Zach says Tone Wood does not matter..

[nightlight]

the reason it works is because to an extent they are right; if you know what you're about with guitars and luck out and get the 1 in 10 or whatever it is budget guitars without any QC issues you are going to feel like you got a steal relative to the cost. If you're a beginner, you wont know the difference anyways. So that way the companies know that it is truly a QC tolerance not a QC standard like there is for Suhr or something is the key to making money off of the gobs of new entryist hobbyists from covid or whatever.

I've had and played some phenomenally good examples of cheap import guitars, and they are out there; the companies are just banking on the vast majority of those guitars going into the hands of people who don't know any better.

It's also a budget thing. Not everyone has cash to splurge on $500 guitar, especially when they're starting out. And this is the majority of people. Add to that the fact that most of those who buy will give up the hobby within a year, and it makes complete sense to offer more budget guitars than high-end ones.