Dear Friends,

I write this post with more than a little trepidation. The last time I made an observation about pipe prices I had my head handed to me. A number of people were offended. Many disagreed with me and some quite viciously. I would hope that, this time, a sense of comity and friendship might prevail. I hope that you will read my concern and recognize it as coming from someone who is a friend and advocate of artisans. I’ve not only spent a lot of money and time, but I’ve also rolled my sleeves up and worked hard to promote this hobby - especially the joy of collecting artisan-made pipes. So, if you don’t think I’m coming from a place of advocacy, I ask you to reconsider.

Over the last four to five months I’ve had many conversations with my pipe collector friends. While the topics and tone have varied somewhat, there are a few threads running through our conversations that are not only consistent, but emphatically so. There is a burgeoning concern among many of us that the cost of collecting artisan-made pipes is moving beyond what’s reasonable, justifiable and, for some, what’s possible. Pipes that just three years ago were routinely selling for $500 to $750 are now routinely priced at $1,250 to $1,750. This level of escalation seems unrelated to inflation or to covering increased costs of living.

I’ve chosen this time to write this post to you for a couple of reasons. The principal reason is that the world’s most important and biggest pipe show is coming. I’m assuming that many of you are burning the midnight oil preparing for this show, trying to complete work that represents the best of what your are capable. it’s only natural that as you complete this work that your pride in your efforts and your accomplishment at producing the best you’ve ever made will prompt that little voice inside you to put a high price on your efforts. Undoubtedly, in some cases, you’ll get that high price. But you may do so at the expense of your friends and peers. There’s only so much money in our pockets. Where we once might have planned to spend $5,000 or so – adding ten to a dozen pipes to our collection – we’re only able to buy two to three collectible-grade pieces. At least that’s true for me. If I spend $1750 with one artisan on one pipe, I cannot buy two $875 pipes from two artisans. Somebody is out a sale.

Ask yourself this question: How many people can afford to travel to Chicago, spend the weekend at a hotel, and spend three to five thousand dollars on pipes? From what I hear, not very many. In fact, a very small proportion of those who attend.

If you’re thinking of your own prices in comparison to Bo Nordh or other stratospherically priced artisans, think again. I personally know of a number of Bo Nordhs that are sitting with their sellers unsold after having been on the market for months. Anybody who buys pipes thinking in investment terms has more risk tolerance than I do.

Collector ranks are shrinking. In case you haven’t noticed, there’s a serious recession out there. Costs of doing business are going up. Opportunities to do business are going down. Here in Washington, you can hear the wallets slamming shut all over town. Some of the wealthiest people in the city are facing business failures, bankruptcy, the loss of their homes, businesses, and worse. The economy has shifted and even the wealthy are becoming much more cautious with their money. It pays to pay attention.

Many of us – again myself included – have built pretty good collections. If another piece is going to make its way into our collection, escalating prices are making the acquisition hurdle very high indeed. New pieces have to be very special to make their way into a collection. Even then, a new piece will have to be financially within reach.

In other words, many collectors are becoming increasingly selective. If prices were not rocketing skyward, I believe the dynamic would be much healthier. There would be more work purchased from more artisans, interest in collecting would grow, and the overall hobby would benefit. Right now, exactly the opposite is happening. I know a number of guys who are interested in getting started in collecting but the price of admission just seems way too high. Just because somebody isn’t financially flush doesn’t mean that he or she doesn’t have a discerning eye. Some people won’t buy anything if they can’t afford what they really want.

Some of us discover new or emerging artisans from whom we would like to buy a pipe or two. Imagine what we think when we discover that this new artisan has priced his or her work well over some of the artisans we have collected for years. It happens all the time and to be brutally honest, a number of collectors aren’t just concerned; they are offended. I put over-pricing down to ballsy, exuberant, cocky taking-a-stand. Many are less generous with their private responses; they run from “clueless” to “arrogant.”

For those of you who are new to the collector markets, think carefully about how you want to be perceived by prospective buyers. If you turn them off at the start, your chances of ever selling to them in the future are pretty low. There’s always the next “hot” carver who pushes last year’s “hot carver” into the doldrums. Collectors don’t buy pipes; they buy carvers. And if we decide we don’t like or trust someone, we sell off the work and don’t buy more. In a small, niche market like artisan-grade pipe collectors, artisans should think carefully about nurturing the size of their collector pool.

When I’ve had this discussion with artisans, what I typically hear is “Nobody’s holding a gun to your head. If you don’t want to buy, don’t buy” or something akin to that. I also hear comments like “A pipe is worth what someone will pay for it. More power to you if you get a high price.” Usually these comments are made by people with advanced degrees in economics, pricing strategy, and market dynamics, of course. Forgive the sarcasm. Usually the people who make these remarks don’t collect and never will. They’re bystanders. I’m not. Neither are the other collectors whose concern is growing.

For your own good, I implore you to think carefully about this issue. I’m not suggesting that anyone should panic or slash prices. What I am suggesting is a more deliberative and thoughtful approach to building a healthier, more sustainable market in this hobby. If things continue to spiral upwards, there will be a crash. Frankly, there may be a crash anyway.

I look at the demographics of pipe collectors, increasing regulatory incursion on smoking rights, rising taxes on tobacco, tightening interstate shipping rules, and the inevitable growth in infirmity and death rates among the collecting population, and envision a boom in selling off collections without a corresponding growth in buyers. Can this be managed? Of course, but turning a blind eye is not the way to navigate through a turbulent time.

I think about several of my mortgage banking clients. I started warning them three years ago about the coming crash. They hated my words, refused to listen, and two of the three have lost everything and I mean everything. What I heard from them was that I didn’t know what I was talking about. It would never happen in Washington. Too many government jobs; too much in-migration. Too much growth pressure. They were wrong. So wrong. I don’t really want to be telling any of my good artisan friends what I’ve had to tell my mortgage banking friends. “I warned you” or “I told you so” are as bitter to say as to hear – especially when one is talking to friends. I take no satisfaction in having been right, believe me. But it doesn’t take a rocket scientist to look at a ramshackle old frame house with peeling paint and wonder if a million-dollar price tag is unreasonable.

Buyers can adapt. Speaking personally, if I must, I’ll just slow down to stay within my means. I have a wonderful collection and if I don’t add many more pipes to it, I’ll still have a good collection. I can afford to wait on the sidelines and snap up the occasional brilliant piece that some other collector tires of, paying far less than the original price. The truth of markets is that while buyers can adapt, sellers are not positioned nearly so strongly. Sellers have to sell to make a living. Buyers don’t have to buy.

The biggest risk is this: if a collector is financially coerced into radically slowing his collecting activity, he may lose interest altogether. I know of a couple of people for whom this is a reality. I’ve even felt like throwing my own hands up on occasion.

Further, consider estate dynamics: Every single re-sale or estate sale takes money from the new sales market. For many artisans, their biggest competitive threat is their own work on the estate market. It’s a nightmare because if a piece is over-priced on the estate market and doesn’t sell, collectors who have that artisan panic because it appears that the value of that artisan’s work is not holding. If the pipe sells for considerably less, the same concern arises and you - the artisan - can’t compete on price with your own work in the estate market.

Let me close reiterating what I wrote in opening. This post is intended to be a supportive and constructive set of thoughts about how to maximize current opportunities, keep the collector pool involved and invigorated, and avoid making pricing decisions that seem good in the short term but turn out very wrong over the long term. I wish everyone the best.