What is the deal ?

blues90,I was goin to say, cars are the same way no one pays "retail" for a car-

There was, at one time, a rule of thumb on marking up products (and service to a lesser degree)- there was a bottom line percentage that had to be maintained profit wise to stay in business- anything over that was the gravy, icing on the cake, etc.- I'm not sure of that number anymore- but, enticing consumers to purchase products is a marketing ploy- marketing is an entire industry in itself- "sale" price used to be a gimmick that was easily seen through for people with a half way decent memory who had any observation skills at all- in fact I've had conversations with acquaintances about "sale" prices when we knew what the wholesale price was, or really close to it- products would be over-priced intentionally (well above the have to have percentage wise bottom line) and then put on sale to entice consumers- then, along came buyin in bulk which changed the retail game immensely-

Now, where guitar manufacturers get their numbers for "street price" I haven't a clue, but, I'm sure there is a formula used that can be learned with some research- personally, I don't care to know it anymore- if I can live with a price I'll buy it- if I can't I'll try to get a better price - I don't consider myself the sharpest knife in the drawer, but, it is my money I'm usin so if "I" am happy who cares- right?

Garland, is correct.

With cars and guitars, I know this much, the profit margin is variable, not static. 

The entry level cars and guitars make very little money each, but sold in volume is where they make their margins there.  So, they must sell a certain number of them at a minimum to keep the model or "line" going.

On the flip side, the luxury (fully loaded or separate luxury brand stuff like Lexus to Toyota or the 800 series to Taylor) models and lines have huge profits.  People don't know this but it doesn't cost much more to make the luxury model.  All the foundational stuff is already there, they just add more bells and whistles or "bling" to the higher end models and crank the price through the roof.

So, when you buy the super high end or top-of-the-line stuff, you're giving the company  way  more profit than with the entry level stuff.

One way to see the proof of this is to look at re-sale values.  There are exceptions to every rule of course. 

blues90, I've seen that "street price" used- not sure which company because I look at so many I can barely remember what day this is- oh, wait, I streamed a sprint car race last night, which I believe was Saturday and I got my Gretsch on Saturday- that was just yesterday wasn't it? So, this is Sunday- whew!