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Reading and responding to LJC’s interesting point also led me to another issue that is related to the initial pricing and eventually the resale value too.
This is the cost that Steinway is charging for their wood finishes.
My opinion is that who ever is setting the prices at Steinway feels they get remarkable prices for wood finish upgrades, far beyond what most of the industry is charging.

For example (and using the 2006 -2007 Larry Fine price supplement).
A NY Steinway “A” Ebony at 6’2 has an MSRP of $59,400.
The same instrument with a “Bubinga” finish is $74,700.

So now, since Steinways are being sold at list or close to it, the affective cost for the wood finish is about $15,000 ($74,700 – 59,400 = $15,300).
Let’s take now a 6’3 Estonia in Ebony, with an MSRP of $34,650.
The same Estonia in Bubinga has an MSRP of $40,320.
So, $40,320 - $34,650 = $5670, but since Estonias, like most other pianos are not being sold for full MSRP, lets take the average discount Fine is talking about in his supplement for these pianos (20%), and apply it to the price difference between the Ebony and Bubinga finishes. $5,670 – 20% = $4,536.

Hmmm…so let’s see. For the same size instrument it seems that one would have to pay more $15,000 to get a Bubinga finish upgrade, while less only about $4,500 for the Estonia. More then three times the difference.
Further more, I would put the quality of the veneer work done at the Estonia factory any day of the week for comparison with that of the NY Steinway, and it is my personal opinion at least, is that the Estonia’s finish work have a definite advantage over that of the NY Steinway.

OK, I can see though that some would say this isn’t a fair comparison, Estonia enjoys a considerable advantage in work rate over a Steinway, allowing them to spend many hours and “fuss” over their pianos and finish work at a much smaller cost.

So let’s take another example, again, using Fine’s newest supplement.
A 6’10 Steinway “B” in Ebony is priced at $66,300. The SAME piano in Ebony Macassar is…$102,500.
So $102,500 - $66,300 = $36,200.

It seems that if these instruments are indeed sold at or near list prices, Steinway is charging about $36,000 for this wood finish upgrade.
This is $36,000 for the VENEER work…

Now lets look at Bluthner in Macassar, at 6’10, Bluthner has an MSRP of about $91,600..
The same piano in Macassar finish has an MSRP of about $102,250.
The price difference between the finishes is $10650. But wait, let’s apply the expected discount of 20%, since no educated consumer would even dream of paying MSRP or close to it on any other instrument except Steinway in our market, and the veneer upgrade charge is smaller. $10,650 – 20% = $8520.
So for Maccasar finish it is reasonable to expect that a Bluthner dealer may charge about $8,500, and a Steinway dealer may charge $36,000…four times more.
Again, I’ll put the finish work at the Bluthner factory against that of the Steinway any day of the week, and twice on Sunday…and the German worker is probably not getting paid less than at the NY Steinway factory either.


But I guess that if Steinway can charge, and get these prices for their wood finishes then all the power to them, they know their customers the best and know how much they are willing to pay for the wood veneer upgrades in order for these to fit their décor.

To be fair to Steinway, I must point the Macassar finish is exceptionally expensive in their price list. However, if we made the same calculation and comparison to the Bubinga or Rosewood finishes, for example, still one would have to pay 2 and a half to three and a half times more for the veneer work at NY Steinway than at the Bluthner factory in Germany.

Great post Ori (for dealers).
Great post IvoryTreasures (for consumers).

Ori, it seems you are in disagreement because IvoryTreasures is advising consumers to buy brands you do not sell? Are you really concerned about us consumers obtaining misinformation or are you only worried about your business thriving with your particular brands? Would you be playing a different tune if you were a new S&S dealer? I know you restore S&S, but I presume it's not your main focus. Isn't it beneficial to you for IvoryTreasures to claim those brands are more resalable, so that you can buy a Steinway L from Mrs. Jones for $26K and sell it for $45K?

As schoy said, not everyone is perfectly knowledgeable and informed, and it seems rather unfair to claim that one is qualified to give advice about buying pianos only if they have decades of experience in the business. I came to this forum to read advice from anyone and everyone. I also look to consumer advice before dealer advice. Consumers without ties to the business of selling pianos I believe have an agenda: buying a quality instrument for the best price. I believe dealers also have an agenda: buying low, selling high, and maintaining good reputation in any public forum. We are both also in the business of feeding our families and keeping a good roof over our heads, not just dealers.

I bought a used Steinway because of the sound, and because new ones are overpriced. I hate that about new S&S, and I hope your prediction of them going to ACTUAL selling prices comes true. I would have bought an Estonia if they made a 7' model. I didn't get a chance to try out Bluthner, Steingraeber, or Hamburg Steinways, but I hear they are all more expensive. I found no other piano attractive in tone, touch, and look in the size I wanted after a 3 month search.

Ori, I have a lot of respect for you. Thank you for the wealth of knowledge you can provide us all, but I don't think you have to try to silence anyone. If you think any "advice" threatens your business, simply request people add disclaimers to their posts: "All brands suck except Spitzenbacher. My advice is subjective. Please visit your nearest dealers, try out all brands, and come to your own conclusions."

IvoryTreasures, thank you for the posts, but you need to make sure you add proper disclaimers that your articles are actually opinions, so that you don't tick off any dealers

Chopin952,
It isn't about me or just my business being threatened by misinformation .
I have plenty of Steinways in my inventory, from all vintages, and I can always decide on what part of my business to "focus". Since you yourself, however, suggest that new Steinways are overpriced you can understand why I like to present other options to my customers too.

However, I think that the advice that Ivorytreasurs gave CONSUMERS was very, very bad.
I think that had consumers acted on his advice and bought new Steinways for "resale value" they'd be very disappointed when the time to sell arrived.
I also can understand that Ivory, which after my initial post in this thread corrected himself, and pointed out that he only meant to say that USED Steinway's have good resale values, but to me it only looked like an indirect way of admitting his mistake (after all, he mentioned young Chang too as a good "resale value").

Now, i don't try to silence anyone and have explained it before with details. But I won't stand by when someone is spreading very bad advice as an "article" rather then his own opinion, which by his own admission is based on a very, very limited experience.

Now, you also however, are trying to enter my brain and "analyze the reasons for which I post what I post.
I think that this is a very dangerous road to take, and one that routinely degenerates threads.
Please, your opinion is valuable as anyone else’s, but I would ask you to relate to the facts or opinions I'm presenting, rather then to what you believe is my motivation.

And just to make it very clear once more.
I'm always in favor of the consumer to know as much as possible. Anyone who searches and reads my posts, whether now or in the past finds a lot of information their, often information that dealers don't want out.
The more consumers know, the better it is for my business. This is my philosophy, so I find the "idea" of being either pro consumer or pro dealer, baseless.
I found myself often, correcting misinformation and providing information on this forum that made a lot of people in the industry, including many dealers very upset.

My name is always attached to the bottom of my posts, and I’m always willing to be accountable for what I say, and therefore take the time to go to details in my posts so that no reasonable people could misinterpret them and could understand what is my opinion and what is fact.

If you don't agree with my opinion, please say so and explain why.
If you don't agree with the factual numbers I present, please state so and hopefully provide some factual basis to your claims.

However, please don't analyze my motivations or try to pick my brain.
All I will tell you about it is that your guesses about what goes in my brain are wrong, so please move on to discuss the facts or explain why you hold YOUR opinions.

I thank you for your other comments though, and think taht your advice to Ivory and others about the disclaimer is a good one, I just ask you to please not open the door for derailing threads to personal levels.

My biggest problem with Ivorytreasures (sorry, Ivorytreasures.com) is his statement that "Americans are most of the time clueless about quality".

Yet he markets himself in the US! :rolleyes:

My American clients are incredibly insightful and perceptive when it comes to quality. Or, perhaps, I am the clueless one. I'd post more, but I have to wipe the drool off of my chin.

Ori, this is a very good thread. You initial post and follow-ups are excellent and on point.

Thank you for taking the time to detail the myth.
And, for providing the logic that shoppers can use to accuartely sift through the "investment" issues.

Ori, this is a good thread. It would be helpful I think to very briefly bullet point your salient remarks if you have time, and then we can ask the moderators to post that as a FAQ answer. There is such a lot here that it really needs summarising.

Incidentally I completely agree that Steinway special finishes are ludicrously expensive. I have always been amazed by this but from what I see in showrooms the vast, vast majority of new pianos in the A, B, D range (C's are rare) in Europe are in gloss black.

Used pianos seem to have either zero or minimal extra value for being in a special veneer, so this apparently makes the depreciation worse.

I also consider that S&S is overpriced (in Europe), but I also see and hear signs of much greater discounting willingness than there apparently used to be.

In any event from a consumer perspective it is a bit crazy to buy a new Tier 1 piano as opposed to a newish used one (if one can be found) as the price differentials are substantial. Of course, finding a lightly used D that is just a few years old (or a Fazioli or Bosie etc for that matter) is easier said than done. Quite easy to locate ex rental Yamaha CFIIIS though (probably in need of cosmetic work) at amazing prices. This can be a cheap route to a pro quailty concert grand in the Steinway D mould?

Anyway, good post.

Adrian

Ori, I apologize if I sounded too personal and I'm glad disclosure on this forum prevents people from anonymously misleading others with damaging advice. I definitely keep proportionate quantities of salt handy as I read advice from dealers, consumers, or self-promoted know-it-alls. I'll try to keep my thoughts on poster's intentions to myself.

Back to the topic.

Do you believe all piano brands have equal resalability if they were bought at a fair price? Given that there is always another person with similar tastes and would buy your brand of piano. If S&S comes down from the clouds and you could buy a new NY B for, say, $45K instead of $68K. Would you say that a Spitzenbacher (or any other brand) bought at $45K is just as easily resold? If other brands could hype their instruments over 150 years as much as the "immortal" Steinway, the ubiquitous Yamaha, or the reliable Kawai, would people's top 5 resalable pianos simply be a different list?

Chopin952,
No, I don't believe that all pianos have equal resale values, if bought at the same relation to the wholesale cost.
Some would hold better value then others, and for different reasons.

I would not like to go here into details about what instruments I believe have better resale value then others, but generally speaking, I'm not a great fan of the low end market, in any shape or form.
When we talk about % drop in value, this is a market where the drop is the most significant.
My opinion is that no matter how many times one multiply zero...it is still a zero, and enough said.
On the other hand, this is the market that in $ terms, there is relatively little to lose.
20% out of $50,000 is more in dollars than 80% out of $10,000.

The second and more important issue however, is that speaking generally, I believe that there is a shift in recent years in the receptiveness of the public to different brands, and this can, and already is, in my opinion, changing the market dramatically, and also in terms of resale value.

I believe that name recognition was much more important only a few years ago then it is now, and that it will diminish in importance over the next years too. I say this in regards to new AND used instruments.

I will explain my thoughts.
Speaking very generally, one can divide the market to two major groups (of course there are many other ways to divide it, but I'm talking in this specific sense).
One group is investing an enormous amount of money into building themselves a name recognition.
These manufacturers (directly or through their network of dealers) may sponsor hundreds, if not thousands of artists. Providing them with support and free instruments wherever they play.
They may sell instrument at wholesale rates to institutions (essentially making them "sub dealers" since these often sell their pianos a few years down the road), or even supply pianos free of charge on a "loan" basis, and replacing them afterwards. They may also spend the money on advertising and marketing, pointing out that all these institutions and artists "chose" to play their pianos.
These manufacturers will lend pianos free to festivals, TV shows, films, or other public venues with high visibility...sometimes maybe even paying for positioning their instruments in front of the public.
These makers spend enormous amount of money on marketing...but in the end, who do you think is paying the bill for these marketing programs? You guessed it, the consumer.

The other group of manufacturers is much more modest about spending their marketing dollars.
The budgets they work with are far, far smaller.
Instead, they try to invest that money into their pianos, making it what they believe is a better product for the money, or a better value.

Through history, it seemed that the companies with big advertising budgets did better in the sense of making more money.
But something happened in the recent decade that may have changed the picture.
The Internet.
It isn’t a matter of just this site, or other sites, but it is much broader then that.
Only ten years ago, most people knew of only few companies when they started shopping for pianos.
Topping the list in terms of name recognition were Steinway and Yamaha.

Today also, people recognize the same few brands more than others. However, their search habits have changed. Once they decide to look for a piano, many seem to make more research, which is tremendously easier to perform these days on the web.
I think that the average consumers today are A LOT more educated in comparison to those shopping for a piano a decade ago.
Once they do some research, they find out that Chocolate and vanilla are not the only flavors for ice-cream.
Consumers today learn much faster that there are also chocolate chip, pecan and cherry ice-cream flavors, in addition to many others.

These consumers are setting out to taste the different flavors and then decide where to spend their money. This is a major change from not too long time ago, when people set out from the beginning of the search to buy a Chocolate ice cream, and if they couldn’t (or wouldn’t) afford it, “settle” for vanilla…
More and more consumers for pianos don’t just spend their dollars anymore on “selecting” the features of their chocolate ice-cream. Whether it is in Ebony or Mahogany, or whether it is 5’11 or 6’11…
They want to get a good PIANO.

Personally, within MY business I feel an amazing shift, and this trend is growing every year.
Only a few years ago the majority of the customers coming here said that they always “wanted” a Steinway.
They weren’t necessarily willing to pay the price…but they said that they always “had the dream” of owning a Steinway. A very large portion of our customers came in ONLY in order to play our Steinways and in order to “select” one from the many we have available.
They wanted to try nothing else.

Now, however, things are very different.
Many people who come here state right of the bat that they are NOT interested in a Steinway, and feel that they are overpriced and have better options out there.
Also, while still a large portion of our customers are coming to us to try Steinway pianos, more and more of them are receptive to trying different instruments too, and ending choosing instruments other then Steinway even if their initial intentions were to “select” one.
I also see a very different pattern between the consumers who I feel have made their research, and others who still go by the old pattern of “chocolate and Vanilla” flavors.

Now, make no mistake, Steinways can be great pianos too, and there are those who prefer chocolate ice-cream over any other flavor…but then again, I see the general picture changing rapidly, and faster than most people imagine, with the result of many more people choosing different flavors over chocolate, regardless of price, and sometimes paying more for their ice cream of their choice then for the chocolate flavor they thought until recentely was "the standard taste".

So this brings me to Chopin952’s question.

If S&S comes down from the clouds and you could buy a new NY B for, say, $45K instead of $68K. Would you say that a Spitzenbacher (or any other brand) bought at $45K is just as easily resold?



Well, the answer really depends on what level of instruments are available in comparison, and if the trend that has developed, and in my opinion is growing every year will continue.
The real question that needs to be asked is if at 45K a Steinway “B” is a good instrument at all in comparison to instruments that are available near that same price range, or if there is a clear preference for it as an instrument over other pianos offered for less (or if it is less favored clearly in regards to other instruments for more).

Mind you, for this general price range of around 45K for a piano in the 7’ range, one could most likely get a lot of interesting pianos such as Mason & Hamlin, August Forster or Grotrian…all “certified” tier one pianos by Fine (rated by him higher then Steinway if it matters to anyone), or for a considerable amount less one could have the slightly smaller 6’3 Estonia as well as other instruments like Sauter, Haessler, Seiler or Schimmel.

One should ask if they prefer the “B” over all these instruments in this price range before they buy, rather than be blinded by a sudden “price drop” in Steinway prices if (or when as I predict that NY Steinways won’t be able to be sold for much longer at these prices with no significant changes and that their actual selling prices will gradually fall) it happens.

One should compare these Steinways to instruments that cost similarly in the wholesale level, and see if they’d actually prefer it, rather then think that if they get one for 20% off list…it’s a great “deal”.
If you like the Steinway better then good, but if you like something else better in the 45K range or less (or like something else for less), than one shouldn’t care too much if the price dropped from 68K to 45K.

I’m sure, however, that a price drop such as this, had occurred, WOULD increase Steinway sales dramatically, at least in the short term. Not just because more people who like them could buy them, and not just because people who preferred other instruments that used to be price at Steinway current levels more will find the difference too great…but because a lot of people will initially think that at 45K, a "B" is a “deal” not to be past on.
However, after a few years the market will get used to these prices and the old higher prices will mean little…of course, unless you bought one at the high prices and wanted to sell it after the price drop, which will make for a very poor “resale value” indeed.

If the trend of looking into other instruments while searching for pianos continues (as I believe it will), it may very well be that the legend of Steinway will run out of air, and that the bubble, like any other bubble will burst.
Personally, I think that this time is closer then most people think.
But these are just my thoughts..

What we lack in this series of posts are graphs and tables showing depreciation curves for different pianos going by market prices.

For the record, when I was looking for a grand in the 7' range, Mr.Larry Fine had recommended the Steinway over ALL the pianos you mentioned. Yes, that included Grotrian and M&H. I enjoyed several conversations with Mr. Fine via telephone. BTW, he is a fine gentleman indeed.

fingers

Fingers,
As someone who had a few conversations with Mr. Fine too, whether in person or by phone, I can tell you that he would probably recommend a particular instrument based on what he feels is the right thing for that particular person.
I believe that by acting so he is doing the right thing.
Not all hats, as you know, fits the same head.

I doubt that Mr. Fine is recommending in the style of "get piano A because it's better then piano B"...he has enough experience in this field to avoid these kind of statements. Also, I agree with your assessment that he is a fine gentleman.
The fact is however, and this is a fact, that in his own book, which was written only a relatively short time before you decided on your restored Steinway purchase and spoke to Mr. Fine, to include the pianos mentioned in his book, in higher position then that of the Steinway.
I don’t think though that arguing on the position of this or that instrument, within the same tier in Fine’s book really matters. I brought this as an example to show that even if Steinways were sold at discounts of 30% or more, there would still be plenty of other instruments, that based on their PERFORMANCE many may still choose over the Steinway.

After all, discounting Steinways at levels that are seen and expected from other instruments in the industry only means…that Steinway dealers will straight a line with the rest of the industry in term of margins.
The consumer may have to decide, a few years down the road (if or when it happens), if the instrument itself is competitive based on its performance and build quality, or if Steinways are also overpriced at the wholesale levels because of their reputation and name recognition…and this is by the way an entirely different issue.

Although this is actually a good and relevant question, and can be asked in regards to other instruments as well, I'm not sure it would be wise to discuss it here.
I have already said enough things in this thread that can alienate quite a few people, whether these are dealers or consumers that invested money and faith in their pianos (although I hope no one bought a Steinway because of the prospect of a great "investment" or a "resale value", but rather because they love they way it sounds and play).

If I'll get into the particulars of what constitutes an expensive piano to make, in terms of its design and in terms of the parts and materials used. And also, try to compare in what I feel is objective terms what constitutes better workmanship and better fit and finish, I'll be risking having people so upset, that a Piano world War III may start.
I'd like to avoid that.

Ori,

Hmmm, interesting. Gee, I wonder what Mr. Fine gleaned from our conversations' that led him to conclude that Steinway was the best for "me".

fingers

Ori, great points about the smarter more search-conscious consumer. I'm so glad you are seeing that trend.

Here's my hypothetical. Let's assume there are two types of consumers: (1) Blind and only wanting to outclass Mr. Jones next door. (2) Smart with recent eLASIK surgery for better internet visibility.

Some say that people buy Steinway or dream to own a Steinway blindly because they are expensive, a status symbol, or were convinced by the S&S salesman that they are an investment. But you say that if there were a price drop it would be a "deal" not to pass up (in the short term). This, to me, implies that there is still some worth to the piano based on performance alone surpassing other brands at a fair price.

Wouldn't consumer type 1 pass on that deal because they are now cheap and no longer prestigious to own? knowing that their aristocratic friends would point out that S&S is no longer out of reach to more people. Wouldn't they instead look to Bösendorfer, Steingraeber, or Blüthner for that rare prestigious piano?

Wouldn't consumer type 2 actually believe it's not a deal because they can buy the "better" M&H, Grotrian, Estonia, or other brand at the same price point? The smart pianist wouldn't buy a $45K model B knowing there is a higher quality M&H BB or Grotrian 208 waiting for them at the next dealer down the road.

Both of these outcomes are not good for S&S in the short or long term. I would tend to conclude that S&S is not going to budge from its thrown as the prestigious status symbol any time soon. They can fix their NY quality control problems from this thrown and still sell them at double what they are worth to at least type 1 customers, and then slowly regain the confidence of type 2 customers with the return of NY quality.

If they are forced to lower prices because all consumers are wising up then you are right and S&S is in trouble. They would have to make sure their piano simply outperforms all others on the showroom floor (prepped) at a fair price to stay at the top of the pack. I hope that day comes.

Ori- Is the number of Steinway sales shrinking commensurate with the disappearing Consumer number 1 you mention above (disappearing rapidly) or are sales flat or increasing with Steinway's volume picking up/replaced by virtue of a more discerning buyer?

One should conclude, I believe, that there are better deals out there than Steinway but if you prefer the Steinway sound then you pay the price and many of us are willing to do that. I have to say once again that at least in New York, Steinway is not even close to being the most expensive piano. The nine foot Fazioli I tried recently was an extraordinarily beautiful piano with workmanship to match. It was also 180K. Could it be discounted? I don't know I was not about to enter into negotiations. From a pure sound standpoint I would buy one of the retired concert grands from Steinway Hall because I prefer the sound of a model D above any other piano. I could actually buy two of them instead of the Fazioli and have money left over. The bottom line is if you buy any expensive piano brand new and have to sell right away you will lose money no matter the brand.