Why are Fender amps suddenly so expensive?

[wingsdad]

People are becoming hard pressed for funds, economy is tanking... so raise prices 30% across the board. Makes total sense, right?

Not totally, but if the MSRP of Fender gear you currently own just went up 30%, your gear just gained about 15-20% in resale value. So, if you're hard-pressed for funds, you now have a shot at making a few more bucks by shucking it.

[oldguy]

FWIW, I visited our one local Fender mom and pop shop this afternoon. They've had a Deluxe Reverb reissue for some time now. It was marked "gotta go!" at $819, not a bad price considering the recent Fender price increases. MF is now selling them at $1199. If not strapped for cash, I would've brought it home...................
Their new shipment of Fender guitars are priced to reflect the increase. Deluxe Player's Strat...$799. They almost always match MF and other big box stores. They lost their Gibson franchise a few yrs. back because they couldn't order enough inventory and leave it hanging, waiting for thousands of dollars worth merchandise to sell. I hope they can survive the Fender price increases, the economy crunch, and the looky-loos who wanna headbang and scratch guitars, but not buy them.

[wingsdad]

...our one local Fender mom and pop shop this afternoon. ... They lost their Gibson franchise a few yrs. back because they couldn't order enough inventory...

Same thing happened a couple of years ago to the local indy Fender shop here that had an Epiphone franchise until Gibson cut them off. They're still stuck with some now NOS Epi Masterbuilt acoustics, aging gracefully in the acoustic room (climate controlled, desert here). I stop in there from time to time. The rumour at NAMM last year (08) was that Fender was about to pull the plug on them ala the Gibson-Greed Phenomenon, but instead, they pulled their new Gretsch franchise from them and handed it over to their competitor, another local indy a/ka/ my Local GAS Station.

[Ch0jin]

Back at the end of last year pretty much every IT vendor announced price rises of 20-30% in -dealer- buy price for laptops and desktops in the Australian market as a result of the US dollar slipping.

If it's not made "at home" and you trade in USD (or in my specific case the double whammy of USD and Yen) -and- (and this is a very, important condition) you were walking the razors edge of profitability to be market competitive, then yes, prices had to go up 20-30% to keep approximately the same bottom line.

If you had loads of margin to start with, (see furniture and fashion industries to start with) then only smaller adjustments would have been needed (if at all).

All this is price to a reseller, not to the consumer. From a consumer point of view, some larger resellers were able to delay and/or minimize the price increase to consumers by amortizing the costs of the older "cheaper" stock with the newer higher prices stock, but eventually the increased costs were always going to hit the consumer.

Now I've not worked in the music biz, so I don't know how tight someone like Fenders margins are to their resellers, but I'd bet this price hike is a result of the situation I've described above.

Wingsdad I don't know if I agree with you about resale.

I thought resale value was relatively independent of RRP (or MSRP as you say), being very dependent on supply and demand. Simply, the more of something thats available in the 2nd hand market, the more chance there is someone will accept below market price, thus driving the market price position down. If we all had '59 Les Paul's at home then they would not be worth far in excess of their MSRP like they are now for example.

[t_ross33]

I noticed that the Squier Vintage Modified HS Tele that I bought for $350 a couple of years ago is now $465 at a local retailer :

[wingsdad]

Wingsdad I don't know if I agree with you about resale.

... If we all had '59 Les Paul's at home then they would not be worth far in excess of their MSRP like they are now for example.

You're absolutely correct about rare or vintage guitars, amps & gear, but perhaps I should have qualified my statement about resale values as NOT being in reference to such instruments as a '59 LP. It is indeed a matter of supply & demand of a particular piece.

I was referring to the less remarkable, common pieces, which other than some Fender Limited Edition or Custom Shop models, most MIUSA or MIM Fender & Squier product of the last 10-15 years is just that, and rarely, if ever, will be resold for more than its original MSRP as compared to the current MSRP of the same model ... if it's still produced, the resale value of a common instrument will be generally in the range of what you might be able to buy it for new, today, which is typically a % of the current MSRP, then adjusted slightly up or down dependent on supply & demand in the market it's sold in.

As a starting point, not as gospel, dealers refer to the Blue Books of Electric Guitars and of Acoustic Guitars which show when a model was first & last produced, the last original MSRP and then a range of current values dependent on condition. In the end, even these guides advise that current value will vary from market to market. Consequently they DO check e-bay to get some idea of resale market value, but that, too, is not gospel.

No price guide or e-bay or Christies auction gives any indication of a potential seller's sentiment or emotion entering into the equation.

In the end, a piece is only worth what someone (market or individual) is willing pay for it. One should never underestimate a buyer's emotion. "One man's garbage is another man's gold".

[scgmhawk]

Time will tell if this price increase is a good idea or not. I was in a small"ish" guitar shop about a month ago and got to speaking with the owner. I was looking to play a Suhr "Pro Series" at the time. Anyway, he didn't have one in stock and went on to tell me that the only merchandise that he's able to move now is the higher-end stuff. $2500+ guitars and even higher priced amps.

He was also a Reverend ($599) dealer and said he can't move them right now either. It kind of made sense to me. The wealthy are way less affected by the current economy and the rest of us are watching our money much more closely.

I'm not sure if this story has much to do with Fender (after typing it!) but it might? Food for thought if nothing else.