How Does Rondomusic Offer Guitars At Such Cheap Prices?
After reading over many different posts and forums on the internet about Agile
guitars there is one question that seems to come up over and over
again. That question is how are these guitars so cheap? When you buy a guitar from Rondomusic,
especially an Agile, and assuming that you have done your research and compared with other guitars, one of the
first thoughts that goes through your mind when you get your hands on the guitar for the first time is how do
they make this for so cheap? You know a similar guitar at a music store is usually twice as
Well we thought we would take a stab at answering the question of "How does
Rondomusic offer these guitars so cheap?". Before we get started let us just state that the following is pure
speculation on our part. However, we do know a little bit about retail vs wholesale pricing and distribution
and such that we feel that our speculations could be very plausible. Again, we haven't talked to Rondomusic
about this so these are just our own musings on the subject so take them at that.
Here's what we know. Rondomusic makes the Agile line of guitars.
Presumeably, they have a supplier offshore (Korea we think) that makes the guitars to Rondomusic's
specifications. Rondomusic is the only place we know of that you can buy Agile guitars so they are the direct
seller of these guitars.
Now if you know anything about how goods are priced than you can probably figure
out why these guitars are cheaper. Usually a product is created by a company. Either the company
invests and manufactures the product themselves or they have a supplier make the product for them. This first
step obviously costs some money so it would be fair to say that it costs the company that makes the product x
amount of dollars to create one of the product. Usually, what happens next is the company that makes the
product needs a distribution company to get that product into different stores. The distribution company
usually buys the product from the company that created the product at a marked up price. The distribution
company than sells the product to a store at a marked up price from what they bought it at. This is usually
the wholesale price. The store sells the product to the consumer at the retail price which is higher than the
wholesale price. Everyone makes money along the way. Many times a product would be marked up at least
100% every step of the way.
So let's say that a company could make a guitar for $100
dollars. If they used a distribution company the distribution company would buy that guitar for
$200. The distribution company would sell that guitar to a music store for $400 and the music store
would sell the guitar to you the consumer for $800.
In some industries like clothing the markups are much higher than in this
scenario. Does a $400 pair of jeans really cost anywhere near that to make? Probably not.
The great thing about Rondomusic is that they are direct sellers. This
eliminates two steps of marking up the price. So if we use our above numbers the guitar that it costs $100 to
make would only cost you $200.
We are guessing that's how Rondomusic offers their guitars so cheap. Does
your $200 Agile al2000 stack up to a similar guitar that is $800? We will leave that up to
You also have to take into account what price the market will bear. The
appeal the of the Agile guitars is that they are such great quality at very affordable prices. Probably not
as many people would buy them if the price wasn't so great. Instead they may be more likely to buy a
different brand of guitar if the prices were comparable. From that standpoint Rondomusic really has a great
business plan to fill a specific niche of the electric guitar market at a specific price point.
We are guessing Rondomusic does quite well with this business model.