How much extra are you paying for the Fender name on the headstock of a new instrument?

Discussion in 'Miscellaneous [BG]' started by g-dude, Jan 22, 2022.

  1. Okay, so this won’t be controversial at all, but hear me out.

    There’s a concept in marketing known as “brand equity” and it’s not a complicated concept. Brand equity is simply the amount extra you can command in the marketplace over an identical good, simply by virtue of the branding.

    One example could be the difference between an Epiphone Les Paul and a Gibson Les Paul, except that Gibson intentionally changes things like headstock angles to make the Epiphones not as good.

    In some ways, you could just look at a Fender and then look at a clone, and use the price difference…but there isn’t always a great comparison in terms of features. I mean, it’s not totally straight forward even comparing a USA made Fender to a Mexican made one, by virtue of the different hardware.

    But clearly, people are either paying more for the Fender name OR they are simply defaulting to the Fender name in the absence of doing research into other brands because of the equity in that brand name.

    Now, there are some offsetting factors at play that do deserve mentioning - while you are paying more for the Fender name, you’re getting some discounts due to:

    - Economies of scale: Fender is massive, and can thus source parts/raw materials for less than smaller competitors can.
    - Cost of capital: Fender can obtain capital cheaper than smaller companies do, and your cost of capital definitely factors into your cost structure.
    - Diversification: While Fender’s fortunes rise and fall with the musical instrument industry, it doesn’t just make basses, or guitars, or whatever. Along with its cost of capital, it has the ability to further diversify better than others.
    - Diversification, part 2: USA. Mexico. Japan. Indonesia. China. Fender can build anywhere it needs to, and even develop product offerings to utilize excess capacity (think low-featured USA models in times where USA production would otherwise be running at less than full capacity).
    - Owning the vertical: you can buy a Fender instrument, modded with genuine Fender parts, strung with Fender strings, plug it in to a Fender branded cable, hang it around your neck with a Fender strap, and then play away with a Fender branded pick through a Fender branded amp.
    - Insert additional advantages that I’m missing.

    As I think about all of these minuses, even if you have a Fender brand instrument retailing for the exact same as a perfect clone made by some random company, you’re definitely paying a pretty good amount in brand equity due to the differences in cost structure. In fact, Fender could probably still command a brand premium and charge less.

    I’ll be the first to admit that the easiest thing to do is to go and buy a Fender. I’ve done so in the past. Some I’ve liked, and some I’ve been lukewarm on. Haven’t had any that were garbage…

    …but then again, I didn’t buy any CBS-era ones.

    And that’s sort of what prompted this. I was watching a video about Schecter guitars, and the person made the comment about Schecter coming about in that age where Fenders weren’t very good.

    Nowadays, Fender makes instruments that meet the expected standards thanks to modern technology and proper QC. They can also leverage their massive size to drive down the cost of making that guitar for you. The result is that you can buy a quality instrument now for far less money than you could 50 years ago in real dollar terms.

    And yes, you’re still paying “extra” for the name on the headstock, even if you walk away with a Fender for less money than a competing product that is otherwise identical.

    Still, I would LOVE to know exactly how much extra Fender’s able to command. I know Gibson can command a lot because every time I play my Les Paul and have to re-tune the G string, I’m reminded of how it’s the most expensive guitar I own with the absolute worst tuning stability. :rollno:
    BigYo, Mickey666, leftybass54 and 2 others like this.
  2. I would say about $200, perhaps more.

    I have a Schecter Guitar Research CV-5.

    Esentially, a 5 string Fender Jazz bass in sound and feel.

    But, some will never consider buying one, because it doesn’t say Fender on the headstock.

    I’m not bashing Fender, just saying there are basses which sound very similar and have extemely good build quality which rivals Fender.

    I speak softly.

    People will buy what they like.

    To each their own. ;)
  3. buldog5151bass

    buldog5151bass Kibble, milkbones, and P Basses. And redheads.

    Oct 22, 2003
    Fender is like McDonalds or any other big name. It may not be the best, but it is a known, and generally more consistent quantity.
  4. tree fiddy
  5. Spidey2112


    Aug 3, 2016
    20-30%, plus or minus 70-80%.
  6. I think it’s funny that you can go to stratosphere parts, buy a neck and body separate, bolt them together, and get essentially the same guitar for less money.
  7. I have a Schecter guitar on order from Sweetwater…

    …and unfortunately they have it in stock at my local GC I just discovered.

    So when I was there today, I just played all the other Schecters. Very nice instruments for sure.

    Closer to “Fender”, I own two G&Ls. In a way, I view G&L to be a branch of the Leo Fender tree that is no less a descendant of what he originally did than what modern Fender is…and in many ways, G&L is more Fender than Fender.
  8. On road trips, I will always hit fast food chains.

    I MIGHT be missing out on some good local food…but I can’t even consistently find good local food near my house.
  9. It’s reverse arbitrage.

    Normally it’s supposed to work the other way.
  10. Lowendchamp

    Lowendchamp Supporting Member

    Jun 27, 2021
    Shelton WA
    True but if you mess up on assembly it's all on you, no warrantee. I'd rather pay for the labor and warrantee. I suck at that stuff though I'm just a player.
    Timmy Liam and lfmn16 like this.
  11. Attaching a loaded neck to a loaded body is literally screwing 4 screws in. A drummer could probably do it.
  12. nnnnnn


    Oct 27, 2018
    I have two inexpensive basses that say "Fender" on the small print next to the Squier logo.
    Glenn Mac, jaybass58, Daddy-R and 8 others like this.
  13. mb94952

    mb94952 Endorsing Artist : SFARZO STRINGS Suspended Supporting Member

    Too much...
    21DaHoagie12, TonyP- and g-dude like this.
  14. JW56789

    JW56789 Guest

    Feb 18, 2017
    I wonder how to you project your costs/selling prices where anybody can and do build the exact same thing you do. There is no proprietary secret sauce that Fender inserts that others can't. In fact, some of the clones can be priced far higher for what some in the market perceive as superior instruments.

    So I'd wonder what FNIC factors in to cover their exposure/market loss to non-Fender Fender-Shaped-Objects, or if that's any consideration at all.
    g-dude likes this.
  15. $10. Got mine online to put on my replacement neck. Screenshot_20220120-215239_Gallery.jpg
    MYLOWFREQ, DirtDog and darthplagis like this.
  16. 9Thumbs


    Jul 3, 2013
    Near Boston
    I haven’t been able to source a fretless “Tele” neck for my Squier CV50s bass anywhere but cheapies from China on EBay, and these have a J width nut. If I buy one, I will have a Frender label made for it, maybe $15. Does that count?
  17. Zeerow. If I don't like the bass, no brand name on the headstock will make me like it better. If the bass is great, no brand name on the headstock will make me like it any less. Technology being what it is today (CNC machines, etc.), it's harder to even find a dog than it used to be, never mind getting stuck with one. Trying out an instrument to make sure you're comfortable with it is the key. One man's trash is another man's treasure. A good setup and your preferred strings make a world of difference, too. If the instrument in question is a vintage '50's or '60's Fender, the cost will be up there. Some are worth it, others aren't. The moral of the story is to evaluate each specimen based on its own merits.
  18. brianrost

    brianrost Gold Supporting Member

    Apr 26, 2000
    Boston, Taxachusetts
    Geez, what a topic!!!!

    Considering that Fender keeps introducing new models in order to keep something available at every possible price point, it's pretty ridiculous to try to figure out what kind of price premium they have over all the cheaper competition never mind all the boutique clones that compete with Custom Shop pricing.

    What's the point? People are really fixated on Fender fanboi-isms here at TB...let's take a break and start bitching about G&L or EBMM for a while, just as a change of pace.
  19. Spidey2112


    Aug 3, 2016
    Bingo... it's the main reason I'll be joining the Harley Benton club. Lol!
  20. conttador

    conttador Supporting Member

    Jun 10, 2010
    San Antonio, TX
    This is a thesis or dissertation type question. Specially if you want quality answers.

    Even in the Fender line you have varying prices. Like, custom shop, American (fill in the blank)… Then you have all the various options in woods, finish, electronics etc…

    In accounting this is called goodwill, which in its simplest form could be considered as the difference between a $10 stock valued at $15. The $5 difference being the value placed on the name. Conversely, if you mismanage a company that same $10 stock is only worth $6…

    There are so many variables that the answer depends. Labor is cheaper in third world countries, like Mexico, China depending on who you ask may or may not be considered a third world country, but because it is the most populous country on the planet, has a surplus of labor so companies can pay lower wages.

    What Im sure of is that Fender knows the answer.
    Mickey666 and g-dude like this.
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