Members chimi Posted January 11, 2011 Members Share Posted January 11, 2011 I've always wondered, i mean i know when it comes to woods, electronics, etc. it could vary a lot but let's say a $500-600 guitar. I'm just wondering how much of a profit a guitar company makes on every single guitar? Thanks Link to comment Share on other sites More sharing options...
Members rchiav Posted January 11, 2011 Members Share Posted January 11, 2011 Add to that - labor, overhead of the facilities and equipment, distribution, markup for the store, etc.. Link to comment Share on other sites More sharing options...
Members chimi Posted January 11, 2011 Author Members Share Posted January 11, 2011 Like i said i know there are other factors. I'm looking for a ballpark figure. I'm sure it varies with each company but if anyone has any info on a specific one that would be fine. Link to comment Share on other sites More sharing options...
Members DaleH Posted January 11, 2011 Members Share Posted January 11, 2011 ^^^^ you have to figure out all the costs involved. With some cvompanies they proabably spend as much just on advertising as the guitar. Many models may not ever show a profit. Like the Firebird X ,even at $5000 a pop it may never pay for the big advertising blitz the company held. The money will come out of the profits of other models in their line. So it will be add into the costs. Link to comment Share on other sites More sharing options...
Members straycat113 Posted January 11, 2011 Members Share Posted January 11, 2011 It does not cost as much as everyone would think, when you figure in even the highest grade wood they buy so much quantity and even top of the line pups must cost them maybe $20 a pop. I had seen a counterfeit Chinese Les Paul some kid brought into my friends shop and believe me it looked and was made pretty well and the kid spent $300 for it. Now figure in what it cost the company that made it about a hundred and change, just think what they could make with a $500 budget. By the way I in no way support counterfeit guitars. Link to comment Share on other sites More sharing options...
Members Brujo13 Posted January 11, 2011 Members Share Posted January 11, 2011 Id say between 15 to 20% of the retail value is the actual cost of mats plus assembly, then you add transportation, and advertizing, and profit. Link to comment Share on other sites More sharing options...
Members aenemated Posted January 11, 2011 Members Share Posted January 11, 2011 there's no one answer. it depends entirely on the company/people/person building it. Link to comment Share on other sites More sharing options...
Members Steadfastly Posted January 11, 2011 Members Share Posted January 11, 2011 If you do it yourself, it's free except for your time. If Gibson does it in the USA, they'll tell you it costs $1500.00. Don't believe them. Link to comment Share on other sites More sharing options...
Members Grantus Posted January 11, 2011 Members Share Posted January 11, 2011 There are too many factors to really answer the question. Are you paying some US luthier $40 an hour or some Chinese laborer $2 an hour? Link to comment Share on other sites More sharing options...
Members kayd_mon Posted January 11, 2011 Members Share Posted January 11, 2011 I thought this thread was going to be about making a Partscaster or something like that. I don't know if the pricing, etc. works the same for guitars as it does amps, but I bought my Vox 4x12 cab at Sam Ash for $300 on clearance. I was talking to the manager, and he said that those cabs cost the store about $325 or $350 to buy (my memory's hazy), but they never moved in their store. The regional manager (or whoever) came in and had them price it below store cost. If a $500 cabinet is purchased for $350 by the chain, I figure it must cost half that to make, ship, etc. Otherwise, where's the profit? Link to comment Share on other sites More sharing options...
Members DaleH Posted January 11, 2011 Members Share Posted January 11, 2011 There are too many factors to really answer the question. Are you paying some US luthier $40 an hour or some Chinese laborer $2 an hour? $2 an hour? outrageous, more like $150 a month 14 hrs a day you get 4 days off at Christmas. Now get to work. Link to comment Share on other sites More sharing options...
Members ashtray Posted January 11, 2011 Members Share Posted January 11, 2011 Sign up for a cost accounting class - then you can answer your own question... if you have the 1,000 points of input you need to figure it out. If I have a company and I hire 1 employee to build my guitars, using tools that I got for free, and he builds them from trees in my backyard, and makes them in my garage, etc etc - ie, no materials, overhead, depreciation, etc costs - just labor. Now imagine he makes 1 guitar per year, and I pay him a salary of $100k. That guitar cost $100k to make. (not really - forgot to factor in employer payroll taxes... so maybe more like $110k. And I'm not offering any benefits!) Now imagine a company with 100 employees, of various salary, using equipment of various cost, renting a warehouse, changing utility prices based on the time of year (heating, AC, etc), getting wood from suppliers at various costs per quantity, quality, and availability, etc etc etc - and you get a clusterfudge of variable and fixed costs to account for, and allocate across your cost pools. Oh - don't forget once the guitar is made, everyone not involved wants $$ for being part of the company - marketing, management, finance, HR, shipping/receiving, etc etc. Bottom line - you could probably build a guitar for anywhere from $40/unit, to $40k/unit. Depending on all the above factors... and then some. Link to comment Share on other sites More sharing options...
Members bonaventura Posted January 11, 2011 Members Share Posted January 11, 2011 there was a build challenge over at neighbour tele forum last year. amazing how those ppl came up with USD210 budget... Link to comment Share on other sites More sharing options...
Members BoneNut Posted January 11, 2011 Members Share Posted January 11, 2011 I'd say most factories work with a 40% margin so the retailer makes some too. Link to comment Share on other sites More sharing options...
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