Heritage Unveils A Brand New Archtop - Heritage H-717

[2bornot2bop]

2B, we had a small window where selling fees and shipping fees were cheap and we were able to use the Internet to buy and sell a bunch of guitars. There are about 20 guitars that I have owned that I sometimes miss, but I have 23 guitars at present, and if I had those other 20, I might be a bit overwhelmed. I think it is hard to not regret selling stuff and watching the price on those items go up, but remember the old adage "you can't go broke making a profit".

Lawson had a case where he sold a Heritage Guitar due to economic difficulties. I get that. In 1987, I had a business failure and sold an amazing 1982 ES-175 that I miss to this day. But I paid my debts rather than go bankrupt (my word is my bond), so that guitar served a purpose. I miss it nonetheless.

I dig that “you can’t go broke making a profit “ line. But truly I had attachments to each of those guitars, and same with an L5CES I sold that was the finest playing and sounding guitar I’ve ever owned. What can I say other than brain damage from smoking too much of that stuff in my youth!

[Doctor Jeff]

I love Heritage guitars, but this is a design miss for me. The fretboard and finger rest a going for a sleek, modern look, and then they couple that with the gaudy laced Citation tailpiece...it just doesn't work for me.

I disagree. I think it works. Kind of like a midcentury home with a vintage antique piece or 2.

Which pretty much describes my house at the present time.

[Doctor Jeff]

2B, we had a small window where selling fees and shipping fees were cheap and we were able to use the Internet to buy and sell a bunch of guitars. There are about 20 guitars that I have owned that I sometimes miss, but I have 23 guitars at present, and if I had those other 20, I might be a bit overwhelmed. I think it is hard to not regret selling stuff and watching the price on those items go up, but remember the old adage "you can't go broke making a profit".

Lawson had a case where he sold a Heritage Guitar due to economic difficulties. I get that. In 1987, I had a business failure and sold an amazing 1982 ES-175 that I miss to this day. But I paid my debts rather than go bankrupt (my word is my bond), so that guitar served a purpose. I miss it nonetheless.

Dang you must have done better than me.

I sold my ‘82 175 in 1988 for only $500. (I paid $800-900 for it new.) Yeah I still regret it big time. Took me 30 years to find another good ‘80s 175.

In the ‘00s I was $500 away from bankruptcy or at least severe financial embarrassment after my divorce. I went out and bought a guitar (Epi Joe Pass) on credit anyway, because…a guitar will get you through times of no money, but no money will not help in times with no guitar.

Surprisingly I got a $10K bonus from work—kind of a distribution for all the docs at my hospital—and was able to claw my way back to solvency.

Back to Heritage—I keep forgetting that good archtops are still made in America. If they can make a profit selling any good guitar, more power to them.

[Doctor Jeff]

I think there are some things missing in all these "that costs too much" raging rants.

1/ $13,000 today is equivalent to about $6200 in 1995. At that time, list price for a Golden Eagle was just over $4500. But the archtop market was more in play then, and Heritage has since changed from a makers-owned entity to a financialized (music conglomerate) entity. In 1995 terms, I don't think the $1700 added differential is out of line with what this H-717 would have cost if introduced then.

2a/ The comparison between factory-produced (or scaled craft shop) guitars and individual luthiers is fraught. For a company selling into distribution the economics are different. If a company is selling into two-tiers distribution, list prices have to typically be about 5X cost out the door. And keep in mind international distribution adds another channel layer for exported guitars. That means a $13,000 guitar sold into two-tiers distribution (maker sells to distributors who in turn sell to retailers) has to leave the factory having *cost* the maker no more than $2600. It might then get sold to a distributor for $3900 - $5200, depending on agreements. The distributor will then sell to the retailer for between $5,000 - say $6500, depending on what they bought it for. Then the retailer has 40 - 50 points of margin to work with and in which to cover any discounting if they sell for less than $13,000.

2b/ If the maker is selling into one-tier of distribution (direct to retailers), retailer agreements will be variable. Sweetwater gets a better deal than your local independent music store. But if they sell on average to allow the retailer 50 points of margin against the list price, the maker will sell into its channel for ~$6500, but because there is one less tier of distribution maybe they allow their cost out the door to rise to 1/4th the list, or $3250, for $3250 in gross profit.

2c/ Now, does anyone think that the all-in costs to an H-717 *isn't* in that range of $2600 - $3250? All-in -- materials, labor, that guitar's share of facilities costs, etc.? I don't know what it is but having run a manufacturing facility for while, I know it's not $1000.

3/ Notice one thing in these examples -- THE MAKER realizes less profit than the channel, unless the channel gives away their own margin. Plus, it's the maker who finances 30/60/90 days payment terms. It's the maker who funds market awareness to drive demand pull.

4/ Individual luthiers selling directly to consumers don't have the channel putting a needle into their potential profit. Someone like Mark Campellone who sometimes sells to a dealer, does on those sales, but as I understand it, it's not the bulk of his business. If Heritage elects to sell consumer-direct only, then the guitar can list at a lower price.

None of this makes one like a guitar or dislike it. But for Heritage to develop and introduce this H-717, yielding something in functional and craft league with Benedetto, the economics involved support the $12,995 list price regardless whether a working musician can afford it.

Phil

I realize this is a completely different product, but someone making a popular kitchen gadget (the Frywall, in case you’re interested—got his start on Shark Tank)—said that your production costs have to be 20-25% of the final cost, in part because many retailers discount them.

BITD most guitars including Gibson were discounted heavily from the MSRP. If fact, I think it was one of the more egregious examples of MSRP overpricing in retail. Over the last 15 years or so, that changed, and the MSRP became almost inviolable, at least for the major manufacturers.

Anyway, there are a lot of costs involved that most consumers are not aware of.

[Stringswinger]

While retailers would double their money in the past (discounters made less), Music stores have not been making Keystone (double their money) for many years. Wholesalers do not double their money but do make a profit.

Is Heritage selling to a wholesaler who then sells to the retailers? Is Heritage doing any direct sales? The more mouths that need to be fed, the more you will have to pay. Always remember than in any deal there are two things that a smart buyer should always keep in mind. First, in most cases everything is negotiable (can't means won't), and second, the power is in the buy. Sometimes a product or service has a supply that is so small compared to the demand that the power shifts to the seller and the price negotiability is in the seller's favor, but IME, not very often.

It is hard to say what these new Heritage archtops will sell for or what they cost Heritage to make. If you want one, find a seller and make an offer of what it is worth to you. If you get it at that price, it is a win-win deal (the best kind). If you don't get it at your price, move one. There are always other fish in the sea.

[2bornot2bop]

In the ‘00s I was $500 away from bankruptcy or at least severe financial embarrassment after my divorce.

Been there, done that. The way out is through.

[EllenGtrGrl]

Aw maaann! The H-717 looks like a cool guitar. My favorite local guitar shop is a Heritage dealer, but if they get one in, it's going to cost waaaay more than I can afford!

[jzucker]

put me in the "loves headstock", "hates tailpiece" camp. Clearly, they don't want to spend money making tailpieces. The new one looks out of place but it's better than the 6 finger tailpiece they have been recently using. , Maybe they'd be better of buying the ebony covered brass tailpieces that Eastman uses>

[jzucker]

my biggest comment here is that, at the end of the day, it's a factory-made guitar. For $5k(ish) I can get a truly handmade guitar from the likes of shaeffer, holst, campelone, etc. Not sure why you'd want to pay $12k for a gibson or heritage?

[Rickco]

put me in the "loves headstock", "hates tailpiece" camp. Clearly, they don't want to spend money making tailpieces. The new one looks out of place but it's better than the 6 finger tailpiece they have been recently using. , Maybe they'd be better of buying the ebony covered brass tailpieces that Eastman uses>

Heres my new to me '35 Broadway, came to me with replaced tail piece (broken original in case)...I cracked up when I saw the Heritage. I think Heritage is great but they never got their tail piece act together. I think they should have kept the H on their top models.

[jzucker]

Heres my new to me '35 Broadway, came to me with replaced tail piece (broken original in case)...I cracked up when I saw the Heritage. I think Heritage is great but they never got their tail piece act together. I think they should have kept the H on their top models.

The current design uses 5 vertical stabilizing wires in total which structurally is more sound than the one on yours but IMO, it's ugly. On a $12k guitar, i'm not crazy about it. I do love the gibson inspired headstock but with a straight string pull. That's an improvement.

[Rickco]

stabilizing wires? now it looks important!