Fender Custom Shop

chris6 · April 7, 2021, 8:26am

Apologies straight off the bat to anyone who has ever shelled out the full asking price to Fender for one of their custom shop ‘creations’ but I’d love to hear from you, or anyone else, who has ever considered buying one of these. Full disclosure, I have never played one and I’m willing to accept it’s entirely possible if I ever do that I will have a lightbulb moment and understand why they cost so much. But I doubt it.

I’ve just idly been looking at a UK music shop website and they have a Pino Palladino precision bass for one English pound short of four grand. I love the description (which I assume Fender wrote):

“A Fender Custom Shop instrument is as good as it gets. You know it when you play one—it’s filled with intangible, electrifying elements that adds a new dimension to your playing experience. It’s as if the instrument itself is imbued with history, and is as close as it gets to an original build Fender from the Golden Era”.

By ‘intangible’ I imagine they mean you won’t be able to spot anything massively different from an £800 MIM but it will hopefully ‘feel’ more expensive.

Don’t get me wrong, I know you have to pay more for something ‘hand built’ but even a Mexican 50s classic player strat for £800 isn’t built by robot. It is still about a dozen components screwed together, just by someone who hasn’t worked for the company so long.

I can understand the craftsmanship in guitars with set neck or neck through designs but let’s face it, Fenders were designed to be easy to build. The whole concept of the bolt on neck was decided by Leo Fender because he wanted something simple that an owner could repair himself. I’ve built three ‘Fenders’ myself, including a supposed MIJ Telecaster that even fooled my guitar tech. It ain’t rocket science, so what do all these supposed ‘master builders’ bring to the table?

Like I said, that Palladino is up for £4000 and I even saw a reliced shell pink strat the other day for £7999 (twice the price so you don’t have to scratch it yourself). I’m prepared to admit it might be just me who doesn’t get it but I want the evidence. If I was shelling out that sort of money I’d want something truly handbuilt like a Fodera or Spector. At the very least if I still wanted a Fender-alike i’d go to someone like Lakin or Sadowsky who have truly put their stamp on the design rather than Fender who have only put a 400% mark up on theirs

Off my soapbox now, over to you…

JT · April 7, 2021, 9:15am

I’ve made a career out of this topic and teach other pricing professionals about it, but I won’t bore you with too much pricing theory.

In a nutshell, they charge what they charge because that’s what people are willing to pay for it. Or put in academic terms, the perceived value of the product is greater than or roughly equal to the price.

So, the question is then, Why? Well, that will be different for every person. But here are a handful of possible value drivers that come to mind:

They’ve always wanted one
They are buying it as an investment
Their favorite musician has one and they want to be like them
They offer a unique color that they highly desire
They believe it will make them a better player
They want the history that comes with it
They value the Fender brand
They know what they are getting will be what they expect
They want others to be impressed
They believe the quality will be higher
And the list goes on…

Lets use some other examples here. Why do people buy an Apple phone at a premium? Prada handbag? And why one model over another? Why do some people care about storage space in a computer and others don’t? Why do some people like tacos and others don’t? See where I am going with this? We are all unique in what we value AND by how much value we attribute to those elements.

There are methods to extract the average perceived value out of consumers. Pricing relative to this is the most sensible thing to do. It tells you the value of your brand alone for example. One method is a conjoint analysis, for those that are intrigued, but I won’t go into the intricacies of that here.

But, it all goes back to where I started. They charge what they charge, because people pay it. They pay it, because they value it greater than the price charged. Will it always make sense to you why people pay a premium for something? Nope. Will others always understand why you buy the things you do? Nope.

If we all valued things the same, this would be a very boring world… and I’d need a different career.

joergkutter · April 7, 2021, 9:24am

As long as there are people willing to shell out such money, companies will offer such items… (age-old market mechanics that still seem to apply). Also, common sense is often sacrificed on the altar of fan-boy-ism

Ah, I just see that @JT has replied in a similar vein, albeit with more substance.

All that said, I have paid about 2500 GBP for a really great instrument myself (not from Fender!), and I would say it is worth it and I don’t regret having bought it (now that the initial pain has subsided). But that would also be very close to my limit… it is hard to see what you would get on top of that for more (other than these intangibles they mention…)

chris6 · April 7, 2021, 10:49am

JT, it’s fascinating that you are involved in this subject professionally. It’s something that interests me massively. I run a catering company that specialises in Pan-Asian food (Korean, Thai, Vietnamese etc) for street food events and festivals and perceived value is something I am accutely aware of.

For instance, with street food there is an absolute ceiling that people will not pay above. Currently for a ‘main course’ that’s about £10 per head and most people will walk away if you try to charge more. The interesting thing is we have a rival ‘bricks and mortar’ restaurant in Birmingham that sells a lot of Vietnamese food similar to ours except ours is all hand made and theirs is raided from the freezer cabinets and bottles at the local Chinese wholesaler and yet, because people are sitting down they will be happy to pay £15- £20 for dishes that we can only sell for £10. We never get tips either, even though the person who took your order very often will then cook your food, plate it and very often bring it to your table. Bizarre!

There are a few tricks though. We sell a Korean Sloppy Joe Burger at £9. There is barely any profit in it because we make it from Aberdeen Angus steak that we grind ourselves (as opposed to a generic frozen burger used by many others). Even though our competitors are selling a far inferior product for the same money we can’t charge more because people won’t break that £10 ceiling. The trick is to advertise the burger at £9 and ‘add fries for £3’ so people will ask for a Sloppy Joe and the immediate response is “do you want fries with that” to which 90% of people will say yes so the £9 meal is now £12 but if I advertised it up front at £12 I’d never sell any.

Anyway, nothing to do with bass and I’ve probably bored a whole load of people but I thought it was a funny story worth sharing.

JT · April 7, 2021, 11:11am

I could talk about pricing strategy all day.

I’m the principal consultant for a pricing firm and have 20+ years experience in pricing. I love it.

You’ve obviously figured out a few things by trial and error, which is not a bad way to test the waters. One of the first rules of pricing is that humans are irrational when it comes to pricing. For example, humans believe that 0.99 to 1.00 is a significantly higher price increase than 1.00 to 1.01. This is because we read numbers from left to right and the addition of a digit makes us “feel” that the increase is greater than it actually is.

When you talk about a price ceiling, that may be true to a degree, but this varies largely based on so many dynamics. What’s the value of a bottle of water at a grocery store? What’s the value of water at Disney Land? What’s the value of water in the middle of a desert? What if there are 5 other people selling water next to you? What if scientist just discovered that drinking water everyday makes you live 20% longer? What if you a famous role model said that drinking water is not cool? Just tip of the iceburg.

Sure, bricks and mortar restaurants may be able to charge more for “the experience”, but their costs are also more. That’s why not everyone goes that route. Interestingly, I wonder if consumers know that the quality of their food is not as high as yours? Or maybe they just prefer that taste (yours sounds lovely though!)? I’ve had some pretty fancy curries for example, but I still love that takeaway curry flavor. Or it could even be something unrelated, like your brand has a color they aren’t drawn to, or the attractive waitress they want to stare at. There are so many variables. This is why all you can ever do is price for the average. You will never have a price that is right for everyone.

That being said, this is where Bronze/Silver/Gold tiers come in. It lets you price to three averages instead of one. Lets say that you want to charge £9 for a Korean Sloppy Joe Burger and that 50% of people think that’s fine, 25% think it’s too much, and 25% would have paid more. How do you maximize your profits in that scenario? You try to come up with a slightly less valuable version for less money and a slightly more valuable version for more money.

There are plenty of other tricks too, like price anchoring. Lets say you are going to watch a movie and fancy some popcorn. The popcorn prices are £4.20 Small, £4.35 Medium, £4.50 Large. Which one do you choose? Most people will go for the Large, because “It’s only 30p more.” and feeling they got a decent deal, while not realizing/caring they just paid quite a lot for popcorn.

Anyway, I could talk for days about pricing. I’ll stop now.

chris6 · April 7, 2021, 11:18am

Brilliant, feel free to talk about pricing all you want but I think we won’t have many others joining in

John_E · April 7, 2021, 11:25am

Yes, I own one, it was my Covid present to myself this year for a LOT of busting arse at work all year. I bought it about 2 months ago, and love it. Period.

Can you feel a quality difference. Yes. From top to bottom. From little things to the relic-ing. Does it sound better than a cheaper version? That is a question that cannot be answered, depends on what you plug it into, how you play, etc. So could be yes, could be no.

Why did I buy it? A few factors. Although I could have done with a $2,000 version and it would most likely play very close to the same, there were some key differences that I really liked in the CS that, if I bought the upper end non-CS version, I would have looked at the bass and always wished I bought what I wanted. I was in a position where I could afford it, and did not want to compromise.

Details in the pick guard, to the relic-ing, and other design elements that are only on the custom shop version, to the pickups. All things that only come on CS basses. Do they make it play better? No. Do I like and appreciate them? Yes.

The build quality is insanely good. It has a lifetime warranty (not a buying driver, but nice to know). The wood is a higher grade, and yes it feels different. Especially in the neck. I like the handmade quality of it.

There are other handmade in USA basses out there for the same price or more, so not sure why these are any different, just another offering into the price point.

Look, you can bash me for buying one, you can bash Fender for being the ‘ big corporate greed monster, you can bash the bass because you don’t like sun bursts (a popular theme here), that is your opinion. Bashing other people’s tastes is not a very positive thing. Everyone has different tastes. Doesn’t add much positive vibe or value. Different people are in different financial positions. My mother always says “there is an ass for every seat”. True in marketing too.

What I wanted was a re-creation of a moment in time, and I got exactly that vs. a truly vintage one that would have cost a lot more for the same thing and came with any issues that grew on it. In that lens, I got a deal. Most all of my saxes are between 80–100 years old, quite rare, and several are much more than a CS bass. These are investments, will hold and gain value over time, but also they are exactly what I want and wanted to do in this area. It is all relative. Others would rather invest in upgrading lower end basses, or finding that amazing high end non-CS Fender, or bash Fender and buy an off brand that has magic for them. It is all good, the market has options for these very reasons.

I did not buy it as an investment, I did not buy it to impress anyone. I bought it for the quality, for what it is, and for what I wanted. Honestly, if I went cheaper or different on this particular bass, I would have always rued about not buying it.

I learned along the way in my sax playing/collecting that when I buy something I don’t want, it tends not to stick around long. I do a LOT of research before buying anything, sometimes I still have a miss, but am getting good at knowing what I want, saving for it, and then buying it.

Net/net, it sounds fantastic, plays fantastic, quality is amazing, and is exactly what I was looking for. I also really dig my Squire J bass, and enjoy tweaking it. But i wanted different things in that vs. this, and others in between.

Would I tell you to run out and buy one? No. That is for you to decide. Another thing I learned a long time ago is other’s opinion of an instrument of any time means nothing to the next player. I had set out to buy a new non-collectable tenor sax a few years back, and after all my research went and play tested dozens of horns. Every horn I thought I was interested in sunk to the bottom, and I ended up with a horn that is generally bashed by many many people. It outplayed horns 2-3x the price and certainly more desirable by many. If I bought the model that has the ‘badge value’, I would have always rued for the better cheaper horn. So I bought what I wanted and what fit the bill for what I was looking for.

Buy what makes YOU happy.

So, is the extra cost worth it? The answer is different for each and every buyer or non-buyer of it, and both are right.

BassFaceDisgrace · April 7, 2021, 11:26am

I love my MIM J, nothing wrong with it at all… yet when I get a P down the road I still want a MIA. I’m not a gigging bassist and don’t need any of the upgrades offered by an American made… yet I’ll be willing to spend the extra just because of what an American made Fender means in my head. If I had a lower income I’d probably say “why would anyone ever pay for a MIA when you can find such great MIM for so much less!?” If I made more money I might say “Well if I’m already paying for a MIA, why not go all the way and get custom.”

My point is there are two variables at play here and both are relative to each individual. 1) Precieved value of the bass 2) Precieved value of the money it will cost you and if that amount is significant to you.

John_E · April 7, 2021, 11:30am

Pricing is one aspect. Value is another. Some things are priced higher and retain value, others to not. My wife has amassed many Prada shoes and LV bags, etc, most before I met her. For her they had a LOT of value. When she lost her job a few years ago and decided to raise funds and sell some off, she learned their actual value, which is next to nothing. Most people are wary they are fakes these days. Items like this have value when they come out as the next stylish thing, or have value when you are out somewhere and SOMEONE ELSE sees them. To me, these items actual value is in the ‘badge value’ of owning them. Most people don’t buy Prada shoes as an investment. But if strutting around in them makes you feel good, then there is the value. For me, I do not see the value in things like this. Once again, everyone is different, no one is right or wrong, and one opinion isn’t better than the next, just different.

chris6 · April 7, 2021, 11:42am

Interesting responses guys and just to be clear It wasn’t intended as a post to bash anyone - there is no right or wrong reason for how we spend our hard-earned. I know I opened the topic with a fairly negative view of custom shop guitars but I knew there would be many fans of them (otherwise there would be no market). I totally get where you are coming from John. I take a long time before buying anything and do a lot of research. My philosophy in life is to always get the best I can possibly buy. I drive a Mercedes even though I know a Ford is probably just as capable and I own a Leica camera even though Sony and Fuji probably make better cameras. Both do however make me feel good. The former is probably a stupid purchase because it will just devalue far faster than a Ford, the later I regard as a wise purchase because apart from being beyond excellent and making me feel good I could have sold it the day I bought it for more than I paid. From all that you’d imagine I’ve now effectively argued against my own post and that I’d be a big fan of Custom Shops and If I held your beautiful Precision in my hands I might start to understand it but I still struggle. A Leica camera is a complex and precise engineering miracle. A precision bass is still a body, neck and some hardware. To me any way. But God I love your bass

Jazzbass19 · April 7, 2021, 11:51am

This describes me almost exactly, @BassFaceDisgrace . . . . . . (just substitute “Squier J” for your “MIM J”) . . . and I still want an American Jazz Bass!

Color me old-fashioned but I’m definitely a supporter of “made in USA”

This is something that has LOTS of meaning for me personally . . . long story.

Cheers
Joe

chris6 · April 7, 2021, 12:27pm

I think Americans are far more patriotic about buying goods made in their own country than we are in the UK. Being part of the EU for over 50 years many of us considered ourselves European rather than British and regarded French, German or Italian goods as from our own home market. The ‘Buy British’ jingoism from the pro-Brexit contingent is sickening to many of us in the UK at moment (particularly as we hardly make anything decent anymore) but I’m veering dangerously into politics now so I’ll stop.

Jazzbass19 · April 7, 2021, 12:55pm

@chris6, this is really an interesting topic . . .

@John_E, @JT, @joergkutter, and @BassFaceDisgrace all made some great replies , too!

I am waiting for a delivery of a Fender American Ultra Jazz Bass . . . it’s not a ‘Custom Shop’ item, but it’s pretty close. At least, it is the top of the line of what Fender has to offer.

I will be in a unique position to compare and comment on the differences between their $350 Squier Jazz and the $2,000 American Ultra and will share my observations with the Forum on a separate new topic.

This ought to be useful for somebody out there . . .

Cheers
Joe

Fahri · April 7, 2021, 1:06pm

I am loving this thread all around…

Not being invested into the “musical life” so much yet, I have been trying to limit myself with my purchases but I agree %100 that you need that special connection with the instrument itself otherwise it all becomes temporary. With almost every other thing else I choose I go for the best value thing (motorcycle, smartphone, car, clothes…)

I say if your bass does not inspire you to play it every time you look at it, than you might have the wrong instrument…

That said I would also personally take it easy in the beginning and give it some time to really understand which kind of bass is really appealing to you and sadly it is not something that you can quickly get from 10-20 minutes fiddling at the music store… (Still it is much better than only watching YT reviews and ordering online of course!)

A side note… I really loved how some of the reasons that @JT listed fitted so nicely what @John_E posted!

Jazzbass19 · April 7, 2021, 1:51pm

I’m certainly not any ‘pricing expert’ @JT , but my worm’s eye view is that . . . in addition to what you said, Fender (and Gibson) had to do something during the 80’s and 90’s as labor and material costs kept rising higher and higher.

At the rate they were going, they were pricing themselves out of existence unless people were willing to pay the money. Enter the foreign market: it was simply cheaper for them to farm out the work to Mexico and Indonesia where labor costs were less.

Add to that a few cost-cutting corners with cheaper electronics and hardware, etc. and a range of product prices was born . . .

Fender was able to stay in business, the average guy could afford to buy a new bass or guitar via their lower end products, AND wealthier guys could have their cake too with the upper end.

I concur with many points you made: #1, 4, 6, 7, 10, but especially #8

They’ve always wanted one
They are buying it as an investment
Their favorite musician has one and they want to be like them
They offer a unique color that they highly desire
They believe it will make them a better player
They want the history that comes with it
They value the Fender brand
They know what they are getting will be what they expect
They want others to be impressed
They believe the quality will be higher

Cheers
Joe

JT · April 7, 2021, 2:15pm

Costs are interesting when it comes to pricing. Back in the old days, most companies would take the cost of their product/service and add a % on top to arrive at a price. This is called “cost plus pricing”. In more recent years, we’ve realized that “value based pricing” is the way forward. Lets say that something cost you £100 to make, but people value it at £1000. What should you charge? Around £1000 of course. But back in the day, they would have probably charged £200 at the most. What if people value it at £1000 and it costs you £1100 to make? Well… then you are in big trouble in less you can figure out how to raise the value higher (like marketing for example) or lower your costs.

But yes, effectively they made a Bronze/Silver/Gold type model with Squier/Fender/Custom or Indonesia/Mexican/Japan/American where they lowered or raised the value and the price accordingly. This allowed them to maximize their sales and profitability.

The other point that is very relevant to all of this is what competitors are doing. The more someone can make a similar product at a lower price, the more the value of the higher price product will deteriorate. This is because people base value of one product relative to the value and price of alternative products. This is why it can be devastating for companies when a new entrant comes into the market and provides almost the same product/service for quite a bit less. Of course, brand and other value-add elements are worth something though, so it’s not simply about dropping the price to match competitors. You don’t always have to do that.

John_E · April 7, 2021, 2:21pm

(just substitute “Squier J” for your “MIM J”) . . . and I still want an American Jazz Bass!

+1 for this for me too, I just have a hollow body and a Music Man in the line before hand.

John_E · April 7, 2021, 2:23pm

Looking forward to your thoughts. I am in process of “superizing” my Squire Jazz Bass just for fun, to see where it gets me, then I will take it along to shops to A/B with the higher end Fenders and a few others and see what I really want out of a higher end, non-custom shop J bass (one is enough for now, haha).

howard · April 7, 2021, 2:26pm

So just for the record, that’s all tongue in cheek and I apologize if it rubbed you the wrong way. I did just drop close to $1k on a burst of my own, after all

There are a lot of relatively loud bursts out there, and pointing them out can be fun, but I wouldn’t ever mean to imply it’s a bad choice if that’s what you like. Same goes for relicing - I personally don’t get it, but it clearly makes a large market segment happy and that’s great.

Gio · April 7, 2021, 2:34pm

This is a killer thread.
Thanks @chris6 for starting it, and thanks @JT for the deep price theory knowledge!
This is what makes me love the forum.

I worked in a guitar shop for a few years, and have hung around them too much since (as they are the home base for teaching lessons).

I’ve had good opportunity to try the entire spectrum of the Fender line. Squiers to Custom shops. You nailed it, @chris6, with

I found this to be… kind of true.
I think @JT said all the smart stuff about where the value is perceived so I’ll just speak to the playing side of things.
There are some Squiers, MIM, MIJ and normal US basses that are extraordinary. There are some Custom shops and MIA basses that play terribly.
However!
The tiers of basses are (mostly) accurate to their price point.
Meaning that - on average - the Squier basses were about half as nice as the MIM or MIJ basses in my estimation.
The US made basses never really hit the double-the-performance for double-the-value price justification for me but they are, on average, better instruments than the MIM line.

The jump to custom shop is the same jump for customization as in any other consumer product. You have to pay to get the extra special, different, one-of-a-kind stuff. In that way, I think they can, for the most part justify the price.

Also, for collectors or resellers - the further up the pricing tiers, the more the basses tend to hold their value… though if you get too far down the custom shop rabbit hole, you risk the danger of making something that only you find valuable… (so it’s not a perfect guide)

For me?
I have two fenders - a Made in Mexico P-bass (50’s reissue) and a MIJ Jaguar (with replaced electronics and pickups).
I love them.
I’d rather have a '65 P and a J from the same era… but my family also needs groceries. Alas.