Health of Ukulele Business

[ailevin]

I remember last Fall and early this year, it was hard to find a Kamaka in stock anywhere. We were on a waiting list for a tenor for several months. I just looked at TUS and they had 53 Kamakas in stock and 19 of them were tenors, 22 if you count long neck tenors. I am not trying to be chicken little here and say the sky is falling, but is supply over taking demand? Are folks finding it harder to sell on the market place here compared to a year ago?

 

[eyedoc]

Yes,
the market is slow…
inflation, cost of gas and groceries with no more in the paycheck

 

[man0a]

I think there are a couple of issues here. During the pandemic, worker health and safety issues probably reduced the supply of new instruments significantly and that is finally sorted itself out this year. Second, over the past few decades, Japan has been a huge market for Hawaiian ukuleles, but the Japanese yen has devalued significantly against the US dollar over the past 3 years, making Kamakas much more expensive. At the same time, high quality Asian-made ukuleles are becoming more available, especially to other Asian countries. So, Kamakas are more available to US buyers now, but they will likely not get any cheaper because of the movement in Hawaii to pay workers living wages. Just enjoy the models that are now easier to buy and help to support the local economy.

 

[DJ Mango]

Easy Music Center in Honolulu currently has 58 Kamaka's listed for sale .

 

[keenonuke]

They've become way more costly, especially with any deluxe feature.

 

[TimWilson]

There are a lot of industries that saw a boost in business during the shutdowns who have seen declines (maybe MOST of them) since things have opened back up. Facebook's market cap has been decimated by the decline. Zoom too. Uber, Netflix, Patreon, you name it. Zuck actually said, "We assumed usage patterns would keep going up" --

-- but why would anybody think that? It's crazy. The world changed, and it didn't change BACK. It changed AGAIN, to whatever the heck THIS is.

As one of the many folks who never gave a second's thought to the ukulele before things shut down, and in fact picked it up to deal with the added stress I was feeling (as much from my previous job as "all this", tbh), I'm very aware that there was a wave of us. Cynthia Lin nicknamed us "qukes" for quarantine ukers, and I both love and embrace that....but if some of the biggest, most valuable companies in the world got hammered when things changed AGAIN (rather than changed back), then how could a bunch of tiny instrument companies avoid it?

Additionally, supply of raw materials got tighter during shutdown, then once builders could get supplies, they ramped up production to meet demand, which then promptly dropped. Ouch!

A lot of what we're seeing in the Marketplace is its own version of market correction: "Uhm, I have too many ukuleles." Yeah, you and Kamaka. I suspect a lot more folks than Kamaka feel into this dynamic, but I'm looking at the same sites y'all are, and it seems to have bit them harder than most.

I'm just guessing at all this, mind you, but looking across industries, the pattern is exactly the same, and, again, I don't see why we'd be exempt from it.

(This is probably a good time to remind y'all that I'm just talking here. I very much appreciate your gracious allowance of me speaking for myself sometimes without being the official voice of anything. In this, I am most surely not!)

Ohana is dealing with "all this" by opening a new custom shop to solve multiple problems at once: a smaller volume of built-to-order models at higher margins, that won't sit on shelves, and with a more local supply chain.

Kanile'a, confident in their supply chain and with a strong custom business already in place, moved down into the open space in their product line between Islander and the K1 with the Oha series.

Pono and Anuenue both went upmarket. I was especially struck by the stock Koa Bird from Anuenue, built in Asia, costing MORE than Kanile'a's Hawaiian-built 25th anniversary model announced this weekend! There's obviously the 25th Anniversary Platinum Edition still out there, although Kanile'a's own allotment of them is sold out, but I still think it's gutsy to be this aggressive, just as I think it's gutsy of both Pono and Anuenue to not leave the high end to the K brands and luthiers.

The moral: the rules of the old normal no longer apply. Doing things the same way is a recipe for disaster.

I think we're a long way from it all shaking out, but I think it's a buyer's market for a while longer.

 

[DJ Mango]

It may be a buyers market but I'm not aware of any shop in Honolulu selling Kamaka's below MSRP .
Don't know about the USA mainland .
Speaking of Ohana's new Custom Shop , I just posted a You Tube video I saw about it to Uke Talk and Ukulele Building .
Their builder says he was a mechanic in the army , has a degree in fine arts , worked part time at Ohana doing set-ups while going to college and started building ukuleles just a couple of years ago !

 

[eternal tinkerer]

Another factor with Kamaka in particular is that the brand announced a couple rounds of price increases over the last year or so. In addition to the apparent general slowing of the ukulele market, the same model Kamaka a couple years ago now lists for 20 percent more. So the sticker shock on brand new instruments is going to take some time for would-be buyers to wrap their heads around before they go back to buying them the same as they did before.

 

[badhabits]

The used market has certainly slowed. Re: Ks and TUS, they seem to come in batches/waves, so part of what you're seeing is their restock.

 

[TimWilson]

It may be a buyers market but I'm not aware of any shop in Honolulu selling Kamaka's below MSRP .

I don't think you ever will. Prices are going up because raw material prices are going up, and no amount of overstocked finished instruments will change that. There's actually not a ton of margin in these things.

There may well be a theoretical point where they have to sell instruments at a loss just to preserve cashflow, but I dunno. On one hand, I've yet to see that happen anywhere in the ukulele market. On the other, like I said in my essay (sorry about that! LOL), there's no real precedent for what we're seeing out there right now.

The place where you might find bargains is in the used market, but even that is only short term. I've also seen people decide to keep instruments more frequently these days, rather than sell for too low a price. I doubt that many of these instruments are being sold to finance medical treatment or food purchases, so sellers can wait. So the more likely result of slower sales is that fewer instruments might be offered, but we're clearly not quite there. The Marketplace remains one of our busiest forums, and people are definitely joining just to buy as often as they're joining to sell.

 

[hendulele]

The cost of living in Hawaii is always going to be higher than on the mainland, and the economy is driven by tourism as much as possible, so it may be less painful for a boutique maker like Kamaka to tolerate slower sales and not discount in-store inventory.

 

[Eggs_n_Ham]

I think there are a couple of issues here. During the pandemic, worker health and safety issues probably reduced the supply of new instruments significantly and that is finally sorted itself out this year. Second, over the past few decades, Japan has been a huge market for Hawaiian ukuleles, but the Japanese yen has devalued significantly against the US dollar over the past 3 years, making Kamakas much more expensive. At the same time, high quality Asian-made ukuleles are becoming more available, especially to other Asian countries. So, Kamakas are more available to US buyers now, but they will likely not get any cheaper because of the movement in Hawaii to pay workers living wages. Just enjoy the models that are now easier to buy and help to support the local economy.

I would think a glut of instruments on the market would be good for competition and prices would compete like the "old days" but they don't anymore. Prices go sky high; the question is for me, who sets the prices?

 

[don_b]

I don’t personally know 58 people who can afford a Kamaka. Everybody I know can afford a Kala.

 

[scrambled_eggs]

I don’t personally know 58 people who can afford a Kamaka. Everybody I know can afford a Kala.

True, however I know Kala has their own inventory problems. If we're worried about 58 Kamakas then what about the 58,000 Kalas

 

[hands_on_lanzon]

As one of the many folks who never gave a second's thought to the ukulele before things shut down, and in fact picked it up to deal with the added stress I was feeling (as much from my previous job as "all this", tbh), I'm very aware that there was a wave of us. Cynthia Lin nicknamed us "qukes" for quarantine ukers, and I both love and embrace that

raises hand...

A lot of what we're seeing in the Marketplace is its own version of market correction: "Uhm, I have too many ukuleles." Yeah, you and Kamaka.

... raises other hand.

i love the fact that i found the uke during the quarantine, i love the ukes i have, and i even love the ones I'm trying to sell. I'm lucky to be in a place where i don't need to sell 'em, but they are taking up space and not getting the love they deserve.

 

[UkeinPDX]

Quker here too! I recently wondered the same thing about the secondhand market... I've got a couple of Ponos listed locally that are really taking a while to sell here.... and seeing a couple of high end ones that are listed after many weeks.

 

[Futurethink]

Ummm… Christmas is coming. Walk into any BestBuy or Walmart and you’ll have a hard time walking through the store because of boxes and boxes and boxes of TVs and PCs and other miscellaneous stuff that won’t fit in the warehouse. Retailers order excess product to meet anticipated demand. Why should music stores be any different?

 

[Keith5523]

I think Tim is spot on. But I also think that when you're in retail and selling everything you can get your hands on that you can easily convince yourself that it will never end, and people will pay whatever. I think some of those price increases, on everything from ukuleles to groceries, were market greed. So we may not see routine discounts, but we may see some Big Sale Events Material prices went up because of demand. I think there can be market adjustment when demand lessens just like we saw market adjustment when demand increased. And I'm keeping my powder dry...

 

[Contrails]

On my recent trip to Kamaka factory tour they did mention that uke sales have slowed down worldwide and that dealers are not ordering ukes from them as often.

 

[Hoopoe]

Seems like it’s going pretty slow in the UU Marketplace, tempted to say it’s probably the same for new instruments too. Maybe I’m projecting, but it seems that the consumer confidence index is rather low in general, real estate, automobiles etc.

Saw some article a month or so ago, could have been Walmart that did some analysis which suggested that these new weight loss drugs have impacted the sales of food, but as some readers pointed out, it’s more likely that people are cutting down on everything because of inflation.

So yeah, not surprised demand for new and old ukes has slowed down, hopefully not projecting, others might have a different view.