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Post by Ripper on May 12, 2006 15:53:22 GMT -5
Randomhero, maybe you can answer this question... Without giving away too many trade secrets, whats the mark-up on say, a Les Paul or a Stratocaster?  |
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Post by Runewalker on May 12, 2006 23:11:28 GMT -5
My "guess" is 25 - 35%
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Post by RandomHero on May 12, 2006 23:51:29 GMT -5
Rune's close, but it really depends on the individual model. I've sold a Les Paul that only made the store $200, and also one that made the store a grand and change, But there was only a $300 price difference between the two!
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Post by ChrisK on May 13, 2006 1:17:49 GMT -5
A typical Fender USA model, which lists for about $1,800 to $2,000 and streets for about $1,200 to $1,400, generally costs the vendor (GC/MF) about $800 to $900.
Clearance instances of these guitars are generally offered at cost (however, the case is removed so it ain't real cost). GC and other huge resellers (MF) may get hold back (an automotive dealer method) in addition to the withheld case. I analyzed a number of Fender guitars at a GC a few years ago and came to the result that most of them street at about 70% of list. Virtually all of those offered at clearance were at about 70% of street.
List $2,000
Street $1,400
Cost $1,000
Assuming a 100% factory markup (50% gross margin),
Factory cost $500
Assuming a 200% factory markup (67% gross margin),
Factory cost $333
Assuming a 300% factory markup (75% gross margin),
Factory cost $250
For the volume of production coupled with the amount of R&D and marketing that Fender does, a 50 to 67% margin is not out of line.
Enjoy your $300 guitar......
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Post by Ripper on May 13, 2006 5:42:42 GMT -5
Thanks guys!
I was told the rule of thumb in marketing is that everything is marked up at least 100%
I guess what you fellas are saying isnt too bad then.
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Post by Runewalker on May 14, 2006 10:43:09 GMT -5
When I toured the Gibson factory in Memphis, the guide claimed that the Gibson model naming convention came from the retail price they set. So an ES 175 would have been priced at $175, an ES 335, $335, etc. So with CK's analysis, which is probably spot on, my '52 $175 would have cost between $28 and $43. Acknowledging the effect of inflation, seeing that either makes me feel like a brillent investor or .... Waaaaahhhhhh.
Also since I put about $200 to $250 in a build that I am going to keep, I am suddenly feeling a lot better about my harem's intrinsic value.
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Post by Ripper on May 14, 2006 15:50:01 GMT -5
I think that would be amazing touring the Gibson plant!
The Rapper 50 cent, must have been asscociated with Gibson too huh?...I think they were charging too much though.
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