Guitar prices again

impmann

To the OP...

http://www.thefretboard.co.uk/discussion/87989/fs-gretsch-g5420t-fairlane-blue#latest

TTony

Alnico said:

Sporky said:

Alnico said:

A US Strat has gone from £999 to £1200 and now to £1400 but that's spanning 8 years.
Is £400 really such a great big leap in such a time span?

Yes, given that inflation only makes up £250 of that.

So how is charging an extra £150 over that time frame unreasonable?
All kinds of production costs, materials, even wages will impact on that.

Because the extra £250 is to cover the (inflationary) increase in production costs, materials & wages, so what's the extra £150 caused by?

Also consider that production efficiency is supposed to be getting ever better, reducing waste and reducing the unit cost price, which would offset the inflationary impact.

It depends on the state of the P&L at the start point too.  If the business was losing money 10yrs ago because the guitar was being priced too cheaply (for whatever reason), then you should expect the price to rise ahead of the inflation amount or else the business would have gone bust.

Exchange rates will play a part too - though I cba to look back 10 years and work out what the £/$ rate was then and is now.

Whitecat

Adam_MD said:

Whitecat said:

It's the main reason though, whether you want to hear it or not. The "out" vote sent the pound down by 15% or so. In fact they haven't even passed the entire decline on to consumers yet, they appear to have absorbed some of it. Expect that to happen next year...

It can't be the only reason though or all guitars would have gone up in price and they haven't.  

Im just sick of brexit being touted as the excuse for everything at the minute.  

Tonnes have though. PRS Custom 24s are up to £3200 for a non-10 top. That's insane and the annual price increase they apply anyway does not nearly account for all of that (US pricing is only up a small amount in % terms) - so what else could it be?

Fender Pro series are now £1400, replacing Standards that were quite a bit less. 

Knaggs guitars have increased by about £400 a guitar since the last shipment landed (the previous new guitars to land were pre-June). 

As I said, some manufacturers haven't raised prices because they want to absorb a bit of loss to maintain throughput, or in some cases distributors have hedged currencies so they can still afford to do the old pricing. That will not last forever though. 2017 is going to be an expensive year. 

And you can't take all the clearance sales as proof that prices are not on an upward trend. In most cases those are dealers sacrificing margin for shelf space and cash flow. 

Bury your head in the sand if you like though!

stickyfiddle

TTony said:

Alnico said:

Sporky said:

Alnico said:

A US Strat has gone from £999 to £1200 and now to £1400 but that's spanning 8 years.
Is £400 really such a great big leap in such a time span?

Yes, given that inflation only makes up £250 of that.

So how is charging an extra £150 over that time frame unreasonable?
All kinds of production costs, materials, even wages will impact on that.

Because the extra £250 is to cover the (inflationary) increase in production costs, materials & wages, so what's the extra £150 caused by?

Also consider that production efficiency is supposed to be getting ever better, reducing waste and reducing the unit cost price, which would offset the inflationary impact.

It depends on the state of the P&L at the start point too.  If the business was losing money 10yrs ago because the guitar was being priced too cheaply (for whatever reason), then you should expect the price to rise ahead of the inflation amount or else the business would have gone bust.

Exchange rates will play a part too - though I cba to look back 10 years and work out what the £/$ rate was then and is now.

The dollar was 2:1 in 2006. It's 1.23:1 as I type this. That accounts for the rest of the change and then some.

Strat_a_tat_tat

stickyfiddle said:

The dollar was 2:1 in 2006. It's 1.23:1 as I type this. That accounts for the rest of the change and then some.

Agreed.

The trouble with a general inflation rate is it's an average... and some of the goods / services included in that average will be home grown (and thus not affected by exchange rate fluctuations... or only partly influenced by rates - if the raw materials are imported).... but imported, finished goods will be greatly affected by changes in exchange rates.

meltedbuzzbox

stickyfiddle said:

TTony said:

Alnico said:

Sporky said:

Alnico said:

A US Strat has gone from £999 to £1200 and now to £1400 but that's spanning 8 years.
Is £400 really such a great big leap in such a time span?

Yes, given that inflation only makes up £250 of that.

So how is charging an extra £150 over that time frame unreasonable?
All kinds of production costs, materials, even wages will impact on that.

Because the extra £250 is to cover the (inflationary) increase in production costs, materials & wages, so what's the extra £150 caused by?

Also consider that production efficiency is supposed to be getting ever better, reducing waste and reducing the unit cost price, which would offset the inflationary impact.

It depends on the state of the P&L at the start point too.  If the business was losing money 10yrs ago because the guitar was being priced too cheaply (for whatever reason), then you should expect the price to rise ahead of the inflation amount or else the business would have gone bust.

Exchange rates will play a part too - though I cba to look back 10 years and work out what the £/$ rate was then and is now.

The dollar was 2:1 in 2006. It's 1.23:1 as I type this. That accounts for the rest of the change and then some.

looks like it was under 1.8 in 2006

ThorpyFX

Just before the crash in 2008 it went to 2:1, I know cos I was buying loads of electronics from the American PX. Tax free and half price I got a £450 suunto watch for £210 

Jez6345789

I think some of the lesser factors that get missed in effecting the final retail price is stuff like changes in borrowing from seeking capital for new machinery, R&D costs not much at Gibson or Fender also brand value if for example Fender is proving more popular and in demand its common practice to creep prices on popular models. CNC over the years has reduced some costs and increased productivity but its pretty much a nett effect  IMHO. 

All that said if you are not a brand snob there are some really great guitars out there for less money.

mellowsun

And yet second hand prices have never been lower.

A new standard Strat may cost £1400 but you'll be lucky to get that for a (arguably superior) second hand recent Team Built Custom Shop model with COA, full case candy and Abby handwounds.

Bellycaster

If I had a little patience, I'd have got the Am Std Mag 7 Tele I bought in April this year £200 cheaper than what I paid. It was Ltd Edition and I was certain they'd sell out before now, but they still have some left, damn.

But, the new Gibson I just bought is a 2017 model and I got it for £284 cheaper than the list price, some are still selling them at £1699, I paid £1415.

Stuff will come down in price, somewhere, eventually. I started the "Little Shops" Thread so me and others on here have a comprehensive list of everywhere to look.

I'll still never have the patience to wait though

Alnico

TTony said:

Alnico said:

Sporky said:

Alnico said:

A US Strat has gone from £999 to £1200 and now to £1400 but that's spanning 8 years.
Is £400 really such a great big leap in such a time span?

Yes, given that inflation only makes up £250 of that.

So how is charging an extra £150 over that time frame unreasonable?
All kinds of production costs, materials, even wages will impact on that.

Because the extra £250 is to cover the (inflationary) increase in production costs, materials & wages, so what's the extra £150 caused by?

Also consider that production efficiency is supposed to be getting ever better, reducing waste and reducing the unit cost price, which would offset the inflationary impact.

It depends on the state of the P&L at the start point too.  If the business was losing money 10yrs ago because the guitar was being priced too cheaply (for whatever reason), then you should expect the price to rise ahead of the inflation amount or else the business would have gone bust.

Exchange rates will play a part too - though I cba to look back 10 years and work out what the £/$ rate was then and is now.

Thanks,
That does help to explain things and i can see where i'd misunderstood now.

Sporky

Alnico said:

So how is charging an extra £150 over that time frame unreasonable?

All kinds of production costs, materials, even wages will impact on that.

I'm not even close to an economist but i honestly didn't think there's anything wrong with this?
£150 over 8 years?

I'm not looking for an argument. If i've misunderstood something i would love to know what it is and how.

What do you think inflation is?

Alnico

Sporky said:

Alnico said:

So how is charging an extra £150 over that time frame unreasonable?

All kinds of production costs, materials, even wages will impact on that.

I'm not even close to an economist but i honestly didn't think there's anything wrong with this?
£150 over 8 years?

I'm not looking for an argument. If i've misunderstood something i would love to know what it is and how.

What do you think inflation is?

I've never actually known properly.
I guess it's more clear now.

Sporky

I'm no economist, but essentially it's the increase in the cost of goods and services over time.

lustycourtier

Alnico said:

Adam_MD said:

@Alnico sorry dude but I think a price doubling in 10 years is absolutely nuts.

Really?

I can't say i've got a problem with it.
It all seems quite relative to me.

Have your wages doubled? 

Alnico

lustycourtier said:

Alnico said:

Adam_MD said:

@Alnico sorry dude but I think a price doubling in 10 years is absolutely nuts.

Really?

I can't say i've got a problem with it.
It all seems quite relative to me.

Have your wages doubled? 

If i was still driving the HGV's then yes, they almost have.

in 2007 i was on £6.50 per hour driving class 1.
This year most of the class 1 jobs were paying between £10 and £12 per hour.

Not quite double but almost.

I do however get the point that's being made in this thread and i'm only answering your question directly as it's one of the few industries that has seen a relative increase in wages.
I'm very aware a lot of others haven't.

I'm not happy with the recent price increases but i didn't regard them as *that* drastic and it wouldn't stop me wanting and ultimately buying the things i want.

stickyfiddle

meltedbuzzbox said:

stickyfiddle said:

TTony said:

Alnico said:

Sporky said:

Alnico said:

A US Strat has gone from £999 to £1200 and now to £1400 but that's spanning 8 years.
Is £400 really such a great big leap in such a time span?

Yes, given that inflation only makes up £250 of that.

So how is charging an extra £150 over that time frame unreasonable?
All kinds of production costs, materials, even wages will impact on that.

Because the extra £250 is to cover the (inflationary) increase in production costs, materials & wages, so what's the extra £150 caused by?

Also consider that production efficiency is supposed to be getting ever better, reducing waste and reducing the unit cost price, which would offset the inflationary impact.

It depends on the state of the P&L at the start point too.  If the business was losing money 10yrs ago because the guitar was being priced too cheaply (for whatever reason), then you should expect the price to rise ahead of the inflation amount or else the business would have gone bust.

Exchange rates will play a part too - though I cba to look back 10 years and work out what the £/$ rate was then and is now.

The dollar was 2:1 in 2006. It's 1.23:1 as I type this. That accounts for the rest of the change and then some.

looks like it was under 1.8 in 2006

Maybe at the start, but I was there in the summer and it was $2 or thereabouts. 

If you count for that AND inflaion, American-made guitars have actually got cheaper 

meltedbuzzbox

I went in October the same year and it was 1.79 I think or there abouts. It's all hair splitting to be fair.

I didn't think to buy a guitar though :-(

Blueingreen

I think the whole landscape is in the process of changing, as the idea that your gear collection represents some kind of investment where at worst you (or your widow) will get a decent chunk of your money back looks a lot less realistic.

Compared to a few years ago, if you buy a new highish-end guitar, you're going to pay more; if you decide to sell it on you're going to get a smaller proportion of your money back; and it's going to be on the whole harder to find a buyer.

That's going to mean buying is a more serious decision.  There will be some guys - deep pockets, natural spendthrifts and/or gasaholics - who will carry on as before.  But the sort of person who in the past was tipped into a purchase by the thought that if the worst comes to the worst he could easily sell it on and only drop a few hundred is going to be a lot more likely to decide to keep his money in his pocket.  And that will further depress the market.

I suspect it's going to become much less common to own several often pretty similar guitars and to buy and sell on a whim on the basis of minute differences in feel/specs.

ICBM

Blueingreen said:

I suspect it's going to become much less common to own several often pretty similar guitars and to buy and sell on a whim on the basis of minute differences in feel/specs.

Exactly. We're going to need to own fewer guitars and learn to get the most out of each one rather than thinking it's the guitar which dictates what you can do with it.

(Says he with nine guitars!)