Squier Models Disappearing ??

[JACink]

If Fender is making the same profits across the board, then why would they even bother with MIA's, or even MIM's when they could build nothing but Squiers and make the same money?, doesn't work that way.

Picture that... Fender completely scraps the Fender line, and starts marketing Squiers, VM, CV MIM, MIA etc.

Everyone would start threads about sanding off Fender decals to replace with Squier decals, Basswood would become an endangered species and the bass world as we know it would implode, creating a huge void where only non J and P shaped basses would survive!!!

 

[hdracer]

If Fender is making the same profits across the board, then why would they even bother with MIA's, or even MIM's when they could build nothing but Squiers and make the same money?, doesn't work that way.

They could be making the same profit margin on all of the line, but I doubt it.
Lets just say they make 10% profit on each bass they sell.
and lets say a Squire costs them $150, they make $15
a MIM costs them $350 to make, they get $35
a MIA costs them $700 to make, they get $70

 

[awilkie84]

If Fender is making the same profits across the board, then why would they even bother with MIA's, or even MIM's when they could build nothing but Squiers and make the same money?, doesn't work that way.

Profit MARGIN, not profitS. Margins are generally done as a percentage. And I highly doubt they make a higher margin of profit off an MIA than a Squier.

 

[awilkie84]

They could be making the same profit margin on all of the line, but I doubt it.
Lets just say they make 10% profit on each bass they sell.
and lets say a Squire costs them $150, they make $15
a MIM costs them $350 to make, they get $35
a MIA costs them $700 to make, they get $70

This numbers are ridiculously low...Squier wouldn't be a viable line if they only made $15 on the Affinity.

 

[hdracer]

This numbers are ridiculously low...Squier wouldn't be a viable line if they only made $15 on the Affinity.

I was just using simple math as a example to show how it could work.
But if you think about it, if they made $25 off every Squier they took off a boat and sent out to resellers that is still a lot of money. They also could have a customer for life.

 

[lowsideonacurve]

Picture that... Fender completely scraps the Fender line, and starts marketing Squiers, VM, CV MIM, MIA etc.

Everyone would start threads about sanding off Fender decals to replace with Squier decals, Basswood would become an endangered species and the bass world as we know it would implode, creating a huge void where only non J and P shaped basses would survive!!!

I have a few Fenders that would be perfect candidates for future Squier projects.

 

[gln1955]

Profit MARGIN, not profitS. Margins are generally done as a percentage. And I highly doubt they make a higher margin of profit off an MIA than a Squier.

Which back to my thoughts before. If the higher end Squiers are pulling customers from higher priced MIM's and MIC Modern Players, that is not good for Fender's bottom line.

I'm also fairly confident that the margin on MIA's is higher than Squires. There just isn't $1000 more parts and labor in an MIA.

 

[lowsideonacurve]

Profit MARGIN, not profitS. Margins are generally done as a percentage. And I highly doubt they make a higher margin of profit off an MIA than a Squier.

Yeah, I understand that you meant margins and not actual profits, but doubt if the margins are too terribly close when it's obvious that the Squier brand is intended to be an entry level instrument so buyers will get the real McCoy on down the road. Profits are usually a wash on things to get people in the door.
Either way, it's all speculative unless a Fender or Squier rep. chimes in with something real.

 

[lowsideonacurve]

Which back to my thoughts before. If the higher end Squiers are pulling customers from higher priced MIM's and MIC Modern Players, that is not good for Fender's bottom line.

I'm also fairly confident that the margin on MIA's is higher than Squires. There just isn't $1000 more parts and labor in an MIA.

Yeah man!, I have to agree with this.

 

[awilkie84]

Yeah, I understand that you meant margins and not actual profits, but doubt if the margins are too terribly close when it's obvious that the Squier brand is intended to be an entry level instrument so buyers will get the real McCoy on down the road. Profits are usually a wash on things to get people in the door.
Either way, it's all speculative unless a Fender or Squier rep. chimes in with something real.

Entry level instruments aren't door crashers or cheap milk at a gas station. You can still make a tidy profit on them.

 

[RedHotFuzz]

Profit MARGIN, not profitS. Margins are generally done as a percentage. And I highly doubt they make a higher margin of profit off an MIA than a Squier.

Not sure why you think comparable margins between Squier and Fender are a win for Fender.

Better to make 20% margin on a $1000 Fender than 20% on a $300 Squier, as hdracer rightly pointed out.

I think the huge range of Squier products is ultimately a very bad thing for Fender's bottom line.

Entry level instruments aren't door crashers or cheap milk at a gas station. You can still make a tidy profit on them.

Fender's financial status seems to disagree with this assessment.

 

[Bent77]

Not sure why you think comparable margins between Squier and Fender are a win for Fender.

Better to make 20% margin on a $1000 Fender than 20% on a $300 Squier, as hdracer rightly pointed out.

I think the huge range of Squier products is ultimately a very bad thing for Fender's bottom line.



Fender's financial status seems to disagree with this assessment.

Agreed, it's a marketing tool. Don't find the Squier you want at $350, spend $100 more and get a Fender...rinse and repeat for whatever model.

 

[RedHotFuzz]

Agreed, it's a marketing tool. Don't find the Squier you want at $350, spend $100 more and get a Fender...rinse and repeat for whatever model.

Problem is, if TalkBass is a reliable indicator, too many buyers seem to be finding the $300 Squier they want.

You can't stay in business selling $300 basses.

 

[Bent77]

Problem is, if TalkBass is a reliable indicator, too many buyers seem to be finding the $300 Squier they want.

You can't stay in business selling $300 basses.

Thus, make fewer of them so you have to buy a more expensive bass to get the same thing

 

[awilkie84]

Not sure why you think comparable margins between Squier and Fender are a win for Fender.

Better to make 20% margin on a $1000 Fender than 20% on a $300 Squier, as hdracer rightly pointed out.

I think the huge range of Squier products is ultimately a very bad thing for Fender's bottom line.



Fender's financial status seems to disagree with this assessment.

When you sell MANY more Squiers than MIAs, it evens out...and many companies have proven that you CAN stay in business selling $300 basses.

 

[awilkie84]

Thus, make fewer of them so you have to buy a more expensive bass to get the same thing

And drive out your market share through removing rungs from the ladder? That doesn't seem like smart business.

 

[grrg63]

You can't stay in business selling $300 basses.

SX and Ibanez seem to be doing ok.

 

[RedHotFuzz]

SX and Ibanez seem to be doing ok.

Ibanez must sell enough more-expensive basses to offset the cheap ones. If they didn't, they'd be in trouble too. SX shovels cheap knockoffs and is irrelevant to Fender's situation/stature. I certainly don't think Fender looks to SX's business model.

 

[ninjaaron]

Another factor to consider is the target market. Squire is typically considered a "beginners brand." The biggest concern is getting you into a functional instrument that looks vaguely like what your heroes play. It's a miracle they offer as much variation as they do!

 

[ninjaaron]

SX shovels cheap knockoffs and is irrelevant to Fender's situation/stature. I certainly don't think Fender looks to SX's business model.

I think you are wrong, and the Squire competes directly with SX, and that Squire is an important part of Fender's business, but I am too lazy to find evidence. If you provide evidence for your perception, you have a chance to "win" this difference of opinion! Otherwise, we can happily disagree in ignorance, each blissfully convinced of the intellectual inferiority of the other!