Why ARE Fender products SOOOO much more expensive here in SA?

Norman86 · 2010-10-18T12:02:39+00:00

As the title states, why is this? the products are often way more than double what they cost in the states! and with the volumes sold, shipping from the sta...

Why ARE Fender products SOOOO much more expensive here in SA?

Norman86

Alan Ratcliffe wrote: THere are a number of factors:
1. $200 is the discounted price. $250 is the RRP.
2. Fender supplies US stores directly with no middleman. Locally they are handled by an importer, who also deserves to make some money for importing them. Compare British prices for Fender and you get something more realistic.
3. The importer pays duties on imports as well as shipping charges
4. Due to lower turnover, discounts locally cannot be as high as they are in the US

Having said that, Fender's prices locally are inflated. Apparently, the reason for this is SA buys stock from Fender Europe, not Fender US, so there is an extra middleman and an extra markup.

While i do agree that everyone needs to make a cut, the prices locally are over inflated!

but i can say, its not the first time i hear of shipping from Europe being MUCH more costly than shipping from the States!
but okay, i was just wondering! if the prices could be more in line with the american prices, hell, i would buy the products new!

sorry if this was discussed before, i probably should have searched, but if the topic was very old, well, things change!

thanks anyways...

chris77

You get to learn where to buy what, so that it suits your own needs and circumstance best. I buy as much of the smaller stuff as possible at my local store, even though I can get it cheaper elsewhere. Their range in guitars and amps is really, really small - so then I will go online. First stop is always Musicmadness. Their prices are competitive and Matt gives great service. If they can't help, I try take2. Huge range and convenient, you can buy ten things from ten different stores in one transaction. Downside is the 1month delivery period. Some other members prefer to import directly - its cheap and fast - or to buy from ebay. So the options are there, you just have to find what works for you. Its when you don't know of alternatives when GAS hits, that you end up paying 4800 for a 2thou something guitar.

infernox

Simple. In SA we get spykered. Simple as that.

I understand fully that the USA and Europe has 100 000+ people to sell to and SA only has 10 000 but none the less, we get overcharged on most things.

shadow1

yip we get overcharged on everything in SA, cars are another prime example!
i realized that when i was overseas - even a VW that is MADE HERE (in PE) is cheaper overseas than locally? figure that one out!

I was under the impression that Bothners was the importer so they in effect are the middleman aswell as the retailer in some cases...

When local bands can easily get a "sponsorship of 40% off" from the local music stores, you have to ask yourself what the margins on musical instruments really are....scary thought...

anyways just buy second hand ? or import

Norman86

jip... if i ever buy another fender, i will import it! ?

infernox

shadow1, the real proof is when music stores have 40-50% off sales and they still make a profit.

I used to sell Canon cameras and can tell you know we had a 10% markup... no less, so the distributers actually made quite a penny and we made maybe R500 minus the credit card charges.

singemonkey

I love these threads. >?

The weird thing about the States is that even items from Asia are cheaper there. Likewise, in east Asia, items from the States are way cheaper than in SA or Europe.

I've never seen a satisfactory explanation in all the threads I've read. It's not just musical instruments either.

And England has the same problem. Routinely, the dollar sign is simply replaced with a pound sign. This might make some superficial sense if you're talking about a Fender guitar made in the USA, but it doesn't when you're talking about an Ibanez guitar made in Japan, or a Nikon camera made in Thailand. And the prices are even higher here.

Norman86 wrote: jip... if i ever buy another fender, i will import it! ?

Or buy it second hand. Unfortunately for many selling, while the new prices are grotesquely high, the second-hand prices are not that different from prices in the USA and Japan.

The only difference is that the second hand selection in the USA and Japan is overwhelmingly vast - don't want your '57 reissue strat in a two-tone sunburst? Prefer it in black with a tortoiseshell pickguard? Well just keep scrolling down the page, buddy! Honestly, I don't know why anyone in either country buys new gear from the store.

The only caveat with importing is that the shipping costs are extremely high. Therefore, it makes more sense to import a R30,000 used Gibson '58 Les Paul Reissue than it does a R5,000 Strat, because the shipping will represent a much smaller chunk of the total cost. You also take a considerable risk.

At the end of the day though, I would never pay double the price on a costly item to avoid the trouble and risk of importing. For me, and many others, it's just not worth it. And those of us who do know the thrill of opening the package that is, 95% of the time, exactly what we were hoping for, and makes all the trouble worthwhile.

AlanRatcliffe

infernox wrote: shadow1, the real proof is when music stores have 40-50% off sales and they still make a profit.

I used to sell Canon cameras and can tell you know we had a 10% markup... no less, so the distributers actually made quite a penny and we made maybe R500 minus the credit card charges.

Sorry, but this is all easy to say if you've never run a music store before. Wholesale prices are 40% below retail, but the customer gets up to about 25% off the RRP, leaving a profit margin of 15% (what discounts do you get off on camera gear?). Subtract commission (or wages) and the "profit" shrinks even further. Plus the retailer absorbs the cost of getting it from the distributor to themselves and musical items like guitars, amps and drum kits are heavy and expensive to ship. Musical gear requires a lot more merchandising and storage space in comparison to cameras, so overheads are far higher. Guitars and many other instruments need maintenance if they stay in stock too (fresh strings, etc.).

Also get over the misconception that the retail stores are the importers - they are not. They are often owned by the same company that owns a distributor (or two), but they still buy their stock from those distributors and don't get it any cheaper than any other store. If a store has an item on 40% or 50% sale, they either are getting a better price from the distributor or they are selling below cost to clear.

I think that everyone buying directly from overseas without even checking locally is being very shortsighted. Sure it works out cheaper on some stuff, and there is always the stuff we don't find locally, but ultimately you're going to drive all the music stores out of business and then where are we going to buy our smalls and the heavy stuff that it's not practical to import ourselves? On the other hand, if we support local business it could grow to the point where we do have the volumes to be able to drive the prices down. Plus you still get to actually play a guitar and walk out of a shop with it rather than buy unplayed and wait six weeks to get it.

singemonkey wrote: The weird thing about the States is that even items from Asia are cheaper there. Likewise, in east Asia, items from the States are way cheaper than in SA or Europe.

Look at a globe and measure how close the US is to Asia (remember Alaska is only 100km or so from Russia). Then do the measurements to South Africa. Face it, we live far away from all the major centres. We're in a different Hemisphere and there is a lot less trade along the route (us being the only country of note for 5000 km), less trade and traffic and higher prices. Australia is in pretty much the same situation.

singemonkey

Alan Ratcliffe wrote:
singemonkey wrote: The weird thing about the States is that even items from Asia are cheaper there. Likewise, in east Asia, items from the States are way cheaper than in SA or Europe.
Look at a globe and measure how close the US is to Asia (remember Alaska is only 100km or so from Russia). Then do the measurements to South Africa. Face it, we live far away from all the major centres. We're in a different Hemisphere and there is a lot less trade along the route (us being the only country of note for 5000 km), less trade and traffic and higher prices. Australia is in pretty much the same situation.

What's England's excuse then...

Norman86

singemonkey wrote: The only caveat with importing is that the shipping costs are extremely high. Therefore, it makes more sense to import a R30,000 used Gibson '58 Les Paul Reissue than it does a R5,000 Strat, because the shipping will represent a much smaller chunk of the total cost. You also take a considerable risk.

Well, i understand everyones points of view...

somehow still, i feel like not just with guitars, but most things, people feel the need to rip off the south african consumer.

not making enough profit? well, just sell it in SA for 3 times the price, they're suckers and because they want it, they'll buy it no questions asked!

if i can pay $60US on shipping with USPS for a Fender, whom which i have had things shipped through before, (a R25000 Zapco Car Amplifier, with no problems), im sure i can trust them with a $500 guitar!
while i do normally support dealers in SA, some things... are just much cheaper and more practical, in my opinion, to import!

Bob-Dubery

A few points....

1) I like to support a real world store. Real world stores are good. You can go into them, pick up the goods, plug them into an amp, play 3 guitars supposedly the same and see which works for you etc etc etc. You can't do that with e-bay or Amazon. There are some items I get from overseas because nobody stocks them locally, but where possible I use local, physical shops. We can get stuff cheaper off of e-bay etc, but if enough of us do that then the real world shops here in SA start struggling and eventually closing down. That will not be a good thing.

2) Spending your money close to home is good for the economy of the country you live in, not some country where you don't live.

3) Stores are entitled to make a profit because they keep stock that cost them money on display in their shops. That's money that could be earning interest for them in a bank account. This applies especially to high-end instruments. They don't order those on Monday and sell them on Wednesday. If they're getting the goods on consignment then the principle still applies - that's somebody's money hanging on that rack.

4) This topic comes up over and over again on GFSA and I'm surprised nobody thinks it through. We're talking about IMPORTED items. OF COURSE they cost more here than they do in the country in which they're made. Buy a Mervyn Davis Smoothtalker here. You'll pay considerably less for it here than you do in the USA. Alan is right when he says that the UK is a better basis for comparison. Except, of course, for British or EU made goods. If you want to compare the price of Lowden guitars to see how much you're getting ripped off then look at the prices in the USA, not in Ireland. But if you want to get a benchmark for Fenders, look at the UK.

5) In any business volume brings discount. I used to work for the Casio distributors in this country. People used to complain that our stuff was expensive, they could get it cheaper in New York. Sure you could... there are shops in the USA that sell more of whatever-it-is in a week than the entire distribution/retail chain in SA can sell in a month.

6) Despite my point (5) the local distributors have many of the same costs as their overseas counterparts. When I was fixing Casio stuff the contract with Casio in Japan bound us to all sorts of things - a certain stock holding of spares, for so many years after a particular model stopped production; a certain quality solder (no kidding! There were contractual stipulations RE a minimum percentage of silver and a maximum percentage of flux); multimeters that could read a 10th of a milliamp (may not be a big deal now, but it was then) etc etc etc.

AlanRatcliffe

What's England's excuse then...

Restrictive import duties since WWII. They owed so much after the war (only paid up recently), that they had to keep a handle on their trade deficit.

Norman86

okay, let me add another thing here...

the normal price for an american standard strat starts at what? 16k abouts?!

well, i was in sandton city the other day, and the musicmate there had an american standard at 12k, or thereabouts...
it was a 2010 model.. sure, it was in some weird fugly green colour, and the headstock was also in that same nauseating green.
but the point remains, it was selling at R12k... if it was another colour, i would consider that a bargain, and much closer to the approximate $1200 for an american standard strat than the R16k they sell at!

vic

You can get some idea of UK Fender prices here

http://www.wunjoguitars.com/index.php?page=1&sid=1&mid=1

singemonkey

R12K a bargain? That's what they're going for on take2. On Amazon (which take2 simply orders them from and then you come and pick 'em up - no floor staff, no stock, no nothing), they're R7,000. Hmm. R7,000 vs. R16,000. Let me think. No. I guess I'll take the R9,000 hit. It's supporting the stores after all... ?

IceCreamMan

i have to concede that it iis in my interest to have the local store ,in this regard Bob is quite correct , but the store and consumers in general need to accept and embrace technology which allows me to import an item for much less than going to my locval store so in effect the local store is inefficient in its operation and if it does not amend its model its going out of business...its that simple. as technology makes it easier for us consumers to import the more its going to happen.

a 70 $ pedal (480 ront ) street price pedal which i can land here for +- 750 incl all fees is a case in point. I contacted the local store and was quoted retial of 1495 but cos i am a most excellent customer i could have it for 1060...... thats 310 ront or +- 40 % more. The dealer does not buy the pefals at american street prices but gets a good discount and transport costs are lower per unit as thye no doubt ship it... so between the middle men and the dealer a lot of money is being made.

the local store needs to be aware that potential profits are being lost because consumers are importing themselves and that this trend is going to continue ....a random search on internet business transactions will confirm this .... and its only going to get bigger , much much bigger.... the local store/middle man is going to run out of places to hide as consumers become more knoeledgeable.

but i want an need my local store ,so a balance needs to be attianed. I live within a 10 km radius of 5 mega stores and a host of smaller ones .... to my limited keynesian mind this indicates so good profits being made.

singemonkey

+1 to everything IceCreamMan said.

AlanRatcliffe

singemonkey wrote: R12K a bargain? That's what they're going for on take2. On Amazon (which take2 simply orders them from and then you come and pick 'em up - no floor staff, no stock, no nothing), they're R7,000. Hmm. R7,000 vs. R16,000. Let me think. No. I guess I'll take the R9,000 hit. It's supporting the stores after all... ?

You won't get the R7K price from Take2 - they have a particular store on Amazon that supplies them (illegally, I might add - it's grey market) and their price is R 12,752. That's not far off what you should get as a discounted price from a retail store locally.

Norman86

Alan Ratcliffe wrote:
singemonkey wrote: R12K a bargain? That's what they're going for on take2. On Amazon (which take2 simply orders them from and then you come and pick 'em up - no floor staff, no stock, no nothing), they're R7,000. Hmm. R7,000 vs. R16,000. Let me think. No. I guess I'll take the R9,000 hit. It's supporting the stores after all... ?
You won't get the R7K price from Take2 - they have a particular store on Amazon that supplies them (illegally, I might add - it's grey market) and their price is R 12,752. That's not far off what you should get as a discounted price from a retail store locally.

Alan, how do you know its grey?

BMU

The laws of supply and demand are immutable, if it's cheaper from overseas I'm not going to singlehandedly attempt to save the local music retail industry. (Actually I think some of the local guys are doing pretty well given the constraints etc. Just making a logical point.)

Anyway I don't see much advantage to being able to try out three badly set up guitars in a local store when I can just buy a badly set up one from overseas *if* it's substantially less.

Ok, the stuff I want never will be in the local store (certainly not three of them) anyway so maybe my view is not all that representative here in Fender Stratocaster Land(R), har.