As posted on the home page earlier, a number of correspondents (this site has too many correspondents and not enough customers…no doubt that’s entirely my fault) ask about how pipes come to be priced, or more specifically, how come pipes come to be priced so high.  So far, no one has said, “Marty, how is it that a pipe to which Larry Roush or Wolfgang Becker has put in so much time, effort, years of experience and minute attention to detail can cost a lousy $800?  A plumber putting in that much time and effort would get more.”  No, never have I heard that. 

   Let’s see if we can break this down so that even I can understand it…and then maybe you will be able to understand it, too.  To this difficult end, I will employ the wit and experience of David Field, my erstwhile business partner who has many years (too many…he’s as old as me) in the business of importing and distributing pipes.  He started going over to Europe and buying from stores and bringing the pipes back to the U.S. in the early 80’s, and graduated to working directly with some of the best pipe makers in the world, including Paolo Becker, Rainer Barbi, Jorgen Larsen, the Radice family, Franco Rossi (Il Ceppo) and others.  In many cases, he very specifically influenced the prices of these pipes, both to retailers and end users, i.e., you.  

   My other consultant is Larry Wagner, a retailer of many years experience in the important market of Los Angeles, working from his store in Sherman Oaks.  

   And now that I think about it, I may see if I can get  Larry Roush, a pipe maker with many years under his belt.  To many, he’s arguably the best of all U.S. pipe makers and has been for some decades.  (Yeah, even he is getting up there.)  He’ll be able to give us some inside insights, if he’s willing.

   With them, and my brilliant editing, and less brilliant thoughts, we might be able to parse this difficult issue.  No doubt, there is nothing like a single area, but rather many factors, and some factors will weigh more heavily with one pipe maker, and less heavily with another.  1). The economy of scale.  At least in the past, this might well have been the one most important factor in pricing the pipes we are talking about, which is the high end of the market…basically pipes that cost at least $80 and up.  I think the $80 might be low, but let’s include as many people as we can…any number will be arbitrary, and I’m the arbitrator here, so we’ll start with $80.

   When most pipes were made by factories, as opposed to the one-man artesian model we see so often today, and millions of pipes were sold world-wide, almost every block that a factory bought (from Dunhill to places like Barontini or Savinelli or Peterson or all the pipeworks in Saint Claude, France) was made into a pipe that would sell…either in a fine pipe shop dedicated to knowledgeable smokers, or from a drugstore, at very low prices.  Go back enough years, but not all that many, and $1.50 could get you a Yello-Bole, or Dr. Grabow or a Mastercraft.  And I am not putting these pipes down, at all.  A crafty eye could suss out the best of these pipes and no doubt, if the wood was good, so would be the smoking properties of that individual pipe.

   The point is, however, that this vast bulk of pipes was underwriting the cost of the relatively few pieces of fine briar block that were going to be hand-finished and sold to pipe shops; the firsts, in other words.  If a factory was going to get $1 for a day’s sale of 2,000 pipes, they would be tittilated at getting $3.50 for the best pieces…better than 3 to 1 return on the cost of the block.  They didn’t need to make a living off just a few good blocks.

   For more prestigious companies, like Comoy’s, GBD, Dunhill, Charatan, Sasieni, etc. (remember, this was the era when England dominated the ‘high end’ market) the same system worked, albeit in an opposite way.  They were looking to sell and market, and feel proud about, their dominant brands.  But, when the wood didn’t work out, which was often, they could make dozens of salable seconds, like Parker, or Hardcastle, or Sasieni Mayfairs, or Gresham from Comoy’s, or Prodigy from GBD.  Again, the sales of these pipes…often with store names stamped on them, truly provided the bulk of the factory’s income, while the smaller sales of the famous brand-named pipes maintained the company’s prestige.  

   Today, that model hardly exists for the kinds of pipes we’re talking about.  Pipe smoking has shrunk to, essentially, next to nothing.  There are no bulk sales to stores to prop up companies.  They have to try to make a living off the relatively few pipes they make and sell.  This means that individual pipes, at whatever grade level, have to cost more.  It’s super simple economics.  $1,000,000 divided by 1,000,000 pipes = a dollar a pipe.  $1,000,000 divided by the new 4500 pipes they now make for the public = $222.  

   And if we want to talk about artisans who make one-pipe-at-a-time, you know that the price of each pipe has to be in the hundreds of dollars.  Lots of these relatively new artisans can’t make even one pipe a day.  What do they have to charge if they want to feed their families?

   So, while this is a rather imperfect model, or example, you certainly can get the gist.  With the few cars that Ferrari makes and sells, it has to charge more per car than does Ford.    

   Let’s call that part one.  It was hard.  Another factor is the cost of materials, a cost which only goes one way…up.  We’ll focus only on briar, although it may or may not be the main cost.  Let’s see what the pipe maker has to say about the subject.  In any case, when relatively big companies (small by the standards of any other industry, but big by pipe standards) bought briar by as many bags as they could afford, the breakdown for a single burl might be a couple of bucks.  Now, at a minimum, with most artisan pipe makers desiring to get only the best grained burls, and buying them in small amounts, a $20 burl would be a bargain.  And what choice does a briar seller have?  Instead of throwing all the blocks into bags, maybe a 100 or so burls in a bag, and pretty much selling them by weight, he has to sift through his stock and sell a few dozen at-a-time.  This is going to cost in the way of time and the pipe maker is going to have to pay for the privilege.  And, when that $35 dollar block displays some huge flaws and has to be thrown away or burned in the fireplace on a cold evening, the cost has to be passed on.  On at the most basic level, then, that next pipe that is made already costs $70 before the pipe maker even begins to pencil in the shape.  So, before anything is done, that pipe has to bring in $150 just to break even…and breaking even doesn’t pay any bills at all.
That’s part one of what looks like it will be a 6, 7, or even 8 part approach. If you have something to add, I’m eager to see it.