Boutique Guitar Dealer Pricing

[lafonda]

Had a dealer tell me he couldn't sell a new high end luthier guitar for less than
10% off the list price because of the terms of his agreement with them plus he claimed there was hardly any margin in them to begin with.
I can understand MAP pricing arrangements but this sounded strange.

[ManyMartinMan]

That's not strange. Completely normal. I don't know about the margins but the terms are normal.

[lafonda]

Would not I could understand. Cannot is a different story.

[Kupuna50]

What you were told is correct.
From a business perspective, it makes sense.
This is the only way boutique guys can keep the prices high.

[tomiv9]

Most boutique builders do have agreements with their dealers which prohibit them from discounting more then 10%. This is done to keep dealers from undercutting each other and keeps things fair. It also prevents them from "devaluing" the brand.

[rogthefrog]

Originally Posted by lafonda

Had a dealer tell me he couldn't sell a new high end luthier guitar for less than
10% off the list price because of the terms of his agreement with them plus he claimed there was hardly any margin in them to begin with.
I can understand MAP pricing arrangements but this sounded strange.

It goes both ways. Some builders also won't charge less than the price their dealers charge so as to maintain a fruitful relationship with dealers.

[nedray]

That rule is in place and it's enforced by the boutique builders. I spoke to the manager at my favorite high-end shop and he said they have to provide proof of the selling price for each instrument they sell. He said it gets tricky and quite time consuming but they have to do it or lose the line. Having said that, I have seen one Collings dealer put select, presumably slow-moving pieces on sale for 10% to 15% off the MAP. I imagine they get permission from the builder to do that.

[ManyMartinMan]

Originally Posted by nedray

That rule is in place and it's enforced by the boutique builders...... I have seen one Collings dealer put select, presumably slow-moving pieces on sale for 10% to 15% off the MAP. I imagine they get permission from the builder to do that.

While I have great respect for Colling's products, to me they ceased being a "boutique" builder years ago. They are a small(ish) guitar factory.

[Paleolith54]

Originally Posted by lafonda

Had a dealer tell me he couldn't sell a new high end luthier guitar for less than
10% off the list price because of the terms of his agreement with them plus he claimed there was hardly any margin in them to begin with.
I can understand MAP pricing arrangements but this sounded strange.

Different item, of course, but Mesa has had this type of arrangement in place for their amps for decades. It's not at all unusual, just not widely known among buyers.

[AHill]

I suspect it's the same kind of thing with custom runs for the high volume makers like Martin and Gibson. For example, you probably won't get the same kind of discount on a Gibson J-45 Vintage as you could on a J-45 Standard. Or an Eric Clapton Martin, etc.

[Tico]

Not really plugging Martin Authentics here, but it's easy to get 40% below MSRP (not MAP) on them.
My second phone call to an authorized dealer secured that instantly, simply for asking (making the dealer I was aware of and expected it).
No argument from him, or even a counter-offer.
And this was in 2016 for an Authentic that's still a good-seller, the D-28A 37 VTS.

Add to that their relatively high production numbers benefiting from economy of scale compared to a low-volume boutique luthier.

When comparing, be sure to ignore list prices.
Compare the boutique at only 10% below MSRP to 40% below an Authentic's MSRP.

No, this doesn't makes Martins any better or luthier boutiques any worse, but some of us poor folk must take price into account when deciding which zillion-dollar guitar to buy.

[RP]

Originally Posted by Tico

Not really plugging Martin Authentics here, but it's easy to get 40% below MSRP (not MAP) on them.
My second phone call to an authorized dealer secured that instantly, simply for asking (making the dealer I was aware of and expected it).
No argument from him, or even a counter-offer.
And this was in 2016 for an Authentic that's still a good-seller, the D-28A 37 VTS.

Add to that their relatively high production numbers benefiting from economy of scale compared to a low-volume boutique luthier.

When comparing, be sure to ignore list prices.
Compare the boutique at only 10% below MSRP to 40% below an Authentic's MSRP.

No, this doesn't makes Martins any better or luthier boutiques any worse, but some of us poor folk must take price into account when deciding which zillion-dollar guitar to buy.

Circling into a previous thread on custom guitars http://www.acousticguitarforum.com/f...d.php?t=470163 ... I can't imagine ever wanting/owning a boutique/custom build for lots of reasons. There are many of you who have the funds and guitar wherewithal and find that your needs are best met by boutique/custom builders. Viva la differences....

[sdelsolray]

Originally Posted by lafonda

Had a dealer tell me he couldn't sell a new high end luthier guitar for less than
10% off the list price because of the terms of his agreement with them plus he claimed there was hardly any margin in them to begin with.
I can understand MAP pricing arrangements but this sounded strange.

That is quite typical of dealer agreements with boutique builders. What a dealer pays to the luthier varies. Margins are tighter for some brands but are less so for other brands.

[Mycroft]

Originally Posted by RP

Circling into a previous thread on custom guitars http://www.acousticguitarforum.com/f...d.php?t=470163 ... I can't imagine ever wanting/owning a boutique/custom build for lots of reasons. There are many of you who have the funds and guitar wherewithal and find that your needs are best met by boutique/custom builders. Viva la differences....

I am completely at sea in how this adds to a discussion of the negotiating margins of different sourced guitars?

[Ted @ LA Guitar Sales]

Originally Posted by lafonda

I can understand MAP pricing arrangements but this sounded strange.

In what way?