Why should a mass produced guitar cost $2000+

[EmgEsp]

I've been playing for over 16 yrs now and I still can't understand the prices of some of these stupidly expensive mass produced guitars.

 

I'm specifically talking about expensive guitars that go through CNC machines and then get handfinished. Obviously, something that was handmade and made in small batches justifies a premium, but that isn't the norm.

 

Let's use the guitar below as an example. What justifies this guitar selling for $2400? Simply because its Made in USA? Is this really going to sound and play better than a well setup Pro Series Jackson with similar specs that sells for less than half the price? Let's be real here, the bill of materials to make that Made in USA Soloist is probably $500 tops, if that. There is nothing exactly exotic about the wood and hardware used in that guitar.

 

I personally think these big companies are just taking advantage of placebo effect. When people pay lots of money for something they will convince themselves it is always better.

 

Don't get me wrong, I wouldn't doubt those expensive guitars have a better setup from the factory than their cheaper overseas "Pro" offerings, but once both guitars get proper setups is there really going to be a huge difference, especially enough to justify such a huge premium?

[Freeman Keller]

Maybe a better question is "what makes a guitar worth the price you are willing to pay"? Name on the headstock? Country of origin? Materials its made out of? Endorsement by someone you admire? A particular brand of pickups (bridge, tuners,...)? A particular sound? Shape? Finish? Setup? Investment potential? Availability in a local store? Warranty?

[EmgEsp]

On the other hand, how can Jackson build and sell a guitar for $149?

 

http://www.musiciansfriend.com/guitars/jackson-js-series-dinky-minion-js1x-electric-guitar

 

 

Per unit they probably make very little profit, but they are probably depending on high volume of sales to balance things out.

 

These companies get huge discounts buying woods and electronics in bulk, so its not hard to understand how they could sell a $150 guitar and still make some kind of profit.

[EmgEsp]

I still think these companies have to justify why they cost so much more than their premium overseas options. How do you go from $800 - $2400 when both guitars pretty much have identical specs?

 

http://www.musiciansfriend.com/guitars/jackson-pro-soloist-sl2-electric-guitar?rNtt=Jackson%20Soloist&index=6

[Freeman Keller]

 

 

Per unit they probably make very little profit, but they are probably depending on high volume of sales to balance things out.

 

These companies get huge discounts buying woods and electronics in bulk, so its not hard to understand how they could sell a $150 guitar and still make some kind of profit.

 

 

First, I removed that post because its pretty much impossible to answer the question. However it is a question that I've asked myself many times - how can (insert company name) offer a decently playable guitar for 3 or 4 hundred bucks? I understand the whole marketing chain, with a fair idea of where the markups occur. I also build guitars so I have some idea of where the costs of materials and amortizing of facilities (yes, I build hand made guitars and expect to be paid for my labor, but I still have to buy pickups and bridges and fretwire and wood).

 

The market will bear what the market will bear. If Jackson wasn't selling those guitars (at both ends) they would cease to offer them. The question for you is does it meet the criteria above for you to spend your money on it

[EmgEsp]

So, the only justification for the high price is whether an individual decides its worth it, not if its actually objectively worth that price? I understand companies have to make a certain level of profit, but the amount of profit they make on those Made in USA guitars is downright criminal lol. They could easily sell those guitars for $1000 less and still make a decent profit.

[1001gear]

Watch a couple Godfathers and report back.

[EmgEsp]

I've already seen those movies, but I don't see connection. Please explain.

[1001gear]

I've already seen those movies' date=' but I don't see connection. Please explain.[/quote']

It's not about services or even the benefit of mankind. It's about money; as much money as possible. The law of supply and demand goes something like first you supply, then you demand. You can disguise this with shiny guitars but the demeanor of the investors is constant. Toward that end, prices go up even if costs have to be fabricated. (something they're real good at)

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[speakerjones]

Because economics. After costs, that is the price it is most likely to sell at and make the profit they desire. I don't think the margins on these top tier guitars is as big as you think it is. And, I think if you take into account inflation, this is always what good, USA-made guitars have cost. Want it cheaper? Wait for it to go on sale, or buy it used.

 

I bought my first "new" guitar in years last year for about $2k. Was that a lot? Sure, but it was worth it to me. It had the finish and specs I desired. It will hold it's value well, and I just dig it.

[EmgEsp]

Are you saying the bill of materials costs over 2x the cost over their overseas Pro Series of guitars with similar specs? I highly doubt that.

[pekelnik]

I'm not sure what worries you. If you think you can get the same guitar for much less, that's great for you, isn't it? It's not your problem that other people are willing to pay that much money for something you don't need.

[mrbrown49]

In response to EmgEsp.

 

It's possible the BOM costs 2x. The US has much more stringent lumber purchasing laws which limits what can be used, and where it can be sourced from. The US also has much more stringent laws on emission points (applies to finishing), labor laws, labor costs, healthcare, taxes etc. All that are included in the BOM as well.

[EmgEsp]

Are people just gullible then?

[EmgEsp]

Yet, you can build a custom made to order Kiesel for $1,000 less than that mass produced USA Jackson.

 

Please explain this? How much cut do the dealers usually take?

[Grant Harding]

There are brand name purses that sell for several thousand dollars because some people will buy them. They're probably the best purses you can buy.

 

You're looking for a mathematical formula for something that's heavy on human psychology.

 

The answer to your original question is that the high price keeps the cream of the cream out of reach of the masses so they stay special.

[pekelnik]

Gullible? People have different objective functions. I derive happiness from a forest nearby, from many completely arbitrary and unique things that you will not even notice. If someone is willing to pay 10k for a 1968 stratocaster that has been made to much lower quality standards than a new 1k am. std. guitar and then feel happy that he/she gets to play it and hang it on his/her wall, how is that wrong? We live in a complicated world and do what we want to do. No matter how hard you will try, you will not be able to form a rational behavior model for humans.

[Phil O'Keefe]

Materials are usually at least somewhat better in USA built instruments, and electronics are usually better too. Generally the attention to detail and quality standards are more stringent in the USA too. All of that adds to the cost, but probably the biggest factor is the difference in labor costs. A skilled craftsperson in the USA makes more than someone doing the same work in Korea or Indonesia.

 

While the USA-built guitars invariably cost more, they're also far more likely (historically) to appreciate in value, whereas guitars built offshore far less frequently do, and rarely do to the same extent.

 

But hey, there ARE options, and there certainly are some very nice instruments being made overseas - if you think one of them is better suited to you, then by all means, get it instead of a USA-built instrument. That's why companies offer them - to give everyone a choice and to be able to provide guitars at different price points to meet the expectations of their various types of customers.

[onelife]

I say it is marketing and marketing companies charge what the market will bear (with a substantial amount of encouragement).

 

The companies that own the brand names Gibson and Fender took note of how the old guitars with those names on the headstock were selling for prices that were sometimes reaching six figures, so they started making re-issues in an attempt to cash in.

 

Jimi Hendrix is probably responsible for a considerable percentage of the Stratocaster's current popularity and FMIC certainly takes advantage of that. There is a strat available at every conceivable price point.

 

Gibson makes high priced Les Pauls and sells them to people who think they can buy their way to someone else's tone. I want to sound like Mark Knopfler and, for a premium, I can get his signature guitar with his actual signature on it - or, if I can't afford that, I could buy a Studio model and learn how to pick with my fingers.

[Freeman Keller]

I've thought about jumping back into this but frankly don't see the point. Emg doesn't see the value in a more expensive guitar - that's fine, there are some really great inexpensive choice on the market. It don't want to open the domestic vs. overseas production can of worms - that has been discussed to death. I looked at the SL2H and frankly I wouldn't pay 200 for it, much less 2K, and I am quite sure that Emg wouldn't see the value in some of the things I own. Life is good when we have choices and when we make the right ones for ourselves.

[Les Paul Lover]

By the way, whether it's the low entry $149 or the USA made $2400 Jackson, you can be pretty sure the profit margin is pretty similar in term of percentage. And probably not as high as youd think, in most cases under 5%.

 

Few companies manage that big a profit margin (or higher for that matter!).

[Mikeo]

I don't thinks that's a bad price at all.

 

I kind of dig the trans green one myself.

 

I've paid more for guitars, a lot more.

 

 

 

 

 

 

[EmgEsp]

Electronics meaning pots and jacks, because the pickups are the same.

 

Labor costs are obviously higher, but still something tells me they just price them that much higher to not cannibalize their cheaper offerings.

[EmgEsp]

My point was simply asking what truly justifies a guitar costing 3x the cost over similarly spec'd guitars made overseas. With CNC machines in the mix is the quality difference really that big anymore? I could see back in the day before CNC existed that consistency probably wasn't as good in regards to imports.

 

I just think there comes a point of diminishing returns once you get to a certain price. Look at those Gibson's that cost $5,000, it's like where are they pulling those prices from? Unless you make a guitar with diamonds or gold no guitar is going to cost $1,000+ to manufacture per unit.

[EmgEsp]

With CNC and Plek machines becoming more and more common the quality differences will become smaller and smaller between a well made import and a Made in USA guitar. At what point are you just literally paying for the "aura" of owning a really expensive guitar over just paying for something that simply plays and sounds well?

 

You can see from the guitars I own that I don't skimp on quality, but there is no way I'm going to spend $2,000+ on a mass produced guitar. At that price I expect something custom.

 

Going from a $200 guitar to an $800 guitar is going to be a much bigger difference in quality over a $800 guitar compared to a $2,000 one. That is when you start heading into diminishing returns. Again with CNC machines in the picture its much easier to build guitars with a higher level of consistency these days regardless of where a guitar is being made.