Guitars in Europe?

[JayFreddy]

I don't understand why a MIM Strat that sells for $400 in the US costs $690 in France... What are prices like on European made instruments?

I know there are some good luthiers in Eastern Europe, they turn up in the States occassionally, and will generally hold their own in terms in quality and price.

I know there are some great custom builders in the UK too, but you definitely have pay pay pay for those... And that's not even including the VAT!

Seriously, it just doesn't make much sense to me. Who gets all that extra money???

[Jelly]

Originally Posted by JayFreddy

I don't understand why a MIM Strat that sells for $400 in the US costs $690 in France... What are prices like on European made instruments?

Sales tax is more than twice what it is in the States. But you'd think American goods would be cheap right now with the exchange rate. Anything made in Europe is expensive because labour is so expensive (the worker has a very good wage and benefits).

Originally Posted by JayFreddy

I know there are some good luthiers in Eastern Europe

There were a lot of Czech-German luthiers who were forced across the border from the Czech Republic into Germany after the big war ended. Many of them settled near where I live and continued to make excellent instruments. Those brands command high prices in the vintage market. Some are not in business anymore, but some are, like Hofner.

[Guran]

When it comes to Fender insruments sold in Sweden, I'm pretty sure that Fender gets the money. Fender has their own agenture here.

In recent years the dollar has gone down about 50% while Fender prices seems to have gone down about 5-10%. A Hot Rod DeVille 410 is about US$ 1900 here, a DRRI is about 2100, an Am Std Tele 1900 (25% sales tax included in those prices).

[studio1087]

My in-laws know a music teacher from Australia who visits every year. His mantra is "Do you know how much this guitar would cost in Australia??"

It's insane.

If the distribution is difficult in Europe (I can't imagine why it would be) I could understand 10% but the actual up charges seem outrageous.

I've often wondered if would be possible to start a guitar courier business where one would hand select a guitar in the States, fly with it to Europe and claim it as personal property and then hand it to the true new owner (no taxes or duties). If a cheap airline ticket from New York was $550 and someone paid 1/3 of my ticket....I would bring them any guitar that they wanted.

Guitar mule? Crazy idea I suppose.

[Guran]

Eventually, buying an Am Std in NYC pays for the trip (hotel not included). If the customs find it I have to pay tax here, but with the low American price tag, tax will be considerably cheaper than if I buy it here.

[T-bone Tone]

In the UK, certain guitars cost almost twice the US rate. It is a disgrace. However, it is the rapacious, ruthlessly efficient UK taxman collecting to keep dear old Liz in luxury that makes the UK one of the most expensive countries in the world.

Even a courier service would be liable to the greedy taxman's import duties. The only way around this is to box clever and take out a guitar with you to the states that looks like the one you intend to buy, but is, for example, a cheap copy of a strat. Such is dear old Liz's poverty, that the UK customs are VERY well informed about guitar makes and values, so it is easier to do this sneaky shuttle with vintage guitars than new ones.

[Big John]

Originally Posted by T-bone Tone

......... However, it is the rapacious, ruthlessly efficient UK taxman collecting to keep dear old Liz in luxury that makes the UK one of the most expensive countries in the world.

Who else is going to pay when they want to take a chopper out for a 'Jolly' at the weekend ?

The exchange rates are good to us at the moment, it's almost 2 for 1 from the US but yes, the trick is getting them back, a lot of folk ARE doing it though, like most muso's i just don't think i would get away with it.

It's been Dollars to Pounds for a long, long time here and not just instruments, anything from guitars to cars and Harleys, if it's $1000 US it will magically end up as £1000 when you get your wallet out.

I like to support UK builders when i can, Bravewood and the wonderful Errington's (late of Richmond NYorks) but their costs just to stay in business make their stuff even more expensive.

Ah well, at least the suns out at last ............

[octatonic]

It is a couple of things.

US price is without sales tax, which is around 8.25%
European prices include tax in them, which is 17.5% in the UK.
(I'll talk about the UK mostly as I live here and know more about it)

You also have import duty which for guitars is 3.2 - 3.7%.

Additionally you need to consider that importers of guitars want to make a profit too- add around 30% for that.

The shops you buy from have higher operating cost compared to the US- the cost of living is higher than most places - they pay more income tax, higher rates and rent etc. That all has to be passed onto the customer.

Also the prices in the UK are full retail, which you need to haggle down from.
In the UK you can't save money by shipping out of state and avoid paying the tax (because we don't have any states or any laws governing out of state sales).

You also have not inconsiderable shipping costs- which are cheaper the more guitars you buy.
On import guitars, if you ship 1000 it is considerably cheaper *per guitar* than shipping 5. This makes a difference with the next point.

Lastly, population in the US is much larger than the UK- so they have economy of scale.
For higher priced guitars (above $2000) it is actually cost effective to fly over, buy it in the US, ship it back as carry on luggage.

[octatonic]

Originally Posted by T-bone Tone

However, it is the rapacious, ruthlessly efficient UK taxman collecting to keep dear old Liz in luxury that makes the UK one of the most expensive countries in the world.

I am no royalist- but the Royal family gets 40 million pounds a year for all of them.
The UK population is roughly 61 million people.

40 million pounds spread between 61 million people means it costs each individual around .65p per year.

Again, I am not a fan of the royal family- I see them as an unnecessary and irrelevant institution... (kinda like organised religion)- but some people seem to want them around, and this is a democracy (of sorts).

[Tony474]

I'm not particularly an ardent royalist but by and large I'm in favour of our constitutional monarchy. Apart from the fact that the Duchy of Cornwall (Prince Charles's thing) puts back more into the public purse than it gets out of it, H.M. The Queen has also volunteered to pay tax on her personal income even though as monarch she is under no obligation to do so.

£40 million is a piddling, trifling sum in comparison with the bulk of U.K. tax revenue and I think it's a bargain when you consider the amount of tourism our royal institutions attract directly or indirectly; I'd bet that we get a lot of that, if not all of it, back from the spending of overseas visitors.

U.K. taxation is very high, having as it does to pay for (among other things) our social benefits system and the National Health Service, one of the world's biggest employers with a wage bill to match. This could be good or bad depending on which newspaper you read and believe. Even so, the V.A.T. rate of 17.5% is lower than in some other European countries and still only provides a modest proportion of tax revenue.

That's only the U.K., though, and not France or the rest of Europe. In fact, there the current strength of the Euro should help keep prices down. The real reason why U.S. instruments are so much more costly over here is the excessive mark-ups applied by the importers and retailers. To be fair, though, as Jim correctly points out, business overheads are higher here and need to be met. Competition from the Internet is helping to temper this to an extent but I can't see it ever being possible to buy an American guitar in Europe for anything like the same price as in the U.S.A.

[copytekk]

Originally Posted by Guran

(25% sales tax included in those prices).

[Big John]

Originally Posted by octatonic

The shops you buy from have higher operating cost compared to the US- the cost of living is higher than most places - they pay more income tax, higher rates and rent etc. That all has to be passed onto the customer.

Also the prices in the UK are full retail, which you need to haggle down from.

Fair do's on the 'Royal' bit, i think it's your job to moan about the Royals if you are a Brit regardless of what they cost, mind you i'd like access to a Chinook for mates parties too but that's another post -

Octatonic, at the risk of sounding like a right old misery, the two paragraph's sum up my feelings totally about the poor old music shop keeper, they DO have ridiculous overheads (my partner manages a 'high end' porcelain and china biz and their rates make me pooh myself) yet after they have paid them in we all come as customers insisting on haggling them down ! "Oh, i can get that cheaper on the 'net".

We have had many a joust here about haggling, personally i don't get it, i can't do it at Tesco's or the Ferrari garage so why would i try it on for a dozen sets of guitar strings ?

Not being a misery, just my .20p (and thats NOT negotiable ).

[TheDoctor]

Originally Posted by T-bone Tone

In the UK, certain guitars cost almost twice the US rate. It is a disgrace. However, it is the rapacious, ruthlessly efficient UK taxman collecting to keep dear old Liz in luxury that makes the UK one of the most expensive countries in the world.

+1 to that, it's really getting beyond a joke. I'd be less fed-up with the taxes if we got a decent service in return, but the state of things here at the moment is getting farcical. That's a different topic though and one I will leave there.

[Tele Fan]

Is it the other way around too? I've never looked at any British guitars because I figured it would cost an arm and a leg to get one shipped to the states.

[octatonic]

Originally Posted by Tele Fan

Is it the other way around too? I've never looked at any British guitars because I figured it would cost an arm and a leg to get one shipped to the states.

Well it is pretty much the same as amps- Marshall are made in the UK and reasonably affordable.

[Tony474]

Originally Posted by Tele Fan

Is it the other way around too? I've never looked at any British guitars because I figured it would cost an arm and a leg to get one shipped to the states.

You may have a point regarding a custom-built, one-off instrument but that would apply to anything of that nature shipped in from anywhere overseas.

However, when it comes to production items, I don't know about British-made instruments and amps in the USA but I do believe that, for example, Triumph motorcycles cost less over there than they do here on their home market...Rip-off Britain rides again. It's a matter of the price being pitched, not at a point reflective of actual cost of manufacture and marketing, but at what it is perceived that the market will stand.

When it comes to haggling, I tend to the view I inherited from my dear late mother... if you have to pay the right price for something, you're somehow being cheated . Groceries and things from supermarkets are one thing, but it's a matter of supply and demand when it comes to musical instruments and even sundries, which are not mass-market goods. Up to a point, whatever his overheads, if it looks like resulting in a sale, in terms of a profit a shrewd businessman would sooner have 75% of something than 100% of nothing. That's the way I operate in my business and it works, generating happy customers who come back for more. So my advice is always to ask for a discount or make an offer - the very worst reply you can get is "No", and you then have the choice to cough up the full whack or walk away. But you'd be surprised how often that choice is unnecessary.

[fakeocaster]

I was told once that Fender sell more guitars in Texas every year than in Europe.If true it means that European dealers, other than Thomann, have limited purchasing power which would offset the currency differance

[Fatmanstratman]

Originally Posted by TheDoctor

+1 to that, it's really getting beyond a joke. I'd be less fed-up with the taxes if we got a decent service in return, but the state of things here at the moment is getting farcical. That's a different topic though and one I will leave there.

Welcome to Rip-off Britain....

[boris bubbanov]

Originally Posted by fakeocaster

I was told once that Fender sell more guitars in Texas every year than in Europe.If true it means that European dealers, other than Thomann, have limited purchasing power which would offset the currency differance

This may very well be true and yet, it may be that Fender makes 50 times more profit per guitar for each guitar sold in Great Britain as it does on those dumped I mean sold in Texas.

UK and EU dealers have every right to be afforded power based upon profit to FMIC and not based on units sold.

[Nick JD]

Fender American Series Telecaster
(Rosewood - Chrome Red)

Allans Price (Brisbane) $2,899.00

Does it have diamond-encrusted fret markers or something? I can build about four top-of-the-line "Telecasters" for this price.

And now for something really shocking...

Squier Standard Telecaster Electric Guitar
(Rosewood - Vintage Blonde)

Allans Price $649.00

You Americans might like to build guitars - here, it's just good sense. And one can make their guitar A LOT better for MUCH LESS.

Want me to find a Custom Shop price? And in case you're wondering, an Australian Dollar costs an American 94c.

[JayFreddy]

So the main issue is rampant taxation?

Still, an import duty at 3% doesn't explain why EU-made instruments are so expensive...

Consider the following thought-exercise:

-------------------------

Fender Standard MIM Telecaster

**TEXAS**

Base Dealer Cost: $300 (est.)
Shipping, Inventory, and Stocking Fees: $35 (est.)
Total Dealer Cost: $335 (est.)

Street Price: $399
Dallas Texas Sales Tax @ 8.25%: $32.92
Total Cost to Customer: $431.92

Net Dealer Profit: $65 (est.)


***UK***

Base Dealer Cost: $300 (est.)
Shipping, Inventory, and Stocking Fees: $160 (est)
Import Duty @ 3%: $13.80
Total Dealer Cost: $473.80

Street Price (including 17.5% VAT): $658 (329 UK quid x $2)
Total Cost to Customer: $658

Gross Dealer Profit: $184.20
Less 17.5% VAT ($115.15)

Net Dealer Profit: $69.05

-------------------------

Please understand that these figures are not definitive, and are simply a rough estimate...

I'm beginning to understand why my ancestors left...

(just kidding! )

[Unseen]

Does no one understand market economics here? Guitars cost what you are willing to pay for them. What you need is a competitive product made over there, which would force Fender, Gibson, to ask themselves "What will it take to get market share in Europe."

Example: Lodestone, a British company, is making some very interesting instruments.

Do you suffer from a syndrome I have given up: having to have a Fender (or Gibson, or whatever) just so you feel you look "cool"? I have four great guitars, NONE of them from Fender or Gibson and all of them giving me far more "bang for the buck" than a Fender or Gibson instrument.

Grow up. Feeling you HAVE to have a Fender is like the kids who feel their life isn't complete unless they're wearing REAL Nike shoes, forgetting entirely what the ultimate function of a shoe is.