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Permalink Reply by ChickenboneJohn on April 26, 2011 at 7:09pm

If you mean how do you put a price on a guitar you've made, with the intention of a selling it ...that is the most difficult thing about making guitars for sale. The final selling price is determined by how big your cojones are..the bigger they are, the more you'll be able to charge. I've not managed to work this out onto a precise mathematical formula yet..but something along the lines of ...

 

P = (m + (h x r)) x s

 

where

P = selling price

m= materials cost

h = hours spent

r = hourly rate

s = size of your cojones relative to the average for the adult male population (female builders have to use the variable vs...which is the "virtual cojone size" factor. 

 

This replaces the conventional 1/3 material, 1/3 hour, 1/3 profit formula, which is negated in this marketplace due to the distorting effects of the SoP (Strangeness of Product) effect.

 

NOTE: Typical values for s (and vs) ranges from around 0.33 for the inexperienced and naive, which will result in a very low selling price and zero (or negative) profit margin, to around 3 (although values for s approaching infinity have been observed in the marketplace) which will result in staggeringly high prices and the general feeling that there must be something in it if they are so expensive (or the question "Why am I being ripped off for a stick and a box?"). However, research tends to indicate that the buying public will adopt the "Goldilocks strategy" and go for the product that is neither too cheap nor too expensive, and settle for something that feels "just right".

 

 

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Permalink Reply by Slowpaw Steve T on April 26, 2011 at 7:41pm

I averaged out the basic building costs for one of my builds and came out with some surprising results..

 

x1 11"x 6" x 2.5" Cigar box @ 5.00 GBP +shipping from USA 16.00 = 21.00 GBP

x1 Oak neck @ 7.50 GBP

x1 Fretboard @  12.00 GBP incl.shipping

x1 Humbucker pickup @ 15.00 GBP incl. shipping

x1 Set of tone/volume controls @ 15.00 incl. shipping

Fittings incl. fret wire, strings, jack socket, tuners, tailstock, varnish, glue = 20.00 GBP

Man hours  @ 10.00 GBP per hour x 20 total building hours incl. planning and prep. = 200.00 GBP

 

Total cost........materials 90.50 GBP

Labour.............200.00

 

Total 290.50 GBP

 

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Permalink Reply by The Phrygian Kid on April 26, 2011 at 9:14pm

im with chooky bones..

Steve your right too, theres no hourly rate in it unless you work in batches..

forget about doing it for money, its a fools errand..

once you been doing it a while and you got twenty or thirty in the lounge room and youre getting hungry a price is an easier thing to reach..

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Permalink Reply by ChickenboneJohn on April 26, 2011 at 9:51pm

I can turn a profit on this, but I look at my materials costs very strictly, and I've got pretty efficient at building guitars. I'm often sourcing stuff in bulk (20-30 boxes at a time, a quarter or half a tonne of timber per batch, trade accounts with parts suppliers etc etc), and I'm pretty well tooled up so I can, at a push, do one or two of guitars a day on a regular basis. It's not so much a fool's errand, but if you do want to earn money, you need to be totally realistic about your time..it's easy to be a busy fool. Whatever you do, have fun with it...I reckon most folk getting into this don't count the cost...there's more to it than that.

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Permalink Reply by The Phrygian Kid on April 26, 2011 at 10:01pm

haha yeah fair enuff boss, not calling you a fool by any means..  :D

i make a quiet buck from em too, but you're spot on, its volume, you gotta buy in bulk, fretwire, tuners etc, also really, you gotta work in batches..   I finish em up individually, but if im cutting fret slots i do several, if im slotting headstocks, i do several etc etc..   the time is in the tooling up and cleaning up

 

ps i do strummers in tins for au$200, and my 3 pair jobs for au$350..   they sell real easy IF people can hold em, hear em with their own ears, feel em in their hands..   i find it very difficult to convey the quality properly with photos or video etc so i'll never get those kinda bucks for em online i think..

I started selling guitars by just taking a couple to a busy place like a railway station or shopping centre and playing them until people ask.   If you play pretty good you might be surprised how quickly that can happen.   I sold quite a few that way then i started putting them in guitar stores on consignment.  Most guitar stores will be happy for you to put one or two if your pricing is realistic.   The ones i deal with take 10% which i think is more than fair.   They sell always within a month but sometimes much quicker than that.   The best guitar stores are the ones in the bohemian neighbourhoods, where the artists and creative types and homosexuals all live, rather than out here in white bread suburbia.  I think you really want to build at least 10 or 15 guitars before you start selling them,. keep those early ones as humblers and reminders of past mistakes, believe me, a year from now you'll be glad your first couple arent out there somewhere with your name on em..

 

if you know any gigging musicians, especially who do rootsy kinda music, give them one..   Lotta sad old guitar tragics go hassle the performers about their gear, ifs hes got some business cards or if you set up a facebook page for em so people can find you with an easy to find name you'll get quite a few sales that way too

 

good luck with it

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Permalink Reply by Jon Pruett on April 27, 2011 at 9:07am

I had a little awakening to my under pricing recently.  I put a 3 string into a charity auction and set the value for $100. They put it on the silent auction table with a starting price of $30 with $10 big increments, and a "buy it now" option for $150. About two hours later there were $10 incremental bids from lots of people all the way up to $140 and the lucky winner took it home for $150 - and was happy about the price too. I could have sold 3 of them on the spot for $150 each.

 

The message I took home was I need to stop paying myself minimum wage and stop selling short the creativity and talent aspect of this hobby.    And increase that "s" factor in ChickenboneJohn's formula too. :)

 

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Permalink Reply by colin mcgrath on April 27, 2011 at 4:29pm

The best formula I have seen is this*: Acoustic, 1-3 strings with low cost hardware sells for $50-$75**

                                                     Acoustic/electric (piezo) 1-3 strings w/low to mid grade hardware $75-$120**

                                                     Acoustic/electric, electric (pup, or combo) 3-6 strings w/mid to upper grade hardware

                                                     $120-$200**

                                                     Solid electric (pup) 6 string top shelf hardware $200 and over**

                                                     If you throw in a case add $30-$50 depending on the case

 

*just the cigar box bodies

 

**All prices subject to raise on sellers discretion.

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Permalink Reply by JonBouye on April 27, 2011 at 4:57pm

I was gonna reply to this yesterday but was called away and didn't get back before some of you had already posted. In that time away I thought of several ways to put a price on CBG's.

You could get printed price tags made, or buy blank tags and a good Sharpie, but that would just cut into the profits. The cheapest way is just use the Sharpie or whatever is handy and mark on a piece of masking tape and stick it to her. You could even put a high price on the tape...draw a line through it and list the markdown below it if the masking tape is big enough. But when I read some your answers here I realized the correct answer was about setting the price for the items and not just putting them on the gitboxes.

You know at first, I thought that was really simple question with an obvious answer. But I'm still learning and just want to share some of the things I do know a little about. Guess I'll have to put this one in the Duh Journal.

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Permalink Reply by Jon Pruett on April 27, 2011 at 5:05pm

LOL!  I love it!  In this spirit I'd say write the price on the back of your business card, punch a hole in it, and tie it to the headstock.  :)

JonBouye said:

I was gonna reply to this yesterday but was called away and didn't get back before some of you had already posted. In that time away I thought of several ways to put a price on CBG's.

You could get printed price tags made, or buy blank tags and a good Sharpie, but that would just cut into the profits. The cheapest way is just use the Sharpie or whatever is handy and mark on a piece of masking tape and stick it to her. You could even put a high price on the tape...draw a line through it and list the markdown below it if the masking tape is big enough. But when I read some your answers here I realized the correct answer was about setting the price for the items and not just putting them on the gitboxes.

You know at first, I thought that was really simple question with an obvious answer. But I'm still learning and just want to share some of the things I do know a little about. Guess I'll have to put this one in the Duh Journal.

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Permalink Reply by Keni Lee Burgess on April 28, 2011 at 12:03am

A little market research like searching on ebay (especially completed auctions) or googling to find vendors selling similar items will help you to understand what the market will bear. What are customers really willing to pay? If as a builder, you can produce an instument at a lower cost for the  same quality or offer superior craftsmanship and/or better building materials this will give you an edge above the competition. I hope this helps. Enjoy, Keni Lee   

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