Is There Enough Market For New Steel Companies?

chris ivey · From: california (deceased)

i'm asking this because the steel community is limited to far less of a consumer base than guitars, for instance. after hearing many businessmen complain about this lack of potential customers.

lately we have jackson, show pro, justice, rains, rittenbury, russler (bad name choice),benrom, infinity, and other fairly new companies popping up.
i wouldn't think all these builders are doing it totally for the love of the art. who can make a profit off of this? especially when most have similar common design features. shouldn't new guitars offer new features and unique tonal offerings?

most of these look to be built well by craftsmen who have lots of pride. but how many people have $5000 or more to buy an unproven model?

open for discussion....

Dickie Whitley · Posted 6 Sep 2011 1:29 pm

Chris, I agree that there seems to be a lot of new steel companies popping up. I also agree the the steel guitar market is small. If our market is indeed over saturated with manufacturers, it is almost certain that in the end only the best will survive. That will include the ones that can adapt to changing needs of the players quickly and with reasonable cost.

This next part is my rantings only. I think all steels need to come standard as either 3/5 or 4/5 as singles, and 8/5 as doubles. I also think that all should handle at least 3 raise and 3 lower at a minumum. Split tunings should be standard also. I don't think that's too much to ask for, but again just my 2 cents.

Bent Romnes · From: London,Ontario, Canada

Chris,
I find it totally pleasing that you include the BenRom name with all those well known names and established companies. I am hardly even a new company- just a retired fellow who wants a hobby and this happens to be steel guitar building. Like I stated on my web site
www.benrom.com , love does in fact have a lot to do with my building hobby.
I offer nothing new technically, just trying to perfect the old method.
I do believe that I have a new tonal offering however. Not sure how this came about but a few weeks ago, when David Hartley played "Blue", he also played two well known brands. Not only did the BenRom sound like a steel guitar should, it was also right up there in tone with the other 2. If that wasn't enough, it also sounded different.

So maybe "for the love of it" is partly correct. In any case I love what I'm doing Smile

I wouldn't pay $5000 for an unproven model either. But because my building is based on fun,love and hobby more than huge profits I can sell my product below that.
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Brian Henry · Posted 6 Sep 2011 1:35 pm

Chris, With the demise of Carter, there is a big gap especially since they were one of the big producers.
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Bent Romnes · From: London,Ontario, Canada

Tony Prior · From: Charlotte NC

LONG sorry..may be worth the read...

Although I am an advocate for anyone attempting to take the plunge and join the PSG manufacturers market, the issue with regard to the PSG , first is always price for the typical consumer/player and then secondly it is the delivery schedule . Consumers want it now. I want it now...

Comparing PSG's to Guitars is not a fair comparison, I am looking at 3 premium Telecasters in my room and the three of them together cost what my "1" D10 did. These are not Chinese Telecasters, 3/52RI USA Guitars.

I am also looking at 3 recently purchased Acoustics, 2 Breedloves and a Taylor, all 3 of those ( 2 used ) came in at about 1/2 of what my D10 cost.

Then the bigger factor, on any good day, I can sell or trade any of the mentioned guitars above, that's not something we can do with the PSG. We can't wake up one morning and decide to sell or trade in ole' blue for the new model, not when we may have 4K ( or more ) invested in ole' blue and we can only get back 2K or less on the trade.

You cannot walk in to any Guitar Center and TRADE the PSG and get back anything close to it's real value. You can do that with a guitar any day of the week, any hour of the day.

So, where is this going ? Chris asks a very relevant question...and it's a good question...

Can PSG builders making a living at this ? Carter ( John Fabian RIP) used his engineering background and had parts manufactured by automated machining. But that required an up front investment on his part while keeping the consumer cost "somewhat" controlled and reasonable. At the same time he had the manufacturing time down to a science and that right there is the primary factor. He told me one time that he could build 1 D10 in a single work day, given everything went well in that day. Controlled quality parts cost and specific manufacturing time was the objective and goal . John was building 15 to 30 PSG's each month and delivering as many. We constantly read and hear that other premium builders are offering a year or more for a delivery. For me, personally, that makes me go to the used market.

I certainly understand the craftsmanship of such Instruments, Zum, Franklin, Emmons, MSA, etc..but I too wonder how a PSG builder can join the market, shipping 10 or 12 instruments in the course of one year. 10 x 5,000 is $50,000. Being a very small business owner , I would have to evaluate gross income vs inventory cost and labor time if the business was only going to gross $50K over the course of one year.

So perhaps, it is the love of the Instrument and craft after all.

And as Chris asks, how many of us have 5K ready to spend on a new PSG ?

New builders such as Jackson, Sho Pro,BenRom etc, I wish them the best going forward in this extremely tuff market which they are part of.

Sadly I have no plans to change my PSG, perhaps add a S10 one day to my collection maybe ,( very distant thought ) but being brutally honest, I would seek the used market first, which does nothing for a builder unless of course the person I buy from is making a new purchase.

When I think of a dedicated PSG builder, it makes me reflect on my many full time musician friends who for the most part are struggling for income and basically being supported by a great wife who has a good job with benefits ! I hope that's not the case for the PSG builders.
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Ken Byng · From: Southampton, England

They obviously are surviving and are even coming up with new inovations, particularly the folks at Jackson. Show Pro and Jackson are offering what can only be best described as custom shop instruments from their professional range.

One thing to bear in mind - even though these manufacturers will list manufacturing and retailing as their core business, most still also provide a repair/restoration facility that generates them income.
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Tony Prior · From: Charlotte NC

Clete Ritta · From: San Antonio, Texas

Jim Cohen · From: Philadelphia, PA

Frank Freniere · From: The First Coast

Tony Prior · From: Charlotte NC

Jim, not meant to cause a rumor, but rather an observation. Yes you are correct it is said to be discontinued due to costs . I have deleted the words from my initial OBSERVATIONS...thanks for that...

http://bb.steelguitarforum.com/viewtopic.php?t=209205

Frank Of course GC will not give you a great deal, but getting 60% of a $600 guitar ( new) ( $360) is a far cry from getting 50 or 60% of a $5000 Steel, that's what is implied...that's a $2500 or more loss...a player may consider selling a guitar to GC for a bit less than they could get outside as makes the total transaction easier, plus GC offers another 10% off on the purchase of a new axe with the trade... By the way GC is "all in" on the used market...they have a very extensive used market web site..over 51,000 used items available across the country. Cash is king for both new and used...

I suspect no card carrying member of the "PSG worth $4k or $5K" club is going to bring the axe in for a 50% trade value, too much invested, too much loss...relative value counts here, that's all I am implying.
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b0b · From: Cloverdale, CA, USA

The market is small, but most builders I've talked to aren't hurting for customers. There's still a healthy market for new steel guitars.

Joseph Barcus · From: Volga West Virginia

I think support should be on top of the list. long waiting on return calls, talked down to like you are a idiot that dont have a clue. and being lied to on the waiting time on your guitar seems to be the most complains on most builders today. I dont think someone should have to wait a year on something they want. I wont walk into a restaurant if I have to wait over 5 minutes. I figure if they wanted my money they would make it easier. there was only one builder that was able to to say to me I could have your guitar for you in 30 days and only one. the rest said long waiting 1 year or more then only to find out you are most likely being lied to and may not see your guitar in 1 1/2 year. so at this time I will stick to what I have and mod it as it needs it a lot cheaper in the long run, plenty of nice used guitars out there and one should not have to wait no more than 30 days and not get any lip back from the questions why is my guitar not done yet
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Dickie Whitley · Posted 7 Sep 2011 7:39 am

Point taken, b0b. I respect your opinion, so we'll agree to disagree.

Geoff Cline · From: Southwest France

Having worked with and represented (legally) luthiers for many years (although not PSG builders...yet), I think the key is what constitutes a "company?" The killer for most businesses, and particularly instrument building businesses, in my experience, is having overhead rise to a point that isn't sustainable when there is the inevitable lull in sales.

That said, small shops with talented craftspeople have been able to carve out a niche and survive economic downturns and other external events that negatively impact business (and considering most instrument purchases fall into "discretionary" rather than "work related tools" that is saying something). Another factor in this issue is the relative "conservatism" of guitar players (including PSG players) when it comes to new ideas or designs that deviate from the established brands/styles. It never ceases to amaze me how many musicians scoff at new designs because "it doesn't look like X" or "so & so didn't design it, so it can't be good" rather than using their ears, eyes, fingers, etc. to really try things. This issue has been vexing for my friends and clients for many years...and shows no signs of getting any better. Frustrating!

Finally, being a relative new comer to playing and owning pedal steels, I am amazed at the level of ingenuity and engineering involved in making these guitars play and sound like they do. To me, it falls somewhere between hot rod building and rocket science, with a large dose of alchemy, mojo and musicianship thrown in. Its tough enough to be financially successful when "all one has to do" is buy wood and parts, shape and finish and sell a guitar (note: I realize this is NO SMALL feat and don't mean to say or imply that it is easy at all), but when you add casting, machining and/or engineering, additional production costs, shipping costs and smaller market, I am mightily impressed with pedal steel builders/companies. Sure it is a business but it has to be a labor of love or a deep passion for the instruments and/or music/players...because there is no doubt that it is a tough row to hoe.

All luthiers have my deepest respect. I am a devotee and supporter of the craft ethic. For me, there can never be enough examples of this kind of dedication and work.

Kevin Hatton · From: Buffalo, N.Y.

There is no appreciable return on building steel guitars. They take ALOT of time and the initial investment is enormous. You have to do it for the love.

Bent Romnes · From: London,Ontario, Canada

Kevin, that's it in a nutshell. But I sure do love it!
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George Rozak · From: Braidwood, Illinois USA

I'd think that the fact that some builders have a 1 to 1 & 1/2 year waiting period for a new steel would indicate that there's a fairly strong market out there for new guitars.
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Bent Romnes · From: London,Ontario, Canada

Good point George.
If you build a quality product, they'll beat a path to your door.
Case in point: Eddie Fulawka has a 2 year wait.
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Kevin Hatton · From: Buffalo, N.Y.

The fact that there is a one year wait has nothing to do with strong demand. MOST builders are a one man show. If you build two per month you can get to a one year wait fast. Overhead/parts are a big factor. Parts are VERY expensive.

b0b · From: Cloverdale, CA, USA

If demand is strong enough to guarantee that you will be building guitars for at least a year into the future, that is a solid business in my opinion. Many businesses, even one-man ones, are at the mercy of month-to-month sales figures to meet their obligations. By contrast, steel guitar builders seem to have some degree of job security, even if they aren't getting rich at it.

That's just my view as an outsider, though. It takes a special talent to build steel guitars, and an additional talent to build a business. Lack of the latter could bring a fine craftsman to the brink of bankruptcy.
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Per Berner · From: Skovde, Sweden

I believe there's always a market for low volume boutique manufacturers, but not necessarily a profitable market – a bit like the sportscar business. Every single supercar project is a loss-making affair: Development and materials costs are much higher than for a normal car, and prices ten to twenty times that of a normal car don't help when sales volumes are 1/10,000th. Volkswagen (Bugatti), Fiat (Ferrari), BMW etc. swallow these huge losses for PR reasons (and bragging rights, possibly), and then a big bunch of Brits in sheds think they too can succeed on shoestring budgets. Which they invariably do not.

For many small steel builders I suspect it is mostly a labor of love, pursuing a life-long hobby in retirement or as an extracurricular activity, or just barely making a living doing something you really like to do. I don't see how anyone could get rich building pedal steel guitars. They may think they are in profit, but that's probably because they are overlooking development and marketing costs and undervaluing their own time. If it were possible, Fender would still be making them, along with Gibson, Peavey and other major players.

By the way, I find this to be just the opposite:

"You cannot walk in to any Guitar Center and TRADE the PSG and get back anything close to it's real value. You can do that with a guitar any day of the week, any hour of the day. "

A regular guitar purchased new loses half its value when you walk out the shop door. A used pedal steel though, usually fetches near its original price. I've even been offered around $1,000 more for my Hybrid Zum than I paid...

Larry Waisner · Posted 8 Sep 2011 2:01 am **Steel Guitar Market**

I believe that the steel guitar has evolved to a beautiful instrument. I also believe there are companys out there large and small that cut corners to produce a product cheaper which gives them more profit. One big issue I have is Bearings verses bushings. Every one knows the guitar plays smoother and sounds better with sealed bearings. but they continue to make bushings. Striker plates is another issue there are alot of PSG's made from big and small named companys producing guitars with stop screws stopping against wood on the under carriage instead of spending twenty five cents for a 1/16 inch thick aluminum plate screwed down under the floor pedal levers to have a solid stop for there screws and discontinue damaging the body of the guitar and cause tuning problems later on. I am a retired tool maker and a musician of fifty years with a small two man machine shop at my home and I certainly have considered manufacturing PSG's and I guarantee the level of mechanical engineering would continue to be at it's best and new design's to an old dog sometimes is in order. I believe Chuck Wright was a man way ahead of his time. He used machinist ideas and concepts in manufacturing that was quietly copied by other guitar makers. One of the first to make and use nylon bushings. In my mind there is nothing prettier than a maple body steel guitar with polished aluminum parts. They can still be produced folks at a competitive price. Just because America is running short on forestry produce there are other countries selling tiger, burl, quilted maple lumber for pennies on the dollar our closest is Canada. Well I will get off this milk crate and go back to playing my guitar.
Best Regards,
From the mountains in northern New Mexico,
Larry Waisner

Per Berner · From: Skovde, Sweden

Bearings are intended for quickly rotating elements. For pedal steel applications, with very limited and slow movements, bushings actually do a better job at a much lower cost. Complication and expense doesn't always mean improvement!

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