economics of pedal business

Discussion in 'The Stomp Box' started by neckradius, Apr 9, 2015.

  1. neckradius

    neckradius Tele-Holic

    Posts:
    758
    Joined:
    Jan 17, 2013
    Location:
    New York
    Sometimes I just can't believe how many pedal makers there are out there. I realize that some may not be doing it as a real business, but as a hobby, or as a sideline to another more profitable electronics business, but I just can't believe it.

    You've got the subset of guitar players, which is small enough, reduce that down to the number of people who are going to use pedals, and reduce that number down beyond people who aren't simply going to go into guitar center and buy a boss overdrive or distortion and a crybaby. And then, you've got high end boutique makers, selling pedals for $200 and up, but you've also got Chinese companies looking at this and saying wow, this is a big enough and rich enough market such that joyo, moen, mooer, etc., have all sprung up. I don't get it.

    But hey, variety is the spice of life I suppose.
     
  2. Paul in Colorado

    Paul in Colorado Telefied Ad Free Member

    Posts:
    23,351
    Joined:
    Mar 17, 2003
    Location:
    R.I.P. 2019
    Guitarists are gear addicts and tone chasers. We're always looking for the next thing to take us to the next level. It's a golden age. Be happy we have so many choices.
     
  3. waparker4

    waparker4 Doctor of Teleocity Ad Free Member

    Posts:
    18,996
    Joined:
    Nov 9, 2011
    Location:
    Philadelphia, PA
    Lots of the companies don't stick around long.
     
  4. Virgman

    Virgman Tele-Meister

    Posts:
    248
    Joined:
    Sep 30, 2007
    Location:
    Joisey
    I suggest other businesses if you want to make money.

    Have you looked into horseshoeing? I believe they are called "farriers".

    Now that's a growth industry.
     
  5. artdecade

    artdecade Poster Extraordinaire

    Posts:
    8,223
    Joined:
    Dec 6, 2010
    Location:
    Twangsylvania 6-5000
    I can think of a few that went crashed ... and a few more that should. :lol:
     
  6. RyanJH

    RyanJH Tele-Meister

    Posts:
    114
    Joined:
    Jan 26, 2013
    And those are the guys who fail to budget for advertising/marketing. They spend all this money on tools and parts, then just sit in their basements or what have you and build pedals for a consumer base within a square mile of their residence.

    -Ryan
     
  7. waparker4

    waparker4 Doctor of Teleocity Ad Free Member

    Posts:
    18,996
    Joined:
    Nov 9, 2011
    Location:
    Philadelphia, PA
    I was actually thinking about HomeBrew Electronics when I wrote that post.

    I guess they had been in biz for a while compared to other ventures
     
  8. artdecade

    artdecade Poster Extraordinaire

    Posts:
    8,223
    Joined:
    Dec 6, 2010
    Location:
    Twangsylvania 6-5000
    Being a creative builder does a businessman make. Hermida, anyone?
    Brilliant pedal maker, terrible business acumen.
     
  9. teletimetx

    teletimetx Doctor of Teleocity

    Posts:
    11,542
    Joined:
    Jul 25, 2011
    Location:
    Houston, TX
    Right now, there are:
    63,322 results for guitar effects pedal
    listings on fleabay for pedals and pedal related stuff;
    you might not get it, but a whole bunch of other people are trying to. Is it a great business model? For some folks, maybe. For others, maybe not.
    Even Robert Keeley, who by many accounts, makes some great pedals, has had some ups and downs - some of it just plain old life experience or personal problems, but just check out all the views in the Stomp Box threads and the pix of pedal boards posted by forum members*.
    It's just a little 'ol box of happiness, right?

    *update: here's the stats on pedal board pix:

    replies: 7,455
    views: 2,119,890

    ...starting to see a trend?
     
  10. Virgman

    Virgman Tele-Meister

    Posts:
    248
    Joined:
    Sep 30, 2007
    Location:
    Joisey
    Plastics.

    Remember it. Plastics are going to be big.
     
  11. neckradius

    neckradius Tele-Holic

    Posts:
    758
    Joined:
    Jan 17, 2013
    Location:
    New York
    No, I'm not starting to see a trend and none of that means anything.

    Let's say there are 8000 people here at tdpri with pedal boards with an average of five pedals on them- 40,000 pedals. let's say there are 100 times more such boards out there than the small sample here- we're up to 4 million pedals, sold once. (Manufacturers don't make any money from guys selling and trading their pedals back and forth). Just making this up, but let's say $50 marginal profit on each pedal, $200,000,000- two hundred million dollars. Ok, that's maybe a decent amount of money to be had, but those pedal boards I just referred to- they were built up over how many years? 10? 5? 2? Let's say 2, even though that is extremely generous (like all my other numbers)- that's 100 million per year. Let's then suppose that boss, dunlop, line 6 and digitech together grab 20% of the market. 80 million left. I dunno, this is starting to bore me, but my point is it seems like an awful lot of builders going after a finite pie.
     
  12. ICTRock

    ICTRock Tele-Afflicted

    Posts:
    1,519
    Joined:
    Jul 31, 2014
    Location:
    Tampa,FL
    obviously if you're looking to quit your day job and solder for a living then yeah, advertising and hype are your best friends.

    I've got a lot of strong opinions on what passes for boutique these days, some of which would be found offensive or against forum rules here but there's a lot of shady behaviour out there.

    I think that "one square mile" comment is a bit dismissive. those customers get the best customer service they will ever find and that's the kind of guy who doesn't have to start doing shady business to get by. they can keep their day job and not worry about getting some youtube guy to demo their stuff or make it into the tone report or getting a booth at NAMM. there's something to be said for that.
     
  13. waparker4

    waparker4 Doctor of Teleocity Ad Free Member

    Posts:
    18,996
    Joined:
    Nov 9, 2011
    Location:
    Philadelphia, PA
    Very much agreed.

    One can get into the biz for the desire to create and help players.. and/or one can start for the desire to get big and make money.

    The ones with a small operation serving just a few passionate people -- maybe they don't want to get big and have pedals demoed on youtube and eventually have to hire help / set up a shop / move to a different town / outsource, etc. and end up in a situation where they're not soldering each pedal anymore.
     
  14. mlove3

    mlove3 Tele-Afflicted

    Posts:
    1,463
    Joined:
    Apr 15, 2008
    Location:
    Phoenix Az
    I build homebrew amps in my basement. A guitar buddy says 'hey, you should build those and sell em', not really fully understanding the amount of man/hours that building/testing/packing one amp would require.
    The only way I'd consider it is to lock down a couple of designs, outsource manufacturing to China, and focus on marketing and sales.
    That's a sound business model that has a small chance of working in an already saturated market, IMO.
     
  15. Flat6Driver

    Flat6Driver Friend of Leo's

    Age:
    46
    Posts:
    3,586
    Joined:
    Jan 14, 2013
    Location:
    DC Burbs
    Those are the same people that tell a guy who prepared a nice meal to open a restaurant. No understanding of the labor inputs or business.

    I'm into old sports cars. For every one forum guy on the net talking about XY and Z there is 10 people buying that without any research. One place that rebuilds motors was NOTORIOUS for ruining them if you did 60 seconds of google searching. Yet, they still ran as a business until AG shut them down.

    Pedals are anywhere from $49 to a couple hundred. There are PLENTY of busy impulsive guitar guys that don't read forums, don't chases tone, don't know what they are doing that see something (magazine, YT demo, etc) and can just BUY it, like they would buy dinner for the family. If they don't like it, under the bed, the closet etc. Maybe they don't even know how to play too well, but people LOVE their gear.

    So, I think the stats are probably under rated.

    This forum has been worried about the demise of the guitar and guitar music for the 2 years I have been here. People are still buying stuff.
     
  16. MilwMark

    MilwMark Doctor of Teleocity Ad Free Member

    Posts:
    10,851
    Joined:
    Apr 29, 2013
    Location:
    near Arnold's
    I think this is a small subset actually (at least as concerns pedals). Most of the guys who I play with have had the same pedals for a LONG time. And if they swap, it's mostly likely to an old Boss or Ibanez that they have on their shelf. Prompted because something broke (pedal, amp), etc. New ones come around only when they NEED (and I mean NEED, like, wrote something with a sound only an organ pedal can do or whatever) a new pedal.

    I was on the gear carousel for a long time but having stepped off, I don't foresee jumping back on. At least based on my circle that seems like the more common path to be honest. But maybe that's unique to my town/circle.
     
  17. Tele Convert

    Tele Convert Tele-Holic

    Posts:
    792
    Joined:
    Apr 1, 2013
    Location:
    Illinois

    I recently found a guy in my area that's like this. He works on guitars, amps, and pedals. While at his house for getting an amp serviced, he showed me the pedals he's built and told me about what goes into making them. I could tell this was his real passion. The creative process of making a really killer sounding pedal. He does sell them to customers for about $200 a pop, But I don't think he's got his sights set on "making it big", sure didn't feel like it.

    I also asked him why he didn't build amps. There's not enough of return on a large investment of time and materials. It also causes him to get backed up in other work he does. He said he's built a couple for himself, and always ends up selling them.
    He's a guy that is only interested in doing a job that he loves and paying his bills.
     
  18. hongaku

    hongaku Tele-Afflicted

    Posts:
    1,121
    Joined:
    Dec 14, 2011
    Location:
    Oakton, VA, USA
    And then there's Vertex.
    I feel really sorry for every person that paid so much money for a re-branded BBE. How that guy even still has a website up that is recently updated is beyond me...
     
  19. Obsessed

    Obsessed Telefied Ad Free Member

    Posts:
    23,806
    Joined:
    Nov 21, 2012
    Location:
    Montana
    I'm with you neckradius. I don't get it either. I'm a fleaBay pedal buyer and what amazes me is that any reasonably priced pedal sells the week they are listed. Sure, there are people looking for good deals to flip, but I've got to believe that most are purchased by people like us, looking for that elusive tone in our head. Not to mention CL, Reverb, TGP Emporium, new on internet and new at brick and mortar stores. Is there really that much of a demand for pedals? When I think about these kind of things, I always go back to wondering where all of the strats are since the mid 50s? It just blows my mind that there are that many people that have operational pedal boards out there.

    I've been recently looking for a tremolo pedal. There is every model of tremolo pedal probably ever made, listed on fleaBay right now from the cheapest new Behringer for $15 to a '50s DeArmond for $499 (there is a Boss Tremolo for $999, but I assume that is a mistake) with tons of Tuna Melts and Boss' in between. What amazes me is that most of them will sell by next week and about the same number of new listings will fill their spots. How can this be? And this is just one effect.
     
  20. Tele Convert

    Tele Convert Tele-Holic

    Posts:
    792
    Joined:
    Apr 1, 2013
    Location:
    Illinois
    They're cheap, in comparison to guitars and amps. I have 3 guitars, 2 amps, and 12 pedals. I could easily buy another couple any day of the week. AND not be in too much trouble with the wife. Wait! That's it! They're easier to sneak into the house than gits or amps!
     
IMPORTANT: Treat everyone here with respect, no matter how difficult!
No sex, drug, political, religion or hate discussion permitted here.


  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.