Interesting dilemma...

Thanks for this - despite my former post I am about to consign a few instruments to a friend and endorsee of my instruments who I trust and who has just opened a really funky gallery/uke store in Northern Europe. I thought 25% was mean but now realise it is generous, so thanks for pointing me in the right direction.

The other thing I thought about is to build a different instrument that would go to dealers than what would go to a direct customer. Right now, I only offer a certain model to my dealer, but I thought I'd extend that to include some upgrades but not increase the price at the same rate. That gives the dealer a chance to sell something that the customer couldn't get from me, so the dealer could be more flexible with the price. All this of course is based on the good working relationship I have with my dealer. I'm grateful that my one dealer pays up front without hassle, so I tend to give him some good deals from time to time to keep him happy.

I don't have a dealer, but I have had inquiries, and they all want too much discount for a small builder to bear.
What I am going to speak of is the customer who wants to control the build.
I had one who sent me long lists of details, including several changes to the depth of the sides.
When delivered, at first he was super-happy, then quickly super-irate at a tiny discrepency, when the ALL CAPS EMAILS ENSUED!!!
I had him return the instrument, and refunded everything but the "non refundable deposit". Every builder should have a non-refundable deposit.
I've moved on, and the instrument has also moved on to a professional touring band.
Bottom line: There isn't enough money to let a customer buy your soul.

David Newton said:

I don't have a dealer, but I have had inquiries, and they all want too much discount for a small builder to bear.
What I am going to speak of is the customer who wants to control the build.
I had one who sent me long lists of details, including several changes to the depth of the sides.
When delivered, at first he was super-happy, then quickly super-irate at a tiny discrepency, when the ALL CAPS EMAILS ENSUED!!!
I had him return the instrument, and refunded everything but the "non refundable deposit". Every builder should have a non-refundable deposit.
I've moved on, and the instrument has also moved on to a professional touring band.
Bottom line: There isn't enough money to let a customer buy your soul.

Click to expand...

Thats why I don't build commision jobs..the worst nit pickers are the worst musicians...fact.

Don't forget that one of my points here is that you have to allow for the sales part of it all to be a profit center, too. If you can build a uke in 20 or 30 hours of shop time, how many hours do you think it takes to market and sell that uke? I'll bet it's at least 4, and those hours have to be built into the final price...if you're a pro. The sales hours cannot be recovered once they're gone, and you'd better be getting whatever your "shop rate" per hour might be for the sales job...after all, those are hours you could have spent building another uke.

Commission, and relationship with customers, especially customers who communicate with other influential people in the field is a great way of building rep. Being completely shielded by a dealer means that your name is solely spoken by your product, as being represented by the dealers. Word of mouth via direct relationship can be very powerful.

Yes the sales hours need to be included, and the hourly rate you figure your time is worth, needs to cover all shop expenses, including the ones you dont remember.

Pete Howlett said:

Thanks for this - despite my former post I am about to consign a few instruments to a friend and endorsee of my instruments who I trust and who has just opened a really funky gallery/uke store in Northern Europe. I thought 25% was mean but now realise it is generous, so thanks for pointing me in the right direction.

Click to expand...

My dealers in the UK work on 35 points

Are you being obtuse or ironic ChrisH - I don't understand your comment...

Neither.. my apologies for lack of clarity. Just stating a fact. In the US, 40 points is standard. In the UK, I understand it to be 35, as that is what I receive, and what the suggested retail/ wholesale margin is for products that I carry from the UK. Most dealers here want 40 points to carry an item, minimum. Art galleries, and stores that do consignment to individuals often want a larger cut. I have heard as high as 60%. I have had numerous experiences with dealers who want at least 40%, and do not really understand, or care to understand what it costs to produce, nor do they care about growing the upper end of an emerging market. For this reason, I have not been able to really build the full on, full blast amazing pieces, as by the time the dealer margin is put in, the price is WAY higher than anyone has ever paid for this product. Nor will they allow me to sell a very limited product direct. They want access to all products. Unfortunately this is a cost of doing business that just sucks. At the end of the day it is my choice to abide by their wishes, as life is better with dealers than without.

I did not fully understand your 25% number. If they are only marking up 25% that may or may not be good for you, depending on the retail cost.

When I fitrst started selling turntable plinths, I did not include a dealer margin, to a retail price that was already higher than anyone had previously paid. After several years of this price point, including a gentle nudge higher, it still remained too low, but is acceptable, as there are now 2 higher tiers, and they have the correct margins. Six years in, I am nearing an adjustment to the correct level for all tiers. All three tiers really needed to be even higher to allow for distributorship level. Raising the prices after established, needs to be done very carefully to avoid shocking the market. As someone previously posted, not including a dealer margin is committing business suicide, that is almost absolute fact.

Like this...

The consignment deal that I am looking at is that I set the retail price and the store gets 20% as their sales commission. They aren't marking it up. The dealer that I sell to is a whole different arrangement. He prices them however he wants. Sometimes they are above the listed price on my website and sometimes below.

Just make sure you do get paid! My dealer "pal" is now promoting another luthier's spruce and rosewood ukes without having paid for one we supplied 16 months ago that sold through... I'd be happy with modest payments at this point, but so far nothing...

HI guys,

speaking as a guitar dealer, if you don't take care of your luthiers, it is a sure fire to find yourself short of stock. I used to pay all upfront for an order which would give my luthiers some breathing space and I have to say that most of the time, I've been treated very well by them, sometimes finding a nice extra option included no charge or maybe getting an order completed earlier.

With the crash that was changed the equation- (doesn't it always?) but we're still trying to work it out together. But I can see if I had huge overheads and a store to keep in the black, mouths to feed, how the temptation to hold payments, and keep mum would be very strong.

When commissions get thin I will build "on spec". All my ukes have been on spec and have sold well.
It is the opposite for guitars, where I mostly have commissions, and spec guitars sit around longer, where prices are higher.
I pick my customers better now days, and discourage those who want to tell me how to build.
I'm a terrible business man, I try not to count shop hours, except on repairs.
I count groceries, if there are plenty of groceries, I must be doing OK in the shop.

Rick Turner said:

Just make sure you do get paid! My dealer "pal" is now promoting another luthier's spruce and rosewood ukes without having paid for one we supplied 16 months ago that sold through... I'd be happy with modest payments at this point, but so far nothing...

Click to expand...

Actually, as strange as it sounds I owe my dealer money. I sold him an instrument about six months ago and he wasn't getting any hits on it, so I offered to take it back and swap him even for one that was close to being finished. Before I got it finished, I got a call from a guy that saw the in progress photos on my site and wanted to buy it. I ended up being the middle man between the customer and the dealer. I had the customer send me the money since I offer a three day approval period. The dealer never even saw the finished instrument. I just got confirmation that the buyer was happy with it, so I'm sending the dealer a check this week.

As an aside, this dealer sells online and has never taken possession of any instrument he has bought from me. He has me hold them and ship them direct to the customer. That way it keeps the shipping costs down. I guess I don't really have to worry about not getting paid.

It sounds like RT will get paid.

nongdam said:

It sounds like RT will get paid.

Click to expand...

Looks like it,...except all the posts relaying that fact seemed to have disappeared?????

Frankly, i found it rather disingenuous for Rick to claim no intention of "outing" anyone in this thread, yet mention it's the same uke warrentee work was done on and was the one recently for sale in the marketplace. That "for sale" uke had links to the original seller in youtube videos,.......so NOT rocket science for us all to figure out who the dealer was.

......and we would be right.

I mention this only because it was Rick who assumed the ukes i once had listed in my signature were the ones i had discussed in posts relaying some genuine issues.

.....and he was dead WRONG!

I intentially kept out the builders names in those posts, and as i've pointed out previously the ukes in my signature were simply my favorite ukes. Yet Rick was relentless in portraying me as wrecklessly degrading the reputations of a few builders listed in my signature at that time. So much so that the entire thread was deleted by the mods.

Funny how things work out. At least here only a few posts were deleted.

joejeweler said:

Looks like it,...except all the posts relaying that fact seemed to have disappeared?????

Frankly, i found it rather disingenuous for Rick to claim no intention of "outing" anyone in this thread, yet mention it's the same uke warrentee work was done on and was the one recently for sale in the marketplace. That "for sale" uke had links to the original seller in youtube videos,.......so NOT rocket science for us all to figure out who the dealer was.

......and we would be right.

I mention this only because it was Rick who assumed the ukes i once had listed in my signature were the ones i had discussed in posts relaying some genuine issues.

.....and he was dead WRONG!

I intentially kept out the builders names in those posts, and as i've pointed out previously the ukes in my signature were simply my favorite ukes. Yet Rick was relentless in portraying me as wrecklessly degrading the reputations of a few builders listed in my signature at that time. So much so that the entire thread was deleted by the mods.

Funny how things work out. At least here only a few posts were deleted.

Click to expand...

Really Joe, can't we just move on from that? This thread has nothing to do with that and is between you and Rick. Let it go. Please.

Canoe Lady said:

Really Joe, can't we just move on from that? This thread has nothing to do with that and is between you and Rick. Let it go. Please.

Click to expand...

Rick's claim to not wanting to "out" the dealer scenario DOES have have relavence to his claims wrongly made at that time. It's the same deal, except that in his case he did out the dealer whereas i did not.

If you're going to call somone out on a point (even if dead wrong in the assumption), don't expect to get a pass when you actually do the act you had an issue with.

Canoe Lady said:

Really Joe, can't we just move on from that? This thread has nothing to do with that and is between you and Rick. Let it go. Please.

Click to expand...

Really, good advise, let it go!!! I thought it was pretty classy that Rick did not mention the dealer and I'm not going to waste my time trying to connect some dots to find out who the dealer was and really, I don't care. I do care and hope that Rick gets paid.
terry harris