Gibson Guitar Board: What Say You? Are American (made) products pricing themselves out of Business? - Gibson Guitar Board

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What Say You? Are American (made) products pricing themselves out of Business? I.E. Law of Diminishing Returns, etc.

#1 User is offline   charlie brown 

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Posted 13 March 2017 - 11:09 AM

Yes, ANOTHER Pricing Rant! (Have you been to a grocery store, lately?!) LOL [flapper] [biggrin]

So, what say you all? Gibson, and other brands seem to keep raising the price, on everything, to way past
the point of diminishing returns, and more like unbridled Greed! Nothing new, of course, but for how much
longer?

Just One Example: In 2002, I bought my Gibson "Lucille" for $1,600 (and change), brand spanking new,
and WITH the original spec'd Ebony finger board. Today, a "Lucille" with a (non original spec'd) composite
(Richlite) fingeboard is $7,000, new! [scared] Now, I have nothing (really) against Richlite fingerboards,
but a $5,400 dollar increase, in that model's pricing, in just 15 years? A lot of Custom Shop guitars have
increased pricing, significantly, in even less time. Going from mid 2-3 Grand pricing, to 5-8 Grand,
now. Does "Period correct" plastic, make THAT much difference??! [unsure]

So, what say you all?! [biggrin]

I'm (recently) interested in Epiphone's "Inspired by 1955 Les Paul Custom Outfit," because it has a real
Ebony fingerboard, 2 "USA" P-90's, and all the original spec's, save the Epiphone headstock, lack of
"Nitro" finish, and name. It's advertised street price, is $800 bucks! The Gibson reissue
(if you can find one?) has been upwards of 9-10 Grand, used! Will the Epi be identical quality
to the Gibson. No! BUT, it isn't anywhere near the $9,000 dollar difference, either!

I'm using the Gibson/Epiphone price differences, only as ONE reference. This kind of thing is
rampant, all over, regardless of product! How can America really compete with China, and other
imported goods (which have to pay import duties, or tariffs, etc.), if our products, domestically,
are so much higher, than "Made in China/Vietnam, Indonesia, etc. equivalent products?

CB
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#2 User is offline   rct 

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Posted 13 March 2017 - 11:20 AM

As the cost of producing groceries rises, the grocery producers have some tricks. The Grocery Store Shrink Ray is first and foremost, that is, the same price, maybe even slightly higher, for less product. Sugar is a great example. You don't get a 5 pound bag of Domino, you get a 4 pound bag, and the price went up 2 cents per pound when they did it. That was a few years ago, the price continues to rise, look for 3 pound bags or CONVENIENT! 2.5 pound bags in the future, with slight price increase. Same for everything else in the store, just give them less.

Guitars can't do that. As costs rise they can only pass it along. The fingerboard is a good example of cost to produce cutting, but there isn't a whole lot of room to cut the cost to produce for something like a guitar.

You can't live without food, you can live without guitars. It's a luxury item to begin with. They'll either sell them or not. No paint, crappy paint, thin "Melody Maker" bodies with weird proportions, all attempts at cutting cost to produce that don't seem real popular with guitar players and probably can't sustain the company for as long as say a grocery producer cutting costs to produce.

rct
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#3 User is offline   Rabs 

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Posted 13 March 2017 - 11:31 AM

Hmm, well there does seem to be a bit of a backlash happening at the moment. Not so much from the buyers but the shops...

From what I understand shops have to (well for Gibson anyway) have a minimum stock that they take per year (from what I have heard $100,000 worth).. A lot of shops cant afford that these days.. And indeed I saw a post on another forum saying that a big UK retailer is about to stop selling Gibsons (PMT).

Also the fact that today more than ever you can buy really decent guitars for really good prices if you don't care about having the big name at the top of your headstock.

The prices are getting really silly.. I know exactly what goes in to a guitar and how much all of that costs (as do most of us) and no guitar is really worth more than say putting a top limit of £2500 (and even that is pushing it) and that's if you are using the most expensive hardware and woods. But the higher priced guitars are tapping in to peoples feelings which is where Gibson and Fender win, artist models, true historics (or whatever they are called now), that's tapping in to the history of rock and blues and people want to be part of that and will pay for it.

What I will say is that the nicest woods are getting more expensive by the month.

Did you see this video? Its quite amusing as when they try to come to a conclusion, they seem to get a bit stuck for a second because they just proved that the £7000 guitar is NOT 40x better than the cheapest LP they could find.. And when they try to explain that you can see that they don't want to say, NO ONE should bother buying a £7k guitar cos it really isn't that much better. But they cant say that cos they are trying to sell them.. So they go for a weird middle ground which makes the whole video kind of pointless


It wasn't that long ago that the music biz were trying to push the price of CDs up... For a classic album like Sgt Peppers or Dark Side they were charging £26.. Crazy price for an album that's paid for itself a million times over yet the price was going up (and cost them like £1 to make)? Same with DVDs.. then came the internet and downloading and it stuffed them all up... The thing is that I reckon if they hadn't tried to con us by raising the price so out of proportion to what a CD is worth, no one would ever have bothered to download.. (or at least it wouldn't have happened as quickly as it did).
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#4 User is offline   charlie brown 

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Posted 13 March 2017 - 11:51 AM

Well, once upon a time, the old "You Get What You Pay For," was true, more or less. These days, that seems
less and less accurate, as we've all experienced, and even discussed, on this forum.

I just wonder, truly, how long we'll put up with the insane (some might even say "Criminal") increases in
prices, on (literally) everything! I see, more and more, out here in Rural America, people going back to
growing their own food, even on a personal level via a garden, as opposed to paying the ridiculous prices
for (too often) expensive, and truly unhealthy pre-packaged food stuffs.

Guitars, it's true, are "Luxury" items! But, some companies have taken that idea, to unprecedented, and
absurd (IMHO) price levels. Having nothing to do, with actual function, or even overall quality, anymore.

Grrrrrr! [scared] [cursing] I just feel like, at some point, people are going to say "Enough!" And,
these manufacturers will have priced themselves right out of business. [unsure] ???


CB
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#5 User is offline   Drog 

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Posted 13 March 2017 - 12:31 PM

Everything is overpriced...from guitars, cars to homes and food. I remember when my parents would purchase a stove and it would last twenty years. I have gone through two in the last ten years. Things just are not built the same anymore and cost one heck of a lot more. At least my Gibsons are gaining in value for me, lol. At the rate they keep going up, I will be rich soon. Lol
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#6 User is offline   BigKahune 

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Posted 13 March 2017 - 12:39 PM

View Postcharlie brown, on 13 March 2017 - 11:09 AM, said:

What Say You? Are American (made) products pricing themselves out of Business?


While the question is in generality, the focus is on guitars . . . Gibson guitars. And at this point it doesn't seem to me Gibson is pricing themselves out of business.

Henry has been following the simple economic strategy of pushing prices up to market tolerance and increasing production. Smartly, Henry has also expanded the value based Gibson offerings - just look at how many "Studio" type models are available, now even in the ES line. For the last decade or so, Gibson has been busy ramping up production in Nashville and Memphis. I haven't been happy with the increasing prices, but so far the market seems to be tolerating them. Unfortunately for the smaller dealers, they aren't handling the increasing stocking requirements Gibson wants to keep up with production rates - so the smaller dealers have been dropping Gibson. However, for now, the bigger dealers that have online advertising rights seem to be keeping up with the stocking demands. And the 5 Star dealers without online advertising rights are hanging in there.

I don't like it. . I particularly don't like the loss of the smaller Gibson dealers. I live in a well populated area, but these days, in order to get a look at certain Gibson models I've gotta take at least a one hour drive. Definitely not happy. Possibly, at some point in the future, if Gibson's pricing structure begins to exceed market tolerance, reducing dealer sales, Gibson will have to reduce prices and/or curtail production. I'm not sure that's gonna happen without some kind of market collapse or recession.


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#7 User is online   kidblast 

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Posted 13 March 2017 - 01:08 PM

The cost of living has reached ridiculous averages.

Aside from things like food, and guitars....... cars......


most folks are paying 150 to 200 dollars a month for FIOS/Cable TV & internet access on average... If I told my dad, 35/40 years ago that we'd be paying 200+ a month for this stuff in 2017, he'd look at me like I lost my mind, (as I adjusted the rabbit ears, or hit the rotary dial which rotated / moved the Antenna on the roof where all the TV broadcasts fed into the house for free...)

my bro inlaw tried to use a HD antenna,, it took him about 8 months to knuckle in and get FIOS..


Cell phone bills for "fammily plans" are in the same ball park... You can switch providers until the cows come home but they are all eventually going to snare you in the same trap once the "new customer incentives run their course in a year or 2.

There are ways to beat the system, go off the grid... but it's hard to do out right.

funny thing is, your income bumps do not match to increases in everything you're working to pay for.....

America....... -- it's a place gone crazy... so many things broken...
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#8 User is offline   jaxson50 

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Posted 13 March 2017 - 01:33 PM

There is little rhyme or reason for pricing any more. Wages seldom go up so that's can't be used as an excuse. Insurance rates maybe, but not enough to justify the price increases we see on most goods.But here is what struck me, a few weeks ago there was an article in our paper about the effects of NAFTA, the writer compared what happened in a town in Ohio where a auto part maker was based for 60 years and what happened to that town and the town in Mexico where the factory moved to in the early 2000s.The Ohio workers were paid @ $30.00 per hour, they were given a 140k payout when the company moved to Mexico. The company now pays its employees $1.00 per hour.Yet the price of the product they make has risen steadily. This has always pissed me off. Move a company to an another country where the wages are 300% lower, where there are few if any safety regulations and where other operating cost are a fraction of what you paid in the US or in Europe then jack the cost of the end product up?If you can make shoes in China for ten cents a pair why should I have to pay $150.00 for them? Maybe the fact that the average CEO earn 600% more then they earned before moving operations has something to do with it.But here is the bottom line, keep eliminating the amount of taxpayers in this country and eventually you will be the only one left to tax.I will not feel sorry for your greedy arse one bit.
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#9 User is offline   capmaster 

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Posted 13 March 2017 - 01:35 PM

In my opinion, the world's financial systems must be changed fundamentally. No matter what goods are manufactured by a company, they have to charge the end customer with the costs for debt and interest. Currency reforms will only help for some two or three decades, then the problem will arise again. The revolution suggested long ago by Henry Ford will have to take place instead of plotting world war after world war.

Another point is that product designer often have, let's say, unlucky ideas and ways of designing what they want to sell as innovations. I still remember well when and how the German camera and consumer electronics industries full of famous, glorious brands and companies went out of business forever, each within about a decade. It were home-made technical and economical collapses. Since I have been interested in both photography and audio technique from my childhood on, I had no other choice than witnessing it with disapproval.

As far as electronic music gear is concerned, my only high-priced and meanwhile discontinued unit made in USA is my Apogee Big Ben master clock generator, and one of my digital Korg multitrackers was made in Japan. Next to everything else including three more digital Korg multitrackers, five 19" rack gadgets from two US brands, eight 19" rack tools and 25 microphones from a German brand were made in China. Ironically next to all of my cables and stands were made in Germany. :-k
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#10 User is offline   deeman 

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Posted 13 March 2017 - 01:38 PM

Kid, I dropped cable. I have an HD antenna, I get quite a bit of channels being under 10 miles outside downtown Chicago. I pay 7 a month for Netflix and 12 for Hulu and about $40 for internet.

I found a cell phone company that is $25 bucks a month per line. You buy the phones outright and get unlimited calls text and 1 gb of data (which for me is plenty as I'm mostly on wifi anyway.)

There are deals out there and ways to catch live sports by subscribing to services just for that or watching the game at the local watering hole.
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#11 User is offline   charlie brown 

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Posted 13 March 2017 - 01:41 PM

Well, I understand, and even accept (even if I don't like it), the price increases that reflect the ACTUAL cost of manufacturing,
and doing business, inflation, etc. What really "bums me out" (in the vernacular of my youth), is the absurd, to the point of
insanity/criminality, pricing increases, that reflect only "Greed," and not form, function, or any real costs, associated with
manufacturing those goods! Gibson, or otherwise! Some items, that have been the same, for decades, or longer, and require no
new research, or new techniques/machine or otherwise, to produce, have jumped dramatically, price wise, as well. Is that just
"inflation?!"

Sorry, I don't buy it (literally, or metaphorically). Cost of Living, vs Wages and benefits, seems way out of "whack!" Never
mind the cost of "luxury" items. Which, even in the cases where they're not as much "luxuries" for those that depend on them,
to make their living, as they might be, for some of us, they soon WILL be (if not already are) true "Luxury" items, if for pricing
reasons alone. [unsure] [tongue] [crying]

IMHO, as always...

CB
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#12 User is offline   capmaster 

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Posted 13 March 2017 - 01:56 PM

View Postcharlie brown, on 13 March 2017 - 01:41 PM, said:

... What really "bums me out" (in the vernacular of my youth), is the absurd, to the point of
insanity/criminality, pricing increases, that reflect only "Greed," and not form, function, or any real costs, associated with
manufacturing those goods! Gibson, or otherwise! Some items, that have been the same, for decades, or longer, and require no
new research, or new techniques/machine or otherwise, to produce, have jumped dramatically, price wise, as well. Is that just
"inflation?!"

...

CB

The quoted points are due to the way of making money exclusively through creating debts. This is the monetary system's built-in greed of only a few that the proverbial "man on the street" has to pay for. It's a hike of exponential dimensions. I know these are equanimous words for the terrible regime of money. [thumbdn]
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#13 User is offline   Digger 

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Posted 13 March 2017 - 02:17 PM

It's pretty much the same here!

We've lost much of our manufacturing to Asia and as a former PM suggested are heading towards being a "Banana Republic". (IMO)

Being on a fixed income means that you have no way of countering price rises and either wear it or cut back!

The TPI (Totally & Permanently Incapacitated) pension) I get, when it was started was meant to be 100% of the Male Average Total Weekly Earnings. The idea was that disabled veterans and their families should be able to have some dignity. Now the MATWE is hovering around 43%. Not all veterans have been able to position themselves like me and are paying rent and paying off a car, these increases mean they have to go without necessities in some cases.

So with prices increasing across the board we see utilities also taking huge hikes, and why? Because we sell our commodities overseas and cant afford to compete with Asia for our own products. Privatisation of utilities here has screwed the average person. Foreign companies care little about Australians, just paying a dividend to shareholders, and getting big bonuses for executives.

So you see you guys aren't the only ones that are feeling the pinch.
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#14 User is offline   'Scales 

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Posted 13 March 2017 - 02:21 PM

View Postcapmaster, on 13 March 2017 - 01:56 PM, said:

The quoted points are due to the way of making money exclusively through creating debts. This is the monetary system's built-in greed of only a few that the proverbial "man on the street" has to pay for.


Cap, yes...you are onto it. It's clearly far too involved to go through here, but since the ponzi scheme of 'fake' money' generation and sale particularly since 1971 it's just been a wealth transfer game which has relied on booms and bubbles to keep the man in the street deluded that he is getting wealthier and to spend away. We are between booms/bubbles (manufacturing, dot com, housing...) so people aren't feeling so wealthy (they never actually were. - real wages declining for over 40 years)....greed and fear are what works and underpin capitalism, which is the only monetary system that works and has provided those of us in countries further up the food chain the lives we get to live these days so it's a Faustian pact of life. Can the plates keep spinning...I dunno, but I keep an eye on Japan's net debt, consider what happens when it collapses and hope that - if its even possible now - some pressure can be released even if we all have to suffer to some degree (less guitars?), in the interest of future generations - but it's well beyond my comprehension as to how that might be managed - the double edged sword of greed right there.
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#15 User is offline   jdgm 

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Posted 13 March 2017 - 03:45 PM

Some very good points here.

If you think the cost of living is high now, wait until demand outstrips supply, resources, capacity. It's coming.

As to Gibson, they - like everyone else these days - want to be seen as a trusted, high-quality BRAND.
They have always been such in fact, but without all the 21st century hoohah.
However mass-produced in the USA = ever-increasing costs etc. The business 'model' means they have to keep charging more.
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#16 User is offline   SmokeyGhost 

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Posted 13 March 2017 - 04:15 PM

I own two Gibsons (J-45TV and 2014 LP Studio) but I'd have to think very seriously if I'd buy another Gibson. I'm in the very lucky position of being able to afford another one if I chose to buy. However, not being a professional musician, there would be a mental price point at which I'd have to decide if I was getting value for money as opposed to mojo (and that is an entirely different matter.)

Over here, a J-45TV now costs over $5k - I certainly didn't pay anywhere near that when I bought mine - and that price, I'd simply say forget it.

And it seems a number of guitar stores around here are limiting the number of Gibsons they have on offer due to the cost. One supplier has only one acoustic and while they have around 48 electrics, some of the higher end models have been sitting there for quite some time. I suspect GC's, as they are a business and have to make a profit, have decided their customers a wider range of less expensive brands but probably just as playable. They seem to shift Fenders, Ibanez, Suhr in relatively high quantities according to one of the staff I was chatting with the other day. Mind you, even these guitars can cost a motza in some cases - I was drooling over a Suhr which was priced at $AU19,000. Bloody gorgeous but Nah, I wouldn't pay that.
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#17 User is offline   SteveFord 

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Posted 13 March 2017 - 04:24 PM

There are a few relative bargains in the Gibson USA line up (Firebird and SGs, for instance) but the Memphis line up is just ridiculously overpriced. Maybe that's why they haven't put up a 2017 line up, they've still got a ton of 2016s to move.


I'm not quite sure what they're thinking but it doesn't matter to me, I pretty much have what I want.
For those who don't there's always the used market.


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#18 User is offline   Mojorule 

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Posted 13 March 2017 - 04:27 PM

View Postrct, on 13 March 2017 - 11:20 AM, said:

As the cost of producing groceries rises, the grocery producers have some tricks. The Grocery Store Shrink Ray is first and foremost, that is, the same price, maybe even slightly higher, for less product. Sugar is a great example. You don't get a 5 pound bag of Domino, you get a 4 pound bag, and the price went up 2 cents per pound when they did it. That was a few years ago, the price continues to rise, look for 3 pound bags or CONVENIENT! 2.5 pound bags in the future, with slight price increase. Same for everything else in the store, just give them less.

Guitars can't do that. As costs rise they can only pass it along. The fingerboard is a good example of cost to produce cutting, but there isn't a whole lot of room to cut the cost to produce for something like a guitar.

You can't live without food, you can live without guitars. It's a luxury item to begin with. They'll either sell them or not. No paint, crappy paint, thin "Melody Maker" bodies with weird proportions, all attempts at cutting cost to produce that don't seem real popular with guitar players and probably can't sustain the company for as long as say a grocery producer cutting costs to produce.

rct


But you have pointed out elsewhere that a lot of the value is in the headstock shape and the name on it, as I recall. Why does an all-solid-wood Epiphone Masterbilt J45ME cost less than half as much as a Gibson J35 made from the same basic types of wood? I know which I'd rather have, but I don't seriously believe that the wood in it is worth over twice as much. I might want to believe it, of course, but that's just commodity fetishism.
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#19 User is offline   charlie brown 

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Posted 13 March 2017 - 04:38 PM

It's SAD, and more than a bit frustrating, that even the Gibson (and other guitars) I have bought, over the years,
couldn't be replaced, very easily (if at all???) from an economical standpoint, if they were damaged/destroyed, or
stolen. And, not just Gibson's...but, my Gretsch and Ric guitars, as well. It's not just the prices on "new" stuff,
but getting work done, on almost anything, is quite expensive, IF they can even get "parts," anymore, in our "Throw
Away Society!" I remember trying to get a fairly expensive (at the time) electronic device "fixed," and the price
they quoted me, for the repair was way more, than to just buy a New one! Planned obsolescence. That is particularly
evident in the Computer and Digital Camera world. At least, we can still get our guitars "fixed" for (mostly) a
reasonable price. How much longer? Who knows?!
[tongue]

CB
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#20 User is offline   Mojorule 

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Posted 13 March 2017 - 04:44 PM

Come back Woody Guthrie. All is forgiven.
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