#1
Since I began shopping for a Les Paul, I've found that there are a great many well made guitars, perhaps as good as Gibson in many circumstances, for much less money. This got me to thinking.....how much of the cost of a Gibson is the fact that manufacturing costs are far greater in the US than in South Korea or China? 10%? 20%? 50% or more? Secondly, how much more of the mark is due simply to the desirability of having that Gibson logo on the head stock? I'm thinking someone on this board might have some inside knowledge. Once you take out the cost of manufacturing and the brand name cost, what would the exact same guitar cost if made in China with a no name logo?
#2
You can basically see the difference when you compare say a Gibson LP Studio to an Epiphone LP Studio. Same guitar, one's made in the US, one's made in Mexico.
Gibson RD Silverburst w/ Lace Dissonant Aggressors (SOLD)
Electra Omega Prime Ceruse
Fender Franken-Jag Bass

Amps and the like:
Laney VH100R
Seismic Luke 2x12
Dunlop 105Q Wah
Gojira FX 808
Line 6 M9
#3
Here is an related example:

I own a MIJ lawsuit era 335 that I bought new in 1979. It retailed for 50% of the price of a Gibson 335 and in side-by-side comparisons over several weeks, I thought it played and sounded better than the Gibbys. I gigged and recorded with that guitar for 30 years and it still stands up today as a sweet player. I paid $400 for it new and a comparable Gibson 335 sold for $800.

Today my guitar is probably still worth around $400 but a Gibson from the same period might be worth $2500. Mine still plays better but it doesn't have Gibson on the headstock. Which was the better value long term?

Food for thought.
"Your sound is in your hands as much as anything. It's the way you pick, and the way you hold the guitar, more than it is the amp or the guitar you use." -- Stevie Ray Vaughan

"Anybody can play. The note is only 20 percent. The attitude of the motherfucker who plays it is 80 percent." -- Miles Davis

Guthrie on tone: https://www.youtube.com/watch?v=zmohdG9lLqY
#4
A rule of thumb I always used was- for manufactured goods- a premium brand name commands about a 33% markup. There are some that do worse, and some do MUCH better, but that's about average.

As for the rest of it? Well, there's quality of workmanship, quality controls, import costs of materials, tariffs, economies of scale...

So I'd guess that a guitar as good as Gibson CAN make, but made by a no-name manufacturer in China would be @50% the price.
Sturgeon's 2nd Law, a.k.a. Sturgeon's Revelation: “Ninety percent of everything is crap.”

Why, yes, I am a lawyer- thanks for asking!

Log off and play yer guitar!

Strap on, tune up, rock out!
#5
Quote by Cajundaddy
Here is an related example:

I own a MIJ lawsuit era 335 that I bought new in 1979. It retailed for 50% of the price of a Gibson 335 and in side-by-side comparisons over several weeks, I thought it played and sounded better than the Gibbys. I gigged and recorded with that guitar for 30 years and it still stands up today as a sweet player. I paid $400 for it new and a comparable Gibson 335 sold for $800.

Today my guitar is probably still worth around $400 but a Gibson from the same period might be worth $2500. Mine still plays better but it doesn't have Gibson on the headstock. Which was the better value long term?

Food for thought.


Reminded me of this that I saw on Premier Guitar today: http://www.premierguitar.com/articles/Ibanez_Lawsuit_Era_Les_Paul_Custom_Copy
Gibson RD Silverburst w/ Lace Dissonant Aggressors (SOLD)
Electra Omega Prime Ceruse
Fender Franken-Jag Bass

Amps and the like:
Laney VH100R
Seismic Luke 2x12
Dunlop 105Q Wah
Gojira FX 808
Line 6 M9
#6
Interesting article. Sounds like even though you can get a very high quality guitar for half or less than what the Gibson would cost, the Gibson will rise in value to a must greater extent than the copy. So, if you are worried about the investment as far as resale is concerned, Gibson is the right choice. If resale isn't something you care about, then you can probably get a much better value with a copy. Does this some it up?
#7
Pedigree has value. Would I trade my Lawsuit era 335 for a 79 Gibby? I doubt it because that guitar is now part of my history. I am a player and not a collector.
"Your sound is in your hands as much as anything. It's the way you pick, and the way you hold the guitar, more than it is the amp or the guitar you use." -- Stevie Ray Vaughan

"Anybody can play. The note is only 20 percent. The attitude of the motherfucker who plays it is 80 percent." -- Miles Davis

Guthrie on tone: https://www.youtube.com/watch?v=zmohdG9lLqY
#8
Quote by jman99
US Gibsons actually do have better craftsman and materials compared to say an Epiphone. That may not change the sound or play-ability that much but it does mean something. Look up the gibson factory tour. They put a lot of TLC into their guitars. Much more than a factory in Korea would. And yeah the brand has a little bit to do with it. Of course it does. Thats the way things work in the world. You can buy a name brand phone charger or you can buy a significantly cheaper Chinese knockoff, they both work but one is a name brand so it's going to be more expensive.


I guess I just assumed that other manufacturers had caught up in the quality dept. with all the complaints I read about with Gibson quality. If they took that much care, it seems like they wouldn't be a try before you purchase company, especially with the prices they are asking. I wouldn't put Epi into the comparison because they are a Gibson company and I wouldn't doubt that they purposely keep the quality as less than Gibson so they are not really competing.
#9
Quote by dannyalcatraz
A rule of thumb I always used was- for manufactured goods- a premium brand name commands about a 33% markup. There are some that do worse, and some do MUCH better, but that's about average.

As for the rest of it? Well, there's quality of workmanship, quality controls, import costs of materials, tariffs, economies of scale...

So I'd guess that a guitar as good as Gibson CAN make, but made by a no-name manufacturer in China would be @50% the price.


Nah. Gibson spends under $150 on wood and hardware for a Les Paul. Maybe a bit more for an R9, but honestly, not much more than that. Don't ask me how I know, but you can get the same information if you buy some folks drinks at the NAMM show. Take a look at the Rondo Music Agile AL2000, which sells for around $225, and which uses most of the same basic hardware and most of the same woods. You're looking at a guitar there that costs under $50 to produce. Most importers of offshore guitars figure that the actually selling price (not the MSRP, but what you end up paying at, say, a GC) is 6-10 times what they pay for the guitar at the dock. That's necessary to maintain the profit structure. So that's what Schecter or Line 6 or even Fender would pay for import guitars. Same goes for amps. No, seriously.

But in what the *importer* is paying is shipping, factory profit, factory labor/overhead, and (at the bottom of it all) material costs.

An Agile AL-3100M ("M" - maple cap) has a 2-piece mahogany body with a solid 3/4" maple cap, one-piece mahogany neck, Graphtech Tusq nut, Graphtech NVS2 bridge, very good four-wire AlnicoV pickups, Alpha pots, good wiring, Grover 102-18N tuners, ebony fretboard (not available on most Gibsons), real mother of pearl inlays (most Gibsons have plastic "pearloid"), jumbo hand-filed frets, multi-layer binding on the body, single-layer binding on fretboard and headstock, MOP inlay on the headstock.

Honestly, it's difficult to find a Gibson with specs even close to that, but a Custom comes close (but many don't have maple caps). The Agile is $399. A Gibson with the same specs is about 10X that price. If Agile can produce that guitar for that price, you can sorta guess what it costs in materials for the same guitar from Gibson. Both companies buy their wood from the same selection of vendors.

Gibson's labor costs are higher, but Gibson also views the Gibson name on the headstock as a "Premium LifeStyle" logo denoting a premium product.

Put another way: If your wife buys perfume from one of the companies that hire hot model spokespeople and that take out double page spreads in Vogue, you could be paying some seriously fancy money. But the actual perfume in the bottle costs pennies to produce. The costs are in the specially designed bottle, the packaging and (most of all) the advertising. What you pay has absolutely no relationship to the value of the perfume in the bottle.
Last edited by dspellman at Sep 16, 2014,
#10
Quote by jman99
Look up the gibson factory tour. They put a lot of TLC into their guitars. Much more than a factory in Korea would.


Technically that’s true, but only because a nitro finish requires so much labor. Otherwise Gibson isn’t putting any more time into their stuff than Asian makers. Especially not the Asian makers that finish fret ends properly, something Epiphone does much better than Gibson.
#11
Quote by jman99
Look up the gibson factory tour. They put a lot of TLC into their guitars. Much more than a factory in Korea would.


Not so much.

I've been in the Epiphone factory in Quingdao and to the Gibson factory (and to a couple of Samick-owned factories and to Taylor and Carvin locally). Looking at a video tour online isn't quite the same thing. Understand that most all guitar factories do the same things, and that most guitar factory workers are task-oriented and trained, making fairly low wages. Taylor probably has the most consistently high quality of any production guitar maker, but they've also developed processes that make that consistency possible.

Gibson workers aren't overly TLC-ing their guitars. There are reasons why Glassdoor reports it's often on the list of the 10 worst places to work in the US.
#13
Boy, I've got to tell you, the more I research, and the more information I gather, Agile is looking better and better from a classic Les Paul standpoint. Especially after reading dspellman's post. From what I can tell, there are three reasons to buy a Gibson over an Agile 3100M.
1. Nitrocellulose finish
2. Resale value/investment
3. The coolness of the logo

Am I missing something?
#14
Quote by columbiar
Boy, I've got to tell you, the more I research, and the more information I gather, Agile is looking better and better from a classic Les Paul standpoint. Especially after reading dspellman's post. From what I can tell, there are three reasons to buy a Gibson over an Agile 3100M.
1. Nitrocellulose finish
2. Resale value/investment
3. The coolness of the logo

Am I missing something?


Yup.

1. Dump nitrocellulose finish as a reason to buy a Gibson and substitute "a reason NOT to buy a Gibson." Nitro discolors, checks, cracks, flakes off, gets gummy, outgasses nitric acid and sulfuric acid (two of the components), can get gummy, reacts with certain materials and chemicals (producing dark stains and sometimes "melting"), etc. Nitrocellulose is the #1 source of customer complaints at Gibson. It is NOT a "thin" finish by any means and it does NOT enhance tone in any respect.

2. Dump resale value/investment as a reason to buy a Gibson and substitute "a reason NOT to buy a Gibson." Gibson's resale values are not all that great, but the future doesn't bode well. Gibson has, since 1986, been propped up by the money of a nostalgic Baby Boomer generation, whose life soundtrack has been dominated by screaming Les Pauls. That generation (and their money) are reaching the retirement age of 65 at a rate of 11-12,000 *per day*, and that money is now beginning to be redirected as the generation becomes less about making big bucks and more about living off what they've saved. Moreover, the music business has changed. The Billboard Top 10 is now dominated by chick singers with one name (Taylor, Rihanna, Adele, Bieber, Beyonce, etc.) and the occasional hip-hop artist, none of whom are featuring guitars. The vintage guitar market is really softening, and with more than 100 different models of the Les Paul (from Gibson) and thousands of similar guitars from other manufacturers, the value of a used LP is unlikely to show anything like "investment" grade growth.

3. The logo still has value only if you think it has. Newer guitar players don't have anything like the allegiance to it that older ones do.
#15
Quote by dspellman
Yup.

1. Dump nitrocellulose finish as a reason to buy a Gibson and substitute "a reason NOT to buy a Gibson." Nitro discolors, checks, cracks, flakes off, gets gummy, outgasses nitric acid and sulfuric acid (two of the components), can get gummy, reacts with certain materials and chemicals (producing dark stains and sometimes "melting"), etc. Nitrocellulose is the #1 source of customer complaints at Gibson. It is NOT a "thin" finish by any means and it does NOT enhance tone in any respect.

2. Dump resale value/investment as a reason to buy a Gibson and substitute "a reason NOT to buy a Gibson." Gibson's resale values are not all that great, but the future doesn't bode well. Gibson has, since 1986, been propped up by the money of a nostalgic Baby Boomer generation, whose life soundtrack has been dominated by screaming Les Pauls. That generation (and their money) are reaching the retirement age of 65 at a rate of 11-12,000 *per day*, and that money is now beginning to be redirected as the generation becomes less about making big bucks and more about living off what they've saved. Moreover, the music business has changed. The Billboard Top 10 is now dominated by chick singers with one name (Taylor, Rihanna, Adele, Bieber, Beyonce, etc.) and the occasional hip-hop artist, none of whom are featuring guitars. The vintage guitar market is really softening, and with more than 100 different models of the Les Paul (from Gibson) and thousands of similar guitars from other manufacturers, the value of a used LP is unlikely to show anything like "investment" grade growth.

3. The logo still has value only if you think it has. Newer guitar players don't have anything like the allegiance to it that older ones do.



1. Just to add to that, I had an LP Supreme that got discolored because of my guitar stand. The stand left black marks around the neck and at the base of the guitar. Never happened to any guitars that I have that have a 'poly' finish or even an oil finish. Pretty ridiculous IMHO.


2. Totally and especially if you're buying new. I took a big hit on 2 Gibbies I bought new when I got rid of them. Never will buy a new one again.


3. Agreed.
Quote by zgr0826
My culture is worthless and absolutely inferior to the almighty Leaf.


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I incurred the wrath of the Association of White Knights. Specifically the Parent's Basement branch of service.
#16
Quote by dspellman
Nah. Gibson spends under $150 on wood and hardware for a Les Paul. Maybe a bit more for an R9, but honestly, not much more than that. Don't ask me how I know, but you can get the same information if you buy some folks drinks at the NAMM show. Take a look at the Rondo Music Agile AL2000, which sells for around $225, and which uses most of the same basic hardware and most of the same woods. You're looking at a guitar there that costs under $50 to produce. Most importers of offshore guitars figure that the actually selling price (not the MSRP, but what you end up paying at, say, a GC) is 6-10 times what they pay for the guitar at the dock. That's necessary to maintain the profit structure. So that's what Schecter or Line 6 or even Fender would pay for import guitars. Same goes for amps. No, seriously.

But in what the *importer* is paying is shipping, factory profit, factory labor/overhead, and (at the bottom of it all) material costs.

An Agile AL-3100M ("M" - maple cap) has a 2-piece mahogany body with a solid 3/4" maple cap, one-piece mahogany neck, Graphtech Tusq nut, Graphtech NVS2 bridge, very good four-wire AlnicoV pickups, Alpha pots, good wiring, Grover 102-18N tuners, ebony fretboard (not available on most Gibsons), real mother of pearl inlays (most Gibsons have plastic "pearloid"), jumbo hand-filed frets, multi-layer binding on the body, single-layer binding on fretboard and headstock, MOP inlay on the headstock.

Honestly, it's difficult to find a Gibson with specs even close to that, but a Custom comes close (but many don't have maple caps). The Agile is $399. A Gibson with the same specs is about 10X that price. If Agile can produce that guitar for that price, you can sorta guess what it costs in materials for the same guitar from Gibson. Both companies buy their wood from the same selection of vendors.

Gibson's labor costs are higher, but Gibson also views the Gibson name on the headstock as a "Premium LifeStyle" logo denoting a premium product.

Put another way: If your wife buys perfume from one of the companies that hire hot model spokespeople and that take out double page spreads in Vogue, you could be paying some seriously fancy money. But the actual perfume in the bottle costs pennies to produce. The costs are in the specially designed bottle, the packaging and (most of all) the advertising. What you pay has absolutely no relationship to the value of the perfume in the bottle.


To clarify, I'm not talking about the overall product markup, just the markup attributable to brand name alone. Across all manufactured goods, premium brand names command on average @33% markup as compared to their less marquee competitors.
Sturgeon's 2nd Law, a.k.a. Sturgeon's Revelation: “Ninety percent of everything is crap.”

Why, yes, I am a lawyer- thanks for asking!

Log off and play yer guitar!

Strap on, tune up, rock out!
#17
Quote by TheStig1214
You can basically see the difference when you compare say a Gibson LP Studio to an Epiphone LP Studio. Same guitar, one's made in the US, one's made in Mexico.


In Mexico? Since when?
Quote by Shredwizard445
Go ahead and spend your money, I don't care. It won't make you sound better.


Quote by Shredwizard445
Sure upgrading your gear will make you sound better.


#18
Quote by Mephaphil
In Mexico?



Yeah, you didn't hear? Mexico is in China now!
Quote by zgr0826
My culture is worthless and absolutely inferior to the almighty Leaf.


Quote by JustRooster
I incurred the wrath of the Association of White Knights. Specifically the Parent's Basement branch of service.
#19
Holy moley! You'd think they'd take the USA first!
Quote by Shredwizard445
Go ahead and spend your money, I don't care. It won't make you sound better.


Quote by Shredwizard445
Sure upgrading your gear will make you sound better.


#20
Quote by Mephaphil
Holy moley! You'd think they'd take the USA first!



They still owe money from their dinner date so they aren't invited.
Quote by zgr0826
My culture is worthless and absolutely inferior to the almighty Leaf.


Quote by JustRooster
I incurred the wrath of the Association of White Knights. Specifically the Parent's Basement branch of service.
#21
When I first started playing 40 years ago I could only afford to have one or two guitars at a time. If I wanted a different guitar I had to trade in one of my then current guitars. That's just how it worked for me financially. At that time I also suffered under the illusion that if I wanted to sound like my then favorite guitarist I needed to have that same guitar modal. Of course I learned the hard way that buying a Gibson SG didn't make me sound like Carlos Santana (circa the early Santana days) and buying a Black Gibson Les Paul didn't make me sound like Jeff Beck (circa the Jeff Beck Band era). I bought sold and traded a lot of nice guitars in the 70's.
In early 1977 I traded my Gibson SG for an Ibanez Les Paul that as it turns out was made in October of 1976. It was (and still is) a great guitar. Is it as good as my 1973 Gibson Les Paul? Sound wise, it might be as good or better but I still love my Gibson. I didn't buy my Gibson with any idea that I was making an investment and I didn't buy the Ibanez hoping it would be worth more in the future since I assumed it wouldn't. I now own a lot of guitars, not because I am a collector but because I no longer have to sell or trade one to get another and I promised myself years ago that I would keep what I had and not have to sell or trade as in my early years. I don't buy expensive Gibson's anymore and am very happy with the Epiphone Les Paul's I have purchased over the past few years. Are they better than a similar Gibson modal? Well that's a matter of opinion and I can only say that for my level of musicianship I sound the same on my 73 Gibson Les Paul as I do on my Epiphone 1960 Tribute. Both are great. Is there $2,000.00 worth of difference between my Epi Les Paul 1960 Tribute Plus and a similar new Gibson modal? Not for me. Gibson has consistently out priced the market and if the rumored 29% price increases on their 2015 modals actually happens, they will have people scrambling to other brands or $200-300 Chibson Chinese replicas (which by the way are getting better and better). No one is to blame except the people who run Gibson and have misjudged their market. They can make affordable high quality guitars (they prove it with the Epiphone Les Paul's). They are counting on name brand loyalty.
Attachments:
ibanez 1976 6.jpg
Last edited by Rickholly74 at Sep 18, 2014,
#22
Quote by dannyalcatraz
To clarify, I'm not talking about the overall product markup, just the markup attributable to brand name alone. Across all manufactured goods, premium brand names command on average @33% markup as compared to their less marquee competitors.


[In His Best Emily LaTella Voice]

Oh. That's Different. Nevermind.