What is the Best Pricing Strategy for New Pipe-makers to use?

What is the Best Pricing Strategy for New Pipe-makers to use?

New pipe-makers just entering the business, have to make a living. They work long and hard hours at their craft and for the hours worked, they need to be compensated. If they are however new to the business, how should they approach their compensation right at the beginning of their careers, in order to maximize their business potential in the future? Is there a strategy or one could even call it, philosophy, for brand new pipe-makers to consider that would help them achieve those long-term goals?

I look at each and every pipe-maker currently out there and compare the very beginning of their careers to that of a new business venture, a start-up so to speak. Ultimately this is exactly what they are doing when they begin, evaluating whether or not they can ‘make it’ in this industry and become a self-sufficient business that involves making and then selling high-grade/expensive pipes. I am obviously excluding the hobby pipe-maker from this analysis.

The difficulties of making it in this business are known quite well to more than a few current as well as no longer carving pipe-makers. Some carvers try to come into the business by first quitting their day jobs, only to find themselves not making enough money selling pipes and looking for that same day job a few years later. Every year all of us watch how the ‘hot’ pipe-maker of just a few years ago used to sell at $X High Value is now selling at $X Lower Value. If this truly is a business for these carvers and how else can it be viewed, then long-term price sustainability and a consistent base of orders, is obviously paramount for their business to succeed. Needing to go back into the workforce, as well as those price drops are likely difficult blows to the pipe-makers ego but can this circumstance be better managed or even avoided?

The ego stoking the fires of all these brand new pipe-makers can act as both a friend and an enemy. Wanting to get ‘paid’ for one’s work, especially one’s extremely hard work, as is the likely case for someone just starting out & learning the business as well as the craft, is very natural. How can that desire be approached in a way that is more fruitful to their careers?

The prominent US pipe-maker Todd Johnson shared some insights on the very beginning of his career in pipe-making. He told me: “During the first year or so of my production, the pipes I was making probably didn’t live up to their $200-$400 price tags. When I sold one such pipe to notoriously picky collector Toren Smith, he returned it in person at the Chicago pipe show, and he essentially obliterated it with his criticism. While it hurt both my pride, and my pocketbook, Toren was absolutely spot-on. Taking his criticism to heart, I returned home with a new understanding of the “bar” a high grade pipe has to clear, and the next year, I believe Toren bought seven or eight pieces from me.”

Todd Johnson

Todd was lucky because he received constructive criticism and combined with his strong personality, he is where he is now. What if other pipe-makers are not so lucky? I would imagine that not all collectors are able to offer the effective form of feedback that Todd received. I also imagine that most pipe-makers are not even able to handle such feedback very well at all. Still though, it is difficult to ignore the need to get more and frankly as much as possible, feedback at this early stage in someone’s career? A good and simple tip however, if your not getting constructive feedback but also not getting any repeat customers at the same time, that likely says a lot as well.

It seems that the connection with the collector community is a very important element in any new pipe-makers future. It seems therefore wise for the new pipe-maker to want to get as many of their first pipes into as many collectors’ hands as possible? The best way to do this then would be to price their pipes right out of the gate with this long-term business goal in mind. Price them in a way that makes it easy for this process to occur. Their pipes should flow into the system with ease. Make that feedback happen easily by participating with it, rather than against it. If the new pipe-maker is truly good and their potential is clearly seen, they will automatically gain a following and potential future customers. If they are really good, this is a small sacrifice for the confirmation they will get, which they so desperately need. No matter which way you look at it, even if they find out that they are horrible pipe-makers, it seems that the value in this step produces only good results and good information allowing the new pipe-maker to better understand their place and future in the business. Such an initial step could be viewed as the ‘market research’ portion of the business plan.

The ultimate costs for these pipes do not concern me as much as what is best for the new pipe-maker when taking their personal long-term goals into account. I am concerned with the new pipe-makers future success rather than how much I pay for his or her pipes. I am happy to pay a tidy sum for something that I want. I also believe in our free market economy.

Todd Johnson echoed a similar sentiment saying to collectors: “If you don’t think the quality measures up to the price, keep your wallet in your pocket. Any pipe-maker with half a brain will recognize that either their pipes aren’t good enough to sell, or they’re too expensive. Collectors needn’t try and make it some sort of a moral issue.”

I completely agree with Todd and find the confidence that I see in some new pipe-makers pricing to be intriguing. When I however see so many new pipe-makers charging at prices that established pipe-makers have taken years to achieve, it simply raises these natural questions and my concern for these new pipe-makers and their future tends to magnify.

Todd Johnson expressed some of that fear with another comment, he said: “I’m asked to look at a lot of new pipe maker’s pipes, and some of them are terrible at any price. Others clear the bar for a couple hundred bucks, and a few are truly exceptional and should indeed command true high grade prices. I have no problem if someone wants to charge $500/pipe right out of the gate, but the pipes had better be damn good. The problem I see with new makers most often is not that their prices are somehow objectively ‘too high,’ for someone without name recognition, but that they don’t make good enough pipes. Guys, if you want to do this for a living, make better pipes!”

I clearly do not look at the quantity of new pipe-maker pipes that Todd Johnson reviews. In terms of his comments though, the common sense portion that one should take away is that the ‘exceptional few’ statistic will likely remain. When you look at what is being sold however and at what prices, the numbers seem to tell us something different. They imply that there are a lot of exceptionally great, brand spanking new pipe-makers out there. Perhaps yes, perhaps not.

One industry veteran who shall remain anonymous shared some insight on this issue. They said: “I have noticed this as well with some guys pricing very high right out of the gate. Like other products on the market, price is more about prestige than money. Some people price low and work up. Some price very high and want people to flock toward them. Both can work and both can fail. Many are pricing high for wholesale, I believe, because they can’t or don’t sell directly. It’s a risk.”

A certain amount of risk-taking is normal with any new business venture. I still however gravitate towards a more conservative approach. What if the carver is really talented? An argument could still be made for staying conservative at the beginning. Especially if they are destined to be great, why are those guys taking some of the same risks? They will easily command the high prices they expect right now, down the road. By taking a gradual price increase approach today, they will actually be more certain of their long-term sustainability.

It also seems clear that all new pipe-makers working during this beginning stage, should definitely have a second job to ease some of the financial pressures that come with starting up a new business. Having sufficient ‘start-up’ cash on hand is key to minimize some of the feelings associated with their personal finances, especially when they are paying $40 per block of briar. There are costs to learning how to carve well. A lot of lost costs that come about from learning from mistakes.It is an expensive business to get up and running.

Todd Johnson again shares some insight from his experience, he said: “Every new pipe maker spends a tremendous number of hours on each pipe, and despite the fact that, when it’s finished, it’s mediocre at best, they can’t imagine that their 20+ hrs of work, has yielded something that’s “worth” only $75-$100. I tell every pipe maker I work with, ‘you don’t get paid by the hour, so efficiency is paramount if you want to make a sustainable living as a pipe maker.’ For me, a sandblasted billiard might be more ‘profitable’ from an hourly rate standpoint than a giant smooth sculptural piece. In the end, it’s the former that finances the latter, not the other way around.”

What Todd said above takes time. If this efficiency will automatically come with greater experience, then a certain amount of investment towards that, is needed up-front.  Who will benefit most from the investment/sacrifice made up front? The pipe-maker or the collector? I vote for the pipe-maker. Once again though, a cross-roads where we are forced to ask ourselves, what is the best way to get there then, as effectively as possible, especially if it is truly meant to be? Marketing ones self takes some time in any case, it rarely ever happens overnight.

Marty Pulvers of PulversBriar.com also chimed in on the discussion adding these valuable points: “We also face the problem (not ever being able to see into the future) of a person who starts off great but fails to grow.  He has commanded a fairly big price to begin with, justifiably, let’s say, but fails to improve enough to attract a wider audience.  He is now saddled with high prices and a small audience. If he kept his prices low even at the beginning, he would at least, we hope, be delivering good value for the dollar without much improvement. Conversely, the guy who starts off slowly, and is smart enough to keep his initial prices low, does have the option of raising his prices.  Thus, I would argue that it is always best to start off with low prices and let time and the market (and ego, I suppose) help dictate any rise in prices.”

Marty Pulvers of PulversBriar.com – Photo courtesy of pipesetbouffardes.com

The pipe economy is changing folks and prices are changing with it. Some things will definitely have their own life and create their own movement which none of us will be able to control. There are also no ultimate right or wrong answers and there will always be exceptions to the rule. Obviously, everyone also has the right to approach their new business however they choose. It simply seems like a good strategy to consider as many of the potential factors that lie ahead as one can, when would be pipe-makers make the leap into this field.

Copyright © 2012. TobaccoDays.com. All rights reserved.

Share This Post

7 Comments

  1. Todd Johnson - April 26, 2012

    David,

    This is an interesting survey of the questions, but I don’t feel like it actually tries to answer any of them. In light of that, I will offer my unsolicited advice to all those who want to enter the industry as “professional” pipe makers. 1. Make pretty pipes that are well engineered. Until you can do this, you don’t have a viable product to offer at any price. 2. Don’t quit your day job. Doing this for a living is difficult, and there are probably less than five people in the US who do this full time, as their family’s only source of income. 3. For the love of God, don’t be “original” until you can carve consistently pretty, well-engineered pipes in accepted, conventional shapes. We’ve all heard the quote “Your work is both good and original. Unfortunately, the parts that are good are not original, and the parts that are original are not good.” Established shapes exist for a reason, and there is no shame in reproducing them. Once your skill set catches up with your inexhaustibly creative brain then, by all means, go apeshit. Until then, keep it simple, stupid. 4. Don’t chase the endorsement of would-be tastemakers, gatekeepers, blowhards, or self-important morons who want to “sponsor” you as their pipemaking boy-toy. Soon enough you will find yourself riding the bus to God know’s where wondering why you’re a passenger on your own effing bus. Beware of Greeks bearing gifts–even if those gifts look like a first class ticket to fame and fortune amongst your benefactors’ adoring klingons. Instead, the city that was once your career will be summarily raped and pillaged. Never let anyone else–not a collector, not a dealer, not another pipemaker, and no, not your Great Aunt, Pearl! 5. LISTEN TO YOUR COLLECTORS when they offer criticism. DO NOT LISTEN TO YOUR COLLECTORS when they offer praise. Every mother tells her daughter she’s pretty, and yet there are lots of ugly women out there. Connect the dots. Someone’s not telling the truth. 6. Get to know your collectors’ tastes and preferences. Every successful visual artist has a “patron” or two. Cultivate patrons that will grow with you rather than trying to be the most popular kid in school. Buyers that can be swayed by trends and blog posts will not help you make a sustainable living. They are like Facebook “friends,” i. e. acquaintances. If you end your life with three real friends, then you are truly blessed. Likewise, if you end your pipemaking career with three real collectors who have grown with you and continued to support you throughout your career, you are again blessed. 7. Quit trying to make Blowfish. The last thing we need is another briar abortion in the shape of a melting lollipop. 8. Buy the very best tools you can possibly afford, but know that great tools will never turn you into a great pipemaker. 9. Listen to every single thing that Lars, Tom, Nana, Jess, Teddy, Toku, Toni, Kei, Former, Per, Ulf, Wolfgang, etc. take the time to tell you, and for God’sake don’t make excuses to them for why your pipes aren’t what they should be. Just listen, and do what you’re advised. 10. Don’t ever give pipes away. Not only does it devalue your work, but it will NEVER pay any meaningful dividends. No one will ever appreciate something they’ve received for free the way they will appreciate something they’ve spent their hard-earned money on. Glowing reviews of free pipes are about as valuable as a bag of shit minus the cost of the bag. And that, my friends–to quote both Dr. Dre and Ben Folds–is some real conversation for your ass.

    TJ

  2. CE Thomas - April 26, 2012

    Mr. M.,
    I have noticed the price increases you wrote about and they do puzzle me. This is a good topic of discussion and I thank you for brining it up. As to the finer points related to artisan growing pains, I defer to your contributors and yourself. Young artisans can now distinguish among alternate paths. I am in the business of providing sound advice myself. I do appreciate the gesture and how you supplied it.
    My regards,
    C.E. Thomas, M.D.
    North Carolina

  3. Ernie Markle - April 28, 2012

    For the new maker, pricing is one of the most difficult aspects of the trade. To compound the problem, if you ask ten different makers what pricing philosophy you (as a new maker) should adopt, I personally guarantee you will receive a minimum of *twenty* paths to follow. Not only will those professionals not entirely agree with each other, but they leave plenty of room for interpretation within their own advice to the new maker. Please don’t misunderstand – I’m not complaining, but I do wish someone would provide me with the equivalent of the Kelley’s Blue Book of pipes.

    Now that I’ve crossed over from being a collector to a maker of pipes, I suddenly see complexity in a dozen areas I thought were simple before. This is certainly one of those topics. Thanks for the article.

  4. Chris - April 28, 2012

    I would like to add to the discussion another question that cannot be ignored in reference to price. The price of high grades appears to be soaring. As a free market guy and a successful business owner, I believe that a pipe maker has the right to seek out the price that the market is willing to pay. It is a hobby to guys like me, but it is in fact a business to those that make pipes for a living. I have the right as a consumer to choose whether or not I want to spend the money. So, the question is, has the rising price of the top end of the market created not only a new “ceiling,” but possibly a new “floor” as well? Has $400 (or insert your own number) become the “new cheap?” If the top end now starts at $1,000+ for a nicely grained smooth, the new pipe maker’s price at $300 or $400, is now comparably cheap.

    Now, I am not defending a new pipe maker that does this whatsoever, and Todd’s point rings true in that it better be a well done piece. Nor am I faulting an established high grade maker for pricing to market demand. What I am doing is suggesting the possibility that the economics of the market place are changing. Personally, I love rooting for young pipe makers and I back that up with making a fair number of purchases from young pipe makers. But, I as a buyer and collector, I don’t personally buy pipes as an investment, but I do want to maintain some value in my purchases. There is a price point (for me personally, about $400 or less) that I will look at what the rest of the market is doing in that price range. It doesn’t matter to me at that price point how great the quality of the new pipe maker’s piece is if I can purchase a pipe for just a few dollars more from a well established pipe maker that has proven that he is here for the duration. Of course there are always exceptions to the rule, but they are just that, exceptions.

    Good job David on a subject that is broad and filled with lots of different opinions. I appreciate your intent to provoke individual thought on the subject rather than attempting to provide a conclusive position.

  5. David M. - April 28, 2012

    @ Todd

    You have fantastic passion my friend and all of us are grateful to hear your un-filtered comments. Having access to that is very important and you have my appreciation for doing it.

    I agree with most of your points whole-heartedly and some of them quite specifically I stand behind 1,000%. There still remain a few caveats in many of them. I could have for example written for new pipe-makers to get their pipes into as many collectors hands that are ‘in the know’ and that they should avoid those who are not. That sentence however is very difficult to implement, I avoided making a blanket statement which is hard to enact. Unless you want to spend some time defining which pipe collectors are ‘in the know’, a different route of discussion is required.

    For me personally, it is all about putting them in the best position possible for them to think on their own.

    I do not know what specific challenges are in front of each pipe-maker. I do not know how many collectors know of them. If they have a lot of challenges in front of them, lower price may be better. If they routinely sell out at shows, ever so slightly higher may be better. The pipe-maker needs to be able to evaluate for themselves, their own self & what is best for them. That is the main point of the article.

    The ability to self-reflect and hopefully do this self-reflection correctly (when taking as many factors as possible into account), will allow them to make the best decision they need to make for themselves. They are themselves in the best position out of anyone to make that determination.

    The question then becomes, how do you build this ‘self-reflection’ confidence…correctly, with as little confusion, distraction and easily ignored type of responses attached? How do you give advice in a constructive manner which allows the easy absorption of alternative thought to occur? That is the intent for TobaccoDays.

    – – – – – – –

    @ CT

    Thank you Mr. T, as always.
    Feel free to question some of the advice we have all given. There is always room for more questions.
    Nice to see you on this side of the discussion.

  6. David M. - April 28, 2012

    @ Ernie

    It is definitely not easy Ernie. No disagreement on that point.
    There is so much out there to consider it can definitely be overwhelming.
    Let’s hope that people simply do the best they can, with what they have.
    Thank you for your comments.

    – – – – – – –

    @ Chris

    That is another good question Chris. The landscape is definitely changing. Luxury goods, across the board, are rising 15-20%, while the economy is tanking. A strange phenomena.
    I do agree with you though in that if it is worth it to pay that price, by all means, charge it. If it is truly worth it, we are definitely getting a value these days by only paying $500 for that new pipe-makers work. Because if he or she will truly get that much better, today’s price is a steal/deal.

    Thank you for the final comment as well. Just providing a general ‘strategy/philosophy’ was the intent. I am not sure what else we can really do here.

  7. eliandro goncalves - March 7, 2015

    Caros amigos,
    Estou iniciando na arte de PIPES (cachimbos para nós no Brasil). Gostaria de contar com vossa ajuda. Obrigado camaradas.

Leave a reply