It makes no sense to me why Fender would advertise a higher price than the street price on their website. Somebody might go to the Fender website, wanting a Standard Tele or Strat and see the $700 price tag. They only have $500, so they end up with a Vintage Modified. The MSRP is a silly outdated idea that should be done away with.

Tell that to Detroit. When was the last time you bought a car at MSRP?

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Bill

What you (OP) are saying makes sense, but Fender is simply stating the value of the product more than the price. Yes, you can get it cheaper, and that is due to competition. Things are such now that if one store sells a Fender guitar for a discounted price, they all jump in and do the same price. That's because if they try to sell for the higher price, they won't get it, and they will soon be out of business.

The MSRP is a 'suggested' price, not a 'street' price.

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Bobby
Coming again soon to a club near you
... or at least one near me. Hopefully.

Almost everything you can purchase new has a MSRP. Cars, cereal, clothes.. the whole lot.

They do this so that whomever thinks they are getting a "great deal" from any given store even though the majority of the larger chains have all teamed up to stick with the more recent, "M.A.P." B.S. This is pretty much the same thing on a lower level.

On a related note regarding a silly outdated idea that should be done away with, so should this whole (for example) $999.99 nonsense be. Is there anyone left who doesn't round this up to the next even hundred in their head?

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You dig?

An Manufacturers Suggested Retail Price is just that, a suggestion made by the manufacturer. The value of using an MSRP depends on a given manufacturers go to market philosophy.

My company makes wireless systems. We sell through distribution (just like Fender does). By law price fixing is not allowed and therefore neither Fender of my company can tell a distributor what to sell their products at. Once a distributor buys from a manufacturer the manufacturer has lost all control over final price.

So how is an MSRP figured. It is pretty simple. I take my rock bottom price that I have to make on an item and from their mark it up by my maximum discount level for volume purchases. I sell to small volume distributors at 30% off the list price. That distributor can sell it at full MSRP, over the MSRP or at some other point even less than what they paid for it if they want.

MSRP is not to try and dupe someone into thinking they got a deal on anything. In fact we do not publish MSRP but will quote an end user that price if asked for a direct quote. That way I know that we are not competing with the price of a distributor or reseller.

It is not an outdated concept either. I have to, as a manufacturer, have some starting point to discount the products into distribution. MSRP provides that point. If I decide to change our go to market strategy and sell directly to end users, more like retail, then I would use a related price point to start at called List Price.

GC and the other big box guys are nothing more than Value Added Resellers. They add value by providing an overall shopping experience. By that I mean you can buy strings, drums, pianos, mics, t-shirts, tabs, etc,. all in one place. There is a value to that, whether it is appreciated or not. I would be willing to bet that if I went into GC and wanted to buy more than one guitar, I would be able to work out a deal not only way better than the Fender MSRP but better than the sticker at GC too.

It's just the way it works. Not perfect but the only system that works for all concerned.

I never look at the price on Fender.

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http://www.facebook.com/UCtheband
2012 American Standard Strat Charcoal Froast
2009 Standard Strat Sunburst Brown
Blues Junior Tweed NOS
2007 Line6 Spider Jam

IN A NUT SHELL


that is done to protect the consumer
its put there to let the consumer be aware of what is the maximum price they shoud pay for that particular item.
if they did not do that, retailers would bend consumers

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Dave
T&T

I find MSRPs are a good way to compare products from the same manufacturer. Like if you want to know whether A is worth more than B you can check MSRPs.

In the car business it got kind of insanely complicated but for musical equipment I think it makes more sense.

At one point GM thought their unrealistically high MSRPs were actually driving away some customers. People would see the price of a nice car and think they couldn't afford it while the dealers were actually ready to do anything to get the car off the lot.

Gleaning from similar discussions on pricing elsewhere in these forums it has become clear that Fender also exerts pressure on vendors with respect to the street price. My experience years ago with a musical merchandise distributor I knew personally was that they sold to dealers at 50% MSRP and dealers usually sold at 70-80% MSRP. That was better than 50 years ago. Don't know how that game is played now between the manufacturer and the vendor. Street vs MSRP is a simple question of maths. Not every vendor can get Fender guitars. FMIC has a volume requirement.

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"Another day in paradise!"

So how do the Mom and Pop stores do it? There are still smaller stores that deal as Authorized FMIC dealers, although I'm sure they pay more that 50% and have to sell for the same street price to stay in business. (they offer better service for the most part.) But they certainly don't do the big volume.

Art

I expect that they are able to meet whatever minimum quota Fender expects them to purchase. Some of these independent vendors, so-called 'mom and pops' are hardly your local corner candy store. I know of one, a Showcase dealer in fact, who is obliged to give a slight edge in terms of product displayed, to one of Fender's major competitors, if they want to carry their line and, believe me...they want to. It's tough row to hoe out there.

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"Another day in paradise!"

It has always been the case, for as long as I have been buying electric guitars (44 years). The actual street price of a new guitar is roughly 65% or so of the manufacturer's list price. It is not unique to Fender.

As pointd out...marketing strategy. One always feels better when you paid $650 for and item with a MSRP of $900!!!!

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Xhefri's Guitars
www.xhefriguitars.com

It is by design, not by chance. Fender and Gibson pretty much mandate what that street price is going to be unless some other price point is set for a specific marketing purpose.

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"Another day in paradise!"