How does the law of diminishing returns manifest itself in the world of guitars? Quite frequently and severely! Let’s explore in detail…
What is the law of diminishing returns?
In guitar terms, this means the more money you spend on a guitar, the less benefit you get, on a diminishing scale.
Take an easy example: the Fender/Squier range of Stratocasters/Telecasters. At the budget end of the spectrum, £200 will buy you a Squier, which is a phenomenal value for money, gig-able, serviceable, workhorse guitar (check out this Telecaster Custom II). Now double that and add a little more. £530 will just about get you into the Mexican Fender Player series. It’s an upgrade, sure, but are they twice the guitar? Of course not. Double that again and we’re into USA build and our returns are diminishing almost to the point of rolled edges, and a manufacturing move over a border.
Factors that increase a guitars value
Here’s what the guitar companies will tell you your money is paying for:
Tone
I’ll start with the most obvious but subjective factor. More expensive guitars should sound better right? In practice, that’s not always the case and quite often it’s easy to convince yourself that more money equates to more guitar. In my experience? As you go up the food chain, there’s perhaps more subtlety and nuance to the tone, but subtle is the operative word here. More tone is difficult to quantify, especially against a price point.
Brand
You’ll pay a premium for the kudos of making an aspiration purchase into a top brand like Fender, Gibson, Martin, Taylor etc. I have to be honest, I’ve owned ‘proper’ Fenders, Gibsons and Taylors, and you don’t get that feeling of pride or one-upmanship anywhere other than in these core lines. They’re the standard by which all others are judged, the instruments your heroes made history with. Owning a brand instrument kind of makes you feel part of that, which is inspiring, but probably all in the head.
Country of manufacture
By way of simple economics, The cost of American labour will always be higher than a product made elsewhere, and this plays a big (perhaps the biggest) factor in the price point of an instrument. Case in point: Fender USA is based in Corona, California, while Fender Mexico resides only 180.7 miles over the border in Ensenada, Baja California, Mexico. Small distance, similar facilities, massive wage difference.
Materials
The best example is from the world of acoustic guitars. Nowadays, solid woods and in particular the now scarcer tone-woods (e.g. rosewood) carry a higher price tag. There is also a significant uplift for sold woods vs laminate.
Number and complexity of processes
Continuing from the above point, solid wood construction is a lot more labour intensive than laminate contraction, using additional processes to prepare the wood for construction, among other things. Here’s a great explanation of the differences between the Yamaha FG800 and FGX5 (£200 vs £1000 guitars).
Attention to detail and setup
I can’t really argue with this one. I’ll never forget my old Gibson Les Paul Studio (and my Standard for that matter). It played absolutely perfectly out of the box with ultimate slinky low action, and as I played it in, it just got better and better until the day I sold it.
Why was it so good?, because Gibson USA models go on the PLEK machine and have time spent on them making the setup perfect from the factory.
Bling and niceties
Perhaps the biggest rip-off. The more inexpensive guitars will omit the nice to haves like a hard-case and the lovely but pointless case-candy that goes with it, fancy inlays and fret-markers, binding, etc. It feels like guitar companies include this stuff as some sort of sweetener to disguise the fact that, in all honesty, you’re getting pretty much the same guitar as the one without a case at half the price.
Hardware
Quality branded US hardware will always come at a cost. E.g. Grover Rotomatic machine heads, or Gibson Branded USA pickups. In the other camp, Squier tremolo systems are notoriously bad and are an obvious area to upgrade.
Electronics
One of the major differentiators between an expensive and affordable guitar. You’ll never really need to bother with the innards of USA made Fender for example, but those smaller, cheaper pots on you’re Squier may need some attention at some point.
Resaleability
Hold onto your USA Gibson or Fender, look after it, and you’ll at least get your money back when you come to sell it, but more often than not you’ll make money. In the main, non-USA branded guitars will depreciate in value. I can’t really argue with the fact.
Are more expensive guitars worth the money?
The law of diminishing returns says no, but the above list certainly sounds convincing doesn’t it? You get what you pay for, right? Yes, there are a lot of factors that go into making a guitar more expensive, but essentially, which factors matter to you will determine if those factors are worth the asking price.
Why do you care where an instrument was made?
It sounds harsh, but, being British, I don’t care if buying Mexican means depriving a USA labourer of their higher wages. It’s my money after all surely? When you look at it, labour costs probably make up the lion’s share of a USA-made price uplift, so why should you pay for them?
My old Epiphone ES335 PRO stood out as being a really well-made, quality guitar for the princely sum of £299. It didn’t bother me that it was made in China, but a similarly put together USA instrument would have cost exponentially more, which, to me, isn’t justifiable.
A setup is always worth it
As detailed earlier, a good setup can transform an instrument, but this can be had for under £100 if you know a decent guitar tech. Taking the Fender series as an example, it’s not until you get into the USA core line that anything near a pro setup is included in the price. My point? The guitar makers are charging a huge uplift for a service you could get done professionally for a fraction of the cost. The cost to you? A little bit of legwork.
Do the sums add up?
Do all the factors that make a guitar more expensive add up to the asking price? The guitar manufacturers obviously think so, and players will always pick up a USA made Fender or Gibson as a trusted brand, a one-stop solution, a no-brainer that’ll do the job every day, for a lifetime…
… but so will a Mexican player series Strat, which shares a surprising amount of components to the USA made model, and that’s half the price.
With regard to Les Pauls. I actually preferred my Studio to my Standard (double the price). It basically had the same hardware features, but minus the binding, abalone, and a 1/4 of an inch off the body thickness which made it nimbler and more versatile.
Conclusion
No, the above factors that make a guitar more expensive certainly DO NOT add up to the asking price, with the law of diminishing returns effectively doubling the cost for the most meagre of upgrades in the Fender and Gibson lines to name just two.
Of course, I’m guessing our American cousins are a lot more patriotic than myself, so perhaps many will, out of principle, only buy American, which is admirable. But for others that are merely seeking value for their hard-earned, justifying a high price tag due to high labour costs seems a stretch.
The other side of it is, for those who have a few thousand to drop on a guitar and don’t care what the cost is, they’ll always go for the top of the line, and the guitar companies know it, which sadly puts their flagship instruments out of reach for a lot of us common folk.
And that’s a great shame.
Leave a Reply