MSRP -- what's the point?

BrunoBlack · #1 02-09-2016, 07:40 AM

Looking at new acoustic guitars it is painfully obvious that every seller of factory guitars sells guitars for exactly the same price, which is 20% less that the posted MSRP. For example, if you're looking for a Martin D28 you are going to pay $2,629, which is 20% off MSRP (unless you are a capable negotiator.) Boutique makers play the same game only with a built-in 10% markdown. What's the point? I think this strategy might do 2 things: set up a false sense of value; and create an expectation for markdowns. Does this help anyone?

Goodallboy · #2 02-09-2016, 07:45 AM

Since it's a common practice and the public is well aware of it I don't see how it causes any of those problems you mentioned.

3 chord · #3 02-09-2016, 07:48 AM

MSRP sets the products place in the market range. When ever you but anything, you decide what it is worth to you. Guitars and cars are things that there is wiggle room on. A pair of jeans, not so much.

billder99 · #4 02-09-2016, 07:50 AM

Pretty simple... there are some people who pay the price on an item without even asking for a discount. When they order directly from Martin, online or by phone, they are paying full MSRP. On those happy bonus days, Martin Sales takes Manufacturing out for a beer.

Muffinhead · #5 02-09-2016, 07:53 AM

From a pure accounting standpoint, MSRP sets a reference point that can be used for accounting and database purposes.

Gmountain · #6 02-09-2016, 08:29 AM

I think MSRP can also be used as a reference point for setting MAP.

Pualee · #7 02-09-2016, 08:31 AM

Quote:

Originally Posted by 3 chord

Guitars and cars are things that there is wiggle room on. A pair of jeans, not so much.

Unless you buy them that way

I don't like the practice. Some people ARE ignorant of the practice when they go to get their first guitar, and they pay too much. Not everybody is forthcoming that they will sell 20% off MSRP.

gfspencer · #8 02-09-2016, 08:33 AM

Quote:

Originally Posted by Haasome

Looking at new acoustic guitars it is painfully obvious that every seller of factory guitars sells guitars for exactly the same price, which is 20% less that the posted MSRP. For example, if you're looking for a Martin D28 you are going to pay $2,629, which is 20% off MSRP (unless you are a capable negotiator.)

You should be getting 40% off on a D-28.

DenverSteve · #9 02-09-2016, 08:33 AM

MSRP is a "keystone" price that the industry accepts at a set percentage above dealer cost. Some industries it's 40%. In others like furniture and clothing it's much higher. A dealer has to make a profit of at least X % on each sale to stay in business. An MSRP gives dealers a target. From that a manufacturer sets a MAP and that's what you see in national advertising. MAP (minimum advertised price) is the lowest an authorized dealer can advertise a product at. They can sell it for whatever they wish. A seller's job is to make as much money as they can for their family. A buyer's job is to get it for the best price they can. Sales occur somewhere in the middle.

Finger Stylish · #10 02-09-2016, 10:04 AM

The MSRP gives the purchaser "Bragging rights" for getting such a sweet deal under that Meaningless Posted Price.
To bad my wife isn't impressed with my Master Purchasing Powers.(or is that MasterCard purchasing powers)

00-28 · #11 02-09-2016, 10:08 AM

What's more ridiculous is the list price.

. .......Mike

MikeD · #12 02-09-2016, 10:14 AM

Quote:

Originally Posted by gfspencer

You should be getting 40% off on a D-28.

Well, maybe. If you are someone that buys a guitar based on how it actually plays, sounds and looks, rather than simply by a price somewhere online or at a random store in another timezone, then you may pay a bit more to get THE guitar you want if the store has higher overhead and needs to sell at less of a discount. Not all guitars are created equal, and sometimes it's worth paying a little extra to buy a guitar you actually got to play and compare against others and KNOW how good it actually is. I'm convinced that 1/2 of the used guitars for sale on the internet and in the big chain stores are because people bought them based strictly on price rather than with their ears, hands and eyes. The best deal isn't always the best buy.

Larry Pattis · #13 02-09-2016, 10:15 AM

Sadly, the music retail industry has always been rife with all kinds of discounting from any published-pricing, which makes for an unsavory flavor overall.

SMan · #14 02-09-2016, 10:16 AM

MSRP is part of the Marketing/Accounting process in most retail businesses. It's a marketing/advertising price, accounting benchmark, and negotiating starting point.

Ted @ LA Guitar Sales · #15 02-09-2016, 10:18 AM

Quote:

Originally Posted by billder99

Pretty simple... there are some people who pay the price on an item without even asking for a discount. When they order directly from Martin, online or by phone, they are paying full MSRP...

You can order direct from Martin???

Quote:

Originally Posted by 00-28

What's more ridiculous is the list price.

. .......Mike

Yes, list/MSRP is ridiculous, should have been dropped years ago. Manufacturers just need to set the street price, and let the most qualified dealers represent their brand. When folks are happy with the dealer experience, they will be happier with the brand. Working like a charm for Lowden, Collings, Santa Crux and others.