2 pointsThis is the final article following the chain of costs associated with how a piece of music gear gets to its retail price. We’ve previous explored MSRP vs MAP and the expenses associated with running a retail store and how those figure into pricing, so it’s time to dive into the final part of the pricing equation- the cost of designing and manufacturing a product. For the purpose of illustration in this piece, let’s use a $200 MSRP boutique overdrive effect pedal made in the US by an actual company (not a guy in a garage) that is available at many major retailers. This simplifies the math because of the relatively low part count and labor as compared to, say, building drum kits or digital synthesizers. Following the MSRP/MAP approach discussed in our article on retailer pricing and our case study pedal has an MSRP of $200 and MAP of $160, we can put a stake in the ground that the retailer paid the manufacturer about $100 for said pedal. Many musician’s will (understandably) think the price of manufacturing is just the BOM (bill of materials) for the pedal and some nominal amount of labor. Like most things in life, the truth is much more complicated. A piece of gear begins with an idea, and then R&D and engineering. Provided there wasn’t a marketing/executive dictate that “thou shalt design X style piece of gear,” designs will go through dozens of iterations once the foundation has been established, and engineers are likely juggling a half-dozen projects at a time. To be extremely conservative, let’s asapply 20 hours of focused research into the category and another 20 hours of experimentation to build the foundation for the effect (breadboarding, troubleshooting, etc). We aren’t counting the years of training that got an engineer to the point where they can tackle a project like this. An entry-level engineer makes $60-80k per year, so we’ll use the middle of the road hourly wage ($34/hour before benefits, or $50/hour with benefits, insurance, and tax); we have $2k in a pedal assuming one focused week to go from idea to working prototype. It’s now time to take that circuit out to testers/artists to get feedback. This will easily be 80 working hours (travel, correspondence, meetings, research). Now we have an additional $4k in user testing and feedback. Assuming everything went well the first go-around, it’s now time to put together a BOM (bill of materials) and design a PCB. The BOM can be defined based on what works best or to meet a price point, but likely represents the smallest expense in a pedal. As a standard overdrive variant in this example, the cost of parts, jacks, switches, and electronics can be relatively small; let’s say $25 assuming a price-break for volume ordering and pre-drilled, fully silk-screened enclosures. One thing people point to when considering the price of parts for modern gear is the perceived cost savings in DSP (digital signal processor) hardware as opposed to now-expensive and part-intensive analog solutions. This is true from a pure cost-per-component standpoint, but doesn’t take into account the programming that goes into the chip (a consideration not needed for analog parts). The median starting salary for a DSP developer is $78k per year, so this work quickly get more expensive than using mojo-drenched analog parts. PCB design and manufacturing can be done in-house, but typically gets outsourced to someone like Cusack Music’s fantastic Stompboxparts.com, where engineers design, test, and print through-hole or surface mount boards, can populate them, and even offer enclosures and varying levels of assembly, from completed products to unpopulated boards and empty enclosures. Whether outsourced or handled in-house, there’s an associated $10 labor with every pedal produced in a standard production run. So we’re at $35 in parts and labor for a simple circuit pedal, which leaves $65 in profit for the builder. OK, now let’s get back to the real costs. That $6k in (overly-simplified) work up front needs to be taken into account, so let’s spread that across an initial run of 1,000 units at $6 each. Additionally, we can add another $10 per pedal in rent, utilities, shipping labor, etc. Website and marketing will add an extra $5 to this first run as well, plus $10 for administration, bookkeeping, supplies, etc. We’re now at $66 in cost in the pedal, so there’s $37 in profit, less 30% for business tax, and we’ve got about $26 profit per pedal. All that math shows if this pedal sells 1,000 units in the first six months there is, in theory, $26k in profits to reinvest in the business, try new marketing, dedicate to longer R&D cycle products, and pay the owner (usually not the designer or builder at a certain point). So, Parts and Labor- $35 After Cost of Manufacturer Operation Costs- $60 After Manufacturer Taxes- $74 Sold to Retailer- $100 After Retailer Operation Costs- $140 After Retailer Taxes- $144 To Customer @ MAP- $160 Final Sale Price + Taxes- $173 Or Parts and Labor- $35 Combined Manufacturer/Retailer Operations- $65 Combined Manufacturer/Retailer/Customer Taxes- $31 Combined Manufacturer/Retailer Profit- $42 Thanks for taking this journey. As I cannot state enough, there are more assumptions I’m not including that negatively impact all parties (start up costs, credit interest, sales and discounts, trade show and travel expenses, sales, warehouse, customer service, rework). Whether you agree with the associated expenses or not, I hope you have a clearer picture of what goes into pricing. The music industry isn’t unique in this; it’s how things work in commerce in general. This information might be jarring if you’ve never been offered a peek behind the curtain of costs, but realize there is an entire infrastructure needed to support bringing you the gear you want. ____________________________________________ Chris Loeffler is a multi-instrumentalist and the Content Strategist of Harmony Central. In addition to his ten years experience as an online guitar merchandiser, marketing strategist, and community director he has worked as an international exporter, website consultant and brand manager. When he’s not working he can be found playing music, geeking out on guitar pedals and amps, and brewing tasty beer.
1 pointby Anne Erickson From Alice Cooper to Rob Zombie, head-splittingly heavy music has a lengthy history of complimenting all things horrific, and what better time to recognize those menacing musicians than this week? Read on for our list of the Top 10 Halloween Songs of All Time, offering some killer tracks to get you in the mood for Halloween. What are your favorite scary tunes? Give us your picks in the comments area! 10. King Diamond, “Halloween” Who better to craft a Halloween hit than Kim Petersen, a ka King Diamond? “Halloween” is taken from the singer’s debut solo album, Fatal Portrait, and while the track’s music is heavy and dark, the lyrics are what really make the ditty fit on this list. 9. The Misfits, “Halloween” It’s only fitting that the Misfits would unleash a Halloween-themed song, and they did so on Oct. 31, 1981, with “Halloween.” Nobody does Halloween like these guys, and this terrifying track was the band’s fifth and final single to feature guitarist Bobby Steele, making it extra special. 8. The Ramones, “Pet Sematary” The Ramones got it right on this spine-chilling Halloween-appropriate track. Their title track for the Stephen King film is certainly one of the group’s darker sonic endeavors, and it’s a refreshing change from their more well-known sound. 7. Helloween, “Halloween” Our list wouldn’t be complete without adding German metallers Helloween to the mix; the guys who actually named themselves after the holiday. While all of Helloween’s songs would fit the bill, we’re going with the most apparent, “Halloween,” a creepy classic. 6. Iron Maiden, “Fear of the Dark” Man, the lyrics alone in Iron Maiden’s “Fear of the Dark” give us nightmares! The song is a great Halloween track, with its menacing nature and dark textures. 5. Tool, “Sober” Tool’s “Sober” is a classic. The track arrived on the band’s 1993 debut, Undertow, and it took the band from underground metal players to superstars in the mainstream rock contingent. “Sober’s” lingering, wandering beats and Maynard James Keenan’s tortured vocals make this a great fit for any Halloween shindig. 4. Rob Zombie, “Living Dead Girl” Halloween brings zombies and other post-mortem terrors out, and perhaps no rocker is more accustomed to the horror world — and the horror film industry — as Rob Zombie. While many Zombie tracks would fit on this list, we think “Living Dead Girl” is the quintessential Zombie Halloween song. 3. Slayer, “Raining Blood” Are you surprised to see Slayer on this list? We didn’t think so. Aside from its Halloween-appropriate moniker, “Raining Blood” carries one of the most wicked guitar metal riffs of all time. Add to that creepy lyrics and you’ve got a song purpose-made for the Halloween holiday. 2. Pantera, “Cemetery Gates” Metal went through a dark time in the ‘90s, and Pantera’s “Cemetery Gates” is the culmination of all good things metal at the decade’s onset. It’s just the kind of track one would expect to hear on Halloween, with themes revolving around death, inspired by Phil Anselmo losing a loved one to suicide. 1. Alice Cooper, “Welcome to My Nightmare” Any Alice Cooper track could be deemed a Halloween song, but when it comes to the haunting holiday, we have to go with “Welcome to My Nightmare.” With lyrics like “Welcome to my nightmare / Welcome to my breakdown … We sweat and laugh and scream here / 'Cause life is just a dream here” coupled with allusions to Coop’s bloody battles, this classic will always be No. 1 in our book! -HC - ________________________________________________________________ Anne Erickson holds years of bylines in Gannett Media publications, as well as music magazines Premier Guitar, Guitar Edge and more. She also hosts radio shows with iHeartRadio and has been syndicated in Seattle, Dayton, Central Coast California and beyond. Anne is a loyal Spartan and holds a Master’s degree from MSU. She resides in Lansing, Michigan.A
1 pointI love this time of year! The days start to cool down, the leaves start to fall <SCRREEECH!!!> Who am I kidding? Here in Nashville, Tennessee, it’s been hovering in the upper 90’s since August and hasn’t let up—yet! This heat makes a man’s brain cook, and, in doing so, prompts a virtual stew of thoughts. As we do hope for cooler weather, and we are moving into full-blown fall, let me take a moment to say thank you for the fantastic response to the new platform at Harmony Central. People who haven't participated in years are returning to the forums. Having the forums simply work has been refreshing! As Harmony Central is a social forum, we've noticed that musicians like to say what they want to say. It’s akin to song writing in a lot of ways. Musicians can be very outspoken about so many issues. From everything social to economic and political to environmental, musicians are some of the first to pen a song, write a post, and sing out for causes about which they believe. I’ve been fortunate enough to watch the Ken Burns Series, Country Music on PBS for the past two weeks. This brilliantly produced series chronicles the evolution of country music and branches into the crossover influences of gospel, folk, and bluegrass. Musicians sang about things that they needed to say. For example, musicians like Johnny Cash initially did so to the potential detriment to their careers. Even so this path always eventually seemed to work to the artist’s favor. From the lyrical genius of Kris Kristofferson to the straight-laced turned renegade braided super star Willie Nelson, to the racial strife faced by Charley Pride, this series has covered the gamut. The HUGE take-away is that most of this music fell out of story-telling put to song through which people were allowed to say what they wanted to say. What they needed to say. What they wanted people to hear. Where they felt the need to speak out. Where they felt the need to be heard. For some, success came from being “at the right place at the right time.” For others, it was because the words they spoke in song were so profound, they couldn’t help becoming successful! In song, you can temper what you want to say in such a way that it's better received and understood. If you haven’t been able to catch the Country Music series, do yourself a favor. Even if you aren’t a country music fan, you’ll benefit from learning about how country influenced other genres and vice-versa. You’ll also be surprised at the number of artists from other genres are country fans and find influence in the music. The series is available online at the link provided above. So whether you are a musician posting your thoughts on Harmony Central or belting your thoughts in song from the stage, be true and say what you want to say! –HC- Dendy Jarrett is the Publisher and Executive Director of Harmony Central. He has been heavily involved at the executive level in many aspects of the drum and percussion and music industry for over 25 years and has been a professional player since he was 16. His articles and product reviews have been featured in InTune Monthly, Gig Magazine, DRUM! and Modern Drummer Magazines.