How can the 4 letter guitar company justify their prices?

[WindsurfMaui]

There is a guitar company whose name is 4 letters that is asking over $3,000 for their guitars. These are basswood Strat or Soloist bodies with roasted maple necks and stainless steel frets. They look to me like Warmoth parts, except for the head stock, that we buy here for under $1,000 finished and the electronics are not that much so how can they ask for so much money for them and why the heck are people paying that much? I'm confused. I could understand people paying a few hundred dollars more for the name because they want to be associated with an exclusive company but $2000 more for a basswood body guitar?

 

[amigarobbo]

Stop being coy, who are you talking about?

the money you save on the wood can be easily spent on other stuff, I dread to think how much some of my more 'esoteric' builds cost.

 

[WindsurfMaui]

I don't think we are supposed to throw shade on other companies in this forum. So I don't want to write the name so anyone doing a goggle search won't show this thread. But it is a 4 letter word starting with S and the 3rd letter is an h.

 

[Rick]

Three reasons off the top of my head ...
1) People don't want to think about putting a guitar together, they just want it done for them. 
2) The ones I've played are pretty well crafted.
3) Resale value.

 

[stultzies9]

Most of that pricing (as I understand it) comes from the time they take on their setups. They DO tend to hire skilled people to do the work, which means they have to pay them accordingly-ish. It still seems a bit overpriced to me, knowing what I can build through Warmoth, but, having played a few, I will admit their setups are fantastic.

 

[DuckBaloo]

• There is a guitar company whose name is 4 letters that is asking over $3,000 for their guitars. These are basswood Strat or Soloist bodies with roasted maple necks and stainless steel frets. They look to me like Warmoth parts, except for the head stock, that we buy here for under $1,000 finished and the electronics are not that much so how can they ask for so much money for them and why the heck are people paying that much? I'm confused. I could understand people paying a few hundred dollars more for the name because they want to be associated with an exclusive company but $2000 more for a basswood body guitar?

  
  People often have a simplified few of manufacture pricing. Profit margins are almost always smaller than you expect.
  
  • Are you making profit on your builds? Can you make a living off of them?
  • Are you making enough profit on your guitar builds to pay your utility bills?
  • Are you making enough profit on your builds to pay your mortgage?
  • Are you making enough profit on your builds to pay for health insurance for yourself? Any employees?
  • Do you builds cover your tool costs, R&D, and wear and tear?
  • Do you design and commission custom shipping packaging to make sure all your guitars arrive intact
  • Can you afford a "spoilage" cost of tossing a percentage of all you parts and guitars in the trash and write off their cost?
  • Could you afford to float the cost of hundreds for months during construction?
  • And the biggie ...Do you offer a warranty? Will you afford to ship some of your builds back and/or forth, put in labor, replace parts and maybe even replace the whole guitar? Or compensate your dealer network to do the work?
  Or ... does your day job cover the secondary expenses like lighting, healthcare, mortgage/rent, etc? That's the benefit of being a DIY, it's a hobby, a money-losing exercise. For manufacturers, this is their day job, there is no subliminal income.
  
  Plus, must manufacturers (like the one in question) are wholesalers. The manufacturer only gets half of the MSRP, the dealer gets the other half. So that $3,000 guitar? The manufacturer only earned $1,500 off of it. Now look at that above list of expenses again ... out of that $1,500, the company has to do all that and make a small profit and make dozens a week...just to keep the doors open. The economies of scale is a double-edge sword. And I've ignored the attention to detail, fit, finish and fret work boutique luthiers offer.
  
  And, yes, there is almost certainly a markup because of brand equity ... we are talking one of the most famous solid-body builders ever, back to his days at Rudy's Music. And there maybe some Chivas Regal Theory going on to (a famous MBA textbook case study of, "the more expensive the product, the more desirable it is.").
  
  A boutique company owner once addressed the market and said someone akin to, the reason the boutique market caters to expensive guitars is because the customers who can afford to buy a high-end guitar without a second-thought are low-hassle. It's the ones who have to scrimp and save and are trying to get the most bang for their buck that are high-maintenance PITAs and will nit-pick over every little thing.
  

<<< I can't delete this!!!

 

[pwrmac7600]

I agree with you. They are not the only company. I am about to build a tele deluxe which is inspired by a friedman guitar because I couldn't justify spending friedman bucks on a a bolt on guitar. BUT I will say alot of what I think you are paying for is the skill of the people who are leveling, crowning, and polishing the frets. Rolling the fretboard edges, and setting these guitars up to play like dream machines. Have you ever felt the necks on those guitars, they feel and play outstanding. But yes 3000.00 for a CNC cut body and neck, and bolt on, not gonna happen from this guy.

 

[JohnnyHardtail]

I didn't wonder much about the Four Letter company starting with "S".  They guitars are great quality and properly supported by the maker.  They even wind their own pickups and make them available in the aftermarket, which isn't common for a maker of their size.

I'm more concerned about the 6 letter company starting with "F".  They charge as much or more (from the custom shop) and don't offer much improvement or innovation in their products than what they sold in the 60s.

 

[WindsurfMaui]

Before I start let me be clear I'm not talking about the painting and finishing. If these guitars were PRS 10 quality guitars made in the U.S. I wouldn't be questioning the price. I am not questioning the price of signature models. I understand people will pay incredibly stupid prices for a signature model. I did that myself once. Big mistake. I'm talking about fairly regular guitars except they have roasted maple necks and stainless steel frets.

Stultzies9- When you say set ups are you talking neck relief, string height and intonation? Am I missing something?

DuckBaboo - I understand the point of view of the business owner.. But from the point of view of a customer there doesn't seem to be value for the money.  If a guitar player is a professional musician and wants to pay the extra money I can understand it. If a person has decide they will own only one electric guitar and that makes them feel good I can understand it. But most guitar players over time own 1/2 dozen to a dozen guitars. And I just can't understand someone who owns enough guitars over time to think that this $3,000 guitar is so much better than the other guitars they own.

As for the profit margin. I agree most items sold in a music store are usually marked up 100% if not more. But if this company is giving up 50% of their retail price to music stores they are making a big mistake.  Yes Yes I understand they want their guitars in stores but they don't have to be in all stores and quality local stores would take less profit for an exclusive in their area. (my opinion.)  Or I would sell them by mail online and take the hit of returns etc and still keep more money than giving up 50% of the retail proce.

Personally I think their parts are being made by Warmoth on a private contract and some guy is assembling them in his garage.

Pwrmac7600  If I were younger I would be assembling them in my garage and I would own a Plek machine and that would solve the set up issues. And that is what is probably happening.  :>)

 

[Chad11491]

Suhr makes their own bodies, necks, pickups, amps, pedals, etc. you can watch a factory tour video to see. PLEK machines are also almost 100k. There’s a lot of things that factor into a guitar’s price.

 

[Cactus Jack]

Suhr is one of my favorite companies. Every interaction I’ve had with them has been fantastic. They are impressive. 

Regarding cost, it’s all subjective. My last Warmoth build cost $1,200 for just the neck and body and I then put in another $500 for parts. Right there I’m up to $1,700 for a pile of wood and metal. On top of that I put in a minimum 20 hours assembling the darn thing. Pretty hefty investment for a no name “partscaster.” By comparison I’d say Suhr is a bargain !

 

[swarfrat]

Lots of things factor into the lowest you can afford to sell a guitar for, but in the end what sets the price they go for is what people are willing to pay. Don't blame them if your peers value their product more than you do.

 

[stultzies9]

I'm talking about everything that goes into making the guitar play as well as theirs do. So, the final fret levels and dressings, balling the ends of the frets, rolling the fingerboards, and then string/pickup height, action, bridge tension, etc etc etc. To do all of that well takes a pretty solid amount of practice/training.

Also, I have to ask, are you under the impression that the 4 lettered manufacturer ISN'T made in the US? Just asking because of the PRS comparison/comment.

As for the rest of it, I think DuckBaloo nailed it all on the head.

Now, honestly, I agree with you wholeheartedly. But that's because everyone on this board is part of an insanely small percentage of the guitar playing/owning crowd. 90+% of guitar players are more than happy to pull something off the wall and play it until they die. The boutique crowd is a tiny percentage of those. The DIY crowd is a tiny percentage of the boutique crowd. Most guitar players honestly don't even know who Warmoth is (which is too bad, I have to say), so even the majority of the boutique folks are looking to just buy something that is better than the "big guys'" stuff. Therefore they'll shell out the money for a S**r, Tyler, Anderson, etc.

At the end of the day, a lot of work goes into making one of those guitars, and the people making them get paid a decent-ish wage. That costs.

 

[stratamania]

They do not justify their prices. They do not have to.

They make quality instruments, with all of the business costs and related mark up etc. Offer exceptional customer service (I own one of their amps and would happily own one of their guitars) and all the rest that others have mentioned.

And there are people who own several of these instruments.

This is a pointless thread, why does a business justify what it charges etc. I could understand paying x for a BMW but not an Audi. Like anything else in life there are choices and costs involved.

 

[TonyFlyingSquirrel]

Suharto is a very high quality builder, and John Suhr was a friend of Ken Warmoth’s from years back from what Ken (RIP) told me years ago when I worked at Warmoth.  They had a very high mutual respect as builders and business men.  In addition to Duckbaloo’s comments, I would also add that since they are so focused on quality, the amount of production in quantity is not as high as many other builders, which reduces supply, increasing demand, which as we know from simple economics can also influence the bottom line.  They may not be cranking out hundreds of instruments per week, but the bills don’t go down with production, so it is all subjective. 

TLDR:  Many people simply can not afford high quality.

 

[Seamas]

People complaining about guitar prices should be thankful they don't play tuba or saxophone or double bass.

Guitars, for the most part, are cheap. That's why so many players have several.

 

[Cactus Jack]

I think this is a great thread, and appreciate you posing a thought-provoking question.

As such, I'm rethinking this thread a bit, and rather than focus on price, I'm thinking in terms of value or price/performance. From a value perspective Suhr still comes out ahead in my book, but remember when imports got REALLY good.

I remember imports used to be the bottom of the barrel cost-wise and as such, so was the product. However, something changed about 15-20 years ago, and now one can readily find amazing instruments in the $500-800 range. I remember wrestling with this when Agile guitars hit the scene. Here's a $300 LP copy, with all the same body and neck material, but with a genuine solid 3/4" flame maple top, ebony fingerboard, coil splitting (which was rare back then), and solid electronics etc. The value, at least perceived value, compared to an LP at the time was so high it was impossible to ignore. Fast forward two decades and several Gibson LPs in the collection later, and I can attest the Gibby's provide no playability benefit what so ever over the Agile. They are cool though . I'll say the same thing about Warmoth. I've purchased the most expensive flame top Showcase bodies, yet my daughters $250 Washburn Idol has a spalted flame maple top with deep chetoyance that puts my Warmoth builds to shame.

Anyway, thanks for thread. It took me down memory lane and got me thinking about a bunch of cool guitars. Value, price, it's all subjective, which is why it's nice to have so many great options. I haven't looked at the import market in a long time...off to see what cool stuff is out there.

 

[Wolfie351]

I said the same thing about PRS in the late 80s, why would someone pay so much for a set neck when they could find an LP for half the price?  Well, when GC started carrying them I went to try one out and, to my amazement, pretty much every PRS I played was a winner.  I could go through a dozen LPs and only find one in the bunch that had potential.  Took me a while, but I saved up and bought a new '91 CU24 and that has been my #1 ever since.

 

[TBurst Std]

Stratamania put it best.

If you don’t like their price, don’t buy their product.

I have no idea what others value their time as, but when doing cost comparison, I use a minimum of $50 hr.

If it takes me 10 hrs to assemble/ setup/tweak a build from parts from Warmoth, you can bet I’m insuring it for parts costs plus $500.

If you disagree with the concept, then it suggests your time, learning, intelligence, and effort are worth NULL

 

[Seamas]

I think this is a great thread, and appreciate you posing a thought-provoking question.

As such, I'm rethinking this thread a bit, and rather than focus on price, I'm thinking in terms of value or price/performance. From a value perspective Suhr still comes out ahead in my book, but remember when imports got REALLY good.

I remember imports used to be the bottom of the barrel cost-wise and as such, so was the product. However, something changed about 15-20 years ago, and now one can readily find amazing instruments in the $500-800 range. I remember wrestling with this when Agile guitars hit the scene. Here's a $300 LP copy, with all the same body and neck material, but with a genuine solid 3/4" flame maple top, ebony fingerboard, coil splitting (which was rare back then), and solid electronics etc. The value, at least perceived value, compared to an LP at the time was so high it was impossible to ignore. Fast forward two decades and several Gibson LPs in the collection later, and I can attest the Gibby's provide no playability benefit what so ever over the Agile. They are cool though . I'll say the same thing about Warmoth. I've purchased the most expensive flame top Showcase bodies, yet my daughters $250 Washburn Idol has a spalted flame maple top with deep chetoyance that puts my Warmoth builds to shame.

Anyway, thanks for thread. It took me down memory lane and got me thinking about a bunch of cool guitars. Value, price, it's all subjective, which is why it's nice to have so many great options. I haven't looked at the import market in a long time...off to see what cool stuff is out there.

I recall when there was the perception that there was no way ion hell a japanese made guitar could ever be as good as one made in the USA--even into the 1980s, when in reality, the lawsuit guitars being built in the 1970s were perfectly excellent while at that exact same time the big names in American guitar--CF Martin, Gibson and Fender were all putting out uneven product and making really bad cost-cutting cutting decisions and just plain poor quality control.

It really took decades for the (wise) consumer to come around and seek out old Takamines and Ibanez of that period. Hell, it took a long time for people to not turn their nose up at Japanese made Fenders.


That said, I have caveats regarding imports. If it is coming from a country like Japan--with reasonable  (or good) workplace laws, countries/companies that abide by conservation treaties--or just plain protect human rights I am all for it.
Personally hate buying things made in dictatorships.