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George wrote:


Uh, that would be JC Penney. The Schulze Pollmann is not for sale!!! :p

penny

To reply to a few of Larry's thoughts:

I think the analogy of GM and their varying lines is the basis of the 2-3k piano comment. As a consumer, I understand that I can't have a 3k Bosendorfer. But maybe all that expertise at Bosie can have a division that builds, or perhaps contracts with an Asian company that can build a 3k piano, based on some of Bosi's R&D. Maybe they could name the line the Victor Borge. You would have Borge pianos starting at 2k and going up to the 6' Borge model that sells for 10k. Then maybe you have a mid-line, the Lederhosen, that encompasses Petrof-quality pianos, starting at 6k for verticals and 12k for small grands, going up to the low 20k range. And then you have Bosendorfer. This type of stratification is not reinventing the wheel, it has been done many times by different companies.

Wouldn't it be simpler for the dealer to use one company, where he could combine different grades of pianos in to a single order, thus lowering his overall cost due to volume purchasing? I assume that this type of pricing already exists for some manufacturers.

On a completely different tack, I'll take a shot at what a piano costs the factory, the dealer and the consumer (and I'll most likely be wrong). Since this is Norbert's question, the piano I will pick is a 5'9" Bergmann, a piano he carries.

I think the factory has about $1500 in the piano, sells it to Norbert for around $4500. He puts probably another $800 in the piano between prep, interest, building, delivery and advertising costs. Total cost around $5300. he lists the piano at 10.6k, but after bargaining, will probably sell the piano for 8k to 8.5k. Total profit for the company - 3k/unit. Total profit for Norbie - about $2700 - ASSUMING nothing bad goes wrong after the piano is delivered and he winds up eating profit to keep the customer happy.


OK guys, how close am I?

And the manufacturers here [listening in].....get a lot of 'free market research'.

Wendy and MacDonalds paid big bucks...for theirs![Nasa,by the way, doesn't need to....]

Who ever said that the Piano Forum....
...is good for nothing?

Or that people here expressing their humble opinions....don't count at all!

You'd be surprised!

I was.

I like Larry. Unfortunately, I disagree with him over the particular issue of dealers disclosing their costs.

Buying a piano is not like buying a Coke, or even a car, because there are many opportunities in most areas to buy that car or Coke from different merchants. It is thus easy to comparison shop, and the buyer weighs issues such as convenience, reputation (though not with a Coke) and price.

On the other hand, piano manufacturers generally limit their distriubtion to one dealer in a given area and forbid other dealers from quoting over the phone. Thus, to suggest that it is easy to become fully informed on piano pricing simply is untrue; rather, it requires enormous expenditures of time and effort simply because manufacturers and dealers generally hide comparative pricing information to the extent possible. My suggestion that dealers disclose their cost to the consumer is a reaction to this bizarre marketing structure; it would not be necessary if the marketing system was the same as with most mass-produced goods.

By way of a test of this theory, how many on this forum have shopped for either the 6' Schimmel grand or the 51" Schimmel upright? What prices have you been quoted on the least expensive finish for these pianos? Outside of this forum, did you have reasonably available access to pricing information from multiple dealers? How?

Jim Lob/Jim L.

Rather than get into the central issues of this debate, I think I'll just comment on one tangent.

Pianos differ from cars in a number of ways, but one major difference is that the car made today is demonstrably better than the one made ten years ago or twenty years ago. Pianos, on the other hand, have stagnated for a century.

Cork

Why does it matter if the store is a factory owned store or one owned by a small businessman? The costs are going to be the same. The power company doesn't give the manufacturer a discount on power, etc. Employees still want to be paid. Rent is rent. If anything, the burden of managing a far flung fleet of thousands of factory owned stores would end up causing their overhead to be higher than the independent dealer's overhead.

I am just amazed at how many ways you guys seem determined to eliminate the dealer.

I wouldn't worry too much about disclosing cost information. In my industry, cost-of-gross-shipment (COGS) is about 8-10% of list price. List price gets discounted anywhere from 20 to 50 percent before the deal is done on the street, and nobody discloses this information. They probably never will. This behavior doesn't hurt sales because customers are motivated by price vs. perceived value rather than notions of socio-economic justice. (And the Death-to-the-Fascist-Insect-that-Sucks-the-Life-Blood-of-the-People crowd is a negligible segment of the grand piano buyer's market.)

I've seen behavior by some of the piano manufacturers that seems to be based on protecting the basic structure of dealer territories. I understand that piano manufacturers must have their own dealer network in order to leverage sales. Fine. But there doesn't seem to be a lot of accountability when those dealers provide little or no value.

What does a manufacturer do about this? I don't know. I'll tell you what I'll do as a consumer. I'll pay a premium to work with a good dealer and, given the relatively low cost of transportation and communications, I think it makes sense to plan my piano buying strategy based on a list of good, honest, responsive dealers--I know several--regardless of their location within North America.

Larry,

You said:



I've often wanted to say:



It's all based on the "me first" philosophy.

Welcome to the club of the 'misunderstoods'.

Derick

I've often wanted to say:


quote:
--------------------------------------------------------------------------------
I am just amazed at how many ways you guys seem determined to defend the indefensible.


There's nothing indefensible about the wisdom of selling your products through a dealer network, Derick. It's a system that evolved through trial and error, and it works. What is indefensible is to focus on the bad apples and then paint the entire system as bad. It is short sighted on your part when you do it, and leaves as your only solution being to toss the baby out with the bath water.

We had a Baldwin factory store here in Atlanta. They sold factory seconds, rejects that had been returned by independent dealers because they were defective, repaired, and then run through the factory stores. Their prices were high, the sales pressure was enormous, and the slime factor was one of the worst in town. There's your reality....defend that one.

Besides, aren't you the one who keeps talking about the evils of big corporations? Are you saying that you consider the solution to the problem of selling pianos is to crush the little guy and give it all to the big corporations so they can become bigger? I thought big corporations didn't care about the little guys like consumers? Just getting you to think - you can't have it both ways you know.

[ March 07, 2002: Message edited by: Larry ]

Larry,

I guess I am going to have to kick you out of the club!

Several times I've heard people "repeat" things I supposedly have said. Now a new one surfaces..

Yes, I'm focusing on the bad apples. The biggest, most powerful, bad apples. The ones that most affect our daily lives. I've said repeatedly that the system needs a few tweaks, patches, revisions, whatever you like to call it. I never said to throw it out and start over.

I've carefully read all of your posts and have come to understand why and where you are coming from. Had you done the same with mine, you would have known that I never painted the entire system as evil or suggested throwing it out and starting over.

It's ok if you disagree with me, but please don't put words in my mouth.

Derick

To the dealers. Take no offense, I was just experimenting at being in the corporate boardroom (can't do any worse than Enron).
But...
Your company rents space at a mall, between the Footlocker and Radio Shack, staffed it with one manager and other low cost help like part timers/retirees(who play some piano would help)like Wal Mart.

Bring in the 5 or 6 pianos that you make. They stay there! Have a local tech keep the pianos in good shape and go to the home for prep. Hang the one and only price on them.

Let the instrument sell itself!

The help writes up orders for delivery from the factory. The company also offers financing and occasional specials like discounts, rebates, 0% down, no interest for on year (again, like autos).

The company makes money on the piano, accessories, financing, and long term service contracts for tuning.

I don't know why it wouldn't work...as long as the prices are fair and the product is good.

And what words would those be, Derick?

These words Larry:



Derick

Of course you don't. That's part of my point. But those of us who do this every day can tell you exactly why it won't work. It's because no matter how it is tried, pianos will not sell themselves.

And to Derick: I was using the word "you" in the general sense, not as in "you" specifically. But as they say.....it's the bit dog that barks.......

[ March 07, 2002: Message edited by: Larry ]

Derick,

What exactly would be your suggested changes, tweaks, patches, or revisions? I would really like to hear what inputs you would apply to this complicated system over here that would not result in some unforeseen and probably worse output over there (law of unintended consequences would definitely apply here).

I have heard a lot from you on the evils of our system but you seem not to have any suggestions to improve it other than generalizations like "uniform pricing" and "fair amount of profit". How exactly would you make that happen.

If you think I am advocating that we do nothing well, as long as the "do nothing" alternative seems to be the only one on the table, then that is exactly what I would choose.

I do not have enough hubris to believe that I can fine tune a system that has evolved over thousands of years and not be sure that I am not doing more harm than good so I am asking you what is your fix.

Jbryan,

Apparently you have not kept up.

The question I have asked over and over is "Is it fair for a CEO to rake in millions of dollars in bonuses in a year when s/he has layed off thousands of workers?"

The job cuts and benefit cuts ONLY happen in the US. Only US employees are affected. BUT, the CEO's and executives in the AMERICAN company are somehow immune. Keep in mind, I am not talking about EVERY CEO and am primarily talking about CEO's of major US corporations.

My solution? Make CEO's/executives feel some of the effects of their "painful decisions" in the form of NOT taking million dollar bonuses when they don't perform. How's that for starters? Too extreme? Or how about not providing the executives with GUARANTEED returns of 10% on their 401(k)s while the rest of us poor slobs have to worry about the fluctuations of the market? Too radical? How about not giving a 1.3 million dollar BONUS to a CEO who bankrupts a company? Whoa, now I've probably crossed the line with that one.

Shall I go on. Have I destroyed your conception of the perfect world we live in? Or are you already thinking of ways to twist my words or defend the indefensible or just not address any of it?

Derick

Here goes Norbert. . .

(Great posts so far everyone!)

I only want quality in materials, workmanship and construction (if any of these are comprimised, it is my opinion that it shouldn't be made at all). I want to bang the heck out of this piano for 50 years and not have any mechanical/structural failures (typical service not withstanding).

I only demand honesty from the dealer as I will only conduct business with them in a fair and honest manner.

My opinion: Don't build uprights under 42"; grands under 66" - "sound is comprimised". (generalization I know)

I would be willing and satisfied to pay:

$2,000 to $5,000 for any upright.

$5,000 to $10,000 for any grand. . .

that meets these "requirements".

How low can you go????

Where's the bomb man?

Jon

Once again, HOW WOULD YOU MAKE THAT HAPPEN!

No need to patronize me with remarks about a perfect world either. I don't mind having a spirited discussion but I don't believe you address the points I made with snide comments about my view of the world.

Try again and tell me what forces would be brought to bear in order to make these changes and be nice.

Jbryan,

Sorry for getting angry with you before.

I would make it happen is thru tax penalities and enacting various laws. This is not to tell companies how much they can/cannot pay their executives, but to prevent abuses and protect American jobs.

For example, when a company shuts down a plant in the US and moves it to some other country where the cost of doing business is cheaper, executives should not benefit. Some shareholders may like this as it boosts the bottom line, but the fact is it is destroying the US. These unemployed workers become a burden we must all pay for. Keep in mind that when the bottom-line goes up, the executives reap the benefits. I believe a company should be penalized should it make such a move to prevent the executives from being rewarded. This is NOT a healthy way to boost the bottom-line from the perspective of the US as a whole.

Next, executives should not be immune to the pain they inflict on everyone else. When they cut pensions (which boost the bottom line and raises their bonuses), their pensions should also be cut. However, there is a two-tier system in place in the US at some major corporations. There is the "employee compensation package" and the "executive compensation package". The former is loaded with risk, contains no guarantees, and can be eliminated at any time. The latter contains no risk, has many guarantees and has, to the best of my knowledge, never been eliminated.

There are a lot more things but I don't have time to address them all. But you get the idea. All I'm interested in doing is pointing out the inequity where it exists and making people aware. I'm not saying EVERY corporation is bad, or EVERY CEO is bad, I'm giving specific examples of those who engage in activities that are not only wrong, but come at the expense of others.

Derick

Fellow pianophiles,

This is a conversation about how much should a piano cost. Norbert has asked for concrete figures and recieved fairly few opinions containing numbers.

Now as much as we all like to beat the dead horse topic of CEO pay and the inner workings of the piano business (and tenderized horsemeat ain't bad if ya know how to cook it! ;)), let us stick to the business at hand.

What should a new piano cost?

Now if you want to base your numbers on a factory direct option, state that and do so. If you want to use the current business model, feel free. If you have a hybrid business idea, state your idea.

But puh-leez, before we go picking dandelions again, give our esteemed Canadian dealer your opinion - sizes and dollar figures, please!