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Yes, if he said that he was either mis-speaking or mistaken.

As to posting the wholesale cost of pianos, that simply wouldn't work and here's a few factors in support:

The average margin is about 40% leading to a 2-3% net (ROI). That means that, in your scenario, on an avergae deal the shopper would see that a $10,000 selling price grossed the dealer $4000. Most shoppers knowing little about the costs of doing business would incorrectly judge that as being excessive.

With the possible exception of the auto industry (and really not even there) are actual wholesale prices marked. If your simplistic "solution" was fealsibly, why wouldn't we see wholesale costs posted on jewelry, ATVs, appliances, etc.?

BTW, there IS a means for a shopper to determine if a price is reasonable. Piano Buyer.

Well, I'm sure glad I spent time on this forum before going shopping. I was WAAAY off in terms of how to go about buying a piano.

Here's a question though: I've noticed that the price for digital pianos is much lower online than in stores. Makes sense, less overhead, etc. Does one negotiate the price of a DP (I know, I know, it's not a piano, it's just that they're selling them next to the real pianos) the same as an acoustic?

(That said, I'm asking all this not because I want a DP, but because I want an acoustic, in case anybody wanted to educate me on that point.)

Firstly, the 50% part here is somewhat ambiguous. Did one person pay 50% less than the other, or did one pay 50% more than the other? It does make a difference.

Irrespective of that, the business model for pianos is not much different than that for anything else. The price for anything is negotiable. Now, most people would not want to take the time or trouble to negotiate pricing at the supermarket, so it rarely happens. When the possible savings get high enough many/most people will negotiate. How well they do it determines the final price. As mentioned above, there are people who are averse to negotiating, and there people that do not have the time to negotiate. These people may pay MSRP for a product, or sometimes even more.

Hm. So someone points out the reality of the situation, his first-hand observations, and a piano dealer tells him he is wrong.

Why did so many shops close up, recently?

Honestly, the acoustic piano industry is stuck in an olden model of sales. It ostracizes people more than it encourages them because of the price and sales-dance. With so few dealers around in this time, I am amazed that there is still a veiled price-point.

In the days of pianos being common luxury items displaying the status and culture of a person/family, pianos could be sold like cars. Those days are gone. The sales side of the equation will have to change with the world around it, or it will further hurt the industry.

I just spoke to Larry.

He said that at one time in his history he relied heavily on piano technicians for his thinking as opposed to also considering the realities of dealers and manufacturers. Gaining a greater understanding of the dealer perspective was a major reason that he hired me as a consultant several years ago to help develope Piano Buyer.

he no longer thinks it true.

There have been many threads at PW on pricing in the piano industry. They clearly explain why acoustic pianos cannot be priced like cars, toasters, or even digital pianos. The huge number of variables that go into the price of an acoustic piano is also explained in The Piano Buyer.

For individuals, it's about half of that. And yes, those are about the only people who can get tier 1 or tier 2 new, comfortably.

Where I work (about 2000 people) only the provost and the president are in the over $100K range. I don't know anyone personally who can truly afford a tier 1 piano.

[If so - why do I see so many new $60k cars on the road?]

They are almost always leased. I think it's very risky but that's my opinion.

[Your logic escapes me. Sorry.]

You must be living in an area where incomes are bloated. I don't. Almost everyone I know and work with (STEM professionals with MS or Ph.D) is in the $20K-$60K range.

Then why can Steinway do it?

Probably because their selling prices involve a markup much more than other makers can afford to charge. Can you imagine how many(inset any other make)pianos would be sold if the dealers charged full SMP(or very close to it)?

Sorry - I am not buying it.

There are several Tier 2 instruments that can be purchased for way under $50k.

High School principals make $125-150k

RNs make over $100k

Pharmacists make over $100k

20% of new cars are leased vs purchased - not "almost always"

In Florida you have over 7,000 state employees making over $100k in salary

The head of the FL state Board of Education makes $509,999


Pianos are expensive, yes. They are a luxury item, indeed. Nobody will die for not having a grand piano. But they are not destined for only the rich.

In my very humble opinion, of course.

For the same reason Ferrari can.



Of course, you do realize there are approximately 151 million people able to work in the US, which means that there are just over 3 million people in the top 2%. Let's look at some numbers (I am not judging, just stating facts people may not be aware of.. these have all been researched and are accurate unless otherwise indicated.)

First, out of the 3 million people in the top 2%, one out of every 1,500 people would have to buy a grand piano to sell off the Steinway brand (numbers below). Or, put another way, about one half of one percent of the available "top 2%" consumer base. So, this is certainly a reasonable figure.

Steinway sold 2,013 grand pianos last year (from their annual report). Let's assume for the sake of argument, that the average selling price (not listed anywhere I researched) was half the top-end of $137,400. That puts the average at around $68k. I think this is a reasonable estimate.

If Steinway makes just 30% on its top-end pianos (relatively low for an elite top-end luxury good, which Steinway considers its pianos, but the number is consistent with the gross margin figure in their annual report so I'll use it), they made approximately $41 MILLION dollars on the Steinway Grand Piano brand alone in 2011.

To further the point, and I know I'm getting long-winded, so I'll do my best to be brief: From Steinway's own annual report, they state that the vast majority of their Steinway brand pianos go to customers over age 50, who hold graduate degrees and report income over $300k per year. (This puts them in the top 1%, an even more elite category than the top 2%.)

Finally, from the 2010 US Census data:
-The average US salary is $41,673.83.
-The average US house is valued at $167,500
-The average US mortgage is $1295 per month


So, my conclusion here would be that there is absolutely no way for the average American to ever afford a Steinway grand piano. In point of fact, we can place all Tier 1 pianos in this category of being entirely unaffordable.

Even Tier 2 pianos are likely out of reach for the average American family, but I did not research many numbers to support this guess.. I am simply assuming based on the average US salary that the average American cannot afford another "car" sized purchase. But we can probably analyze that, too, if you're interested.

Okay, I have talked too much.

First of all, who said anything about Steinway??

Secondly, Steinway did not sell 2,013 grand pianos in the U.S. last year. That figure represents their grand piano sales worldwide. Worldwide - and how many people is that now - 7 Billion or so?

Thirdly, Steinway Musical Instruments, Inc made a total net profit in FY 2011 of
just $1,630,000 - all products, all locations - worldwide.

Lastly, Steinway pianos are not meant for the "average" American family, just as Mercedes Benz vehicles are not meant for the "average" family, nor are other luxury goods. Luxury goods.

I repeat - there are several so-called Tier 2 pianos that, purchased brand new, can be acquired for significantly less than $50k - and yes, that is significantly less than a new Steinway. And yes, that is a lot of money for not only the "average" family, but just about every family.

A Steinway is a luxury good. It is marketed as such, and marketed well, I might add.

Now I am finished playing financial analyst and will retire to the kitchen for a delicious PB&J (the wife is out this evening).

Wish you could join me. It is a lovely evening here.

In my humble opinion, that is.

I wish I could say I selected Steinway because it was the most recognizable brand, or the highest selling. I didn't. I chose it because it was the subject of another reply and it filtered over.. LOL Still, I think it is an accurate representation of a Tier 1 piano.

You are correct, the 2,013 is a worldwide number, which makes my argument even stronger. Thank you for pointing it out.. it slipped my mind in the middle of number crunching!

Steinway's net INCOME of $1.6M is very different than their Gross PROFIT of $105M. Corporations pay taxes on income, not profit, so they try to show as little income as possible. That is why I used their profit statement, and not their income statement.

I suppose my two major contentions were:
1) The average American family cannot afford a purchase of $10k, let alone "$50k or less"
2) The salary estimates for US employees (especially as representing any kind of average) were way off

If we were to extrapolate meaning, I might suggest:
3) The idea that pianos are anything except overpriced is, perhaps, misguided
4) Pianos, especially grand pianos, are a luxury item destined only for the rich
5) If classical music expects to survive well into the future, it needs to find a way to make itself more affordable for the average family to bring it into their homes

5a) I can get a decent Xbox on eBay for less than $300. I'm not saying an Xbox is better than classical music.. what I am saying is that it is more readily available to the masses who do not have high income, and who cannot afford luxury goods like a piano, but still want some form of entertainment.

However, I did not want to drag the thread into any new directions, so I stuck only to the facts, and hoped other people would be more interested in interpreting them whichever way suited them best.

PS- I wish I could get me some PB&J right about now. But it's a long drive to California.. :P

I wonder: of all the posters on this thread who argue that, in effect, grand pianos are not unaffordable, how many -- have grand pianos?

In a way you can. When I purchased my DP about 18 months ago, I shopped locally and on line. Most of the on line dealers had "meet or beat" policies. I simply found the lowest price, downloaded the ad, and sent it to the merchant I actually bought from. They honored the price and even took a few more bucks off the price. The DP arrived a week later in perfect condition as the packaging was excellent. In the end, I saved almost $500, which, percentage wise was excellent.

There is even one on line retailer that offers customers a "play now, pay later" option whereby you can put 25% on your CC and they put another 25% on the card each month for 3 months.

4) that is a little stretched comment. you can say the same for a house... you can fit a family of 3 in a 2 bedroom apartment. is a matter of priorities. the average american wants a house with the yard. than he tries to get the pool to distinguish himself, that cost (during the years) way more than a tier 2 piano. or let's talk about leasing a nice beemer instead of owning a corolla and a bosendorfer.

for the average american income a tier 1 or 2 piano is possible but has to be a choice.

the rich measure use yachts and planes as measure stick... pianos, mansions and cars are "given".

5 and 5a) Classical music did survive in the past 600 years and will survive in the future because Beethoven, Bach, Brahms, Mozart, Schumann, Schubert and all the other are de facto immortals. In the same way the art of Michelangelo survived. I hope the time will consign to oblivion Justin biebers and rhianna.

the xbox as "entertainment" has nothing to do with "classical" music. people makes choices. you can play a videogame as well you can play "card"... or read a book, listen a concerto or go for a walk. the last one is totally free, you can enjoy the glory of nature and good for your health... way better than become obese playing the xbox.

the bottom line, a tier one piano is affordable for MOST people, is just a matter of priorities.

the bottom line, a tier one piano is affordable for MOST people, is just a matter of priorities. [/quote]

Amen to that. Life is all about choices and priorities with the latter always changing with time. How we spend any disposable income we may have is a matter of personal priorities. As you point out, some prefer the Beemer while others would prefer to have a piano in their home. The very fortunate amongst us can do both.

Yer speaking the truth.

By the way, even involving "tier 1" pianos.

You just have to find right dealer and make your deal.

Kevin, you're reading out there?

Norbert