[jsalk]

As many of you know, our build times have become quite long. Talking to other manufacturers, it seems like this is an industry-wide situation.  Fortunately, our customers have been very understanding.  But the time has come to do what we can to address the situation.

One possible solution would be to expand our facilities and add additional employees.  But that would require additional investment in equipment and add overhead to our operation.  At my age, this is not something I would be comfortable doing.

So here is what we are likely to do...

For many years, we have developed new models and if we thought they were worthy, displayed them on our web site.  A number of these designs are not all that profitable, but we kept them in the lineup since they were great speakers and sold at a price anyone could afford. The problem is, a single center channel here or a single pair of low-cost towers there takes time to build and is not all that profitable.  So it is probably time to eliminate some models so that we can be more efficient and produce multiple pairs of cabinets at a time for the remaining speakers.

So during the next couple of weeks, expect to see our offerings paired down.  I hate to do this as the designs we will eliminate are great designs.  But we need to concentrate on efficiency so we can reduce build times.

If there are models you might be interested in, let us know.  That will help us evaluate which models to keep.

Thanks,

- Jim

[DMurphy]

Feel free to eliminate the BMR series. 

[Early B.]

So during the next couple of weeks, expect to see our offerings paired down.  I hate to do this as the designs we will eliminate are great designs.  But we need to concentrate on efficiency so we can reduce build times.

This is an excellent approach. This is often done in the restaurant industry when there too many options on the menu that create higher costs and inefficiencies. Don't be afraid to cut entire lines and focus on a handful. And maybe maintain your premium custom build option.

[Tone Depth]

Consider factoring in the build time/expense into your pricing structure, especially for lower demand or more complex manufacturing models. Then you can better manage your profits, as well as your schedule.

[RonN5]

Jim,

A couple thoughts:

1.  When you say "at your age"...does that mean that you don't have a succession plan...because if you do, and I'm guessing you do, then that person/company should have a strong vote on what a future line up might look like. 

2.  Salk (the company) has reached a point where it's reputation no longer requires a low margin entry level product.

3.  When you go to a restaurant, they have already made a calculation that they need you to spend at least $XX, no matter what you order, even if it's just a basic salad or eggs and toast, otherwise the restaurant can't survive.  I'm sure it takes a similar amount of time to build an $1800 Songbird as it does a $5,000 Veracity ST...with that in mind, it makes sense to set a minimum...maybe eliminate all towers under $4k and stand mounts under $3k.

Good luck and keep developing and building great speakers!

[ratso]

i'm kind of surprised this didn't happen a long time ago. i mean, you are a custom builder, so nothing is really "off the table" anyways.

[SlushPuppy]

Well, 14 floor standing models under $5000 must be pretty difficult to manage. I wonder how much time you spend with clients trying to choose a model in that price range? I would pair that down to two and have center channel options for each. Then pair down the rest of the line to the 'best of the best' in $1500 increments or higher. I can't think of another manufacturer who has so many options in a single price range (you also have 4 models at $6500). Keep the profitable best sellers, and for sure some of the models with the highest sensitivity for the tube aficionados. I know this is a difficult decision, but necessary for the times. BTW, the SS 9.5 is my favorite of the bunch. It's a fantastic looking speaker and the one I would most likely consider.


Cheers!

Slush

[jsalk]

1.  When you say "at your age"...does that mean that you don't have a succession plan...because if you do, and I'm guessing you do, then that person/company should have a strong vote on what a future line up might look like. 

I wish I could say we do.  But while we have some great employees, running a company is not necessarily in their skill set.  My daughters aren't interested either.

I was in discussions with a gentleman from New York who expressed interest in purchasing the company and having me stay on, at least part time, until he had a handle on everything.  He even had investors lined up.  I thought this was a good plan, but he had second thoughts about moving to Michigan and eventually the conversation died.

If someone wanted to be in the business and wasn't keen on starting from scratch, this would be a worthy consideration.  But I'm not expecting it to happen.

- Jim

[whitey019]

I agree you need to pare down and good luck deciding which ones to stop producing.

[DFpritchard]

Fifty speaker variants listed on the website by my count (including 18 Songs, 12 SS and 8 Veracity) with another on the way (presumably the BePure3).  That is problematic and, quite honestly, confusing for the consumer.  At least I found it to be.  Some suggestions:

1. Go through sales records of each speaker or speaker family.  Move anything that has not been ordered in the last 36 months (+/-) to a Legacy dropdown.  This is a common practice for removing non-current models while acknowledging their existence.  See dCS and Pass Labs, for examples. 
2. Of the models that are still commercially active (active orders in hand or ordered with the last 36 months), identify the top 10 in terms of units ordered.
3. As with 2. above, rank list models by profit margin.
4. The overlap between 2 and 3 should define those speakers Salk Sound should focus on, as a business.
5. There are likely to be speakers that make one list but not the other; I suspect the BePure2 may be attractive from a margin standpoint but its' newness may preclude inclusion on list 2.  One way of normalizing unit sales is to evaluate them by sales per unit of time, nominally a year.  That should put newer offerings on an equal footing with older models.  It might also be instructive to see which models sold best in their first year of launch, and whether that growth was sustainable.
6. Salk Sound is not selling speakers it is selling its' time and knowhow.  The above steps should indicate just which products return the best on your investment of those limited resources.  That's where to focus.

Fair to say that we are all friends and fans of JS and the products he makes and just want everything to succeed as much as it deserves.

[Early B.]

One approach to consider is not focusing on what sold well in the past, but what you're most interested in selling now and in the future. What is it that you enjoy most about building speakers? Once you answer that question, then eliminating everything that doesn't align with your passion is easy. 

Another option is downsizing and doing custom designs only. Fun to do. High profit margins. Buyers expect to wait. No need to keep a bunch of drivers and parts in stock. 

"At Salk Sound, we don't merely design and build speakers. Instead, we customize sonic experiences. We remove the nightmare out of crafting your dream speakers."
   

[RonN5]

Jim, I sincerely hope on behalf of your customers, suppliers and employees that you can find a succession plan that keeps the company making great speakers for many years to come… even if it needs to be fewer speakers than currently offered.

[AllanS]

I’ve never run a business but can appreciate the heartache and tough decisions you’re facing. 
 At the lower, presumably lower margin, price points the distinction between one model and another similarly priced model may be lost on those shopping that price point.  Someone else said the same thing another way.  So many models can be confusing.
 From one consumer’s perspective don’t be concerned about thinning the herd, raising prices, and establishing price point separation as necessary to get to a min margin to run the business.  Assuming you’ll still offer veneer options at all price points I also wouldn’t be concerned about raising the option price.  It’s a custom product.  People who gotta have it will spring for it.  Others will be ecstatic just to have a pair of Salks in their system.
  For the lower volume, presumably higher margin offerings where the buyer may also be a bit more discriminating, perhaps you retain a bit of the custom shop offerings.  Maybe have a couple of driver options on models where it makes sense and the only custom content is routing the openings and crossovers.
  I also agree with something Early B offered.  Build what you believe in.  You and all involved have worked hard to establish a reputation.  Trust that reputation.  Your fans do.