A young man stopped by the other day to drop off his guitar to have some new strings put on. This is not the first time this has happened and it’s always a bit curious to me that someone would pay for this, considering the fact that the process is really quite easy and not terribly time consuming. There are dozens of videos on You Tube that clearly show the process too. I always feel a bit guilty charging someone for this service (and I would never charge my students) but I guess it’s just another example of the “I want it NOW!” society we live in. Or perhaps I’m being harsh – maybe the kid was just not confident in his ability to do it.
In any case, I put on a new set of strings, adjusted the action and made a bit of beer money doing it, so no harm done. He was thrilled to pick up his guitar and have it ready to play.
This was yet another example of a conundrum we face here on Olde Cape Cod. There are a couple of very small music stores farther down Cape but nothing like a full line dealer who offers not only a good selection of products but also service. The reasons are certainly not news. Every once in a while I toy with the idea of opening a music store here in Falmouth or nearby but then I come to my senses. There is no way to compete with the mega online retailers; in any case, margins are miniscule on big ticket items and few people have the resources to tie up tens of thousands of dollars in inventory to make a tiny portion of that back – probably after waiting months or even years. Factor in very high rents here in our tourist-based town, paying a decent wage to dependable, knowledgeable staff (assuming you could find such people!), sunk costs such as insurance, infrastructure, taxes and the fickle economic times we live in and the bottom line looks stupid.
Many people are also not aware of the way dealerships work for big, name brand guitars. In almost every case there are “protected” territories. Only one dealer of Brand M, T, G or F is allowed within an area. How these areas are defined is somewhat fluid but I can understand the logic from a retailer’s perspective. However – this concept made much more sense back in the days before the internet. Sure, you shouldn’t have to compete with someone a few miles away carrying the same premium products. That’s the way the old story goes. But how do you compete with the Guitar Center or Musician’s Friend? Especially when the major manufacturers have MSLPs that must be adhered to – at least in theory. The few successful retailers of premium guitars in the U.S. will sell you a brand new Martin, Taylor, Gibson or Fender at 40% off list price but they cannot advertise that policy, you must contact them directly. The manufacturers are well aware of this but look the other way as long as the phantom MSLP or MAP is what’s listed on the retailers’ web sites.
But… this means the retailer is lucky to make 10% profit. Maybe less if he includes free shipping. In real numbers: Say a premium, American-made guitar “lists” for $3999. In all likelihood, the retailer pays about 50% of that amount for the instrument. (He probably had to pay inbound shipping too, further affecting the bottom line) This means he will probably have to sell that guitar for about $2200 (40% off list). Put another way: he is supposed to time up $2000+ to maybe, MAYBE make a profit of $200. Every day that guitar hangs on the wall costs him money in sunk costs. And of course you can’t have just one premium guitar for sale if you’re going to be a “real” music store.
See what I mean about the folly of opening a small town, full line music store?
OK, what about other instruments, you may ask. What about the school business for band and orchestra instruments? Well, around here at least, one very large outfit out of Boston has OWNED all the instrument rental business for decades. A few have tried to break this monopoly over the years and have failed.
OK, Gene, enough with the negativity. Music stores are no different than what hardware stores, small grocery stores, sporting goods stores and others are facing. The only way to compete is in the one area that the mega retailers cannot: service. I’m hard pressed to believe that the kid with the guitar this week would have walked into the Guitar Center in Boston in hopes of having his guitar restrung and adjusted, and if he did, he would have been charged much, much more.
All I can hope is that he’ll remember, tell his friends and maybe take some lessons at some point. Maybe even buy some more accessories or even a new guitar if he comes to trust my judgment and expertise.
Peace & good music,
Gene
In any case, I put on a new set of strings, adjusted the action and made a bit of beer money doing it, so no harm done. He was thrilled to pick up his guitar and have it ready to play.
This was yet another example of a conundrum we face here on Olde Cape Cod. There are a couple of very small music stores farther down Cape but nothing like a full line dealer who offers not only a good selection of products but also service. The reasons are certainly not news. Every once in a while I toy with the idea of opening a music store here in Falmouth or nearby but then I come to my senses. There is no way to compete with the mega online retailers; in any case, margins are miniscule on big ticket items and few people have the resources to tie up tens of thousands of dollars in inventory to make a tiny portion of that back – probably after waiting months or even years. Factor in very high rents here in our tourist-based town, paying a decent wage to dependable, knowledgeable staff (assuming you could find such people!), sunk costs such as insurance, infrastructure, taxes and the fickle economic times we live in and the bottom line looks stupid.
Many people are also not aware of the way dealerships work for big, name brand guitars. In almost every case there are “protected” territories. Only one dealer of Brand M, T, G or F is allowed within an area. How these areas are defined is somewhat fluid but I can understand the logic from a retailer’s perspective. However – this concept made much more sense back in the days before the internet. Sure, you shouldn’t have to compete with someone a few miles away carrying the same premium products. That’s the way the old story goes. But how do you compete with the Guitar Center or Musician’s Friend? Especially when the major manufacturers have MSLPs that must be adhered to – at least in theory. The few successful retailers of premium guitars in the U.S. will sell you a brand new Martin, Taylor, Gibson or Fender at 40% off list price but they cannot advertise that policy, you must contact them directly. The manufacturers are well aware of this but look the other way as long as the phantom MSLP or MAP is what’s listed on the retailers’ web sites.
But… this means the retailer is lucky to make 10% profit. Maybe less if he includes free shipping. In real numbers: Say a premium, American-made guitar “lists” for $3999. In all likelihood, the retailer pays about 50% of that amount for the instrument. (He probably had to pay inbound shipping too, further affecting the bottom line) This means he will probably have to sell that guitar for about $2200 (40% off list). Put another way: he is supposed to time up $2000+ to maybe, MAYBE make a profit of $200. Every day that guitar hangs on the wall costs him money in sunk costs. And of course you can’t have just one premium guitar for sale if you’re going to be a “real” music store.
See what I mean about the folly of opening a small town, full line music store?
OK, what about other instruments, you may ask. What about the school business for band and orchestra instruments? Well, around here at least, one very large outfit out of Boston has OWNED all the instrument rental business for decades. A few have tried to break this monopoly over the years and have failed.
OK, Gene, enough with the negativity. Music stores are no different than what hardware stores, small grocery stores, sporting goods stores and others are facing. The only way to compete is in the one area that the mega retailers cannot: service. I’m hard pressed to believe that the kid with the guitar this week would have walked into the Guitar Center in Boston in hopes of having his guitar restrung and adjusted, and if he did, he would have been charged much, much more.
All I can hope is that he’ll remember, tell his friends and maybe take some lessons at some point. Maybe even buy some more accessories or even a new guitar if he comes to trust my judgment and expertise.
Peace & good music,
Gene
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