Pfeifenbox

Back...

"Most collectors already have enough pipes"

In the first part of a Pfeifenbox interview, German carver Rainer Barbi defined value-for-money coordinates along which to judge pipes and their prices. In this second instalment, he discusses the costs of pipe production and distribution. What does it take to get a high grade to the customer?

(Pfeifenbox is publishing the entire interview as a loose series of articles. The first part can be found here. Future instalments will focus on issues such as the influence of transatlantic trade and the estate market on pipe prices.)

What does value for money mean from the carver's point of view, taking his financial needs into account?

RB: Personally, I am one of the few makers who cannot rely on a spouse's money, a pension or another job for my basic income. Since carving pipes must cover my needs, I can neither afford to charge prestige prices nor hobbyist ones geared to the means of my friends and relatives. Quite simply, I must calculate my prices according to my output and the market in general. God knows that's not easy. In the current sales situation, we can hardly afford to fix prices the way a plumber or car mechanic might. While such people can easily ask for 70 Euros an hour, pipe makers get nowhere near that sum.

Our basic raw material - top quality briar - starts at 30 Euros a block. Add around eight Euros for stem material, stains, polish and sanding media. Also, we need two blocks per pipe, since we high-end makers aren't allowed to use fills. So that takes the basic investment up to 68 Euros. Additionally, we must calculate rent for a workshop, electricity and heating costs, the price of machines and tools. Due to our low output this adds up to another 18 Euros per piece. So we arrive at total raw costs of 86 Euros for every pipe.

Working on the basic assumption that a high-end piece takes a day to make, we can now add another eight times 15 Euros - the minimum hourly wage for a building labourer [in Germany].

This means that every piece leaving the shop will cost 206 Euros - but that's ignoring the time a carver needs for other tasks such as procurement, public relations efforts or office work. Just for the sake of it, I once worked this out to an extra three and a half hours a day. So add three times 15 Euros, and the price goes up to 251.

How much can a carver add to the price in order to build up a financial reserve? Okay … we'll make do with the very minimum, which no other business person would find acceptable. We'll take just ten percent. Thus, adding 25 Euros, we reach a manufacturer's price of 276 Euros.

Of course, this kind of calculation means nothing to a consumer, since he will have to pay the retail price. And that's where the drama starts: Somehow, the pipe must get to the customer. This means that a wholesaler, importer or some other distributor will have to take care of things. So this person buys pipes and gives them to his employees, even though he can't be certain of selling them. His staff then travel up and down the country with their wares, creating distribution costs. They need cars, hotel rooms and money for other expenses. Whether or not every visit to a retailer is a success remains uncertain. Whatever the case, they create costs that a wholesaler or distributor will normally calculate at about 80 to 100 percent of the price he paid for the goods. Taking the lower percentage figure, that means that the pipe now costs 496 Euros.

But that's not the end of the story. Naturally, a retailer has his own costs. He has formidable rent and energy bills for his shop, must pay staff and finance his stock - at today's interest rates. High-end pipes don't sell like daily newspapers, either. Money is not as easily spent as in the 70s and 80s, and besides, most collectors already have enough pipes. Nowadays, we count on shops buying an average of six pipes per high-end maker - slightly more, if he's well known, and less in other cases. So to be able to afford all this, the retailer will employ a mark-up factor of 2.2. Even then, he can only do this because pipes aren't his only products. Otherwise, he'd have been broke long ago. The magic word is 'hybrid costing' - of great benefit to pipe lovers.

So that's a basic pattern for calculating the price of a high-end pipe. And the result? The shop price of an average artisan pipe would have to be 1091 Euros - and that's without rewarding the creative party for the imagination and financial risk involved. Shall we do the arithmetic again, taking a comparable occupation and its customary salaries, paid holidays, sick leave and social insurance payments? Perhaps not. If we were to conduct our price calculations that way, few people would be able to afford artisan pipes. Incidentally, for every ten Euros a carver adds to the price, the customer will end up paying an extra 40. And another thought: Why do so many highly respected pipe makers cancel their phones, sell their motorbikes or temporarily return to their former jobs in order to make a little money and subsidise their passion for carving?

Surely all this is based on a distribution concept dating from the pre-Internet era. Can't we neglect importers and retailers, nowadays?

RB: Well, first of all, prices on the Web aren't really low, considering that carvers eliminate the entire traditional marketing chain and pocket its proceeds themselves. Okay, a maker may be 20 percent cheaper by selling via the Internet, and 20 percent of 1000 Euros are a tidy sum. I'd do it myself, if it were that easy. But I know of no direct Internet vendor with an international reputation. And, as Ebay shows, only highly reputable brands fetch top estate prices. Buy a Bang or a Former, and you'll see what I mean. You'll always get a good resale price and won't lose too much, should the pipe no longer appeal to you.

Secondly, buying pipes is more than need fulfilment. Pipe purchases are also a way of spending one's leisure time. I want to reward myself after the frustrations of a stressful day. Or I need to communicate, or to be praised for my discerning tastes. Or whatever. Only one thing is almost for sure: I don't really need another pipe.

Of course, there are people who collect by brand, and there are bargain-hunters. There are people who actually enjoy passing the time ordering stuff from the comfort of their desks. Internet offers are also attractive to collectors trying to fill gaps in their racks … But otherwise, I myself would prefer to be able to see and fondle a product I'm considering as a buy.

Without wishing to offend anyone: What do I really get to see when a product is offered via the Internet? I get a bad photograph, a few measurements and the vendor's reputation to go by. That's okay for some Americans, who would have to drive 300 miles to get to the nearest shop. But here in Europe, we're usually just half an hour away from the next vendor, where we can browse the shelves and compare products. You can generally haggle a bit, the coffee's for free, and you sometimes even get a tin of tobacco thrown in as a gift. There's pleasure in that - it's fun. Mind you, I'm talking about new pipes. The estate market has its own rules and German retailers have neglected it foolishly.

That said, I have to admit that the Internet has brought progress in one respect: The pipe market has never been as transparent as today, both in terms of international diversity and prices. But that involves risks as well as opportunities. I've known gullible people who have felt pretty stupid on delivery of the product they ordered -which then rapidly became a new item on Ebay.

For my own products, everything I've said up to now means that I have to offer excellent value for money combined with a first-class reputation. In this context, other people's prices make no difference at all. On the contrary, when I ponder the price policies of some makers in the past few years - those buoyed by some mysterious element of fame - I really wonder for whom such pieces remain affordable. Then there are the perpetual trainees, who apparently demand payment by the hour or rewards for some reputation they have yet to win. Their price policies often appear to ignore reality completely - the reality of average earners, at least.

For this reason, I've always considered it important for an entry-level Barbi to be available at the price of a higher quality factory pipe - and for such a pipe to be made to the same standard of craftsmanship as a top-tier Barbi. This is where I'll never make compromises. My name is a guarantee for top-level workmanship, for affordable value and for a service policy second to none. Every pipe that leaves my workshop carries a piece of my soul. That's why I always offer full warranty, regardless of who makes a mistake - the user or myself. Buy a Barbi and you buy me. I'll be at your disposal at any time.

I think that pleasure, happiness and enjoyment are things we need more of in these stress-plagued times, and I like to think of myself as a partner in people's search for these goals. That's why I see a machine-made series of Barbis as part of my future. They'll meet the same maximum demands as my high-end pipes, except that they won't be so rare. The aim will be to provide enjoyment, sustained value and craftsmanship at the highest level, but at a moderate price.

Part III...

(November 27, 2003)

Back...