7 Things That Do Not Make Guitars Expensive Anymore

[guitar george]

If you don't want to watch the video, the 7 things that do not make guitars expensive anymore are:

1. Inlays - Now cut out with CNC machines
2. Veneers - Only an extremely thin layer of actual expensive wood is used
3. Binding - Can be attached by pouring plastic into a router groove in the shape of a guitar before cutting out the guitar rather than using strips glued on the wood
4. Bolt on necks - cheaper than set necks
5. Pickups - Companies using their own pickups versus paying extra for name brand pickups.
6. Photo finish decals - Custom graphics and grain patterns are painted or photographed decals glued on top of cheap wood.
7. Wood - Except for a few exotics, does not have a huge premium from one wood to another

[Tony Done]

I'm not watching a 10 minute vid. In technical terms (eg not including labour-related, like wages and OHS), I would rank CNC and UV catalysed poly finishes as the big two. The poly finishes avoid the cost associated with applying several coats and curing time, eg storage. Nitro also involves major anti-pollution and OHS costs in some locations, such as California.

[rct]

CNC and other kinds of automatic machining began in the 70's as I recall.

rct

[Tony Done]

Originally Posted by rct

CNC and other kinds of automatic machining began in the 70's as I recall.

rct

I wonder how that relates to their wide adoption by the Asian makers?

[SpruceTop]

Credit cards can seem to make guitars not seem expensive anymore because you can buy them anytime for the mere entering of a number or swipe of plastic--Quick 'n' Easy! Then there's the credit card no-interest-same-as-cash 12/24/36/48-month terms! It's the aftermath that can be a bit hard to bear, though ...

[rct]

Originally Posted by Tony Done

I wonder how that relates to their wide adoption by the Asian makers?

That's a great question. If their use is fairly recent, they are light years behind the big American makers.

I don't think enough emphasis was placed on the ever spiraling race to the bottom on parts and raw materials used to make guitars. Leo made his own bridges, plates, jacks. It was always cheaper to make your own. Today, and for who knows how long, you part that stuff out, buying from the low bidder, doing exclusives to push your costs down even further.

The result isn't just less expensive guitars, it's also crappier guitars.

rct

[SpruceTop]

Let's not forget that American money is behind some Asian makers.

[Rmz76]

Originally Posted by Gmountain

Do you own your own business? Do you pay employees? Do you pay suppliers, who have to pay employees? Add in taxes, insurance, mortgages or rent, utilities. Now you are out of pocket for a lot of money, before you even see a cent of profit.

If you work for someone else, are you willing to take a pay cut?

And let's face it, the only reason people are in business is to make money. So if you can't make a profit, then there is no point.

Unless you inserting a big load of sarcasm here, it seems you two are both preaching the same sermon.... The reality is for any business with outside investors or shareholders to answer, when it comes to decisions that impact the bottom line, ethics are not defined by morality but exclusively by what is legal and what isn't legal and the impact of bad PR. If consumers were to find out a product they paid $3000 for only cost $300 to manufacture and there's a huge public outcry then suddenly the board of directors has strong incentive to change pricing. Not because it's the ethical thing to do, but simply because not doing this could lead to a snowball of bad Public Relations that damages future profits.

However, if the company can keep secret their actual per unit cost (and they all do as far as I know) then they have a legal obligation to bring that product to market and find that sweet spot of demanding top dollar and still keeping sales high. A big part of that formula is looking at the market value of competing products. Taylor's 810E has an MSRP of $3399, Martin's D28 has an MSRP of $3299.... Considering what's been made public knowledge regarding Taylor's advancements in CNC tech, I would imagine Taylor's per unit build cost of each 810E is much lower than Martin's per unit cost of each D28. Taylor innovation's in CNC technology are well known and there is no reason to not think they are still leading in this area. If they are leading in automation that means they are spending less per unit and making more per unit.

Assuming this is true, Taylor does not have a moral obligation to bring the 810E to market for less than the D28 and pass that savings on to consumers. If they are a publicly traded company they have a legally binding obligation to bring their products to market for much as they can possibly get customers to pay and maintain high sales volume. This is just business and usual and how every company in every industry competes.

If you want to buy a product where pricing was set with some influence by morality, some private builders probably still do that. But any company, even smaller ones can not afford to. Truthfully, if they did customers would become suspicious and assume because the product cost less that it was a lesser quality product. We'll all programmed to put our faith in brands and the idea the more we spend always brings us better quality. Gibson even did an experiment with Les Paul pricing some years back where they proved this to be true.

[rct]

Originally Posted by Rmz76

Unless you inserting a big load of sarcasm here, it seems you two are both preaching the same sermon.... The reality is for any business with outside investors or shareholders to answer, when it comes to decisions that impact the bottom line, ethics are not defined by morality but exclusively by what is legal and what isn't legal and the impact of bad PR. If consumers were to find out a product they paid $3000 for only cost $300 to manufacture and there's a huge public outcry then suddenly the board of directors has strong incentive to change pricing. Not because it's the ethical thing to do, but simply because not doing this could lead to a snowball of bad Public Relations that damages future profits.

However, if the company can keep secret their actual per unit cost (and they all do as far as I know) then they have a legal obligation to bring that product to market and find that sweet spot of demanding top dollar and still keeping sales high. A big part of that formula is looking at the market value of competing products. Taylor's 810E has an MSRP of $3399, Martin's D28 has an MSRP of $3299.... Considering what's been made public knowledge regarding Taylor's advancements in CNC tech, I would imagine Taylor's per unit build cost of each 810E is much lower than Martin's per unit cost of each D28. Taylor innovation's in CNC technology are well known and there is no reason to not think they are still leading in this area. If they are leading in automation that means they are spending less per unit and making more per unit.

Assuming this is true, Taylor does not have a moral obligation to bring the 810E to market for less than the D28 and pass that savings on to consumers. If they are a publicly traded company they have a legally binding obligation to bring their products to market for much as they can possibly get customers to pay and maintain high sales volume. This is just business and usual and how every company in every industry competes.

If you want to buy a product where pricing was set with some influence by morality, some private builders probably still do that. But any company, even smaller ones can not afford to. Truthfully, if they did customers would become suspicious and assume because the product cost less that it was a lesser quality product. We'll all programmed to put our faith in brands and the idea the more we spend always brings us better quality. Gibson even did an experiment with Les Paul pricing some years back where they proved this to be true.

Except...nobody is publicly traded, there are no shareholders to answer to, there is no board accountability. Except Yamaha, and that has nothing to do with their guitars.

All of the guitar makers are privately held, you and I have no access to their costs, it is none of our business. There are no shareholder meetings or votes. In fact, the two time two major American guitar makers "went public" if you will, Fender to CBS and Gibson to AMF/Whatever that was, it was pretty much a disaster.

rct

[menhir]

Along the same lines, the purchase of a machine to do the job of a person is not always just to increase profits, but often an unfortunate solution to the problem of recovering lost profits due to ever increasing business expenses. The price to the buyers may not go up past the point where people stop buying or choose another option.

If a company doesn't make a profit it goes out of business, then it's employees are unemployed. Unemployed people don't buy guitars and then the dung keeps rolling downhill.

*Not me. My business is incorporated, but I'm not nasty and I'm not rich...Filthy or otherwise.

[AndrewG]

Originally Posted by stringjunky2

Of course, but there comes point where there's profiting reasonably and actually gouging people. I read often about what markets can stand. Big Pharma works on the principle.

Big Pharma can charge whatever they like because drugs will always be needed, and thus it has a captive audience with a semi-monopoly. We have little or no option but to pay whatever the cost is. Guitars, a luxury item, not so much.

[justonwo]

I don’t pass on my production cost savings to my customers, and I won’t unless there’s competitive pressure. I wouldn’t expect guitar companies to either. I’m not sure that guitars are any more expensive than they ever were, with some notable exceptions like Custom Shop Gibsons and Fenders. But most of those companies also offer a lot of stuff at lower price points. Also, remember 2002 was 16 years ago. At 3% inflation, prices double every 24 years.

[Scootch]

Originally Posted by Shortfinger

Capitalist pigs are making our instruments? Smoking cigars on their yachts and laughing at us? Rolling in profits?

I feel a song coming on.

Lighting their cigars with a Martin...

[waveform]

"China" as a whole makes guitars not expensive anymore.

[mercy]

I can buy all the materials for a nice guitar with $200 but I cant build a guitar. What we pay for is the skill of the builder. Sure the better known builders like Olson command higher prices and that is a different factor but if youre willing to buy one of those guitars then you are buying a brand which is also a product. I can buy a hand built guitar for $600 but his name is not known nor is the skill he builds with.
I know of car dealer that adds thousands of dollars to their cost for certain modifications. Doing so has made him a millionaire but the buyer is willing to spend his money on that. The buyer is buying status, not just a physical property.
If I had the money I would buy an Olson or etc knowing their mark up is high. But I am willing to spend my money buying the product and the name.