Question about Luthiers' interactions with commercial guitar sellers

[gerberguitars]

Originally Posted by justonwo

That is about normal for a retailer that buys something at wholesale, takes inventory risk, deals with the cash flow of carrying inventory, etc. However, if you ask me, it's an obscene percentage if the retailer is simply consigning the instrument. The other big issue with the consignment model is that the retailer isn't motivated to sell as they would be if they owned the inventory. This means the builder and their dealer are somewhat at cross-purposes.

Very good points Juston, thank you for stating your position. I agree 30%-35% for consignment is obscene as you say. I would say something around 20% is reasonable for consignment.

There are good shops out there who are reasonable, and those are the ones I want to work with.

[Jeff Mc]

Kind of on the same topic - what is the deal with builder slots that dealers like Dream Guitars offer? They may be $x,000 for say a 2024 slot for a builder with a long wait list. Is this just an increased deposit or an additional cost?

[Merlemantel]

Originally Posted by Jeff Mc

Kind of on the same topic - what is the deal with builder slots that dealers like Dream Guitars offer? They may be $x,000 for say a 2024 slot for a builder with a long wait list. Is this just an increased deposit or an additional cost?

I am curious too. Why not go directly to the luthier? Does this get you in the queue quicker, so you pay a premium for that? Does the luthier have some pre-arrangement guaranteeing so many slots to get some kind of preference or deal? What is going on there?

[SiliconValleySJ]

Originally Posted by Merlemantel

I am curious too. Why not go directly to the luthier? Does this get you in the queue quicker, so you pay a premium for that? Does the luthier have some pre-arrangement guaranteeing so many slots to get some kind of preference or deal? What is going on there?

My understanding in talking with a couple of builders is that they go with dealers for exposure and marketing, as well as some financial stability. Dealers often have client networks that a starting out builder just isn't going to have. The dealers end up guaranteeing them builds (like 1 or 2 per year), which is significant when a builder has a few dealers they do business with... some solo luthiers are only building 10-15 guitars a year, so knowing that 25-50% of their income is basically guaranteed helps a lot--enough to take a haircut on the dealer commission.

And yes, the dealer's build slots do allow you to jump the line normally.

[Merlemantel]

Originally Posted by SiliconValleySJ

My understanding in talking with a couple of builders is that they go with dealers for exposure and marketing, as well as some financial stability. Dealers often have client networks that a starting out builder just isn't going to have. The dealers end up guaranteeing them builds (like 1 or 2 per year), which is significant when a builder has a few dealers they do business with... some solo luthiers are only building 10-15 guitars a year, so knowing that 25-50% of their income is basically guaranteed helps a lot--enough to take a haircut on the dealer commission.

And yes, the dealer's build slots do allow you to jump the line normally.

Makes total sense.

[iim7V7IM7]

Something for young luthiers to consider....

When you give up a 20% commission to a reseller/dealer, every 5th guitar you send to them is for free.

Yes, resellers offer some financial stability to a luthier, some insulation from time spent at clients and some global reach that they may not have had without them. For clients/customers sometimes a dealer slot allows them an opportunity to jump a wait list queue.

There is one talented younger builder who I admire who has their guitars listed is 3 dealers in the US, 2 dealers in Japan, 2 dealers in China and dealers in Europe, Korea and Singapore. A solo luthier providing guitars whose work I admire to 10 dealers (even if they provide the dealer a slot or guitar not every year) is not a good business plan IMO.