Phil O'Keefe Posted January 3, 2017 Share Posted January 3, 2017 I thought some of you might find this article interesting... https://reverb.com/news/guitaronomics-how-much-does-it-actually-cost-to-build-a-guitar?utm_campaign=81408b6303-20161231_favorites&utm_medium=email&utm_source=newsletter&utm_term=0_5889ed6702-81408b6303-58136921 Link to comment Share on other sites More sharing options...
Members Freeman Keller Posted January 4, 2017 Members Share Posted January 4, 2017 For what I pay for a set of tuners (or pickups or a nice maple top or....) you can by a MIC or MIM or MII or MIJ or... guitar. For what I have to charge for a fret job you can buy a new neck (or maybe a new guitar). Is it somehow ironic that for a Mighty Mite neck they send nice US maple to China, make the neck and send it back. It will be interesting to see how this changes..... Link to comment Share on other sites More sharing options...
Members t_e_l_e Posted January 4, 2017 Members Share Posted January 4, 2017 for over 200 years we fought for labour laws, safety standards, minimum wages, health insurance, maximum works hours etcall this made labour expensive in our countries. remove all these advancements, multiply it by millions of workers having no other choice to work as under these conditions, thats why everybody is manufactoring east from india nowadays, cause we as consumer want to have it cheap, so we destroy all our maufactoring jobs cause we do not want or can not afford the real cost of our labour getting our manufactoring jobs back, would mean that we need to reduce our working standards again to make labour cheaper... Link to comment Share on other sites More sharing options...
Members Ancient Mariner Posted January 4, 2017 Members Share Posted January 4, 2017 It's an issue across the western world. Nobody wants workers rights to go down the pan, but no-one wants to pay for goods produced by those western workers at fully weighted prices. Link to comment Share on other sites More sharing options...
Members WRGKMC Posted January 4, 2017 Members Share Posted January 4, 2017 ^^^ Its more then all that. Its about countries manipulating their currency exchange rates. China devalues their currency to attract manufacturing.You have to have a basic understanding of world economics to understand it. Their money within their own boarders has value. Workers can support families when they have factory jobs. When you judge their pay by our standards you'd think they are all being cheated. That's because you're judging their pay on your scale. We're used to living with an inflated dollar. Our money buys less and less as the dollar is allowed to inflate. China manipulates their currency so just the opposite happens. Workers get paid less but their dollars buy more. Many workers there may only earn enough to survive. Much of that is the result of communist rule and over population. People there work for the state and the state doles out a minimum wage. In the process the state becomes rich by cheating their workers out of profits. Not to get political but the goal of the west is to balance the exchange rate so dollars there are worth less and dollars here are worth more. That comes from fair trade deals. As far as building guitars at a reasonable cost I can build one for under $200, of course I'm not factoring in the labor which I'm absorbing, If I were to add in my own labor at minimum wage it might be closer to $500 depending on the difficulty of the build. If I don't have to finish the body and neck the cost would be less because those are time consuming tasks. The assembly of a simple Tele or Strat with bolt on necks only takes a couple of hours. If I build my own body from scratch or do the whole thing from scratch like Freeman does the labor costs are high. Having good power tools and a shop can cut the labor time down allot. Buying materials in bulk and doing an assembly line is where allot of time is saved too. Hiring people to do one task and the repetition of performing that task brings the time down and quality up. You still have to market the product however. When you have inexpensive imports coming in and no middle men to add their profits on top of the manufacturing costs it makes manufacturing here unprofitable. Direct internet sales without the need for marketing through a large dealership has helped but its still not enough to level the playing field. Link to comment Share on other sites More sharing options...
Phil O'Keefe Posted January 4, 2017 Author Share Posted January 4, 2017 The playing field is about to be leveled. Regardless of where the workers and factories are located, pretty soon those workers will be out of jobs because of automation, advances in robotics and artificial intelligence. We're on the cusp of a fundamental change in society the likes of which we haven't seen since the Industrial Revolution... Link to comment Share on other sites More sharing options...
Members t_e_l_e Posted January 4, 2017 Members Share Posted January 4, 2017 its one thing if your willing to pay it, and another if your are not able to afford it... another thing is, why paying more, when the qualitiy is the same bad and it will not last, like things used to but we are losing or have lost our manufactoring jobs, and they will not come back soon and if, the price will be high and the majority of jobs left will be at wallmarts and mcdonalds. i'm exaggerating i know. but what else is left for low to mid educated people which are still the majority in numbers in our countries? Link to comment Share on other sites More sharing options...
Members onelife Posted January 5, 2017 Members Share Posted January 5, 2017 from the article... The reason for the markup is the many hands a guitar has to pass through before it gets to the consumer. Obviously, a guitar’s maker, distributor and dealer each need to make money on every guitar. And at each step in that process, the cost increases by a minimum of 50% – more likely, 100%. Wouldn't it be easier just to be one of the many hands that the guitar passes through? I wonder what percentage of Gibson or Fender profits come from guitars they make themselves compared to the 'copies' they have manufactured for them. Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 5, 2017 Members Share Posted January 5, 2017 MIJ? Seriously doubt it. Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 5, 2017 Members Share Posted January 5, 2017 Yep and now people have stopped fighting and corporations have taken advantage and used their puppets in government to rewrite laws allowing them access to virtual slave labor in the third world. Getting manufacturing jobs back means Americans have to do what their grandparents did in the 1930's. Get out in the streets and DEMAND corporations provide those jobs regardless of the effect on their profits. "reducing working standards" is what corporately owned right wing propaganda media has SOLD Americans as the "answer". Labor has been destroyed. And Americans allowed it to happen. Consumers do share a whole heap of the blame as well. Automation has been a factor but it's a small one. Labor costs are far and away the driving factor in corporate decisions. If people want everything cheap then nothing will change. Simple as that. Cutting off your nose to spite your face kind of thing. If people can't afford something then maybe they need to save for it. Hey...here's an idea....instead of people buying 100 cheap guitars cause they want to have a collection like their favorite rock star....maybe they should try just saving and buying 1 or 2 really nice one's that aren't made in sweatshops. Naa....that would require too much discipline. Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 5, 2017 Members Share Posted January 5, 2017 And the US prints money like it's candy whenever it needs too. America has no right to any "moral high ground" when talking about currency manipulation. As for the working standards that's just nonsense. They get paid less because they have no rights. They often work on quota systems so factory managers can take advantage of employees missing production numbers. Chinese factories are notorious for workers killing themselves because the payouts to family members are more than the wages. It's not about "communism"....China hasn't been communist for almost 30 years. It's about greed. The same greed that fuels exploitation in those "capitalist" countries like Indonesia, Mexico, Guatemala...etc....you know...the ones that followed US "advice" with their puppet dictators. Fair trade is about insisting that if you manufacture overseas that the employees be paid a decent living wage with benefits. I seriously doubt any of the guitar companies are doing that. Oh...they'll claim they are.....but they will be lying. Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 5, 2017 Members Share Posted January 5, 2017 “This is basic economics,” he says. For any consumer product, 50% to 75% of the cost is not the product and includes the costs associated with transportation, warehousing, personnel, benefits and computers. “That’s why we don’t make Nike running shoes in California. They’d cost $600 per pair. They probably cost less than $30 to make.” Love this part.....lol...what total BS. They'd cost 600 dollars ONLY because Nike is such a greedy corporation they don't want to make 7.38 billion a quarter instead of their usual 7.4 billion dollars....lol Nike outsourced their labor to maximize profit. There was NO other reason. Nike can afford to make shoes in America and pay excellent wages to Americans with benefits, and still make more profit than they'd ever need. As could virtually every other major corporation that exported jobs. Nike were the leaders in outsourcing. Guitar companies copied their example. Link to comment Share on other sites More sharing options...
Members t_e_l_e Posted January 5, 2017 Members Share Posted January 5, 2017 soundcreation its not only the u.s. its also valid for the whole european union aswell Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 6, 2017 Members Share Posted January 6, 2017 yeah most definitely. Corporations are simply institutions that do what they do to maximize profits. European, American, Chinese...whatever.... The difference though is that (most) Europeans are aware of the corporate propaganda and have stronger regulations over them. European governments generally do more to protect the well being of their citizens. Americans seem to fear this kind of thing....mistakenly call it "socialism" and then think the answer to the problem lies in allowing corporations even more freedom to maximize profits under the naive idea that the "free market" will somehow trickle benefits down to them. Link to comment Share on other sites More sharing options...
Members demonstro1 Posted January 7, 2017 Members Share Posted January 7, 2017 ^^^ Not to get political but the goal of the west is to balance the exchange rate so dollars there are worth less and dollars here are worth more. That comes from fair trade deals. . This is straight up retarded. The US Dollar is highly valued because it's the default currency of exchange across the globe. It is also the form of currency that ALL oil transactions internationally are priced in. The only thing possibly more valuable than the American dollar is American debt. And guess which country is the leading holder of that? I'll give you a hint: it's the same one idiot politicians over in the USA are libeling as currency manipulators. No renegotiated trade deals on earth are going to change the value of the dollar without drastically lowering the standards of living of US workers. Good luck affording your next fancy electric banjo then. Or even electricity, period. Anybody that believes that nonsense probably voted for a reality TV star billionaire and really believes in fairy tale trickle down voodoo economic theories that have been demonstrably proven false since at least 1982. Americans are funny. Link to comment Share on other sites More sharing options...
Members Freeman Keller Posted January 7, 2017 Members Share Posted January 7, 2017 Actually Phil, this is something that I have always wondered about. You are close to the industry and might know, but frankly I doubt that anyone would release this kind of information. I come from a production/assembly background - completely different from musical instruments but I still needed to understand all of the costs to make a profitable product. So, what I would like to know, and lets do this for both a typical domestic guitar and a typical PacRim clone. I just grabbed the price of a new LP Standard and Epiphone Standard from Sweetwater at $2799 and $494, and just for chuckles I'll include a blatant LP counterfit at around $200 and a PRS McCarty single cut at $3600 (which went thru some legal issues with Gibson) https://www.aliexpress.com/w/wholesale-les-paul.html http://www.sweetwater.com/store/detail/Mc594SCFTMS OK so lets break down the costs - raw wood - mahogany, maple, rosewood, ebony- fabricated parts - truss rod, covers, maybe pickups- purchased parts - tuners, pickups, electronics, maybe bridge and fretwire- finishing materials- labor- direct costs including any benefits Profit and overhead- amortized costs of plant and facilities including machine tools (CNC)- CNC programming- any other overhead at the plant level Shipping, handling and tariffs- shipping from country of origin- domestic distribution to retailers- import duties and tariffs- taxes Profit and mark ups- original manufacture's profit- retail dealer's mark up- factory support/warranty All other overhead- corporate costs, legal, engineering....- advertising, artist endorsement- owning an internet discussion forum (LOL)- share holder dividends... There must be other costs - those come immediately to mind. So, what does it ACTUALLY cost to build an electric guitar? Link to comment Share on other sites More sharing options...
Members Freeman Keller Posted January 7, 2017 Members Share Posted January 7, 2017 For a point of reference to my last post, I have built two Les Paul style guitars and kept rather detailed spreadsheets of the costs. Here is a summary from the last one Wood $422Hardware 224Electronics 156Finish 36Inlay 60Case 150 That puts my cost for parts and materials right at $1000. I buy things onesy-twosy and don't try to find the best deal - everything is top quality and I'm willing to pay for it. I never keep track of my time (partially because I'm not very efficient) but I'm going to guess that there is 80 or 100 hours in this thing. I do not own a mill or duplicarver so all of the body, neck shaping, and inlay was done by hand. If I was going to pay myself a living wage lets say $25/hour plus 10 for benefits. Obviously eliminating labor would bring my "costs" way down but our typical computer numeric controlled machines where I worked before were in the $800K range - we tried to keep them working constantly if we could. There are small "home" CNC's that are big enough to route a LP neck but they are still in the $10 range. Besides, I honestly like carving a neck by hand. So, for comparison with the above costs, lets just say that a small time builder might have $3 to 5K in his costs to build that very same guitar that you can get for a few hundred Link to comment Share on other sites More sharing options...
Members soundcreation Posted January 8, 2017 Members Share Posted January 8, 2017 lol....since 1982? More like since 1882. It's interesting because you always hear Americans talk about how much debt China holds and how worried they are about it, but Japan holds nearly as much and you never hear anything about that. For the US, foreign held debt is virtually meaningless. Link to comment Share on other sites More sharing options...
Moderators Ratae Corieltauvorum Posted January 10, 2017 Moderators Share Posted January 10, 2017 Not sure how your figures add up FK, but they seem to reflect pretty much what I've worked out, and it's always made me of the opinion that in terms of what you get for your money, something like a Gibson Les Paul Custom is pretty decent value for the money, they are not trivial to build. Slab bodied, bolt ons shouldn't cost much more than a $1k Link to comment Share on other sites More sharing options...
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