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DTFrontera -> RE: Buying a guitar in Spain (Dec. 19 2006 17:54:39)
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Like most have already said, you won't be saving much, if at all. For some makers, it's even more expensive to go direct (i.e. Conde Hermanos).
And then factor in customs/duties/importing fees (customs alone is 8.7%, don't know about the rest), VAT (17.5%), possible local taxes, etc. While it's technically possible to recover some of the VAT, it's a red-tape nightmare that will take months and drive you insane.
So, even if you manage to find a better price, don't forget the hidden costs and hassles. I'm personally glad dealers take care of that, especially when their prices are almost always the same as direct, if not better. Compare Conde(www.condehermanos.com) Ramirez, etc. - last I checked there's no dramatic price hike that people like to accuse the dealers of.
Regarding how much money they're making? Like any business, they usually buy at wholesale prices, and then recover their costs/make profit by selling at normal retail prices. In other words, the dealers aren't making their money by inflating final prices, they make money by buying at wholesale prices. It's the basis of retail business.
Finally, going to Spain to find a guitar is nowhere near as glamorous as it seems. I would only consider it again if I was going anyway (as you are, I realize).
My $.02
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