Solo Builder - does it pay?

[tubesornothing]

This is for all those solo builders who have a line up of amps they sell.

For a 1x12 combo amp, single channel, reverb, perhaps tremolo, it costs me about $1300 in parts.  It takes me about 35 hours to build (metal work, electronics, wood work, tolexing, testing etc.)

This does not count the hundreds of hours spent on design time, nor any costs for my shop facilities.

So If I was to sell the amp at $2000 (more expensive than a Dr Z Maz 18), I'd get $700 profit.  That'd be $20 per hour.   But if I was to factor in the cost for my shop facilities, perhaps some marketing, time spent selling the darn thing, accounting etc.  It comes out to around $10-15/hr.  Yuck.

What do your numbers tell you?


Obviously if I increase production I can decrease costs.  As well if I hire cheap labour I can also help to reduce costs (only if production in increased).  However, I am quite happy at pumping out 20-30 amps a year. But just broke.

[imaradiostar]

So the question is- is doing something you love worth doing it for $10 an hour?

Did you account for "production style" builds? Do you have board templates made up from hardened alu or steel so you can cut 4-6 boards, stack them, and drill them all at once? Have you built yourself a finger jointing saw so you can do all four corners of a cab in two passes? Do you have a panel cutter? Glue pot? CNC mill or more metal templates for chassis drilling? A machine shop that could pre-make your chassis in bulk so you can use them for multiple products like Fargen or Dr. Z?

I'm not doubting that you're building something excellent but materials cost seemed a little high to me.

There are plenty of guys that build amps because they enjoy it and sell them at a minimum profit. You could always start that way and transition.

jamie

[tubesornothing]

Yes, I have all that covered, I do have production runs, but they are small, cause I am small. 

I am curious from other builder/seller experiences.  In your building and selling what numbers are you seeing?

[G._Hoffman]

Well, working in a similar field, streamlining your production is the whole game.  Things like having a standardized chassis, instead of having to drill out a custom chassis every time you build, will go a long way.  If I was you I would look for things you can "production line."  For instance, if you had that standardized chassis (you don't need to use every hole on every amp, of course), you could make a run of, say, 12 of them at the same time.  This saves you a lot of set up time.  Similarly, you could easily production line the building of cabinets.  Depending on how similar your circuits are, you could probably do the same thing with your circuit/tag/turret boards (whatever you use).  

The other really helpful thing, production wise, is to build in batches.  You do the same task on each amp of a batch, and again you are saving on setup time.  This of course requires that you make the up-front investment for parts in (say) 12 amps all at once, but then you can probably get bulk discounts when you buy like that.  I don't know who you are buying your transformers from, but I'd be willing to bet they give bulk discounts.  And given the price of iron, that discount could be the difference of a couple dollars an hour.

Also, are you a registered business?  If so, you can probably get a wholesale account with at least some of your suppliers.  The standard discount for most wholesale account is 50%, so it makes a big difference.

But of course, it really all comes down to the old joke - a luthier wins a million dollars in the lottery.  A reporter asks him what he is going to do with the money, and he says, "well, I've got some bills I'm going to pay off."  

The reporter asks, "what are you going to do with the rest?"

"Oh, they're just going to have to wait."



Gabriel

[G._Hoffman]

I'm not doubting that you're building something excellent but materials cost seemed a little high to me.

It seems exorbitantly high to me.  My materials costs are something like 25%, and I already feel like they are too high.  You really need to find ways to bring the cost of materials down (without sacrificing quality, of course) if you are going to make a living at this stuff. 


Gabriel

[tubesornothing]

So you mean to say you can build a "boutique quality" combo amp, with reverb and trem,  Speaker, Cabinet, faceplate, logo, nameplate, Tolex, - the whole enchilada for $325 ?!?!?!

[G._Hoffman]

So you mean to say you can build a "boutique quality" combo amp, with reverb and trem,  Speaker, Cabinet, faceplate, logo, nameplate, Tolex, - the whole enchilada for $325 ?!?!?!

Sorry - on my guitars my materials costs are about 25%.  Amps are clearly going to be higher, but having your materials cost be over 50% is WAY excessive if you want to actually make a living at something. 

Back in the late seventies and early eighties, two guitar builders I know were in a similar situation.  They were building guitars they were very proud of, but were going slowly broke.  They both hired business consultants to help them figure out how to make a living.  The consultants told them both the same thing, either make more guitars, or charge more money for what you are building.  They both felt they couldn't do either one, but they had no choice.  One guy (Jeff Traugot) just didn't think he could maintain his quality while building more guitars, so he charged more.  These days his base price is $15,000, he builds about 12 guitars a year and his waiting list is years long.  But he makes a living pretty good living.  The other guy went the other way, developing methods of ensuring his quality while building a larger volume of guitars.  He hired a lot of employees, bought a lot of new machines, and created new ways of doing things.  His name is Bob Taylor, and he is doing pretty well too.  Every year it is a toss up between him and and Martin to see who built more guitars that year.

So if you really want to do this for a living, you need to figure out which path makes sense to you, and follow it.  If you really feel you can't make more amps while maintaining the quality, then you are going to need to charge more money for your amps.  It will limit your market a bit, but there is an odd thing that happens when things like this become more expensive.  There is a group of people out there (who you probably have never met many of them, or at least didn't know it) who won't even think about buying something like this unless it is the most expensive available, because its a status thing.  They can be hard to connect with, but once you do they will sell your stuff to their friends too.  The thing is, you won't be selling to many real musicians anymore after that.  Myself, I prefer a slightly higher production (though I'm certainly not a Bob Taylor), but you will have to decide for yourself.


Gabriel

[tubesornothing]

Hey thanks for the info.  I am all good with what it costs to run a business, what I am looking for is info from other amp builders who are selling there amps - I am curious to know if my numbers are in line with theirs.