Guitar vs Amps Prices - Guitar Manufacturers are Taking the Mickey

ICBM

dindude said:

But if it improves the coffers and image of Fender as a whole we probably all benefit in some way at the price point we are willing to pay.

It might marginally help Fender service their half-billion-dollar debt, but I wouldn’t expect it to have any impact for the rest of us. The pricing for the cheaper models is what they can charge relative to their competition at those price points, they’re not going to artificially reduce them just because they sell a few thousand overpriced guitars at the very high end.

Iamnobody

Adey said:

I like the earlier arguement about th £7k car compared to the £7k guitar.

The cost to build the car is clearly much more than the guitar. Materials costs are way more for the car.

Yes the economics of scale aren't really comparable, but I suppose Dacia don't have to spend much in endorsing celebrity drivers.

Maybe the profit in high end guitars props up the rest of Fender’s business. 

Because folk are spunking car money on guitars that only cost £100s in raw materials, Fender are also able to offer decent sub £100 Squiers our the door that are accessible to everyone.

NelsonP

The clever way around this issue is to simply buy a Harley Benton and upgrade the pickups.

  

RaymondLin

Neil said:

Blaendulais said:

Economics.  Pricing depends on demand.  End of really.  Components in a rolex cheap as shit.  Assembly non complex.  People prepared to pay 20k.  Charge 20k.   Basic business

I'll have to take issue there.

1. Components in a Rolex are not "as cheap as shit" , they are incredibly finely machined.

2. "Assembly non complex" .
Have you ever tried assembling the 220 odd minuscule components in the movement and making it run to chronometer specs? I have.
It's not like putting four screws into a Fender neck/body combination.

3. Cost 20K.
Completely wrong.
Of course you can pay what you like but Men's Rolexes start at £4100 and a Submariner is £5750. 

They seem like incredible value to me compared to a "Masterbilt" Fender.  

They are both marketed as luxury items.  100 years ago watched are utilitarian, something to tell time. They are not jewelleries.  Then the 70’s digital happened with Quartz and was literally driving mechanical watches out of business and the Swiss mechanical watch makers had to shift angle and market it more as luxury.  That’s why you see adverts for them with men on boats, climbing Everest, etc.  The movement, yes they are great, but you can also get a fully automatic movement for 1/10th of the price, also made in Switzerland too elsewhere so it’s not all about workmanship or components.  It’s not made of diamonds.  Also it’s accuracy is kinda bad in this day and age...+ or - like 2s a day is their tolerance.  After a month it could be over a minute out so if you need something accurate I wouldn’t use it or you might be adjusting it on a monthly basis. 

Rolex (and all the luxury watch makers) relies heavily on their heritage in their PR, much like guitars, because they know it is one thing people falls head over heels over. Seemingly you can buy history, as you can pretend to be a part of it.

These luxury items no doubt are good quality and no doubt are the best the market can produce, however the rules of diminishing returns mean it has to rely more on it’s PR to sell than the product speak for itself since a watch or guitar comes out of the factory today has a history of 1 day, not 50 or 100 years.  

Yes value is relative but value for money they are not.

then again....If you buy the right model you can get your money back when you come to sell it but that’s a different topic.

YellowLedBetterMan

As with all things, it's only worth what somebody's willing to pay.

I see people with their ludicrously expensive "boutique" amps on YouTube and think that they're no better or worse sounding than the circuit they are trying to emulate or build upon. To me a Matchless and a Vox are far closer than the price points would suggest.

But people will buy the Matchless because to them, it's worth the investment. Same applies to everything from kitchen appliances to cars. If people want to spend big on something because they love it, then they will.

Voxman

dindude said:

I really don’t see this issue - most on this thread (including me) wouldn’t contemplate buying a Master built. So non-issue.

But if it improves the coffers and image of Fender as a whole we probably all benefit in some way at the price point we are willing to pay. 

Let the rich spend their money. 

This. It's kind of like having an expensive bespoke Armani suit made for you. If you can afford it and want one, go for it. Most folk will be quite happy with either an off the peg or a good tailored suit. 

LastMantra

I suppose that, with these kinds of guitars, people want to feel like they are getting something really special. There's not much you can do with a tele or strat to make it that special though apart from hiking the price up.

scrumhalf

Part of it's the labour and material cost, but part of it is the "it's expensive and uncommon so it must be good" argument.

Look at things that cost unreasonably more than similar items in the same genre and you will find it difficult to justify those prices. Look at cosmetics - you are paying for advertising, packaging and the maintenance of a "brand". That "brand" in turn ensures the contnued high price of other items from that same manufacturer in the future.

Blueingreen

First question I'd ask: if the guitar trade is "taking the mickey" on price, where are the super-profits?  If a fair price is one where a business makes a reasonable return on capital an excessive price would  generate excessive profits.  Anyone seen any evidence of these in the guitar business lately?

Second, amp v guitar is a false comparison.  Guitarists are generally much more utilitarian about amps than about guitars.  You get the minority who are willing to pay for the latest boutique offering from Two Rock or whatever, but then you get similar arguments about how much more expensive these are than perfectly decent alternatives. 

With guitars it's different.  Everyone know that these days you can get a very playable, good-sounding guitar for modest money.  And yet, once they get past the beginners stage most players are not keen to settle for that £200 guitar.  They want "better".

So how do you make a perfectly good tool "better"?  Actually there's not a huge amount of scope.  Pretty much any improvements you can make will be minor, which doesn't mean they are cheap.  More expensive materials; tightening up QC - more labour intensive, and more wastage;  smaller runs of niche examples and vintage clones sacrificing economies of scale; bling.  And of course you ramp up your marketing budget so that players are informed about the fine distinctions you need them to pay more for. 

All these things do a better job of making guitars expensive than they do of making guitars better.  So why do guitar manufacturers do them?  Short answer: it's what their customers want.  Tumble drier manufacturers don't do it because they know their customers won't pay silly extra money for minuscule incremental "improvements"; guitar manufacters do it because they know their customers will.

I'm as much of a sucker as the next guy.  My last purchase was £2,500 and that was used.  I know perfectly well that with a bit of hunting around I could have got a guitar that, objectively was about 97% as good for about 10% of the money.  I know I'm irrationally fetishing micro improvements in playability etc.  It's what guitarists do.

I disagree that the reasonably thing to do would be to spend more on your amp and less on your guitar.  Of course amps matter more to your sound.  But you don't need to spend a lot of money to buy a good sounding amp.  The problem, if there is a problem, is we're not rational about guitars.  You don't solve it by becoming less rational about amps.

Three-ColourSunburst

Neil said:

1. Components in a Rolex are not "as cheap as shit" , they are incredibly finely machined.

2. "Assembly non complex" . Have you ever tried assembling the 220 odd minuscule components in the movement and making it run to chronometer specs? I have. It's not like putting four screws into a Fender neck/body combination.

3. Of course you can pay what you like but Men's Rolexes start at £4100 and a Submariner is £5750. 

They seem like incredible value to me compared to a "Masterbilt" Fender.  

A Rolex might be "incredibly finely machined" but they are still mass market goods (sales of 800,000 a year plus) with all the actual manufacture being done by automated machines. Even when it comes to assembly of the movement all process are done on, or with the aid of, a specialised machine in order to ensure accuracy.  I doubt you have access to such machinery, which is probably why you view assembly as being laborious, but Rolex is geared towards mass manufacture and, like all companies, does all it can to minimise its unit costs.

Due in part to its bespoke manufacturing machinery - and even more so because Rolex is an image and marketing led company - it releases no photographs of its actual manufacturing processes, only those final assembly stages that look good in the advertising photos. Yes, a Rolex will cost more to make than a Seiko 5, in the same way as an R9 costs more to make than a Harley Benton, but we are still comparing apples with apples, and many of the things that add to the cost of a Rolex - such as individually applied dial markers - hardly make it a better watch, even if they give it a little more kudos as 'man jewelry'.

I don't see how any 'luxury' watch can be considered to be "incredible value". Rolex are a classic examples of Veblen goods and the unit manufacturing cost is likely to be less than 1/30th of the retail price - perhaps significantly less than this - certainly much less than the generally accepted rule of manufacturing which holds that unit costs should be no more than 1/10th of the final retail price. Then there is the cost of ownership, with Rolex doing all it can to keep servicing and repair in house, so enabling it to gouge its customers even after purchase.

Just look at the way the prices of luxury watches have increased over the years as they have gone from utilitarian to 'luxury' items. For example, the original Rolex Sub-Mariner cost $150  in 1953. Adjusted for inflation Rolex's No-Date 114060 - which is practically the same watch - should be $1,440 today. The Daytona Steel has been made since 1957, adjusted for inflation it should cost $2,228. On Rolex's site today's Euro price for those watches, including Vat, is 7,450 €  and 12,400 € respectively. Rolex's localisation won't let me check today's Dollar or Sterling price, but it is still clear that todays prices are out of all proportion to their historic price, when their manufacturing cost, in todays high-tech, automated world is likely to be lower than it has ever been.

A Rolex can only be considered to offer "incredible value" in comparison to a Masterbuilt Fender if that £8,000 Fender the OP referred to cost less than about £270 to make. That said, I would bet that the cost of making that Fender wasn't vastly more than this....

Bottom line: neither luxury watches nor expensive guitars can be considered to offer value for money, and in both cases the selling price has very little to do with manufacturing costs and a whole lot to do with the power of marketing.

RaymondLin

Three-ColourSunburst said:

Neil said:

1. Components in a Rolex are not "as cheap as shit" , they are incredibly finely machined.

2. "Assembly non complex" . Have you ever tried assembling the 220 odd minuscule components in the movement and making it run to chronometer specs? I have. It's not like putting four screws into a Fender neck/body combination.

3. Of course you can pay what you like but Men's Rolexes start at £4100 and a Submariner is £5750. 

They seem like incredible value to me compared to a "Masterbilt" Fender.  

A Rolex might be "incredibly finely machined" but they are still mass market goods (sales of 800,000 a year plus) with all the actual manufacture being done by automated machines. Even when it comes to assembly of the movement all process are done on, or with the aid of, a specialised machine in order to ensure accuracy.  I doubt you have access to such machinery, which is probably why you view assembly as being laborious, but Rolex is geared towards mass manufacture and, like all companies, does all it can to minimise its unit costs.

Due in part to its bespoke manufacturing machinery - and even more so because Rolex is an image and marketing led company - it releases no photographs of its actual manufacturing processes, only those final assembly stages that look good in the advertising photos. Yes, a Rolex will cost more to make than a Seiko 5, in the same way as an R9 costs more to make than a Harley Benton, but we are still comparing apples with apples, and many of the things that add to the cost of a Rolex - such as individually applied dial markers - hardly make it a better watch, even if they give it a little more kudos as 'man jewelry'.

I don't see how any 'luxury' watch can be considered to be "incredible value". Rolex are a classic examples of Veblen goods and the unit manufacturing cost is likely to be less than 1/30th of the retail price - perhaps significantly less than this - certainly much less than the generally accepted rule of manufacturing which holds that unit costs should be no more than 1/10th of the final retail price. Then there is the cost of ownership, with Rolex doing all it can to keep servicing and repair in house, so enabling it to gouge its customers even after purchase.

Just look at the way the prices of luxury watches have increased over the years as they have gone from utilitarian to 'luxury' items. For example, the original Rolex Sub-Mariner cost $150  in 1953. Adjusted for inflation Rolex's No-Date 114060 - which is practically the same watch - should be $1,440 today. The Daytona Steel has been made since 1957, adjusted for inflation it should cost $2,228. On Rolex's site today's Euro price for those watches, including Vat, is 7,450 €  and 12,400 € respectively. Rolex's localisation won't let me check today's Dollar or Sterling price, but it is still clear that todays prices are out of all proportion to their historic price, when their manufacturing cost, in todays high-tech, automated world is likely to be lower than it has ever been.

A Rolex can only be considered to offer "incredible value" in comparison to a Masterbuilt Fender if that £8,000 Fender the OP referred to cost less than about £270 to make. That said, I would bet that the cost of making that Fender wasn't vastly more than this....

Bottom line: neither luxury watches nor expensive guitars can be considered to offer value for money, and in both cases the selling price has very little to do with manufacturing costs and a whole lot to do with the power of marketing.

I agree totally.

800,000 Rolex a year works out at....

If you consider that they only work 12 hrs a day, Monday to Friday...

Thats 3,076 a day.
Which equates to 256 an hour.
Which is 4.2 Rolex a Minute
So a new Rolex comes off a production line (it is a production line no doubt), less than every 15 seconds.

By the time I finish writing this post about 4 would have come off the line.

And look at this watch.  £299 !!!

Fully mechanical, it has every right to have another zero at the end of it but because it doesn't have the brand and history behind it, it's "just" £299, and I doubt they are losing money either.

https://www.marloewatchcompany.com/collections/coniston/products/coniston-speed-edition?variant=31588408787033

Image courtesy of Robbie Khan

Three-ColourSunburst

RaymondLin said:

Just look at this watch.  £299 !!!

Fully mechanical, it has every right to have another zero at the end of it but because it doesn't have the brand and history behind it, it's "just" £299, and I doubt they are losing money either.

£299! My Seiko 5 cost me £65 and - after I regulated it - it keeps time as well as my old Omega Seamaster ever did.

RaymondLin

Three-ColourSunburst said:

RaymondLin said:

Just look at this watch.  £299 !!!

Fully mechanical, it has every right to have another zero at the end of it but because it doesn't have the brand and history behind it, it's "just" £299, and I doubt they are losing money either.

£299! My Seiko 5 cost me £65 and - after I regulated it - it keeps time as well as my old Omega Seamaster ever did.

Seiko 5?

I have one too. 

guitars4you

A major rule of pricing is that if no market exists, at what is hopefully the asking price, then either a) reduce the price if margin allows or b) don't make it - The fact that Masterbuilt Guitars are now around 24 months order time means a  market exists - The perceived customer might well not be many of us on FB - And granted anyone can moan about is it worth it or not, but the simple fact is a market exists

Furthermore the price of the guitar is not just about the cost of the ingredients - Factory costs include rent/rates - investment in capital expenditure inc CNC + spray booths - wages including a decent health care plan to many/all staff - local tax (not sure what corporation tax is in California/USA - electricity - loans/interest to bankers/investors - Just for starters

In simple terms, a Strat may well be just 2 pieces of wood bolted together - But a cottage pie is essential only potato and mince meat, but I bet any of our well known TV chefs can make it taste better than me and probably you - Likewise the MB and CS team can do likewise to the Strat

Finally, remember in the UK, that around 25% of the new selling price, of 8K, goes to Boris and co, in the form of vat and import duty - I haven't sat down with a pen and paper and worked it out,  but I bet they make more out of the price of the Strat then any other party involved - And that is not a dig at the government it is a simple fact 

Cols

And as if by magic...

Kurt Cobain's MTV Unplugged guitar sells for $6m at auction https://www.bbc.co.uk/news/world-us-canada-53128416

Can anyone imagine, for example, Hendrix’s Marshall stack from Woodstock selling for even a fraction of that?

RaymondLin

Cols said:

And as if by magic...

Kurt Cobain's MTV Unplugged guitar sells for $6m at auction https://www.bbc.co.uk/news/world-us-canada-53128416

Can anyone imagine, for example, Hendrix’s Marshall stack from Woodstock selling for even a fraction of that?

That's a different thing, one is Music History.  

A new guitar coming off an assembly line has no history, despite what the PR says.

Cols

RaymondLin said:

Cols said:

And as if by magic...

Kurt Cobain's MTV Unplugged guitar sells for $6m at auction https://www.bbc.co.uk/news/world-us-canada-53128416

Can anyone imagine, for example, Hendrix’s Marshall stack from Woodstock selling for even a fraction of that?

That's a different thing, one is Music History.  

A new guitar coming off an assembly line has no history, despite what the PR says.

Aye, and it’s an example of the skewed worth of equally important pieces of musical history.  After all, Jimi would’ve looked pretty stupid plunking an unplugged Strat on stage - the Marshall was an essential part of his sound and performance. The Strat sold for $2 million, but what happened to the amp is anyone’s guess.  Faded into obscurity.

ICBM

Cols said:

Aye, and it’s an example of the skewed worth of equally important pieces of musical history.  After all, Jimi would’ve looked pretty stupid plunking an unplugged Strat on stage - the Marshall was an essential part of his sound and performance. The Strat sold for $2 million, but what happened to the amp is anyone’s guess.  Faded into obscurity.

If you could find it (them - there were two full stacks if I remember rightly) and conclusively identify them, I wouldn't be surprised if they'd sell for more than you might think. Not as much as the guitar, but possibly a significant fraction of that. I'd also expect tens of thousands each for his pedals, which are also arguably as important to the sound.

Cols

Oh, I’m sure they’d sell for a handsome sum.  Not millions though.

springhead

What happened with that "Dickinson" Marshall amp of Jimi's? Wasn't that attracting offers of upto £1M a few years back? And yes his pedals change hands for huge amounts on the rare occasion a verified one comes up.