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Effective April 1, 2006, $29,595 is the YAMAHA MSRP for an ebony polish standard C2.

Can't wait.....

Norbert

I don't know if it matters much, but sz never mentioned the finish of the quoted piano. FWIW, I like C2's quite a bit, but when I was quoted $18K for one a couple years ago, it wasn't a good enough price for me to buy one and I chose something I liked better for a little less.

So what is the street price of a new C2? This is all very confusing...

Sid:

This is supposed to be confusing!

Craigen provided the US MSRP: $29,595
Ryantim provided a good European "street price" : $16,000 including tax, i.e. $14,000 excluding it.
Finally, it is public information that in Japan the list price is 1,300,000 Yen, or $11,000 (net).

So the street price is anywhere between $10,000 and $30,000 depending on which street you're on.

Perhaps it's time some ambitious attorney general slap an anti-trust suit on these jokers...this disparity is ridiculous.

I am afraid how the list and street prices in Japan are helpful for you guys in US, but please be informed that a new C2 ebony polish costs usd10,800(list) and 0-20%(mostly 0-7%)Off(street) in Japan.

Yamaha has established "minimum selling prices" in the US. I think they should just publish that and go with a Steinway-like "fixed price" model. (Actually, I think all pianos should go to that model.)

As for getting the US Attorney General to investigate piano pricing - that would be a waste of tax payer's money. In a country of 300 million people and a $10 Trillion economy, piano represents a luxury good with fewer than 100,000 new units sold per year. There must be a million things more deserving of the Attorney General's attention and tax payer's investigative dollars.

Sid:

first, I completely agree with Axtremus on the priorities the government should have.

Second, I actually think that this disparity is far from ridiculous; it is not only logical, but informative and scientifically interesting.

At least a couple of times I have rambled on this forum on the deductions I can try making as an economist. Anyway, the bottom line:

1) Pianos are luxury items; they are perceived as pretty different from each other (which is the whole point of this Forum, after all); traditionally (and to a very large extent still today) they are sold rather locally. This situation has "pricing to market" written all over itself.
There's nothing stupid, wrong, or unjust about it: it's a free market!
Yamaha is free to try charging thrice as much for its piano in the US as it does in Japan; private parties are free to import "grey-market" Yamaha pianos from Japan to the US; the consumer is free to buy either, or another brand altogether.

2) The desire for fixed prices is psychologically natural---we hate bargaining (mainly because we are not accustomed to it: I find in my own experience that eBay is highly educational), and we pine for the safety of knowing we have had the same deal as everyone else.
In practice, however, you have to think carefully what you wish for. If piano dealers actually charged a fixed price, it would be a higher price than a savvy shopper can get under the current regime.
If you have a taste for theory, I have already written a little economic model which proves (under assumptions that may or may not be realistic) that the maximum price under price discrimination equals the average price under price transparency.
By the way, the whole thread in the link was enlightening to me, though you may not agree.

3) Finally, over the past few days I have been fascinated by a suggestion of Piano Dad's that the "big guys" in the US piano market have sufficient market power to raise prices across the board.
Surely you'll notice that the only companies attempting a fixed-price policy are Steinway and Yamaha.
Needless to say, I find $30,000 for a Yamaha C2 a ridiculous sum. Perhaps manners would prevent me from walking out of the dealership laughing, but not from walking out.
However, this works so long as we know that Kawai and other competitors have much lower prices for instruments of similar length and quality.
If Yamaha bites the bullet and resists at $30,000, losing sales in the short run, will it succeed in being a cartel leader in the long run? In other words, will Kawai (and whoever else you think is Yamaha's direct competition) also double its prices?
Time will tell. It wouldn't be pretty for the consumer. After all, there's a good reason why price-fixing is frowned upon. Why should one then like fixed prices?

I wasn't proposing fixed prices, rather, it's the inflated and demonstrably fixed prices here in the US that I object to. If the C2 can go for 10k in Japan and 16K in Germany, but lists for 30K here, and as you've yourself said, Yamaha has imposed minimum selling prices, then this isn't free market at work but rather price fixing by a wantabe cartel. It's this sort of price fixing I object to; if dealers were allowed to truly sell at market, then prices would come down on increased competition and over time will equalize across all markets, be much more transparent, and benefit both consumers and the producer (lower cost, higher volume).

Best thing 'one' can do is buy something else. There are so many options for obtaining a good quality instrument. It's the public's perception that they must have a specific brand that allows manufacturers to dictate what some people consider to be unreasonable terms. Once buyers wise up (which will probably never happen in the general population) companies will have to compete on a more level playing field. It's our free enterprise system at work (or not quite working, depending upon your opinion). In the meantime, I'll look elsewhere for value and pass on my thoughts to those who ask my opinion. Hopefully this site will also introduce piano buyers to all of the options available to them.

Sid:

I cannot think of any industry that is not a "wantabe cartel". That's natural.
But few of them actually succeed in forming a cartel, and most cartels eventually break up even without government intervention.
How many cartels survive without government protection? I can think of oil (OPEC) and diamonds (De Beers), but nothing else.

Also, I am afraid you and I are not necessarily thinking of the same economic agents.

I'm thinking of competition between Yamaha and Kawai, and there I have reasons to suspect that price transparency is actually not unambiguously good for the consumer. Yamaha may be willing to give you a great deal to steal a customer from Kawai; but it would not do so if it knew that it would then forced to offer the same deal to everyone else.
At a minimum, price transparency makes the savvy bargainer worse off, and the clueless consumer better off.
Moreover, as I said, I can also write a model where the general-equilibrium interaction makes all consumers worse off, because price transparency reduces incentives for firms to price-compete aggressively.

What you seem to be thinking of is competition among Yamaha dealers. In that respect, I have to agree that price transparency should drive the price down.

This raises the interesting question: what underpins the international price difference?
My guess was that it is driven by the manufacturers themselves, i.e. that Yamaha charges different wholesale prices to different markets in order to price discriminate.
Your implication instead is that it is dealers whose costs or profits are substantially higher in the US than in Japan or Europe.

Obviously there exist figures that would allow to distinguish between these hypotheses, but they are industry secrets I am not remotely privy to.

Price fixing occurs when two or more competitors collude to fix prices for a certain type of product in the marketplace. This is illegal although it's not clear how effective this sort of action is (or ever was) because, in the absence of government regulation, there is no (legal) way to prevent competition from outside the cartel.

As for Yamaha and their pricing practices, I can't see how they can be accused of price fixing when they are only attempting to control pricing of their own product in their own dealer network. Buyers can always shop for another brand. If anything, I'd argue that Yamaha is less effective than most brands in establishing consistent pricing; their efforts are ridiculously ineffective. Yamaha pianos are priced all over the map, even in the same urban areas. (Stated) MSRPs differ from one dealer to the next on the same model and large discounts are thrown around without even asking for them to get the prices down where they belong. In the end, this can scare buyers away because they don't trust Yamaha pricing practices.

This is arguably bad business practice (which ultimately hurts Yamaha) but there's no criminal behaviour here.

Just dumb behaviour (IMHO).

Hi Starting Over:

just in case I was not clear above, I never had any intention of accusing Yamaha of price fixing.
I know that's illegal, and I know that Yamaha and its dealers know better than to be on the wrong side of the law.

Having said this, attempting to control pricing of your own product in your own dealer network could be illegal price fixing under U.S. federal law. Although I'm not a lawyer and I've been chided before on this forum for venturing beyond my depth in legal matters, the Federal Trade Commission has this to say to the general public: The piano situation that you describe is of course perfectly legal: Yamaha has (or claims to have) established a policy that its dealers should not sell below a minimum price leve, but apparently its dealers have not even decided to follow it ...

Don't know about the acoustics, but when I purchased my ypg625 keyboard, it seemed pretty obvious that all the dealers/sellers colluded to put in a $749 minimum floor, they competed by offering differing accessory packages, but the minimum was VERY consistent across the country; sale of grand pianos may only affect a few, but when it comes to keyboards and other musical instruments, Yamaha is a BIG player and the obvious complicity to control prices, is I think, cause for action...

BTW, would anyone care to comment on what the current out the door price for the new C2 is? How about for a used one that's 5, 10 or 15 years old?

Thanks.

sid,

Get a copy of the Fine pricing supplement. It's not that expensive, and has a fairly decent idea of what the price is like for almost every new piano sold in the US.

If you're dissatisfied with the pricing scheme, shop another brand, or shop used, or demos. Or, do like Goldberg7 did on here a few months ago and waste a lot of bandwidth cutting and pasting from various governmental publications about price fixing and collusion-- which will get you precisely nowhere.

I think I'm out of the acoustic piano market for now, after my very brief attempt at entry (thank god)...guess my initial impression is valid afterall (...how much did you spend for a piano!!?? )

My guess is about $18k~$20k pre-tax.

So is $11,000 the dealer cost?

I purchased my Yamaha C2 last year in November.
Yamaha has a sale every year at the store I purchased it from, usually in Ocotober. The list price was 28,999. I purchased it for 20k.
I put money down, so i didn't finance that much, but YES, yamaha is expensive! I wanted the C3 very badly, but I felt good to get out the door with that price. To be honest I didn't even look at the list price on the C3, or the sale price. I didn't even try the C3. I made up my mind before I walked in the store that I was going to stay somewhat modest in my decision. Not to mention, our living room, would probably not accomadate a C3! As it is, the C2 does a pretty good job of occupying the entire space! We just went with it, and pulled it into the center of the room! Now we have a piano room instead of a living room! The sound is better, and it looks pretty cool too!

Good luck with your piano search!