Friday, July 8, 2011

The Value of Wood

If a normal person takes a step back and looks at the electric guitar industry, they must think "what a bunch of loons!"  And, in fact, they would be right.

At the highest end there's the collector's segment.  These are typically guitars played by rock icons such as Eric Clapton or Jimi Hendrix.  They can also be "vintage" (1950s/60s), very rare models.  These are uber-expensive guitars that only the rich can afford and aren't for playing, but being displayed in a museum.  For example, Clapton's "Blackie" sold for almost 1 million dollars (that's m as in million)!

Then there's the "prosumer" tier - typically custom shop guitars ranging from $3000 up to $10,000 give or take.  These guitars are custom creations from well-respected luthiers, either independent or working for major manufacturers such as Fender and Gibson.  They are meant for playing, although many guitarist buy them and leave them locked up for fear of scratching their new, relatively expensive instrument.

Continuing down the ladder, we have the high-end "consumer" guitars.  These are typically American made and weigh-in at $1000 to $2000 give or take.  I believe these are typically the most sought after guitars.  It's funny really, as guitarists are musicians and as such, shouldn't they be trying to be creative, unique and push musical boundaries?  Yet, as a group, guitarists are about the most stubborn traditionalists I have ever seen.  Bodies and headstocks must be a certain shape and have a specific name.  If its not American-made it must be crap.  Etc, etc.  This sentiment really helps drive the sale of guitars in this segment.

Then we get to an interesting market segment, guitars in the $400 to $800 range.  Mostly imports but of good to very good quality.  From what I understand, more guitars are sold in this price range than any other.  This make sense as Fender, Gibson and many other manufacturers sell guitars in the price range made in Mexico, Canada, Indonesia,  Korea and China.  Many guitarist buy this guitar as an upgrade from their beginner model (although they really want the American model but can't afford it).

Finally, there's the entry-level, cheap beginner guitars.  These sell for $200 or less.  They are always imported (if there are any $200 American made guitars please tell me!), usually from China.  They are typically cheap pieces of junk, or are they?  Find out in a future post (hint).

Does the value match the product?  In my opinion, NO.  Guitars have the same basic components - wood bodies, wood necks, pickups, hardware (bridge/tremolo, tuners), etc.  The quality of these components vary widely.  The fit and finish of the final products also vary widely.

Here's my point - the difference in value between a $200 guitar and a $3000 guitar is not $2800.  The value of a $200 guitar can be doubled by spending some time setting it up and making it (more) playable.  Much of the difference in value can be described as perception versus reality.  As evidence, note that Gibson tried lowering the prices of their higher end guitars and found they sold fewer units which they attributed to customers' change in perception of those models(!).

American Alder is American Alder, rolled steel saddles are the same regardless if it's done by a guy in the US or some dude in China especially with today's CNC machines.  Setups can vary regardless of where the guitar is made.

Are you a headstock snob?  This will be a topic I'll revisit in future posts so stay tuned.