Buying A New Guitar — What You Need to Know About Pricing

Though people buy guitars every day, and many of those buyers are players who have decades of experience, there continues to be a veil over some of the most important aspects of the business, and a good bit of ignorance.  This article, the first in the series, is being written to illuminate the mysteries.  Let’s start with terminology, so we’ve got a good foundation.

  • List (aka MSRP): That’s the price set by the manufacturer, an arbitrary number that is generally a LOT more than people actually pay for anything.  So why does it exist?  Because sometimes manufacturers sell direct to the public.  In order to keep them from competing with the dealers who have a significant investment in that company’s product, they agree that the manufacturer will sell ONLY at MSRP/List to the public.  That keeps them from becoming unfair competition.
  • MAP (Minimum Advertised Price): Any product worth having has price protections in the dealer agreement.  These help both the retailer and the public.  Though some may think otherwise, pricing wars do NOT help the public or free market.  Rather, they allow some really Fat Cat to undercut the competition until there is none — and THEN he’ll set prices as high as he likes.  Meanwhile we all suffer from the pricing rollercoaster inherent in such wars.  The goods you bought at a fair price suddenly cost a LOT less because of that Fat Cat, and you can’t get fair value out of it, for just one example of how pricing wars can and do harm the consumer.
    Note: Taylor Guitars is among those who have dispensed of List/MSRP and now have only the MAP pricing.  Since they never compete with their dealers, there wasn’t much point to having a list price anymore.
  • New Used: This seeming oxymoron is a term used by some companies to describe a product  being sold directly from factory to the dealer at a reduced price but without warranty.  Every company has its own criteria.  (In the case of Taylor guitars, if there is ANY small flaw that causes Quality Control to flag an instrument, it will be repaired to full functionality and nearly perfect cosmetic condition but since it wasn’t perfect, Taylor will not sell it as New.) Some companies do not make the repairs and it amounts to a damaged item which is still functional and sold as-is.  WIth such companies, the term really does mean Used and implies the Buyer Beware.  Other companies won’t sell anything that doesn’t meet their standards at all.  Luckily for high end guitar buyers, that’s not a reason for concern with Taylor’s new-used.  The author has owned several of them and found it impossible to even discern the flaw.
  • Retail: Probably the most vague of terms, retail has no actual specific meaning, except to express that the product was sold to the end user.  When people say they won’t pay Retail, what they may mean  is that they want a price below List.  Regardless of what they’ve been told, whatever price they’re paying is de-facto retail.

Now to address a few myths and misunderstandings.  The biggest is that the big corporate retailers will give you a better price than a mom and pop brick and mortar or independent retailer.  That presumes they’re making the profit on volume and in this industry it’s simply not true.  Places like Guitar Center may ADVERTISE that they’re offering 10 or 15 percent off, but what they’re actually doing in those ads is raising their advertised price above MAP so that their coupon is still at MAP.  To do otherwise is a violation of their dealer agreement — the very same dealer agreement that every other retailer has with the company, big or small.  So no, even during their sales, they aren’t actually any lower.  BUT their employees aren’t authorized to discount below the advertised price either, so you’re not really getting a lower price.  They’re just wagging the dog.

What CAN happen is that, during a direct conversation, a retailer may negotiate a lower price.  These are usually a time-limited offer, and not put in writing (as doing so also violates the MAP policy/agreement.) . And that’s true with both Corporate stores and independent retailers, except that the Corporate stores don’t give their employees that much autonomy.  The final analysis is that an independent retailer is in far better a position to negotiate a lower price with you than a corporate employee, and more willing to give a regular or potential customer a break. Why?  The corporate shill gets paid the same no matter what.  The independent dealers’ lifeblood is in developing relationships with their customers.  To that end, it remains more likely that you’re going to get a fair shake with that dealer than with a corporate-owned store.  More importantly, the independent dealer has invested everything into that store.  Guitars are what they do, eat, sleep and breathe.  The corporate associate is just there to punch the clock and get a paycheck.  You’re going to get better counsel from the independent dealer.

“Just give me the price.”  Dumbest purchasing inquiry EVER.   All guitars are not the same, no matter who the manufacturer, no matter how consistent their production may be.  The dealer you make relationship with is going to know what sorts of sounds appeal to your tastes and ears.  He’s going to select the right guitar to make you happy.  And he’s going to do his best to keep you happy before, during and after a sale.  That doesn’t mean that an independent dealer won’t stick to MAP, especially if he feels you’re just there to shop price and then take that lower price to another dealer or a corporate store.  Why should he be real and serious when you’re not?

Price is one factor, but the price of WHAT?  The guitar itself?  Realize that the corporate shill doesn’t have a close relationship with the factory.  In fact, that company may not even have access to some of the instruments that the dedicated inde guy can get.  And then there’s stepping up, speaking with the factory your behalf, should there be a problem.  That can make a LOT of difference in what it costs you and how long it takes to get a problem resolved. In the final analysis, it pays to buy from independents who have a close working relationship with the factory.  As has already been mentioned, you will probably end up with a better price AND better service with the inde.

Warranty is another vague concept.  For example, they may all have a lifetime warranty, but if they don’t have techs or a network of authorized service centers, you’re going to be footing the bill for shipping to (and perhaps from) the manufacturer’s location.   Does it cover everything, or just some aspects?  Wear and tear clauses are normal, but what is the company’s reputation?  Martin has earned a rather dismal corporate rating on that score, while Taylor, for example, goes out of their way to ensure good customer satisfaction.

To conclude, when looking for a new guitar, you’re best served by talking candidly with a knowledgable independent dealer.  Spend a little time getting to know him (and he you) and if he seems knowledgable, go with his advice.  He’s got a stake in future sales with you as well and is far more likely to do right by you.

Stay tuned for Part 2, which does into further detail and talks about aspects to look out for when buying used guitars.

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