2016 Price Increases

[Misdee]

In the long term, I fear for specialist high-end guitar and bass shops. People will pay a bit more for a while,but ultimately higher prices will lead to a tail-off in sales that would be disasterous for smaller independent retailers. There is a certain point at which consumers start to look elsewhere to spend their money.

Folks will pay 21/2 to 4k for a high end " boutique" bass, they won't pay 5k upwards, except for the most prestigious brands, such as Fodera and Wal.

Look at the drop in sales of German- made Warwick basses over the last few years. Their incredibly high ( some would say exhorbitant, or even just plain mental) prices have led to their disappearance from the UK retail scene. When was the last time anyone on Basschat ordered a new German-made Warwick?

[molan]

[quote name='TrevorR' timestamp='1470217157' post='3104107']


But no surprise that corps react that way... Costs rise 10%, prices rise 30%... = more profit. Twas ever thus!
[/quote]

I'd love you to find me a musical instrument retailer who's increased his profit since the Brexit vote. Simply because I'd like to shake his hand.

All I'm hearing on the circuit is that sales have fallen away badly because of the lack of 'consumer confidence'.

Most people reporting that July was the worst single month for years

[molan]

[quote name='project_c' timestamp='1470327398' post='3105188']


Doesn't look like second hand prices have increased at all here on bc or eBay tbh. if anything they're dropping.
[/quote]

Used Fenders definitely increasing in value. Especially anything remotely vintage - 60's have risen a lot, 70's definitely up for nice examples and early 80's higher too.

[molan]

[quote name='tauzero' timestamp='1470298298' post='3104800']


Ah, we're getting somewhere then. I'll try and make myself clearer - Brexit and all the uncertainty about it caused a fall in the pound's value. This fall is insufficient (by a factor of two or three) to account for the entirety of a 30% price hike. Therefore, although Brexit is partly the problem, it's also being used as an excuse to profiteer.
[/quote]

There's more than just the simple exchange rate at play post the Brexit vote. One simple example is that Warwick withdrew all credit from UK suppliers.

Where a UK retailer used to get 30 days post delivery to pay for a new instrument they now have to pay in full in advance before Warwick will even ship to the UK.

That can make quite a dent in cash flow and, effectively, increase the unit sale prices simply for the retailer to maintain the same margin

The other alternative is to delist some brands completely. It'll certainly be a lot tougher to find a German Warwick in the UK now following this decision.

[mrtcat]

I was hankering for a Maruszchyk but the current exchange rate has buggered that one. I still believe it's worth the current price but it just kills me that effectively it's gone up by £100

[Woodinblack]

[quote name='Misdee' timestamp='1470308825' post='3104928']
I am brassed - off myself because I've been saving for a new MM Stingray and now can't even bring myself to find out what the post- Brexit prices are. My only hope is that Sterling Ball takes pity on America's closest ally and cuts us a special deal. I am not, however holding my breath!
[/quote]

Maybe if you move quickly before various shops have put the prices up it might be a good plan?

[project_c]

[quote name='molan' timestamp='1470330551' post='3105232']


Used Fenders definitely increasing in value. Especially anything remotely vintage - 60's have risen a lot, 70's definitely up for nice examples and early 80's higher too.
[/quote]

Are they the import ones from the USA on eBay? because that's just the drop in the pound when the price is converted. Although I guess they may have gone up in price regardless of that, whether they're selling is a different matter.. I'm certainly holding off on any major purchases until I know what's going on, and it sounds like many others are doing the same.

Still have my eye on that new Mustang PJ though, but that's under a grand which makes it a less risky buy because of the smaller increase in price.

[molan]

[quote name='project_c' timestamp='1470338920' post='3105337']


Are they the import ones from the USA on eBay? because that's just the drop in the pound when the price is converted. Although I guess they may have gone up in price regardless of that, whether they're selling is a different matter.. I'm certainly holding off on any major purchases until I know what's going on, and it sounds like many others are doing the same.

Still have my eye on that new Mustang PJ though, but that's under a grand which makes it a less risky buy because of the smaller increase in price.
[/quote]

Just general used prices of decent Fenders. Not that long ago you could pick up a decent used USA Jazz for £600 and a Precision for a bit less.

Very few falling to those sort of prices now and anything from the various reissue series holding value much better than they used to.

[4stringslow]

[quote name='Misdee' timestamp='1470308825' post='3104928']
The fact is that the pound will not be recovering to pre -Brexit levels any time in the foreseeable future, not least of all because many in the financial markets believe that sterling was grossly over-valued for most of the last 35 years.
[/quote]

35 years? Who are these 'many'?

Many members of this forum might believe that, say, Fenders have been over-valued for 35 years, but if the market for fenders has sustained those prices for 35 years then I'd say that would be a pretty good indication of what those fenders were actually worth.

That's not to say that circumstances couldn't change such that their value suddenly plummeted, but I'm not sure that's the same as being overvalued in the past.

[gs_triumph]

[quote name='project_c' timestamp='1470338920' post='3105337']
I'm certainly holding off on any major purchases until I know what's going on, and it sounds like many others are doing the same.
[/quote]

And that's exactly what's going to stagnate the used prices. Used prices won't increase along with the increased price of new instruments because people need to believe they have that kind of cash to blow.

[molan]

[quote name='gs_triumph' timestamp='1470344134' post='3105431']


And that's exactly what's going to stagnate the used prices. Used prices won't increase along with the increased price of new instruments because people need to believe they have that kind of cash to blow.
[/quote]

I'd say the exact reverse will happen. Potential buyers of new instruments will be put off by price increases and will gravitate towards lower priced used ones. This will increase demand, albeit marginally, and prices will rise correspondingly until they get closer to new values - at which point new ones become more 'desirable' again.

[Happy Jack]

Give it up Barrie. No one is interested in reading sensible, informed opinion.

They want to vent about it all being unfair and someone's fault, always someone's fault.

[size=4] [/size]

[lojo]

I thought the used market , for the non "classic" more standard modern gear is around 2/3rds of the new cost for items in good condition

That has seemed to fit for my sales and purchases

[hubrad]

[quote name='crez5150' timestamp='1470328165' post='3105199']
Not sure... We've just had to issue a 6% increase on USA and German products and thats now fixed for a year
[/quote]
That's brave; most of our suppliers are 'monitoring the situation'.
IMHO, that's the biggest problem for the next couple of years at least: there's so much opportunity for insecurity hence instability that many are just sitting on their hands.

[crez5150]

[quote name='hubrad' timestamp='1470390927' post='3105653']
That's brave; most of our suppliers are 'monitoring the situation'.
IMHO, that's the biggest problem for the next couple of years at least: there's so much opportunity for insecurity hence instability that many are just sitting on their hands.
[/quote]

Well to be fair we haven't increased prices over the past two years. Plus we are running a cash back promo on our most popular lines at the moment

[tauzero]

[quote name='crez5150' timestamp='1470392246' post='3105666']
Well to be fair we haven't increased prices over the past two years. Plus we are running a cash back promo on our most popular lines at the moment
[/quote]

Clever. The cash is worth less so it doesn't cost you as much.

[crez5150]

[quote name='tauzero' timestamp='1470394257' post='3105685']
Clever. The cash is worth less so it doesn't cost you as much.


[/quote]

Ha... you could look at it like that

[LayDownThaFunk]

Blame it on Brexit - just an excuse to get more money out of us.

Remember global warming and how all the ice was going to melt and we would be living underwater by now? Nothing has changed and we're still being charged/taxed for all this co2, carbon monoxide, environmental claptrap. Why?

Until China and other Asian countries take it seriously, whatever we do will make no difference.

But yeah, the pound will increase again over time. Fenders were always overpriced no matter what.

[TimR]

The thing about consumer confidence is that as Dad says, if it drops then the shops still have to cover rate and rent. If people buy fewer instruments. Then there has to be a premium added to those that are sold.

eg overheads of £1000 a week. Sell 10 basses at £1000 with 10% profit then you cover your overheads. Consumer confidence drops and you only sell 5 basses at £1000 you have to make 20% profit on them to clear your overheads.

So a combination of exchange rate and a depressed market is causing price rises.

The answer is forget about buying the £1000 bass for £1300 and find yourself a £700 bass that's now £1000, or save up. Better get used to the new prices, they'll be staying for a few years yet.

[hubrad]

[quote name='crez5150' timestamp='1470392246' post='3105666']
Well to be fair we haven't increased prices over the past two years. Plus we are running a cash back promo on our most popular lines at the moment
[/quote]
My first few years in the shop, exchange rates just gently slid in our favour which nicely absorbed any increases in material and factory costs. I knew the price of pretty much every item in the place, as prices stayed the same for about 7 years until the 2008 crash.

[taunton-hobbit]

Decimalisation was an excuse for an orgy of rounding up & price increases........

just sayin......

[4stringslow]

If you think the current situation is bad, wait until we have negative interest rates . . . .

http://www.bbc.co.uk/news/election-us-2016-36979230

[skankdelvar]

[quote name='4stringslow' timestamp='1470412273' post='3105871']
If you think the current situation is bad, wait until we have negative interest rates . . . .
[/quote]

Quite so. But if interest rates go [i]up[/i] then everyone with a mortgage will be hoyed into penury, loans for business will become more expensive, the economy will collapse and we'll all be murdered in our beds.

It's probably for the best if we don't have interest rates at all. [i](Sticks hands in pockets, awaits arrival of Dad3353 bearing proposals for 'villages')[/i]

[mentalextra]

[quote name='skankdelvar' timestamp='1470416342' post='3105898']
Quite so. But if interest rates go [i]up[/i] then everyone with a mortgage will be hoyed into penury, loans for business will become more expensive, the economy will collapse and we'll all be murdered in our beds.

It's probably for the best if we don't have interest rates at all. [i](Sticks hands in pockets, awaits arrival of Dad3353 bearing proposals for 'villages')[/i]
[/quote]

Nice 'French' villages?

[skankdelvar]

[quote name='mentalextra' timestamp='1470416550' post='3105901']
Nice 'French' villages?
[/quote]

Lovely French villages, preferably without any French people in them. To paraphrase Bishop Heber: '[i]France; where every prospect pleases and only man is vile[/i]'