How Is It Possible?!?

[kcole4001]

More to the point of the original post in this thread, no one who has even a rudimentary grasp of modern economics should be surprised, let alone upset that there is indeed what seems like a HUGE mark up on all goods and services we spend our cash/credit on.

NO ONE is in business to lose money, and every single person involved before the actual sale of an item is entitled to his/her percentage of that sale.
That is how the system works.
I see it all day, customers getting excited when they hear the cost of an item, thinking that they should be able to buy it at the store's cost for some unimaginable reason.

Why?
Don't my children deserve to have food and shelter just as much as yours?
Just because I sell you something doesn't mean I'm gouging you.

"Why the heck does that muffler cost $70?"
Then I watch them leave and drive across the street (literally) with their muffler dragging on the pavement to the liqour store and come out with a flat of beer or a bottle.
I guarantee there was no squawking about the price in that transaction.

People are just funny, sometimes.

 

[kcole4001]

Or, more on topic, why do those same D'Addario XL nickels that used to cost me $40 now cost me (the consumer) $25 at the same store, bought from the same owner?
Of course there's mark up, the man needs to stay in business, and it's actually in my own interest to keep him in business also.

 

[thumpbass1]

Anyone remember the 1970s?
What did your $300 get you then?
A plywood POS that sounded AND played like what it was: crap.

A least these things are half-decent quality for beginners to start out on. They have it pretty easy now.

How is it possible?
The workers who make this stuff are paid next to nothing.

In 1972 a new Fender P-Bass was about $290.00 without the case in my neck of the woods. Granted things inflated a little bit by the end of that decade, but 300 bucks back in the 70's could buy you some awful nice stuff. Buying used was better, as I scored a clean 63 P-Bass with case, for $225.00 that year. A buddy of mine scored a late 60's J-Bass that was a little bit dinged up for about $190.00 in a Omaha pawn shop back around 73 or 74. However 200-300 bucks was still considered big enough money then.

Now if you are talking about the budget stuff that was put out back then, yeah a lot of it was crap and barely playable if at all. I'm amazed at what a musician can find in the $300-$500 range these days for both guitar and bass.

 

[kcole4001]

In 1972 a new Fender P-Bass was about $290.00 without the case in my neck of the woods. Granted things inflated a little bit by the end of that decade, but 300 bucks back in the 70's could buy you some awful nice stuff. Buying used was better, as I scored a clean 63 P-Bass with case, for $225.00 that year. A buddy of mine scored a late 60's J-Bass that was a little bit dinged up for about $190.00 in a Omaha pawn shop back around 73 or 74. However 200-300 bucks was still considered big enough money then.

Now if you are talking about the budget stuff that was put out back then, yeah a lot of it was crap and barely playable if at all. I'm amazed at what a musician can find in the $300-$500 range these days for both guitar and bass.

Yeah, I was strictly talking starter stuff.
There were no cheap vintage Fenders to be had in my area when I started out: 1979.

 

[KingRazor]

In this example, y < x.

I go to best buy and see a computer part for sale for x amount of dollars.

I go on to newegg and see the exact brand and model for y amount of dollars.

I think that this phenominon is one of many reasons why people automatically assume businesses are overcharging for products. If you can buy the exact same item for less from one store than you can for another, then the store charging more is "over-pricing"
the item. This doesn't mean though that EVERYONE is charging more than they should for their product.

It costs a personal luthier quite a bit of money just to build their own bass. Heck, even if you go with super cheap parts off of ebay, just building a parts bass often costs more than simply buying a squier. When you get into quality parts, the price difference becomes huge.

If a Squier is enough for your needs, that's great for you. Some people need something else. In my case, I strongly desire a bass with a 12" or greater radius for the fretboard. No Squier bass will offer me that. I'm picky, and if I want to satisfy my pickyness I'm going to have to pay extra for it.

My $0.02.

 

[plangentmusic]

In this example, y < x.

I go to best buy and see a computer part for sale for x amount of dollars.

I go on to newegg and see the exact brand and model for y amount of dollars.

I think that this phenominon is one of many reasons why people automatically assume businesses are overcharging for products. If you can buy the exact same item for less from one store than you can for another, then the store charging more is "over-pricing"
the item. This doesn't mean though that EVERYONE is charging more than they should for their product.

It costs a personal luthier quite a bit of money just to build their own bass. Heck, even if you go with super cheap parts off of ebay, just building a parts bass often costs more than simply buying a squier. When you get into quality parts, the price difference becomes huge.

If a Squier is enough for your needs, that's great for you. Some people need something else. In my case, I strongly desire a bass with a 12" or greater radius for the fretboard. No Squier bass will offer me that. I'm picky, and if I want to satisfy my pickyness I'm going to have to pay extra for it.

My $0.02.

That was never the claim. Everyone deserves to make a profit. The poin t is, if a DECENT bass costs a hundred dollars, a REALLY REALLY good bass shouldn't cost four thousand.

 

[AntekStalich]

That was never the claim. Everyone deserves to make a profit. The poin t is, if a DECENT bass costs a hundred dollars, a REALLY REALLY good bass shouldn't cost four thousand.

Define "decent".

 

[KingRazor]

That was never the claim. Everyone deserves to make a profit. The poin t is, if a DECENT bass costs a hundred dollars, a REALLY REALLY good bass shouldn't cost four thousand.

I was never saying that claim was made in this thread, just that it seems to be made a lot nowadays.

People's opinion of what a "really, really good" bass is will vary. My opinion of a "really, really good" bass is an Ibanez SR400QM bass. Retails for roughly $400. I also think an American Standard Precision bass is a "really, really good" bass and it goes for about $1200. I think both of those basses are absolutely worth what they cost. But when I realized I can get a bass that's even closer to my specs if I just build a part bass, I decided to do that. The bass should cost me roughly $500 to assemble, not including labor costs for anything I decide to have a professional do.

Some companies don't use cheap chinese labor and automate everything and can't afford to price their basses as low as Squier can.

 

[kenfxj]

(sarcasm) But the wood makes no difference in the tone. It's all in the electronics, right? (/sarcasm)

Some would point out that manufacturers tend to put the cheapest electronic components into plywood basses.

 

[Relayer71]

Fender's counting on that starter kit being a way to get someone else into playing, learning about GAS, and because they started with the Fender logo when they progress they'll probably be more inclined to buy another Fender.

That's right! Those Squires are a gateway drug.

And then pretty soon all those beginning bassists will be hopped up on American Standard P Basses and all that Jazz (bass)!

 

[thumpbass1]

Yeah, I was strictly talking starter stuff.
There were no cheap vintage Fenders to be had in my area when I started out: 1979.

I know what you mean. I was lucky my hometown had some decent pawn shops, and a few musical instrument stores that took in trades back in the 70's. I even ended up working part time for one.

I agree that some of the starter stuff was horrible. I do remember when the first wave of not so bad Japanese made copy instruments began to appear, but while they were priced much lower than the U.S. made stuff, they really weren't much cheaper than just saving up for a good used major name instrument at that time. It was funny how things changed from the mid 70's, to the early 80's in regards to Asian made stuff and the quality of what they made. Now thanks to CNC machines and such, I find myself ogling the affordable Chinese made stuff as much as I geek on the pricier offerings on a music store wall.

 

[BongoBoyLA]

Squier offers a "Jam PAck" which is a bass, a strap and a PRACTICE AMP -- for $249.00. Use a coupon at GC and get it for just over 200 bucks.

Okay, figure it out. If you bought the practice amp alone, that's at least $75.00 Add the cost of the cardboard, and shipping -- another $30.00 Of course, there's a set of strings -- $15? And I do believe the bass has a pickguard -- they go for $45, but let's say that these are only $25. The strap, even if it's junk is worth $10.

So, your calculations are factoring each bit bought at retail. Let's look at what they probably spent (keep in mind that ALL their components are lowest-bidder, ultra-bulk purchases and the rig is most likely assembled in rural China):

Bass (per unit):
- Body (with finish): $3-$5
- Neck : $7-$10
- Electrics: $3-$7
- Strings: $2
- pick guard: $.50
- Bridge, strap buttons, tuners, nut: $3
- Assembly*: $.36

Amp (per unit):
- Amp circuit/electrics/power supply: $3
- Speaker: $2
- Cabinet: $.75
- Assembly*: $.36

*assembly assumes an eight hour shift at $.45/hour -- average wage -- with 10 units assembled per 8-hours, per technician.

Strap: $.10
Bag: $1.50

Shipping to distribution center (bulk sea container): $3 per unit

TOTAL COST: $29.57-$38.57 -- Let's call it a clean $35.

Post manufacturer:
<big box guitar shop> buys unit for $99 + $18 shipping

You pay $200 (with a coupon), and:

Fender makes : $64 (282% profit)
Guitar-Mart makes: $83 (170% profit)

You paid 571% more than it cost Fender to make.

So, the deal doesn't look nearly as good now does it?

 

[nostatic]

That was never the claim. Everyone deserves to make a profit. The poin t is, if a DECENT bass costs a hundred dollars, a REALLY REALLY good bass shouldn't cost four thousand.

ahh, now we get to the real point of the thread. You coulda saved a bunch of electrons by just titling it as "boutique basses aren't worth the money."

 

[Bryan R. Tyler]

That was never the claim. Everyone deserves to make a profit. The point is, if a DECENT bass costs a hundred dollars, a REALLY REALLY good bass shouldn't cost four thousand.

There ARE really, really good basses that cost less than $4000.
There are also really, really good basses that do cost $4000.

The fact that their are really, really good basses for less than $4000 has nothing to do with the really, really good basses that do cost $4000 and should have no effect on the price of the $4000 bass at all. There is no sliding scale of quality to price, and there shouldn't be.

I think McDonalds double cheeseburgers are delicious. They cost me $2.60 for two. I also think the mattar paneer at my local Indian food restaurant is delicious. That costs around $15 for about the same amount of food. The fact that both are delicious shouldn't bring down the price of the Indian food which costs 7x as much for the same amount of food and equivalent deliciousness. In fact, the Indian restaurant would go out of business if they did lower their prices, as they can't mass produce and mass sell their meals, and then there would be no mattar paneer for anyone. There is no status in eating the Indian food, there is presumptiousness in having it. It simply is what it is, and you won't get the same thing by buying the McDonalds. Lots of folks don't like or want the Indian food. Other folks like it, but don't think it's worth paying so much more for it than the McDonalds. In either case, those parties shouldn't comment on the Indian food's value, as they are talking about something that doesn't concern them as they don't want to spend their money on it. There are plenty of people that do love the Indian food though, and are fine with the cost of it because that's what they prefer. Saying that the McDonalds is delicious too as well as cheap doesn't detract from what the Indian food has, which is its own flavor. No matter how delicious the McDonalds is, it's never going to be Indian food. Why question those who are happy to pay more to get exactly what they want? Why question the Indian food restaurant's pricing when A. you're not going to buy anything from them, and B. they need the pricing the way it is in order to stay in business and not needlessly undercut their profits?

It's usually a very false assumption to believe that those who are charging far more for their handmade items are charging too much or making a large profit off of them. Talk to or hang out with some luthiers some time, and you're going to notice a distinct lack of yachts and Porshes.

 

[Waterpilot]

I think McDonalds double cheeseburgers are delicious. They cost me $2.60 for two. I also think the mattar paneer at my local Indian food restaurant is delicious. That costs around $15 for about the same amount of food. The fact that both are delicious shouldn't bring down the price of the Indian food which costs 7x as much for the same amount of food and equivalent deliciousness.

Man I love Indian food... On topic, that's a great analogy.

 

[Bryan R. Tyler]

One thing that saddens me in my life is that I don't live close to a good Indian restaurant anymore. The local one is still too far to get to on a weekly basis. I could literally eat it every day for the rest of my life and be very happy. I also could have purchased a $4000 bass or two with all the money I've spent on Indian food thus far in my life.

 

[michael_atw]

Man...there are alot of numbers in this thread - and everyone has different ones. We should put you all in the Federal Reserve and see how long you last

 

[michael_atw]

It's a bit of a semantic/philosophical issue, but i would generally consider that intrinsic as opposed to inherent value.

Inherent to me mean "inherent to the valued item" - i.e. the ITEM carries an inherent value, separate from the evaluator.

In Webster's Dictionary, intrinsic and inherent are synonyms.

 

[michael_atw]

Or, more on topic, why do those same D'Addario XL nickels that used to cost me $40 now cost me (the consumer) $25 at the same store, bought from the same owner?
Of course there's mark up, the man needs to stay in business, and it's actually in my own interest to keep him in business also.

Things like strings, polish, and straps are about the only things a small store can mark up significantly. They can't mark up instruments due to the price-cutting massive retailers and wholesalers. When I go down to my local shop and buy a bone nut, they cost $6. I don't mind paying $6 - I won't get it much cheaper buying online after shipping. But I know that that bone nut probably cost 50 cents to make and $2 for that music store to buy and stock it.


The problem with our culture these days is we are all expert consumers and idiot economists. If we were smarter about macro and micro principles we wouldn't be dumping all our money in China while simultaneously complaining "where are all my jobs?" Consumerism and hypocrisy are dangerous by themselves, let alone together. Recognizing the reason for mark-ups is a first step to a greater understanding of how to keep your downtown buildings occupied with profitable business.

 

[nostatic]

In Webster's Dictionary, intrinsic and inherent are synonyms.

I'd prefer they were Cinnabons