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What's the wholesale cost of basses?

Discussion in 'Miscellaneous [BG]' started by Gorn, Jan 1, 2017.

  1. Gorn


    Dec 15, 2011
    Queens, NY
    For say, a $600 Mexican Fender, what does GC/MF/Sam Ash pay? What might a mom and pop shop pay? I've always been curious. Anyone know?
  2. Mike N

    Mike N Missing the old TB

    Jan 28, 2001
    Spencerport, New York
    Less than $600 would be my guess.

    Ironbar, Buszkock, birdman14 and 14 others like this.
  3. Don't know but I'm guessing big chain music shops buy them at a price that would make us drool.

    The actual factory cost of making one would probably make us drool too.
    Last edited: Jan 1, 2017
    Felken and Aqualung60 like this.
  4. OldDog52

    OldDog52 Gold Supporting Member

    Jan 1, 2011
    There used to be a business rule of thumb that a product's retail price must be a minimum of 3x the manufacturing cost in order for everyone in the manufacturing, distribution, and retail chain to be happy. More than 3x is better. Less than 3x is a money loser. If you watch Shark Tank, this rule still seems to be in the general ballpark.

    If the brick & mortar retail store pays more than $400 for that $600 bass, they're not going to make a profit after they factor in all their overhead expenses.
    Last edited: Jan 1, 2017
  5. RickyT


    May 29, 2015
    Dee Why
    When I worked retail (not music related though) we would double our cost price + tax.

    I'd say most stores would be buying a $600 bass for $250-300, maybe less if it's a massive chain store that are buying a lot of one thing.
    ahc and fourtet102 like this.
  6. PolkaHero


    Jan 5, 2002
    Yep, 100% markup when I worked for a retail store. MF is still making money even with frequent 15-20 percent coupons.
  7. BurnOut

    BurnOut It's The Billy Baloney Show Supporting Member

    Feb 1, 2015
    The Natti
    I was told, and I'm not sure how it works. That the all new guitars they have hanging and in stock, are own by the companies that made them. My Buddy runs a small store and was telling about it.
  8. I think it depends on the brand and how high end the instrument is..... I'd guess GC pays no more than $200 per MIM Fender (1/3 of sale value) but probably more like 40% to 50% the final sale value of USA made MusicMan or a German made Warwick.
  9. Guitar Center hasn't been paying anything for their Fenders last I heard. :eek:

    But to answer your question, it comes down to gross margins before operating expenses. If a bass has an MSRP of $888, it might have a MAP of $599. Now to me, that's a $599 bass - as MSRP is a worthless number. But a huge chain store like Guitar Center might be able to buy it for $250, while a small mom and pop store with very low sales numbers by comparison might pay $400.

    One way to tell how much Guitar Center or Musicians Friend pays for an item is to look at their closeouts. They are not likely to take a loss on a product they can just keep in stock or return to the manufacturer for a fee, so they will price them near/at cost.

    MF was selling some acoustic guitars marked down to $399 that were $999 - so there's definitely a ton of profit built in to their MAP pricing.

    That said, unless you want to order 1,000 P basses, the cost Fender sells them to MF for is not relevant to the customer. MF's cost of business is so high that they're barely turning a profit (ironically).

    TL;DR: It depends greatly on the distributor and the volume purchase. Figure 1/4-1/2 of what their selling price is. Accessories tend to be dirt cheap.
    Bob_Ross likes this.
  10. Its possible that some distributors work a financing deal with small shops - charging them a small fee monthly and then take payment for the items sold each month. There would likely be a minimum stock level the store would have to keep up though, so as basses were sold, the distributor would get paid and the shop would order more basses to equal their sales of the month to maintain their inventory levels.
  11. BurnOut

    BurnOut It's The Billy Baloney Show Supporting Member

    Feb 1, 2015
    The Natti
    Not him the Big Chain Stores, guess I should of been more clear on that. But this is just what I heard
  12. murphy


    May 5, 2004
    Toronto, Canada
    I believe it used to be 30% mark up at smaller boutique stores

    I may be wrong.......again
  13. mongo2


    Feb 17, 2008
    Da Shaw
    A friend of mine recently retired from his music shop. He once told me he paid 50% of MSRP, ticketed instruments/amps for 70-75% MSRP and sold for 60% of MSRP as a "professional" discount to those he knew were working musicians.
    Last edited: Jan 2, 2017
  14. Spidey2112


    Aug 3, 2016
    But salesman at _______ promised me they're making close to nothing on a sale.
  15. nutdog

    nutdog when I'm a good dog they sometimes throw me a bone

    Feb 19, 2009
    in the dog house
    I ordered some ampeg stuff from a friendly musical big box and when I returned it they accidentally sent me their invoice price. It must be dirt cheap to make and ship stuff overseas if ampeg made money on that. Suffice to say they're still making decent gross profit when they mark it down 15%.
  16. Spidey2112


    Aug 3, 2016
    Agreed... 20-25% 'profit' is standard across the board, on most items sold in U.S.A...

    ... it gets iffy when you cross over into Istanbul.
  17. Spidey2112


    Aug 3, 2016
    Here's markup...

    Wife and I purchased baby stroller from big box store. Salesperson had to special order it, and scanned it into our registry...

    ... $300 list price...

    ... $75, price that was scanned into our registry, I.e. what they paid...

    ... $55, after discounts...

    ... convinced them that once item/price was put into registry, it became legal binding contract (manager reluctantly agreed)...

    ... I'm not a lawyer, but I did sleep at a Holiday Inn Express, the night before...
  18. Wohlf


    Dec 14, 2015
    Music City
    Clearance and close out prices mean nothing. Cost averaging over a period of time is a big part of those prices.
    Brad Johnson likes this.
  19. generally, retail is double wholesale and wholesale is double manufacturing cost. granted that is a gross overgeneralization

    or in the case of the OP's question. it cost 150 to make and cost the store 300.
  20. Plutonium244

    Plutonium244 Supporting Member

    Mar 29, 2015
    When my mom ran a music store a long while back, she was paying for inventory. Some gear may be floated, but definitely they pay for inventory (not sure about big box/internet retailers-- with internet sales, actual stock is less relevant, but I do know gear moves into the warehouses of retailers; how they pay the bill for it is another matter).

    Inventory cost that is 50% of list/sell price was called "A Mark" and 60% cost of goods vs retail price was "B Mark". There are some high-demand/prestige companies that offer retailers less profit margin than "B Mark" today; back then you wanted to make A mark sales, and B mark was meh.

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