I just had some quick quistions about the whole idea of marketing anything. CBG's, pickups, t-shirts, shoes.....you name it.......
Let's say that there is a product that you can purchase. This product has 4 different price points.
$30.00
$22.00
$8.00
$3.00
Now, you find out that you can make this product for next to nothing yourself, by hand. You can order the material that you need (wire, cloth, magnets etc) and make them. You can churn out 3 of these products yourself, by hand in about an hour. So, you have yourself this little side hobby /skill that you may be able to make a couple of bucks on. You don't want to charge people an arm and a leg, but you don't want to break yourself either....just a nice little side craft you can do to make a few bucks.....no biggie.
You see this product and look at the price points and think "Man, 30 bucks is insane, who would pay for something like that for that amount of money."
You look at the 22 dollar price point and think "Well, this is a bit better, but still high as a cat's back."
Then the 8 and 3 dollar price point you think " Okay, now that is way more resaonable, but I can make 12 of that same product for 7 dollars myself."
You do the math and think "Well, I can buy the material for 7 and sell each one of these products for at least a dollar, (making 12 items each) and still come out ahead. But, since you are making this product, by hand, you need to at least come up with a price point for your time and talent. So, you charge a $1.25 for your product......1 for the product and since you can make one of these things in about 10 mins, you treat yourself to 25cents.
But here is a bit of a catch. You still have these other price points running around from other company's that are making the same product. But, you are selling your items for way less, so you know that the consumer will see that your item is the exact same thing and think "Man, I am coming out ahead and I am saving money because I want this product, but I don't want to pay 30 bucks for it, when I can get it this cheap."
Where are the rules drawn out in the sand? Who says that you can make the same exact thing that Joe Blow down the street is making, for less? Is it all just fair in love and war? Would someone get in trouble if they found out a way to make something, that someone all ready sells, but just for less? A 2 liter of pepsi is a $1.50, but a RC cola is 50 cents.....they both are pretty much the same thing, a bit different taste, but in all reality, who cares if you can save that extra buck.
Is this what they call the american dream? Is this where the rules don't really tend to apply? I can make a single coil pick up, so can that guy, but mine is cheaper, they both sound the same way, his just has a different brand name....but you save money buying my product. The you have thos other guys that say..."Well, his has this going for it, or that, or I like him better, or his comes with this..." It all boils down to a choice that a customer makes. Back in the day, on the farms, if you could not make it with your hands, you really did not need it. This is where guys like the old blues men were born, they saw a need, or a want ( I want a guitar to sound like Son House) So they use what they had.....but then over time, improved upon it, improved upon it, and then Bam, flash forward till now, and look at all of the six strings we have.....but throw guys like us in the mix, and then people get a bit taken out of their norm, get interested and then start making CBG's for themselves.....that is a bit off the subject, but you get the point.
What I am saying is, it boggles my mind that I can make a product, just as good, if now better than the next guy, but how can I get a peice of the action so to speak...Where can I get my foot in and say "Hey, don't pay that crazy amount of money for that product, when I can sell you one for way cheaper than his, that is just as good."
I am not greedy.....really.....I have always just wanted to have a samll buisness on the side, just to do and gain a bit of a cash flow. Is there anything really wrong with that? If you enjoy doing it.....then you should be fine right?
Replies
Jerryrig240 said:
I have had people tell me I should sell my cbg's...but really, I don't think any of mine would compare to any out there on the market today...plus the tools, space, time....I just don't have it....I barley have enough time to build the one's I make for myself. And I tried the pick up winding, and I am to to the point now, it's just better for me to think less and just buy a pickup than to make one.
No, it's another craft/hobby that I have picked up here in the last month or so....and yes, I have made one of these items and sold it on ebay......posted the item for 1 dollar and sold it for $2.25......I made a bit of a profit in my eyes and it does not take me long to make the item....okay, I will go ahead and tell you what the item is.....just google paracord bracelet's, or survival bracelet's....nuff said.....you will see.....I just wanted to make sure that I was in the clear for selling these items, I quickly learned that I was, since there are ton of people on ebay that are selling the same thing, for a lot more and sometimes a lot less.
Thank you again for all of your time and advice....
There is a lot to discuss in the above paragraph and perhaps even a few points I could argue about. One of the first things you are missing in your analysis is the concept of branding. Fundamentally what you are selling is "you". Establishing yourself takes time and work. Once you get past the materials cost equation, you will want to factor in what it will cost to get the word out. Word of mouth works to a point but takes time and more work. Are you willing to do all of this for free? I wouldn't be.
The concept around selling something that is the "same" can have more than a couple of pitfalls. Sure, you'll find some if not many that will buy only on price (to a point). The real money and success is appealing to the emotional choices musicians make.
If you make a pickup that you make $1 profit after material costs and I sell one that I make $10 on, the math on profit vs effort is pretty easy to understand. You have to sell 10 to make what I'll make on one. If I make and sell 10, I've made 100 times more profit than you. The effort I need to put into selling 10 pickups will be child's play compared to what you will need to go through to sell 100. Take a really good look at the size of this market place. How many pickups do you think this market is ready for? How many members are in this community? What percentage of market penetration do you think you could realistically achieve?
As a fellow pickup winder I am also troubled by your assertions that there is no differentiation in the market place. You make it sound like there is no art or science to this, only wire and magnets. Sure just about any monkey can wind a pickup. I've been winding for a couple of years. Some have been winding them for a lifetime. You?
In the two years I've been experimenting with pickup design (yes Virginia there is science to this) I've built and listened to many pickups that I've and others have built. Depending on wire and magnet type along with height, width and length of the coils and number of winds, the variation in what I can build is very broad. Even methods for wax potting can be varied to add to the sound palette variables.
I too looked into the CBG market because the 6 string pickup market is littered with custom winders. I could easily get my bobbin material laser cut and crank out a bunch of a standard design in a weekend. In the end I decided there just wasn't enough volume to justify the effort. Add to this the fact that many builders will want different string spacing and others will have depth issues with the design of many CBG's. Small volume custom builds seems too problematic unless you develop a customer base that is willing to pay for the custom work. Here is where that work I spoke of comes into play. The only real effective way to get such a customer base is to build it one customer at a time along with building your reputation.
It takes more than building a product to sell it. In the end it is the customer that makes a choice based on what is presented to them. It is all on you to figure out how to get them to know you exist and what your brand stands for.
in helping me determine price. I agree that most festival goers probably will not be cash rich. There is, however, an ATM on site. Also, we (my wife & I) always go to the festival anyway and the booth cost includes weekend tickets - 1 of us is free to wander around & enjoy the festivities. Isn't the ? how much the ones w/$100 in their pocket will pay?
Iggy - We all do it for our own different reasons. I enjoy the building, but how many do I need? I don't see anything wrong w/turning a buck and sharing this craft/art & introducing music to others, do you? Its fine to spend 50-100 hours on a build for your own satisfaction & pursuit of perfection but that isn't necessarily EVERYBODYS goal. Isn't one of the goals of the CBG "movement" to be accepting and inclusive of all ways and ideas? Not tryin' to be argumentative -just sayin'.
Skeesix - My dinosaur computer will not open an XLS file. Can you post it in any other format? Thannx - Roy
Thanx for all the replies as well!
E D said:
Roy Alderman said:
To this post, I would say you have to consider how much pocket money the festival attendees have and what they will let loose of in a single transaction (assuming you will only take cash). That's more important than anything else, probably. If you figure the average person is walking around with $20 and maybe 10% have $100 (as an example only) then you see your customer base shrinking without factoring in the appeal of your product. I would think you could clear the shelves at $45 faster than $50 and a lot faster than $65. The only way to tell is trial and error.
BTW, my rule of thumb for pricing has been ~3X material cost. Fast and easy (and successful). That leaves you with 1/3 materials, 1/3 labor and overhead and 1/3 gross profit. From the profit come your expenses (fuel, booth cost, taxes, etc) so you may end up around 10% to 15% net depending on how you control the expense and tax side. Too many small business owners use 1.5X to 2X material cost and wonder why they haven't made any money at the end of the day.
If I make $2.00 an hour for my time, I call it good. I do it more for the satisfaction than the money. Having someone like what I built and appreciate my craftsmanship is more important to me that how much I sold it for.
My typical build is 3 string, fretless, poplar neck w/CB's economy tuners and a piezo pickup and of average quality. My build time is 2 & 1/2 - 3 hrs. and cost to build is about $13.00 per unit. My primary venue will be grassroots music festivals. I will have 15-20 CBG's and assorted canjos, diddly bows and lever basses.I will also be selling handmade soap. Booth cost is $200.
I would rather move all or most my CBG's than get absolute top dollar for them. Given these parameters - what is a good price point? I was thinking $65 but my wife and a friend think closer to $50. Opinions please??? Thanks, Roy A
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