Reville News

Affordable Guitars: 6 Ways We Keep Your Costs Down

“How do you offer affordable guitars with quality equal to Big Brand guitars 2-3x the price?”

Since our start in 2014, we’ve received this question on a daily basis.  Our mission here at Reville is to offer musicians quality, affordable guitars that can keep up with Big Brand guitars 2-3x the price.

We’ll let you in on the secret.  In reality, the concepts are simple, but the execution is its own beast.  When it comes down to it, our mission is intertwined with every daily decision that we make – to reduce waste and keep costs low, so that we can keep offering affordable guitars.

Let’s get to it:  the 6 core principles we use to keep costs down so that we can achieve our mission.

1.  Experienced Production

But wait – isn’t that more expensive?  Absolutely.  In modern quality theory, the following is a major principle that many overlook:

It costs more to fix a mistake rather than to prevent it in the first place.

affordable guitars luthier

Many companies with our mission would use lowest cost production.  There are literally hundreds of guitar factories, and production costs range dramatically.  It is a minefield with a few diamonds who can offer exceptional value, and the diamonds are incredibly difficult to find.  If you go on Aliexpress, you’ll find hundreds of guitar factories – I can tell you now, these are all factories to avoid.  Do you think a successful, quality guitar factory needs to offer custom guitars with a minimum order of 1?  Sorry to burst the bubble, but the successful factories are running at near capacity with minimum runs of 60, 100, or more guitars of a single design, selling only to big buyers.  They want to land the large brands and sell in high volume.

The high quality factories don’t usually have a website, or advertise at all.   It’s difficult to find them, and often they won’t even consider working with you when they have never heard of you before.   Historic relationships drive their business, and the main way to find them is word of mouth.

Luckily, we discovered this quickly, and had contacts in the industry who put us in touch with several factories.  Over the years, we have partnered with a few factories, each better than the next for different reasons.  However, there was one common theme across all of them: they were 20%-30% more in terms of production cost than other factories.

The result?  No guitar ever gets scrapped.  We have eliminated 90% of re-work, which adds up quickly especially in labor hours.  And the reputation we’ve earned for offering quality, affordable guitars is priceless.  Over the years, we’ve saved ourselves a lot of agony and wasted money by working with experienced production.  We’re able to pass these savings on to you to keep our affordable guitars competitive.

2.  The Big Bloated Corporate Machine

I know, I know, we’re starting to sound like that “Corporate America” song by Boston.  While we’re obviously pro-business, we are all musicians at heart and there there are about 50 reasons why not being a corporation enables us reduce waste and keep from inflating prices like the Big Brands.  As a small company, we run on efficiency.  Here are just a few of those reasons:

  • No inflated executive salaries
  • No shareholders or board demanding higher markups, higher returns, or trying to control what we do
  • Limited travel – and if we do, it’s in coach
  • Eliminating wasted payroll – nobody is floating under the radar, not doing their job:  we all work hard here
  • Spending Control – not $1 goes wasted on something we do not need
  • Controlling Leverage – to date, we’re 100% funded on personal investments and business operations.  While some leverage is okay, it can easily be something that turns into waste.  This also keeps us in check to make good decisions.  If we make a bad one, there’s no bail out!  Sink or swim.  (PS. Can guitars act as floating devices??)

3.  Large Production Runs, but Small Batches

When you produce in high numbers, factories offer bigger discounts.  But this is hard for startups!  It ties up limited funds, storage space is expensive, insurance costs are high, etc.  When it comes down to it, a startup like us just can’t afford to do it.

However, our factory noticed the potential of the Reville brand and generously offered us their storage space.  If we agreed to larger production runs, they would cover a significant portion the funds until we were ready to take them.  This opened the door for discounts and savings.  Frankly, this business arrangement is one that you would see between friends or family – not international business partners.  It takes a high level of trust and commitment.  But in the end, our factory does this for the same reasons we do – a passion for guitars, and we share a similar mission.

With this agreement, we are able to cut storage costs by 80%, insurance costs by an equal margin, and expand the use of the funds we have.  All of this flows to you in the form of more affordable pricing.

4.  A $400 Guitar In The Store Is Really Only $240

Guitars in a Store

Here’s where you can really see the difference in price.  Take our Maverick, for example, which we sell at $240.  Most dealers expect a 30-50% margin once they’ve sold a guitar, sometimes higher.  We’ll take an average and use 40% for this example:

To make 40% profit on the sale of one of our $240 Mavericks, the dealer would need to sell it for $400!

This is one of the biggest differences between us and big brands.  But there’s more to it than that – using dealers requires a dealer program, sales reps, dealer marketing materials, and lots more.  We’ve cut 100% of those costs by selling direct.

5.  Better Packaging – Low Shipping Damage

UPS TruckAgain, eliminating waste is the name of the game.  Doing all this work, only to have a guitar destroyed during shipping would be a significant loss.  Shipping insurance, which can cost $5-6 per package, is a big waste for businesses.  Don’t skimp on insurance for personal shipments, but when doing volume as a business, insurance on such a small level is a loss, for example:

  • Our double boxing, bubble bag, craft paper packaging has a 0.2% damage rate.  (2 out of 1,000!)
  • For every 1,000 guitars, that’s a $400 loss rather than $5,000-$6,000 in insurance costs.  Accidents will happen, but we can absorb this minor loss.
  • The cost of our packaging was $0.00 as the factory provided the upgrades free of charge.

This alone saves about $5 per guitar, so we pass those savings on to you.  Small, but effective, and example of how we apply our principles to everything we do.


6.  Expensive Marketing Campaigns

Big Brands spend marketing dollars on endorsements, full page magazine ads, even TV placement.  At Reville, we have primarily relied on word of mouth.  Our thought has always been – if the guitars are good (which we know they are), they’ll naturally gain exposure through word of mouth.  This has been working well for us and there have been rushes where we couldn’t keep up!  While we do engage in inexpensive marketing like our Backstage Reville Newsletter and social media marketing, we avoid big ad spend and pass those savings on to you.

Can You See The Difference?

These core principles keep Reville guitars affordable, however, the list doesn’t stop here.  Everything we do, every dollar we spend, is carefully considered in order to control costs.  The blog portion of our website that you’re reading now – hosted for free.  We switched website platforms a few months ago to save even more costs.  We have one email address – admin@revilleguitars.com, rather than 30 (customerservice@, accountspayable@, webmaster@).

We’re serious about our mission, and we are striving to improve each day.  Check out our guitars.  You can try one risk free with free shipping and free returns.

We hope you’ve enjoyed this read and would love to hear your comments!

 

2 Comments

    • Cameron

      Hi Steven,

      It’s certainly a possibility! For now, we’re focusing on what we know best – guitars. We have a lot more we want to do in the guitar realm, but basses are not out of the question!

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