of nice stuff to the "higher end" Chinese violin producers. He tells me that the skill level of the Chinese workers in that plant has risen sharply over the last decade, and that they have also invested in high quality tooling and finishing technology. Where once it was literally a home-made spray booth with no safety measures, now, it is as good as anything you'd see in the US or Japan. Those workers are now highly skilled, not just cheap semi-skilled labour. And.. of course... they are not stupid! They know it. That same company was making violins 40 years ago, but just cheap 'school outfits' sold to raise (then) badly needed foreign currency. The materials were poor, the finish looked like it was put on with a fence brush. Now, they make some really fine instruments that even serious players take a long hard look at... they demand high quality woods (and are prepared to pay or it), they have a very modern plant, and skilled workers who want to be able to buy new TV's, computers, and afford nice vacations....

Times change. As someone else said, genuinely "low cost" production bases are getting thin on the ground.....

Mike Romkey

Jan-03-2012, 1:39am

Interesting subject, as always. You get what you pay for. Mandolins are labor intensive and thus expensive. The old Gibson oval As are a tremendous bargain, IMHO. Not sure why someone would buy a Pacrim F over one of those. if the cost of Chinese mandos go up and more people buy Old Waves, that's ok with me. Rather than rush to buy an import, why not buy a Ratliff? While rising prices tend to rise across the board, some bargains are more perceived than actual.

Steve Sorensen

Jan-03-2012, 2:27am

FYI - From the BBC Oct 2011 --

The city of Shenzhen, next to Hong Kong, guarantees the highest minimum wage of 1,320 yuan ($207; £130) a month.
Beijing offers the best hourly rate of 13 yuan ($2).

Still a big gap to be filled compared to US labor.

almeriastrings

Jan-03-2012, 3:01am

The old Gibson oval As are a tremendous bargain, IMHO..

True, but only if you like the oval-hole sound and that type of neck...

John Adrihan

Jan-03-2012, 6:18am

Just wait until if there is ever a "Bil Monroe" movie. $$$UP

Mandobar

Jan-03-2012, 7:40am

Steve, you need to compare it all to their cost of living. It's better than 35 cents an hour. They've come a long way and so have their instruments.

greg_tsam

Jan-03-2012, 9:59am

As different parts of China have very different standards of living, China does not set one minimum wage for the entire nation. Instead, the task of setting minimum wages is delegated to the local governments. Each province, municipality, or region sets its own minimum wage in accordance with its own local conditions.

http://en.wikipedia.org/wiki/List_of_minimum_wages_in_China_(PRC)

So if the chinese mandos are priced at $300-$3000 when their MONTHLY minumum wage is between $78-$208 how much would Northfield have to charge if they payed equivalent USA wages? $10,000?

greg_tsam

Jan-03-2012, 10:01am

That's assuming all chinese mando shops pay minimum wage.

almeriastrings

Jan-03-2012, 11:00am

Their better violin/viola/cello shops don't. Well above it. With extra benefits on top.

Big Joe

Jan-03-2012, 9:11pm

Ok, the KM 1000 Kentucky is rising to 3K (USDollars). That is more than doubling the price. The Loar will see 10% or less increase. The cost to build both is very close to the same. Now the KM1000 will be 3 times the price of the Loar. Sure makes the Loar an even better bargain.

When I see a price increase like this it indicates they want to seriously decrease production, or eliminate the production without eliminating the product in case they wish to reprise it and re introduce it at a later point in time. This would not surprise me with these products. If someone would order one it is profitable enough to make it, but not have to maintain production. A price increase like this is not to cover increased cost of materials or labor... Or even profit. It is usually to decrease sales intentionally. Maybe they need to put the energy into guitars, which is a LOT larger market.

Brent Hutto

Jan-03-2012, 9:18pm

So are the Northfield and the KM-1000 going to be selling for approximately the same "street" price? Somewhat similar instruments experiencing pretty similar price hikes just a couple months apart. I guess these things run in cycles.

The list of F-style mandolins that can be reliably touted as outstanding value-for-money instruments is getting thinner. Not that either is a bad deal that price but certain they are no longer surprisingly affordable for what they are.

Nick Triesch

Jan-04-2012, 12:44am

The good news is that there are zillions of mandolins already built for the few of us that play them.

dcoventry

Jan-04-2012, 1:39am

If every mando player only had one, there'd be enough for everybody.

There ain't gonna be enough for everybody.......

rico mando

Jan-04-2012, 2:28am

If every mando player only had one, there'd be enough for everybody.

There ain't gonna be enough for everybody.......

I can barely remember what it was like to own only one mandolin. let alone only one instrument .

BradKlein

Jan-04-2012, 4:36am

If every mando player only had one, there'd be enough for everybody.

There ain't gonna be enough for everybody.......

We must stand up against the increasing calls for a 'redistribution of mandolins'. It's in the US Constitution people!

JEStanek

Jan-04-2012, 9:09am

Lets really NOT go there, people. There will always be less expensive imports for people to start on that a) hold tune and b) intonate reasonably well. They may not sound great but people can learn on them. If the very bottom end sees drastic price increases, I would imagine there will be fewer people who start playing as a hobby. I know I wouldn't have started if I would have to invest $300 vs the $150 (for the instrument and a set up) I probably wouldn't have started.

Jamie

Mandobar

Jan-04-2012, 9:26am

it's going to be interesting to watch the used prices of the mid-level instruments. i'm guessing that resale prices of these will increase, not at first, but within a year they will be harder to come by and more expensive. that range being $1500 to $4k.

BradKlein

Jan-04-2012, 9:43am

Sorry Jamie!

I really have no idea if import prices will rise, or quality will decline, or rise, or whether spider silk in epoxy resin will be the next big thing. I DO think that Americans are still blessed to have many of the 100,000 or so high-end mandolins that were made during the craze years of the first three decades of the twentieth century.

JonZ

Jan-04-2012, 1:26pm

When I hear about all of the great machinery the Chinese are investing in, it makes me wonder how anyone managed to build a decent mandolin back in 1924.

Schlegel

Jan-04-2012, 2:01pm

When I hear about all of the great machinery the Chinese are investing in, it makes me wonder how anyone managed to build a decent mandolin back in 1924.

Gibson was highly mechanized at the time, making extensive use of powered machinery and duplicating jigs. It was emphatically not a "hand tool" operation.

JeffD

Jan-04-2012, 2:22pm

Bob Scrutchfield

Jan-04-2012, 3:45pm

Eventually they will price themselves out of their market niche, making an opportunity for someone else.

Since nobody needs a mandolin, at any price, nobody is going to pay more than they want to pay.

I totally agree. If their prices exceed what people are willing to pay they will quicky price themselves out of the market.
The pressure will then be put on the used instument market which should push the cost of used instuments upward.

tkdboyd

Jan-04-2012, 4:02pm

Kentucky, Loar, Northfield, et al. may find themselves in some troubles when you can go to the Mandolin Store and get a new Weber F for under $2k. Or Weber/The Mandolin Store will just increase the price. Either way I think the increase to the higher $ import market, however needed due to transportation costs, labor, etc..., may make Weber, Collins, and some smaller boutique shops/luthiers just that much more desirable for the US consumer.

Dang, knew I should have put in an order for a Kimble...

OldSausage

Jan-02-2013, 10:47pm

Did this ever happen? It doesn't seem like it did to me.

Londy

Jan-02-2013, 11:07pm

I dont think so.

Beanzy

Jan-02-2013, 11:13pm

Not in the UK. I just checked Hobgoblin site & the KM1000 which used to be about £1600 with case is about £20 cheaper now with the KM900 having a £50 discount at the moment. One anomaliy I noticed is their KM1500 is £80 cheaper than the KM1000- is that normal?

OldSausage

Jan-02-2013, 11:20pm

No, it seems like that's a display model maybe? I agree, it seems odd.

allenhopkins

Jan-03-2013, 12:23am

I have the feeling that the factors edging prices upward, ran smack-dab into the still sluggish economy.

Retail sales around the holiday season were disappointing, and all the fiscal foofaraw kept the plastic in lots of people's wallets. Still likely to be increases in the future, but probably not until the growth rate picks up -- assuming it does...

OldSausage

Jan-03-2013, 12:33am

Unless something else happens.

mandroid

Jan-03-2013, 1:29am

Minimum wage is still minimal.

Clement Barrera-Ng

Jan-03-2013, 2:05am

I think prices did go up on some of the imports. If memory serves, a KM1500 was going for around $1500 at the beginning of the year, then crept up to $2k in mid year. Some of the other models also went up. Perhaps not by the magnitude that we thought they were going to, but prices did go up, and yes demand seemed to have dropped correspondingly, and some downward adjustments did occur in the last quarter.

With the payroll taxes going up for 2013, I'm starting to contemplating whether I should cancel my custom order or at least put it on hold, until I am more certain how things will pan out in the next 4-6 months.

John MacPhee

Jan-03-2013, 4:41am

All i can say is "Thanks, to the Australian Dollar" as i am a very proud Weber SE owner!
Happy New Year to All!
Cheers
Maccka (John)

Charlieshafer

Jan-03-2013, 6:45am

With the payroll taxes going up for 2013, I'm starting to contemplating whether I should cancel my custom order or at least put it on hold, until I am more certain how things will pan out in the next 4-6 months.

Might as well go for it.. taxes aren't going down for a while, if ever, and I doubt there's a serious rebound happening soon, more like a gradual roll up a handicap ramp, so if you can afford it now, why wait?

bluemtgrass

Jan-03-2013, 8:20am

:crying:
Might as well go for it.. taxes aren't going down for a while, if ever, and I doubt there's a serious rebound happening soon, more like a gradual roll up a handicap ramp, so if you can afford it now, why wait?

The dog and pony show is over in Washington ( for a while ) at least. Payroll taxes are again at what they were, only income taxes for you 2 per centers are going up, unless of course you're able to hide it. And if I was in the 2 percent tax bracket I certainly wouldn't be waiting for a mandolin purchase.

Why don't we all stand up and cheer for our duly elected officials that " saved us " ? :)) :mad: