Fender Eliminates MSRP

[FuseG4]

Re: Fender Eliminates MSRP

Sweetwater puts candy in with their orders. That's pretty much the only meaningful difference between one retailer and another much of the time.

Sweetwater and Wildwood have been better than other retailers to me and it's more than candy. They take detailed pics by serial number and will play a guitar for you over the phone and they set their instruments up well.
With AMS, GC, etc, you get what they have on hand and you can't ask them, "hey can you play the 3 LP Stds you have in HCSB and tell me which one plays and sounds the best?".
That's as good as one can hope for if you're buying sight unseen, and that stuff makes a big difference to me.

So while there's not much difference between many of the big retailers, especially regarding price, at least some companies care about you getting a guitar you're happy with cuz that makes a loyal customer.

 

[DreX]

Re: Fender Eliminates MSRP

Sweetwater has good customer service. I almost feel bad for them, thinking about how much effort they put forth on my behalf for what must be very tiny margins.

 

[Diminished Triad]

Re: Fender Eliminates MSRP

Willcutt Guitar Shop aka Willcut Guitars has been great for me......both on Ebay and dealing with them directly. The lowest advertised price (allowed by Fender) will remain key.....I doubt Fender will reduce its grip on not allowing retailers to compete for business by lowering price.

 

[Securb]

Re: Fender Eliminates MSRP

If you are a good negotiator you do not need to calculate the MRSP to get a good deal. Just get the deal done.

 

[stringbender11]

Re: Fender Eliminates MSRP

I seriously never any paid attention to msrp on any product, not just guitars and gear. I've always thought of it as a complete fabrication to make people believe they're paying less once they see the actual price.
As someone else pointed out you can find the real going rate for any product now in minutes. Makes msrp pretty much pointless.

 

[nsatke]

Re: Fender Eliminates MSRP

Sweetwater has good customer service. I almost feel bad for them, thinking about how much effort they put forth on my behalf for what must be very tiny margins.

All the major retailers have good margins on just about everything. The manufacturers need them to keep buying overhead so they don't wind up stuck with it. They may lead you to believe otherwise...

 

[DreX]

Re: Fender Eliminates MSRP

All the major retailers have good margins on just about everything. The manufacturers need them to keep buying overhead so they don't wind up stuck with it. They may lead you to believe otherwise...

That surprises me considering how normalized prices tend to be between various retailers. I rarely see differences much beyond a few cents. Amazon makes a big deal about being low margin, and there prices seem no better than Sweetwater.

 

[Gearjoneser]

Re: Fender Eliminates MSRP

If they eliminate Manuel, Salvador, Ricardo, and Paco, who will make their guitars?

 

[Masta' C]

Re: Fender Eliminates MSRP

If you were to go off MSRP alone, my top-tier Jacksons would be "worth" less than my mid-tier Washburns, even though the Jacksons are finished better, use more expensive woods, were built in a more expensive country to manufacture them in, use better electronics and hardware and even came with a hardshell case, rather than the cheap gig bags that came with the Washburns. The MSRP is an arbitrary number that I wish all manufacturer's would get away from. Sure, MSRP is great for advertising, but we have enough resources available to us now that "price normalization" has largely become a reality and MAP serves a more functional purpose these days.

 

[dominus]

Re: Fender Eliminates MSRP

That surprises me considering how normalized prices tend to be between various retailers. I rarely see differences much beyond a few cents. Amazon makes a big deal about being low margin, and there prices seem no better than Sweetwater.

MAP.

 

[Little Pigbacon]

Re: Fender Eliminates MSRP

I'd rather see the MAP and the actual pricing restrictions go.

It's not that the small dealers benefited from those.

I think it's healthy to have a bottom of the barrel on pricing. If everyone sold for the same price, our buying decisions would be based on convenience, delivery time, customer service, and the best overall experience. I don't think dealers who provide on those points should have to slash their own throats to compete with dealers who have the lowest price but nothing else. Personally, if I look at dealers I'm comfortable giving my credit card number to, and I have a good experience getting a product at or near the lowest price among those dealers, I feel good about the transaction.

 

[uOpt]

Re: Fender Eliminates MSRP

I think it's healthy to have a bottom of the barrel on pricing. If everyone sold for the same price, our buying decisions would be based on convenience, delivery time, customer service, and the best overall experience. I don't think dealers who provide on those points should have to slash their own throats to compete with dealers who have the lowest price but nothing else. Personally, if I look at dealers I'm comfortable giving my credit card number to, and I have a good experience getting a product at or near the lowest price among those dealers, I feel good about the transaction.

No, the MAP thing only means that those large bulk buyers who get better prices for the incoming merchandise have much larger profit margins. Which they then (partially, other than private pockets) spend on advertising and location, not anything benefiting the customer. The big shops roll over the small ones (those small ones that make an effort) with marketing and location, not because they have a better in-shop experience.

If the MAP thing meant that everybody has to pay the same money per item to the manufacturer then we could talk.

 

[nsatke]

Re: Fender Eliminates MSRP

No, the MAP thing only means that those large bulk buyers who get better prices for the incoming merchandise have much larger profit margins. Which they then (partially, other than private pockets) spend on advertising and location, not anything benefiting the customer. The big shops roll over the small ones (those small ones that make an effort) with marketing and location, not because they have a better in-shop experience.

If the MAP thing meant that everybody has to pay the same money per item to the manufacturer then we could talk.

Yeah. There's even map on proprietary gear!


Sent from my iPhone using Tapatalk

 

[Little Pigbacon]

Re: Fender Eliminates MSRP

No, the MAP thing only means that those large bulk buyers who get better prices for the incoming merchandise have much larger profit margins. Which they then (partially, other than private pockets) spend on advertising and location, not anything benefiting the customer. The big shops roll over the small ones (those small ones that make an effort) with marketing and location, not because they have a better in-shop experience.

If the MAP thing meant that everybody has to pay the same money per item to the manufacturer then we could talk.

Would you rather the big stores beat the little guys on price every time, in addition to everything else you mentioned? You can survive as a small business, though somebody else is making a better margin per unit than you, if you make the money you need to out of what you do sell. You can't make it if no one will come to you because your pricing isn't competitive. The big guys can use that margin instead, if they choose to, to bleed out smaller competitors on pricing -- by making more on each sale and always getting the sale because they can go lower.

Besides, the only thing MAP prohibits is advertising a lower price than the Minimum Advertised Price. It doesn't stop people from playing dealers against each other in a pricing battle. You can still sell for whatever price you want, as long as the presentation of some lower-than-MAP price can't be considered advertising. (Other types of policies, varying from one agreement to another, might seek to preclude selling below a certain price, regardless of the surrounding circumstances. I've encountered that once, though not in this industry.)

I don't agree with you that advertising and location don't benefit the customer. I tend to learn about products I'm interested in through mailings and websites of dealers. I also benefit from locations that are close to me, in safe, well-lit, well-traveled areas, that are big enough to demo product. I realize all this benefits the dealer, but I'm not going to pretend that it doesn't improve the shopping experience when I visit their store. Granted, they still have to deliver on everything else once I'm inside, and that's where a small store with good people can really win over loyal customers. You're not going to blow the big guys out of the water, but if you're smart you can keep them from blowing you out of the water.

The main reason I support MAP is because I don't like playing games. I don't think I need a special discount that's just for me and just because I knew the secret handshake with the right sales person. I don't like hunting around for the best price on something when I want it and I know I can afford it. I want to pay a fair price and get it over with. And I don't like it when a million trunk-slammer websites show up out of the woodwork trying to hook people on price when that's all they have. I'd prefer that the products and manufacturers I support not eventually become channeled through a slippery network of sellers with bad websites and lousy customer service. I like the idea of a good dealer being able to count on a certain amount of gross margin from selling some known product -- not spending a lot of time haggling over how much of the customer's purchase he's going to fund out of his own pocket by giving him a discount.

 

[uOpt]

Re: Fender Eliminates MSRP

Would you rather the big stores beat the little guys on price every time, in addition to everything else you mentioned? You can survive as a small business, though somebody else is making a better margin per unit than you, if you make the money you need to out of what you do sell. You can't make it if no one will come to you because your pricing isn't competitive. The big guys can use that margin instead, if they choose to, to bleed out smaller competitors on pricing -- by making more on each sale and always getting the sale because they can go lower.

Besides, the only thing MAP prohibits is advertising a lower price than the Minimum Advertised Price. It doesn't stop people from playing dealers against each other in a pricing battle. You can still sell for whatever price you want, as long as the presentation of some lower-than-MAP price can't be considered advertising. (Other types of policies, varying from one agreement to another, might seek to preclude selling below a certain price, regardless of the surrounding circumstances. I've encountered that once, though not in this industry.)

I don't agree with you that advertising and location don't benefit the customer. I tend to learn about products I'm interested in through mailings and websites of dealers. I also benefit from locations that are close to me, in safe, well-lit, well-traveled areas, that are big enough to demo product. I realize all this benefits the dealer, but I'm not going to pretend that it doesn't improve the shopping experience when I visit their store. Granted, they still have to deliver on everything else once I'm inside, and that's where a small store with good people can really win over loyal customers. You're not going to blow the big guys out of the water, but if you're smart you can keep them from blowing you out of the water.

The main reason I support MAP is because I don't like playing games. I don't think I need a special discount that's just for me and just because I knew the secret handshake with the right sales person. I don't like hunting around for the best price on something when I want it and I know I can afford it. I want to pay a fair price and get it over with. And I don't like it when a million trunk-slammer websites show up out of the woodwork trying to hook people on price when that's all they have. I'd prefer that the products and manufacturers I support not eventually become channeled through a slippery network of sellers with bad websites and lousy customer service. I like the idea of a good dealer being able to count on a certain amount of gross margin from selling some known product -- not spending a lot of time haggling over how much of the customer's purchase he's going to fund out of his own pocket by giving him a discount.

No, the small shops are at a disadvantage either way since the bigger ones can buy inventory cheaper.

However, in a situation where one way isn't clearly better than the other I prefer unregulated sales so that the more flexible, more nimble smaller businesses can see for themselves how to compete.

Right now that MAP-wielding manufacturers tell them how to compete, and quite frankly it isn't working. It isn't even working for the big one, guitar center, who are almost bankrupt.

And it isn't working for the customers either. Many musical instrument customers are not number-of-item-capped (like e.g. with cars where mostly people can only have one), they are money-capped (you can have as many as you want if you have a basement), so lower prices would mean more sales and more items manufactured.

Personally I bet a big reason behind the persistence of the MAP thing, even though price fixing in general is illegal in most other areas of business, is that the guitar centers want it and tell the manufacturers to keep it.

 

[Little Pigbacon]

Re: Fender Eliminates MSRP

I realize the smaller shops are at a disadvantage either way because of the buying power of the larger stores. I think that, without MAP, they're at a double disadvantage. A large, financially healthy retailer might be able to run a deficit by selling product at a loss long enough to put a small competitor out of business. If you're small and you want to keep a positive cash flow, you want a product you can make money on, where people won't flee because you can't afford to match the price of the big box in town or some website. They might flee because you're a jerk to them or because you don't have something in stock, but at least you've got a chance.

I don't see how much consumers will benefit from guitar equipment getting cheaper. It's so cheap now that, like everything else, generally only the most cost-effective places on Earth are getting jobs building it. Where would you like the prices of things to be trimmed so that we can all buy more of everything? Out of dealer margins, so they have to work for less money or do more work for the same money? Do you want to do more work for the same money? Wanna take a pay cut? Wanna have someone else pushing for you to do one of these things because it let them buy things they don't really need, at a faster rate?

When things get less expensive to buy, they get less expensive to build. Or is it, when things get less expensive to build, they get less expensive to buy? With mass-market consumer products, it's both. The demands of the competitive marketplace drive prices at the same time technology drives what we're able to do with a product at a given price point. People get used to buying more for less, and it leads to price compression in a vertical market. As more and more players come into the arena, brand identity becomes less important as people scramble to find, say, the cheapest WiFi router with 802.11ac, gigabit ports, simultaneous dual-band radios, etc. If you're looking for a feature set and a price and are focused on finding that combination, manufacturers are going to figure that out. Next time, they're going to build the cheapest thing they can that will do what they think will make you buy it.

Oh, you miss some feature that used to be on your old router? Too bad. Research told the industry that most consumers don't really care about it, and since the prices are always dropping, the money wasn't there; that feature is gone. These kinds of processes are accelerated by aggressive price competition among retailers. It acclimates consumers to a price on everything above which they shouldn't be paying. With no MAP, anyone can do this and make it whatever they want. If anyone else wants to sell that same thing, they have to fall in line -- assuming a monolithic consumer behavior of seeking the lowest price and ignoring the same product offered elsewhere at anything higher.

A key question: How much consumer deviation do you think there is from that practice? Because I don't know; you're never going to have everyone always buying purely on price or purely not on price. I think the big retailers watch pricing that's out there, and they often proactively adjust to match or beat competitive pricing. They might lower a price on one popular item to beat a small startup, but because of their size, in doing so they "broadcast" that pricing to the whole marketplace, and are thereby affecting people who shop at little stores where they've never even heard of the small startup that started it.

This domino effect can quickly gut a product or a brand of its perceived value. It may not be an inferior product or less expensive to build or bring to market, but because of where it gets sold and for how much, people arrive at a judgment of how worthy it is. What's the crappiest TV you'll find the day after Thanksgiving? The doorbuster special. It's sold on size and price. Maybe one guy's idea of an innovative way to compete is to do this with the best TV he carries. Lose a bunch per unit, make some happy customers, and make it up in… whatever; that's his problem. But I would be pissed if that were my TV he'd done that with; nobody who saw that would ever want to pay my cost to build one of them again, much less a price that would allow me or my dealers to stay in business.

 

[uOpt]

Re: Fender Eliminates MSRP

Nah, you are making too many connections too freely.

There is no reason to assume that lower consumer prices for the same gear will automatically lead to cheaper gear being made.

 

[Mad-Max]

Re: Fender Eliminates MSRP

I always thought the MSRP was a pointless move of marketing. It doesn't make any sense, why even post that if nobody is gonna pay that much in the end?

Also, why do the official website prices always seem to be WAAAY higher than retail prices? That has never made any sense to me.

 

[blueman335]

Re: Fender Eliminates MSRP

Something else that needs to go is music store's 'BIG SALE' catalogs that advertise '30% off' and it's based on 30% off MSRP, so everything in it is at the same price it always is. I am so sick of those fake sales. If nothing else, that a reason to get rid of MSRP. It's abused. How about the big music stores actually lowering prices when they have 'sales'?

 

[Little Pigbacon]

Re: Fender Eliminates MSRP

Nah, you are making too many connections too freely.

There is no reason to assume that lower consumer prices for the same gear will automatically lead to cheaper gear being made.

You seem casually dismissive of my entire post without offering any specifics. Maybe I'm making connections because I've actually been on both sides of the retail counter. You expect cheaper gear. How do you expect it to get cheaper? Who's going to take a haircut for you?