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When did MSR and street prices align???

Discussion in 'Bad Dog Cafe' started by E5RSY, Aug 15, 2016.

  1. soulman969

    soulman969 Telefied Ad Free Member

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    Well of course you don't but I do and I think others would as well and you just repeated it here. Here's the post I quoted you on.

    Even before all this you posted about overpriced gear. Then you post that everyone wants $1200 and more for used 52RI which implies to me you feel at $1200 and more they're being overpriced because they aren't even a PV. How does that not imply you wouldn't be a buyer at that price? If that's not what you meant then I'm not sure how else to interpret that. It's like saying the grocer wants $10 per lb for round steak and it's not even a real steak.

    Then in both the first post and in this one you say again that you're only a buyer at those lower prices, somewhere between $650-$800, but if you're a seller YOU'D ask $1000 plus too because people will pay that, but not you. How can you complain about a 52RI being overpriced at $1200 when you claim that if YOU were a seller and not a buyer you'd be asking the same price?

    So how is that not inconsistent with what I pointed to you?
     
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  2. Chick-N-Picker

    Chick-N-Picker Friend of Leo's

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    We'll let me see I can explain through text, which is sometimes difficult.

    If YOU or ME sold a used 2003 one for $1200 then it would be IMO a little over priced in my option because well it's used and you can get PV used ones for ca. $1400.

    Just because I feel that they're overpriced doesn't mean I would never be a buyer because I might be waiting a long time to find another one for $700. I would have no choice. The fact is people sale them for $1200 because people pay $1200, even me included, if I wanted one.

    So I can't see how your making a connection of me being "hypocritical" by saying I'd buy one for $700 then sale it for more if people pay more.

    $700 is a deal with the way current prices are. However as I said before I think $700 should be a standard price for a used "older" 52RI.

    It's like used 80'-90's toyota 4x4 pickups. People ask crazy prices for them. But every once in a while I'll see one for like $1700. If I bought and drove it for a few years and decided to sale it and someone was willing to give me $2500. Why would I be wrong?

    What would I say I believe these Toyotas are overpriced so I'm going to sale it for much less than I could. That would make no sense.

    I really hope that explained it.

    Edit: I never said I was only a buyer at lower prices. I'd said at a deal like that I would snatch them up if possible. If some one was selling 3 vintage 52's for $5000. If someone had the money who wouldn't get them?
     
  3. soulman969

    soulman969 Telefied Ad Free Member

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    I never implied you were being hypocritical but possibly inconsistent based on how you posted. What you may actually have been thinking I can't say because unlike my ex I never claimed to be able to read minds. ;) LOLOL

    I think I understand your thinking a little better now it's just how I linked what you posted in three different posts into what one might call a policy of sorts. I think you've cleared it up pretty well now.

    At the risk of getting nailed by a few maybe my response was based on those who seem to think that a $500 guitar is only worth $350 if they're buying it but the same guitar is worth $550 if they're selling it. During the course of my selling experiences I have had that happen frequently and as recently as within the last month or so.

    So I do tend to question it when there's an obvious profit motive involved because even verbal low balling then becomes a totally self-serving issue that in some forms of commerce could easily be considered a conflict of interest if that same person is also a potential buyer but is thought to be giving an arms length unbiased opinion.
     
    Last edited: Aug 16, 2016
  4. Jakedog

    Jakedog Telefied Ad Free Member

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    Music retail is QUITE a bit different. When I (very briefly) sold home decor I was appalled. We sold a lot of stuff from Asia. Some of these gigantic porcelain planters/pots etc were very popular at the time. When I saw the invoice one day I about fell over.

    The biggest ones sold for $299. And cost the store a whopping $3. This was back in the very early 90's.

    At the end of the season they had a 90% off sale and still made bank. Crazy.


    When I worked in music retail, and sold stuff "below cost", we actually did. The lowest cost items we had of any kind were 50% of MSRP. At that time, if we had clearance items we really needed to get rid of, and they weren't moving even discounted to cost, we'd drop them below cost. In order to avoid taking a loss on them, we'd use a process called "devaluation".

    Devaluation involved taking money out of one piece of inventory and distributing it to other bits of inventory.

    Say I have a tele that I really need to move. It's been in the shop for a year. It is marked down to dealer cost at $600. It's still not selling. I have 100 other guitars in inventory. I can take $200 off the cost of that guitar, and add $2 each to the cost of the other 100 in stock.

    I can now sell a guitar I bought for $600 for $400. And I can do it without losing a penny. And, the rest of my inventory still stays profitable.
     
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  5. soulman969

    soulman969 Telefied Ad Free Member

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    Yep, that works especially when you don't want to show a loss on one particular item on the books. It's a simple adjustment if the company favors that approach to accounting. The cost of inventory doesn't change just how it's distributed.
     
  6. soulman969

    soulman969 Telefied Ad Free Member

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    I'm in favor of the idea that Fender did away with MSRP once they decided to sell direct. In reality MSRP has come to mean very little with most product lines being listed online and in catalogs at street price anyway and most dealers would discount from there.

    If an item was listed with a street price 30% below MSRP and someone bought at a 15% off sale I can't recall anyone boasting they got a 45% discount when the only real savings was the 15% sales discount. Theoretically a manufacturer could assign any MSRP to an item they wanted as long as the dealer pricing allowed them to sell off a greatly reduced street price and also offer additional discounts if they chose to.
     
  7. Wally

    Wally Telefied Ad Free Member

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    What it all comes down to is that Carvin has had the 'modern business model' for the music industry in place since 1948....factory direct sales.
     
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  8. soulman969

    soulman969 Telefied Ad Free Member

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    I for one really agree with that idea and used a similar pricing model in another business I managed long before I'd ever heard of Carvin. I never quoted MSRP and then haggled with a buyer over his final price. I worked out my dealer margins and overhead costs with our comptroller and used that to develop a selling price on each piece of equipment we sold.

    Everyone got the same deal without favoritism for one buyer over another and it helped us turn a $200k a year division into a $2 mil per year division with a fair and sustainable profit margin. I still favor that approach but it seems that few use it these days so we've all come to expect discounting in order to even things up.
     
  9. radiocaster

    radiocaster Poster Extraordinaire

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    There used to be more variety in prices before the internet, but also some manufacturers had the suggested price set pretty low, so most dealers used that, while for other manufacturers it would usually sell for 60% of the suggested price. Also depended on regional (or national in some countries) trends.
     
  10. Wally

    Wally Telefied Ad Free Member

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    Retail in most situations used to have a list price....maybe that is what is considered MSRP..".which was a 100% mark up from dealer cost? Selling at 60% of that figure will NOT sustain a retailer....at least it will not sustain a local dealer when battling the GC's and Internet "retailers" in the market. I don't think it sustains any local outlet. http://schematicheaven.net/fenderamps/champ_5c1_schem.pdfIt bout the bailout a year and a half ago of GC by their largest creditor, who bought up the rest of GC's debt, there would be no GC today. GC then slashed their commission program as I understand it in order to maintain some sort of cash flow.
    Get used to buying without seeing and making profits for the shipping companies. Amazon will be dropping your musical tools from overhead??? LOL?.....heavy lifting drones are coming. Eeeeehaw....
     
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