You can check out my prices here to give you an idea of what I charge.
http://www.fayguitars.com/guitars/prices.html
When I first started out and for my initial 5 years as a builder, I just mostly charged close to what the actual sets cost me. If you are a hobby builder, then you can do a lot of things that a professional builder simply can't -- or at least, most of us can't.
Take Ziricote for example, costs about $300 for a decent set. In order for me to work with Ziricote, I want to have it in my shop for close to 1 year (to ensure it is a stable set with no cracking issues). This means that I need to have a couple sets of this stuff in my inventory to effectively offer it for customers and maintain an adequate supply. There is no way I would outlay this kind of money if I didn't make some profit on it. When you factor the hassle and capital investment, you will find that for special tonewoods, you really need to double your investment in the wood or it isn't worth it.
Put another way, do you realize how cost effective and time efficient we could be if we only offered 3 or 4 different woods. We would never have super expensive sets lingering in inventory for long periods of time. We could get bulk discounts.
Then you factor in the increased difficulty of some of these woods. Woods with extreme figure can break during bending and that is a lot of trouble. Woods like African Blackwood will dull your binding bit very quickly ($40 for a replacement bit).
There is so much difficulty and inefficiency added to our business model because we custom these tonewoods. So in order to make it - you charge the customer more.
Going along you will also have unexpected things happen. I had a customer drop out of a commission because of the bad economy and he simply couldn't afford it anymore. I had purchased a $1500 Old-growth Brazilian RW set for him. I haven't found a customer for this set yet and it has been about 3 years. Start factoring unexpected things like that into your business model.
Certain tonewoods seem way overpriced, like mastergrade Koa. Because I laminate my sides I never lose any sides during the bending process. And so, due to my processes I charge less for mastergrade Koa than a builder who uses solid sides. If I used solid sides and had a Koa set that cost over $400. You better believe I would charge more than a grand for it because eventually -- I would break a side and then who would be stuck paying with it.
Brazilian Rosewood is a major pain to work with. It costs a fortune. I honestly don't have the kind of money to outlay for these kind of sets and it is a real financial burden to acquire them -- let alone find a good quality set that I know will be stable and that also looks beautiful. If I am paying $1200 to $2000 for a premium set of Brazilian -- then I am going to upcharge close to $2500 to $4000 for that set. Otherwise it just isn't worth it. Then factor in old-growth mastergrade Brazilian which is incredibly difficult to find let alone, pay for. Then the price really goes up.
In the end, it is the customer's decision. If they want a great sounding guitar that also looks incredible - they can get it with a beautiful set of Indian Rosewood. If they can afford these expensive upgrades, then wonderful - let them pay for it. It isn't like any of us are actually making much money building for a living. Why cut our prices even more -- unless you want to live exclusively on Ramen.
