Dizzying prices

[89bruin]

I suppose one of the benefits of relatively free societies is that we each get to decide how to spend our “disposable” income. In my case being realistic about my ability is the best protection for my wallet - I generally stop looking when instruments break the $2000 point and I won’t even pick up something over $3000.

[blue4now]

It’s all about context. If guitar is your life and you play 5 hours every day 13k for a froggy is no big deal. For me I play casually here and there so 2k on a Taylor is sufficient for me

[Brucebubs]

Originally Posted by MBee

I wish it was only $13,000. It's $17,658 in Canadian dollars!

... and $18,949.78 in Australian dollars.
... plus shipping.
... plus 5% Import Duty.*
... plus 10% Sales Tax

* Australia-US have a Free Trade Agreement, with correct declaration paperwork from seller item can be bought in 'Duty Exempt'.

[LakewoodM32Fan]

I think the problem statement can be summarized as this: "If I can't afford it, then it's priced too high, and how dare these guitar companies do this!"

Which is certainly one way to look at the world.

[Rmccamey]

You missed the point. The hole/market niche/opportunity requires a more specific sort of the data:

1) $500 - $1500 (new price)
2) Solid wood
3) Made in USA.

If you expand item 3 to be Made in North America, many Godin lines/models would qualify.

Originally Posted by LakewoodM32Fan

Supply and demand. If these were "outrageous" prices, no one would buy them, and the prices would have to come down. But they aren't. And that's not because guitar builders are not market-savvy.

There isn't a "hole in the market" for guitars in the lower price range. Look at this screencap I just took of Guitar Center's site alone:

That's just for models, not numbers of each model in stock. And you better believe they'll have way more stock of a sub $2K model than they will of a $5K+ model. But for simplicity's sake, let's tally just the models: that's 2,640 models 2K and under, 589 between 2K-7.5K. No market hole there.

And again, this doesn't include Sam Ash, Sweetwater, etc.

The real issue being discussed is: people want a Santa Cruz or a Bourgeois or a Collings at 2K-3K.

Well, I'd love a Jaguar at the price I would pay for a Honda. But it's Jaguar's right to price their models at what they believe their product is worth. If the market isn't there, their business will suffer. If it is, what right do I have to insist they sell their XJ at Accord prices? That's just not the way the world works, not in guitars, cars, or essentially any other consumer good.

[BrunoBlack]

Originally Posted by LakewoodM32Fan

Supply and demand. If these were "outrageous" prices, no one would buy them, and the prices would have to come down. But they aren't. And that's not because guitar builders are not market-savvy.
....

....
Well, I'd love a Jaguar at the price I would pay for a Honda. But it's Jaguar's right to price their models at what they believe their product is worth. If the market isn't there, their business will suffer. If it is, what right do I have to insist they sell their XJ at Accord prices? That's just not the way the world works, not in guitars, cars, or essentially any other consumer good.

All very true. And no need to go that far with the car analogy. Just price a 2010, 2015 and a 2020 same model Honda. There’s been a $10k increase over the past decade.

The other thing you can do is a rough calculation of gross income/revenue vs all cost/expenditures for SCGC who builds ~400 guitars/year — or Froggy Bottom who builds ~100 guitars/year — and I think you’ll be surprised what’s left on the balance sheet.

[LakewoodM32Fan]

Originally Posted by Haasome

All very true. And no need to go that far with the car analogy. Just price a 2010, 2015 and a 2020 same model Honda. There’s been a $10k increase over the past decade.

The other thing you can do is do a rough calculation of gross income/revenue vs all cost/expenditures for SCGC who builds ~400 guitars/year — or Froggy Bottom who builds ~100 guitars/year — and I think you’ll be surprised what’s left on the balance sheet.

Exactly. American workers should be paid a fair value for great work, and so to the person saying there's a "hole in the $500-$1500 range, all solid wood, made in the USA" has perhaps not calculated the costs behind running such an operation. Not just the labor/workforce, but the tooling, distribution network, etc. Remember if a guitar sells for $1500, that's not what the maker gets. They sold it to the dealer for around 55%-60% of that.

Let's say for arguments' sake that hole in the market does exist...there are no shortage of entrepreneurs who would have rushed to fill it if it were financially a smart move to do so. It's telling that, thus far, no one has.

[Rev Roy]

Originally Posted by LakewoodM32Fan

That's telling Victor. It seems SCGC has started including Adi bracing and HHG in their "standard specs" and thus the built in higher starting price (again, using Martin's Custom Configuring Page those are 1K+ upgrades). And most of their competitors, like Collings, still sell with standard spruce bracing and regular glue for considerably less. It's an interesting tactic that SCGC has employed, because it seems they won't build one without those "add-ons"?

Yep...that is telling. And interesting to contrast with Bourgeois, which moved in the opposite direction when it introduced its Generation Series in 2018. MAP is “just” $3,775, which makes it their entry/budget model. It’s the only model that comes with a pickup (Baggs Lyric).

The only corners they cut to meet that price point was to replace Waverley tuners with Schaller, give it a satin finish and skip the volute...none of which effect tone or playability. So Bourgeois is actually trying to push prices down to become accessible to more folks.

I’ve got one coming in Monday. Looking forward to owning my first “budget” boutique guitar.

Here’s Dana explaining why he chose to make this move...

[HFox]

I'm 74 years old.
In 1968 a SS 396 Camero Indy Pace Car Convertable with Hurst 4 speed was $3,600.
My first House in 1972 in Squaw Valley was 20 K.
A pair of Rossignol Skis was a 120 buck with Marker bindings.
What dos that tell me ???
No Price On a GOOD TIME.
Grow up... If you don't want to pay for the best......Don't.
But to each his/her own.

[Rmccamey]

As a consumer, I don't have worry about the business aspects. If Godin can do it in Canada, there is no reason an established builder in the U.S. can't do it, too (Fender, Gibson, Martin, Taylor). It is unlikely that a small startup or entrepreneur would be able finance such a project. But, just because the major players are not doing it does not mean that a market niche doesn't exist. The US car makers found that out the hard way in the 80s when the Japanese exploited the market for smaller cars with better quality at a lower price. The large, established companies in most industries are slow to change and often miss new opportunities. In today's world, it would pay benefits if the "establishment" of US guitar companies would look for new markets, even if those are subsets of existing markets.

Originally Posted by LakewoodM32Fan

Exactly. American workers should be paid a fair value for great work, and so to the person saying there's a "hole in the $500-$1500 range, all solid wood, made in the USA" has perhaps not calculated the costs behind running such an operation. Not just the labor/workforce, but the tooling, distribution network, etc. Remember if a guitar sells for $1500, that's not what the maker gets. They sold it to the dealer for around 55%-60% of that.

Let's say for arguments' sake that hole in the market does exist...there are no shortage of entrepreneurs who would have rushed to fill it if it were financially a smart move to do so. It's telling that, thus far, no one has.

[LakewoodM32Fan]

Originally Posted by Rmccamey

As a consumer, I don't have worry about the business aspects. If Godin can do it in Canada, there is no reason an established builder in the U.S. can't do it, too (Fender, Gibson, Martin, Taylor). It is unlikely that a small startup or entrepreneur would be able finance such a project. But, just because the major players are not doing it does not mean that a market niche doesn't exist. The US car makers found that out the hard way in the 80s when the Japanese exploited the market for smaller cars with better quality at a lower price. The large, established companies in most industries are slow to change and often miss new opportunities. In today's world, it would pay benefits if the "establishment" of US guitar companies would look for new markets, even if those are subsets of existing markets.

If you are convinced you absolutely see a space in the market that the Big Four have foolishly overlooked, perhaps you can offer to inform their teams of market analysts that have missed this obvious opportunity. Could be a great entryway into a new career opportunity!

[jazzereh]

Originally Posted by LakewoodM32Fan

If you are convinced you absolutely see a space in the market that the Big Four have foolishly overlooked, perhaps you can offer to inform their teams of market analysts that have missed this obvious opportunity. Could be a great entryway into a new career opportunity!

Oooohhh I think I sense sarcasm

[LakewoodM32Fan]

Originally Posted by jazzereh

Oooohhh I think I sense sarcasm

Well, depending on one's level of cynicism. But crazier things have happened. I'm sure there are examples of outsiders noting trends that people too close to the situation have missed, and made millions by pointing it out and making a killing on a consulting fee.

Can't think of any concrete examples off the top of my head, but I'm sure there's gotta be some.

[Rmccamey]

I'd be happy to do so.

Originally Posted by LakewoodM32Fan

If you are convinced you absolutely see a space in the market that the Big Four have foolishly overlooked, perhaps you can offer to inform their teams of market analysts that have missed this obvious opportunity. Could be a great entryway into a new career opportunity!

[Rmccamey]

There are lots of examples. The Swiss watchmaking industry was devastated by one of their own inventions, the quartz movement (electronic) watch. Texas Instruments and Seiko saw opportunities the Swiss themselves were too close to see and ultimately TI and Seiko took most of the entire world market for watches.

Originally Posted by LakewoodM32Fan

Well, depending on one's level of cynicism. But crazier things have happened. I'm sure there are examples of outsiders noting trends that people too close to the situation have missed, and made millions by pointing it out and making a killing on a consulting fee.

Can't think of any concrete examples off the top of my head, but I'm sure there's gotta be some.