COVID sticker shock and the end of Fender "starter" guitars

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COVID sticker shock and the end of Fender "starter" guitars

Post by bessieboporbach » Wed Feb 10, 2021 8:49 am

Please forgive me if this isn't the place to talk about this, or if this topic has already been ad nauseamed in other threads. But here in Canada I know that I and my friends (all of us in our thirties and forties) have been struck by Fender sticker shock lately, especially on the lower end, during the era of COVID-19.

To be clear, I am not necessarily criticizing Fender for this, I gather that they're seeing what the market can bear, and obviously I understand the circumstances. I just think we're witnessing a transition in what the Fender brand name means, at least for electric guitars. And the transition has happened really quickly.

In 2019 the cheapest Fender electric guitar in the catalogue, as I recall, was the Offset Series Duo-Sonic, which went for $649 here, in both SS and HS configurations. Last year this line was "refreshed" as part of the Player series, and these guitars seem to me to be identical to the previous ones, except the SS ones are now $849 and the HS ones are $899. That's an almost 40% price hike for the HS model. ($900 Canadian = about $700 US)

The Player Jaguar has crossed the $1000 mark for the first time -- currently the Canadian list price is $1049, as is the price for the Player Strat HSS (the standard SSS version still hovering below the psychological barrier at $999.) In 2015, a Standard Strat cost $500 US. In 2021, a Player Strat (virtually the same guitar) costs $750 -- a 50% increase.

Meanwhile, back in Canada, the Squier JMJM is now $659, and the Classic Vibe Jag is $629. This is startling to me, because literally the last time I went into my office you could get a new guitar that said Fender on the front of the headstock for that price.

The product descriptions for the Player series still describe them as "starter guitars." But it really seems like we're witnessing a transition to where Fender has ceded the entire starter guitar market -- and indeed, a fair chunk of their intermediate market -- to their import line, kind of like Gibson has done. It's been generally recognized for a long time that Gibson guitars are for "blues lawyers" and professionals -- everyone else who wants one of those plays an Epiphone. I never expected this to be the case with Fender, at least for MIM stuff, but it seems to be where we're heading. The price increases have considerably outpaced inflation. When I was in high school in the late '90s and early 2000s, I had several friends who owned Fenders (although I myself didn't get my first Fender until last year). I can't imagine this is the case anymore in schools like mine.

It may be a slight overstatement to say that Fender no longer makes affordable instruments, but everybody I know still considers $1,000 (Canadian) a lot of money for a hobby -- and right now, Fender is on the cusp of no longer making anything below that line.

It used to be that Fender's modern business model was to get repeat customers to climb the ladder from Squier to MIM to MIA. But now MIM guitars like the H.E.R. Strat and certain Charvel models are $1600 here. In other words, for a lot of people I know, MIM guitars are now in the "aspirational" price range.

So I guess what I'm saying is, we're at the end of an era that began in 1955 with the introduction of the Musicmaster. They haven't changed their sales literature to reflect what's happened, but I'll say it anyway: in 2021, Fender no longer makes starter guitars. And it's quite possible that they never will again.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by shoule79 » Wed Feb 10, 2021 9:48 am

Check out the prices of the MIA Fender stuff. The first time I tried the American Professional series I almost fell off my chair when I saw they were going for around 2K, where the previous AM Standards were $15-1600.

Shop used and try to trade up is all I can say.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by Telliot » Wed Feb 10, 2021 9:56 am

shoule79 wrote:
Wed Feb 10, 2021 9:48 am
Shop used and try to trade up is all I can say.
A thousand times, this.
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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by seenoevil II » Wed Feb 10, 2021 9:57 am

Now, my perspective on this is an American, and as I'm going to be talking about both inflation and currency conversions, I'm not going to go to the trouble of putting these figures in CAD.

When I was in high school, Mexican Fenders were seen as the province of the "kid rich." They were $350 a piece and you felt like a dork with your Squier. You either spent that birthday money, or that summer job dough, or both to get a "real" fender. While they were certainly a sight better than most Squiers in that day, they were kind of "meh" compared to American Fenders.

For their part, American Fenders cost about as much back then as the Mexican line does now. A highway one was about $800 and the standard series was about $1000-1200. Now, this was back in 2005-ish, so a lot of this change can be explained by inflation. But not all of it. Also, at least in the states, wages have not kept up with inflation. Especially low wage jobs that most young people and aspiring musicians have. The federal minimum wage has been $7.25 and hour for 12 years and counting now!

There are two elements I want to talk about. One is a general improvement in quality through those years. At some point around 2010, Fender stepped up their game on the Mexican standard series. True one-piece maple necks, better pickups, and just general better attention to detail (this is what I observed anyway). So, the slightly higher prices at that time seemed justified to me (I think they jumped from $450 to $500 at that point). But, I see no real difference between those MIM guitars and the current player series. They messed with the specs a bit, but none of the changes seem to be more expensive to implement. At the same time, Squier's quality really improved a lot. It was about at this time that Fender also started making both Fenders and Squiers in China as well.

I think it's a bit greedy. You referenced Gibson, and while I really really don't want to discuss Gibson's pricing scheme, at least they manufacture all their stuff in the US. Fender are making a huge savings by manufacturing in Mexico and China, but aren't passing enough of those savings on to the consumer anymore. The worst example of this was the MIC Starcaster. It was basically a Chinese-made Epiphone dot (a guitar that cost $400 at the time) but worse. But they charged $800 because Fender is on the headstock. They now make an essentially identical guitar in Indonesia that costs half as much as it's a Squier.

I think they're deliberately moving themselves up the price ladder without too much consideration to costs. When the VM offsets launched in 2012, they were $300. Then, when they sold like hot cakes to ermm... us, they pretty quickly jacked them up to $400, and I believe they are $450 now. I personally do not believe they are worth nearly that much. They're an assemblage of the cheapest possible versions of various parts, bolted on to really questionable wood. Really green, wet, poorly selected wood. $300 was about the most I would ever pay for one new without feeling ripped off. With all the "high end" MIM options, I think they're blurring the line between MIM and MIA in both terms of quality, and the psychological perception of pro grade gear. I think this is likely deliberate and points to a future merger. Soon, I think Fender will move to making guitars internationally like cars are made. Soon, they won't have lines delineated by country of origin.

I think they know they've got the market by the tail. The realm of the electric guitar is ever shrinking, but where it still has relevance amongst young people, Fender is the only salient choice. I have to give them Kudos for some of their recent marketing. Though it's pretty cringe, they seem to be the only major guitar brand marketing to women and POC. The fender aesthetic works in the 2020's. They both look and sound "clean." Gibson's visual and sonic aesthetics?... not so well. I would say Fender's time horizon is a bit more distant than Gibson's at this point. Taken more broadly (and at the extreme danger of putting this thread into a tangent), Fender is courting and courted by the rainbow coalition of Democrats, and Gibson is living off the buying power of the core Republican demographic- unless you're a punk or a jazz weirdo, but punks don't buy new Gibsons, and jazz weirdos can only sell enough blood for one archtop in their lifetime.
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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by bessieboporbach » Wed Feb 10, 2021 10:11 am

seenoevil II wrote:
Wed Feb 10, 2021 9:57 am
Now, my perspective on this is an American, and as I'm going to be talking about both inflation and currency conversions, I'm not going to go to the trouble of putting these figures in CAD.

When I was in high school, Mexican Fenders were seen as the province of the "kid rich." They were $350 a piece and you felt like a dork with your Squier. You either spent that birthday money, or that summer job dough, or both to get a "real" fender. While they were certainly a sight better than most Squiers in that day, they were kind of "meh" compared to American Fenders.

For their part, American Fenders cost about as much back then as the Mexican line does now. A highway one was about $800 and the standard series was about $1000-1200. Now, this was back in 2005-ish, so a lot of this change can be explained by inflation. But not all of it. Also, at least in the states, wages have not kept up with inflation. Especially low wage jobs that most young people and aspiring musicians have. The federal minimum wage has been $7.25 and hour for 12 years and counting now!

There are two elements I want to talk about. One is a general improvement in quality through those years. At some point around 2010, Fender stepped up their game on the Mexican standard series. True one-piece maple necks, better pickups, and just general better attention to detail (this is what I observed anyway). So, the slightly higher prices at that time seemed justified to me (I think they jumped from $450 to $500 at that point). But, I see no real difference between those MIM guitars and the current player series. They messed with the specs a bit, but none of the changes seem to be more expensive to implement. At the same time, Squier's quality really improved a lot. It was about at this time that Fender also started making both Fenders and Squiers in China as well.

I think it's a bit greedy. You referenced Gibson, and while I really really don't want to discuss Gibson's pricing scheme, at least they manufacture all their stuff in the US. Fender are making a huge savings by manufacturing in Mexico and China, but aren't passing enough of those savings on to the consumer anymore. The worst example of this was the MIC Starcaster. It was basically a Chinese-made Epiphone dot (a guitar that cost $400 at the time) but worse. But they charged $800 because Fender is on the headstock. They now make an essentially identical guitar in Indonesia that costs half as much as it's a Squier.

I think they're deliberately moving themselves up the price ladder without too much consideration to costs. When the VM offsets launched in 2012, they were $300. Then, when they sold like hot cakes to ermm... us, they pretty quickly jacked them up to $400, and I believe they are $450 now. I personally do not believe they are worth nearly that much. They're an assemblage of the cheapest possible versions of various parts, bolted on to really questionable wood. Really green, wet, poorly selected wood. $300 was about the most I would ever pay for one new without feeling ripped off. With all the "high end" MIM options, I think they're blurring the line between MIM and MIA in both terms of quality, and the psychological perception of pro grade gear. I think this is likely deliberate and points to a future merger. Soon, I think Fender will move to making guitars internationally like cars are made. Soon, they won't have lines delineated by country of origin.

I think they know they've got the market by the tail. The realm of the electric guitar is ever shrinking, but where it still has relevance amongst young people, Fender is the only salient choice. I have to give them Kudos for some of their recent marketing. Though it's pretty cringe, they seem to be the only major guitar brand marketing to women and POC. The fender aesthetic works in the 2020's. They both look and sound "clean." Gibson's visual and sonic aesthetics?... not so well. I would say Fender's time horizon is a bit more distant than Gibson's at this point. Taken more broadly (and at the extreme danger of putting this thread into a tangent), Fender is courting and courted by the rainbow coalition of Democrats, and Gibson is living off the buying power of the core Republican demographic- unless you're a punk or a jazz weirdo, but punks don't buy new Gibsons, and jazz weirdos can only sell enough blood for one archtop in their lifetime.
Can't really disagree with anything you say here. Your point about current Fender marketing is trenchant. I think they have actually been doing a very impressive job in that regard. Stuff like the H.E.R. Strat, the Haim stuff, Shawn Mendes, and some of the things they have been doing in Japan show a pretty savvy awareness of potential growth markets that few other guitar companies have attempted to compete with. I am a teacher and certainly my students find a lot more to relate to from Fender's marketing than they might from FMIC's competitors. I would say that the signature models from Charvel and Jackson also show a certain savvy about attracting younger players (albeit not so much women and POC) that the other companies aren't matching.

I also like your point about the "kid rich" price point which Fender seems to have abandoned entirely to their import line. I think we are of similar age and my best friend in high school had a MIM Standard Tele which I did not think was that much more impressive than the Squier that he also had (not sure which model). As I said in my OP, I don't think Fender makes a "kid rich" guitar anymore. When I was in high school, cell phones were still relatively rare, but I am quite confident that a very, very tiny contingent of current students at the high school I went to could afford both a decent phone and a Fender guitar in 2021.

As the "proud" owner of a Classic Vibe JM, I would agree that those guitars are absurdly overpriced.

Are any Fender electric guitars in the current catalogue made in China? I know the acoustics and ukuleles are. (I assume there are Chinese Jacksons and of course there are usually Chinese Squiers. I believe everything from Charvel is MIM or MIA except for a couple of MIJ models and two or three Korean-made ash models.)

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by tammyw » Wed Feb 10, 2021 11:55 am

When I was in high school, I didn't understand how a Squier strat could be $99 and some other strat could be worth hundreds more. Combined with a perception of some snobbery about this stuff I didn't understand, it completely turned me off from Fender guitars for a long time.

Also I can't believe they raised the prices on Jackson USA Selects by like $1000 this year, so they could slot in a new MIJ series in the $2000-3000 price range.
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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by Larry Mal » Wed Feb 10, 2021 11:55 am

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by bessieboporbach » Wed Feb 10, 2021 12:27 pm

Larry Mal wrote:
Wed Feb 10, 2021 11:55 am
Sorry your guitars aren't as cheap as you feel they should be, I guess.
That's not really the issue I'm raising in this thread. I say in the OP that I understand why prices are going up and that Fender are clearly charging what they think the market can bear.

On a personal level, I do find it a little weird that things that, at the start of the pandemic, were priced at a level that I would consider affordable hobby amusements are now no longer so. But that's just me.

The issue (for me, anyway) is charting out a change in Fender's business model, where they are becoming more like Gibson (where the parent brand is for pros and "blues lawyers" and everyone else gets imports) and less like how they used to be, or how their other competitors in the guitar-selling business (such as Schecter, Ibanez, Yamaha, etc.) still are, more explicitly setting out to serve everybody under the same brand.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by seenoevil II » Wed Feb 10, 2021 12:51 pm

bessieboporbach wrote:
Wed Feb 10, 2021 12:27 pm
Larry Mal wrote:
Wed Feb 10, 2021 11:55 am
Sorry your guitars aren't as cheap as you feel they should be, I guess.
That's not really the issue I'm raising in this thread. I say in the OP that I understand why prices are going up and that Fender are clearly charging what they think the market can bear.

On a personal level, I do find it a little weird that things that, at the start of the pandemic, were priced at a level that I would consider affordable hobby amusements are now no longer so. But that's just me.

The issue (for me, anyway) is charting out a change in Fender's business model, where they are becoming more like Gibson (where the parent brand is for pros and "blues lawyers" and everyone else gets imports) and less like how they used to be, or how their other competitors in the guitar-selling business (such as Schecter, Ibanez, Yamaha, etc.) still are, more explicitly setting out to serve everybody under the same brand.
Just a point of clarification. I'd say Gibson courts and is courted by the key demographic of the GOP, not its members per se (although, I'd imagine that's a rather round Venn diagram).

And I think that's key here. Fender is owning the youth segment for a host of reasons. Some have to do with the ever fickle flow of taste over time. Fenders are great for Aesthetics . The youths are more nostalgic for Sonic Youth than they are Pearl Jam.

But what the pandemic guitar buying spree has been fueled by is not young people starting out, it's been adults with disposable income adding to already swollen collections. I mean, just look at "Post Your Guitar Family." And this matters because, that's the market segment that Gibson has been focusing on for decades. That's also a market segment that is much less sensitive to increased prices. This could also partially explain Fender's better performance with younger people, as broadly speaking, Millennials haven't had and will likely never have Gibson money just laying around. SY and Nirvana and the punks of various stripe played old Fenders for the thrift of it, and that may be a virtue that's evergreen in a society that produces successive generations of poor people.

We'll see if this works out for Fender in the long term. Financially, it will be a boon for as long as Xers and well off Millennials are willing to grow their collections. But if they're not careful, they could alienate the very young people that they're marketing to by playing the premium brand game. Trouble is, that in 2021, if you alienate youths from a guitar brand, they won't play a cheaper brand, they'll more likely just not play guitar. Why bother when you can have an OK PC and a torrented copy of Ableton?

You reference FMIC's competitors, but if both they and Gibson go to prestige pricing, then I wouldn't count on those other makes keeping their prices low. It's like when Apple takes away a port or stops including chargers. We praise Samsung for not doing that, but in a few months they announce that they are doing the same thing.

Guitar pricing and inflation is an oft discussed and fairly contentious topic on this forum. It crops up everywhere.
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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by bessieboporbach » Wed Feb 10, 2021 1:20 pm

seenoevil II wrote:
Wed Feb 10, 2021 12:51 pm
You reference FMIC's competitors, but if both they and Gibson go to prestige pricing, then I wouldn't count on those other makes keeping their prices low. It's like when Apple takes away a port or stops including chargers. We praise Samsung for not doing that, but in a few months they announce that they are doing the same thing.
True that, I had to exclude ESP from my list of competitors for exactly that reason: they actually just introduced an "in-between" brand a few years ago (E-II) because their ESP-on-the-headstock guitars were so astronomically expensive, and their "budget" line (LTD) so successful. And now, as we get into the meat of the 2020s, there are LTDs that cost as much as a MIA Fender.
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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by beninma » Wed Feb 10, 2021 1:20 pm

I'd echo what others have said.

FMIC is a giant corporation. It doesn't care about you. We're just numbers. They're run by a guy who came over from Disney Consumer products whose career passion is making as much money as possible. They don't care about providing you with an affordable guitar, they care about figuring out how to make the cheapest guitar they can that you will pay the most money for.

For some reason because we bond with musical instruments and we come into contact with small companies, techs, luthiers, etc.. who do really care about players we brainwash ourselves to think FMIC cares. Just like we brainwash ourselves to think FMIC's quality is particularly great and the price increases are justified.

Leo Fender died a long time ago, he sold the company before almost all of us on this site were born. That was Fender.

If you want to feel like you're buying a guitar from a company that actually cares about you and thinks of you as more than a number look at smaller/newer companies. Go with a company that's still run by it's founder and that founder is not a business guy but is still someone who can build a guitar.

The guitars are still cool despite being nothing but carbon copies of what Fender was making before most of us were born, buy one if you want one, but don't buy into the marketing romance. FMIC is just like Gibson. It's not the company that it pretends to be by draping itself in the history of the company/companies it once was.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by Larry Mal » Wed Feb 10, 2021 2:21 pm

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by beninma » Wed Feb 10, 2021 6:10 pm

Fender Play is indeed genius and you need to give them a ton of credit for that.

It was expensive to build and it's gotta be expensive to run, they're doing a good job and the content is nice and straight up unlike most.. it's not trying to sell you something even more expensive.

My only real complaint (I've had an account off and on, it's so darn cheap even before the pandemic) is that it'd be cool if they had more advanced material.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by fuzzjunkie » Wed Feb 10, 2021 6:12 pm

I have only bought one Fender new, a Jaguar bass 13 years ago. The rest were all bought used and they are all considered vintage now except for the JMJM.

Prices for guitars seem to be up all around though. Used guitars on Reverb seem to have gone up 30-35% in the past year.

Smaller luthier builders have gone up quite a bit too. I really wanted a Saul Koll guitar a few years ago. His Duo-Glides were in the $3000-3500 range, but his Juniors were going for just under $1800. I decided not to buy the Junior I could afford and wait for a Duo. Now the Juniors are nearly $3k and a Duo starts at $4500 and most are over $5k.

Fender is keeping up with inflation. A $300 Strat in 1955 is
equivalent to over $2900 today. Wages haven’t.

Wood has gone up. Pickups have gone up. Marketing has gone up. The only thing that hasn’t is wages. Minimum wage should be at least $12/hr and probably $15 at this point. I was making $7.25 back in 1988. I was getting by okay on that then. You absolutely can’t live on that now.

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Re: COVID sticker shock and the end of Fender "starter" guitars

Post by Embenny » Wed Feb 10, 2021 6:33 pm

I'm also shocked by the rate of increase. It's absolutely not just inflation. Mexican Fenders were $500 here in Canada about 10 years ago and they're $1000 now. Inflation has been 19.7% and the exchange rate is similar relative to the USD. There's another 80% price hike that came from elsewhere, and it wasn't wage increases at their factories (which is just about the only reason I'd be happy to see a price hike).

I've always enjoyed parts guitars but the value relative to new Fenders has never been better. I can get a USA made neck, body, pickups, and hardware, and even pay for Canadian or American labour assembling it, and come out ahead of a similarly-specced American Fenders with their giant factory and economies of scale.

Fender has done a great job making sure I'll never buy another one of their instruments new. I've paid less for my 60's Offsets than their higher end non-Custom Shop guitars cost now, and less for my parts guitars, too.

It's especially bad value for money when you take this into context:

Image

The number of hours an average person has to work to buy a new Fender in 2021 is just staggering compared to 10-20 years ago. It's not all Fender's fault, but they sure as hell aren't suddenly paying their Mexican factory workers 80% higher wages compared to 10 years ago, despite charging 80% higher prices. I know their material costs haven't gone up by a full 80%, either, and materials are probably a smaller component than labour (human or robot) in building a guitar anyway.
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