“No one in the industry is going to give you their cost-plus pricing,” said everyone in the industry.
But then someone did.
An executive at a guitar manufacturer recently spoke with Reverb about the manufacturing and cost realities of the guitar industry. For the sake of consistency, he selected a base-level, generic slab-body, two-pickup T-Style guitar with a bolt-on neck for his reference point
https://reverb.com/news/guitaronomics-how-much-does-it-actually-cost-to-build-a-guitar
The High Cost of Upgrading Components
“We have this debate often. We build our own version of an ES-335 and put our Chinese-made version of [boutique brand pickup] in there. If I’m street pricing that guitar for $500, that means I have to sell it to the dealer for $320, so there’s enough profit in it for them. I need to be making it for $150 – certainly under $200 – to make it profitable for me,” he says.
“If I put actual USA-made boutique pickups in, they cost almost as much as the guitar itself. Even if they give me those pickups for $100, that brings my cost from $150 to $250, and I have to almost double my price to the dealer,” he explains. “Then the dealer has to sell it for almost $900 just because I added $100 pickups. It’s just the distribution model. That’s why you rarely see guitars with boutique pickups for less than $1,500. There has to be enough profit for the manufacturer, the pickup maker, the distributor and the dealer.”
What It Actually Costs to Build a Guitar
“If you want to build a generic slab-body, two-pickup with a bolt-on neck — a T-Style — in China, it’s going to cost the manufacturer $50 to $100,” he says, if you use the bare-bones quality necks, tuners and components.
“If you use better-quality components, you can hit $100 easily. You end up in the $200 range in Indonesia, which is the $400 range in Korea. If you carry those same components to the U.S., it’s likely $1,000 to $1,400.”
His final word of advice to buyers is to upgrade those pickups yourself.
Which seems fairly obvious - but it's re-assuring to hear the rationale? I've long held that Corts are good guitars for the $, but their stock (non branded) pickups are terrible and their 'under licence' produced pickups are not comparable to the real deal.
To maintain a competitive price point with the markup's through the supply chain, it just isn't feasible to have boutique parts imported?
Nice article. Thanks
