[J Hollenbeck (Jaxson)]

J Galante (Johnny G), on 13 August 2010 - 09:14 AM, said:

So the buyer would have just another place to order a guitar that he never got try out? He got to sample the model, but not THE ONE he will own?

No thanks, not enough. I want to take my guitar home with me - the one I tested, and A/Bed and inspected, not hope it shows up on my front porch on a 0degree winter day or 100degree summer day ready to play and with no quality issues. I want to be able to return a guitar if something does arise after the purchse, and not have to wait to get another one as a replacment.

Small shops, to be competition for GC et. al., need inventory they can sell NOW, otherwise I ain't buying. I realize too many others don't worry about trying them out 1st, or enjoy keeping their fingers crossed as a guitar ships ground, but when that happens with Gibson, I will find another brand to buy.

That isn't what I said..Let me explain it this way..I once was a sales rep for a company that sold very expensive automotive diagnostic computers, before you could hold them in your hand, they were big and cost about 30K each. As a salesman I had several different models I would haul around in my van and demonstrate. The customer would get to use them before buying...
Just like business was done in this nation for a century...but in the case of the small dealer they would still have to buy inventory, but they would not be required to buy as much because instead of warehouseing inventory, the customer would find what they wanted, then have it ordered from the Gibson factory...So actually you would be getting a brand new never played by anyone else guitar....maybe you enjoy cleaning the snot off of the guitar you buy off the hanger at GC after every heavy metal head banger has sneezed on it. I don't

[M Weaver (Awfers)]

H Juszkiewicz (HenryJ), on 18 July 2010 - 05:07 PM, said:

I have to make a bold statement, which many of you may not agree with.

The reason that small dealers are dying is because consumers will not support them. In a free economy, it is you the fan and the customer who gets to choose by spending your hard earned money. If you spend your money at small dealers, I can guarantee Gibson and everyone else in the industry will be there. The fact is, as a group, you do not spend your money there.

There is not a single consumer who does not look at Thoman's catalog offerings in Europe. His prices are incredibly aggressive, the service is exceptional and he has a 500,000 square foot distribution center that ships product to most consumers within 24 hours. He has millions invested in inventory.

He is an aggressive and competent business man who is able to make a profit even though his prices are very low (very low profit margins). No small shop in Europe can stay in business at his very competitive prices, and so where do consumers buy?

Since I have been in this industry, I have found it to be the most price oriented business in the world. Every guitar player seeks out the lowest priced product, and then goes to the local shop and says, "Sell me your guitar at this price or I will walk". These small shop owners gets dozens of calls every day from people shopping price. If they put their inventory online, the situation gets even worse as guitar players will shop the world and hammer the poor small business person. Come on guys, who is going to tell me they know a player that paid more of a guitar because of a relationship. Yes it happens, but not enough to support a small shop. People do not as a rule pay more regardless. I don't think they should have too. I think the fan is always right, and we are there to service our valuable fan. And the best way to get a lower price on a product is to buy from an aggressive merchant that does high volume and probably has only so-so service.

Look at other industries. Look at consumer electronics. How many small stores are left. Where do you buy a big screen TV: Best Buy, Dixon's, Amazon or Joe's TV Shop? Why is Walmart the largest retailer in the world, because they charge higher prices, and have a more limited selection?

Brands and companies react to what consumers want. That is the only way we can succeed. My sin is that I have studied other industries and have gone to where consumers are going before other brands and companies in this industry. I have used strategies and tactics that allowed brands and companies to thrive, and ruined companies that did not adopt them. The sin is to give to consumers what they really want based on their buying behavior.

People bring up stores like Centre City Music, and Gruhn's as small merchants. They may have smaller stores, but they are some of the largest volume dealers in the country and they are extremely aggressive in pricing as is the great store in Cologne which is building a new distribution warehouse with thousands of square feet.

We do our share to support those retailers that have a good customer base. We have Business Development Managers that help them with annual business plans, District Product Specialists that travel to the store and help with training and merchandising, Relationship managers that provide direct line account support, and an extensive 24 hour computerized systems allowing account management. We give smaller dealers significantly better credit terms than large dealer because the smaller guys have a harder time with financing. The average store turns a guitar 4 times a year (Thomann probably 20 times a year) and we extend 90 day terms meaning we fully finance the independent store site. This cost $$$$ money. We cannot support a single store visit that can easily run $1000 when the store sells 10 of our instruments a year, let alone the rich support each of our retailers get.

While you may complain about the demise of small local retailers, it is not the brands and companies that are killing them. It is the price driven consumer. It has happened in every industry, and it is now happening in ours. I think, the consumer and fan are always right.

Thanks for this clarification. It's good to know you are helping the smaller retailers so much. Sorry to hear that the guitar business has become "main stream".

The prices that Thomann are able to offer at, in comparison to the "retail" prices in CH or France for that matter, makes the local and French prices here "seem" scandalous. (Thomann sells a SG Standard for €975, for €999 you can get a cable, extra strings, a strap, set of picks and Gibson Luthiers Choice cleaning solutions). Compare that to the retail price of the same guitar at €1390 and you have to choke as the consumer... But this consumer base is 1/10th that of Germany. There's one local company that is famous for selling more guitars in the area than all the other guitar shops combined. Reason? Price. He works out of dirty "hole in the wall" storefronts and sells guitars at a discount, he ships so many that he makes it up on volume. No other shop in the local area does this. They can't afford to. So yes, it's the consumers fault, but does the "poor, starving artist/musician" still hold true? Does that not have an influence as well? I also find it hard to imagine that Gibson guitars are consumed like Big Macs?

I've also glimpsed the reseller costs for these guitars, they only make about €300 to €400 per "mid priced" guitar, my BFG for example. I don't think this has a lot to do with Gibson, and more to do with the importer, if the Swiss importer mentality holds true for the guitar business as well. I'm waiting for the change to happen here too. Last month one of the local small guitar retailers has recently announced 25% off everything in the store as they are closing their doors (it's a horrid shop actually, service was always horrible and their idea of a Luthier was a joke..). They have some SGs (Specials) which haven't moved, mostly because even at 25% off (and the recent price changes here), they're still more expensive than the "one local company".

I know you probably won't answer this, but I would be curious to know if you're using the Custom Shop and the high priced models to keep the company afloat, while offering the lower end models at an affordable price for the "regular" musician.

[m dailey (milod)]

In a way I really hate this thread because I see a "no win" for almost anyone.

In my case, just going to the closest dealer that carries Epi will cost $75 and up (considering sales tax, travel costs and not even time off work) compared to web purchase. A trip to the closest Gibson dealer in my state is more by far - over 800 miles round trip, etc. Pretty much ditto in surrounding states.

So on a $400 purchase, it'll cost me close to $75 to buy "locally." That's a fairly substantial percentage over a web buy where $400 means $400. That assumes no "dealmaking" involved and I doubt there can be much. The store sez it'll do a setup, so that's a second trip killing half a work day and an increase in cost. So figure adding at least 25 percent to an Epi price tag.

On the other hand, I realize there are more people in the metro Memphis, Tenn., area than in my whole state. So... how many potential customers are there within a 300-400 mile radius of where I live? Not many when much of the population is spread well under one human per square mile.

And getting a problem mail order guitar? Now you've gotta add time and money to send it back, etc., etc., and figure you'd best know how to do a basic setup yourself.

I dunno. In the olden days <grin> there were a lot more places to buy guitars, but there were not that many Gibson dealers regardless. That is why when I had my 1970s local and nearby music store buying binge (my personal economy was in far better shape than today), I never saw a Gibson or an Epi.

I'm not sure things have changed in a lotta ways for some regions of Anglophone North America except that mail/web order makes things a lot more feasible. It also lessens the chance of getting "the one" guitar.

What I'm hearing on this thread is what I've heard for literally half a century and more. It's a lot harder to keep a small retail biz going and there are a lot of dilemmas for wholesalers and manufacturers in how far they can go to support the very-low inventory turnover dealer.

m

[S Sanchez (trekhead)]

I think there is more to small mom and pop stores than just sales figures. If that's your only criteria, then you are absolutely correct, and small stores will just have to learn how to survive. However, I would point out that these small stores are still out there and while they may not be selling Gibsons or Fenders, they are still selling other brands. Many of the people that are buying these brands may be new players, or parents buying guitars for their children, or folks that have given up on ever owning a Gibson. Down the road, these individuals will develop certain likes regarding how a guitar feels, or sounds and the feels and sounds they are going to be familiar with are not the feel and sound of a Gibson. Instead it will be the feel and sound of that Jackson, Ibanez, or Dean guitars. If only from a marketing point of view, I think it would serve Gibson well to find some way to keep Gibsons in small shops. Just to throw out a suggestion, set up a program where small stores are allowed a maximum of 4 guitars per year at the same price point as the big box. The big box stores won't feel threatened because the small shops will obviously have limited inventory, and the small shops will have Gibsons present in their stores again without having to invest large sums of cash.

[J Hollenbeck (Jaxson)]

S Sanchez (trekhead), on 23 August 2010 - 01:19 PM, said:

I think there is more to small mom and pop stores than just sales figures. If that's your only criteria, then you are absolutely correct, and small stores will just have to learn how to survive. However, I would point out that these small stores are still out there and while they may not be selling Gibsons or Fenders, they are still selling other brands. Many of the people that are buying these brands may be new players, or parents buying guitars for their children, or folks that have given up on ever owning a Gibson. Down the road, these individuals will develop certain likes regarding how a guitar feels, or sounds and the feels and sounds they are going to be familiar with are not the feel and sound of a Gibson. Instead it will be the feel and sound of that Jackson, Ibanez, or Dean guitars. If only from a marketing point of view, I think it would serve Gibson well to find some way to keep Gibsons in small shops. Just to throw out a suggestion, set up a program where small stores are allowed a maximum of 4 guitars per year at the same price point as the big box. The big box stores won't feel threatened because the small shops will obviously have limited inventory, and the small shops will have Gibsons present in their stores again without having to invest large sums of cash.

With the way our economy is going this is a moot point...if there is any companies making products here and selling them here in ten years we will be lucky.

[J GGoerge (joey257)]

Quote

maybe you enjoy cleaning the snot off of the guitar you buy off the hanger at GC after every heavy metal head banger has sneezed on it. I don't

Nope - I do not like that at all - which is why I won't shop at Guitar Center et. al....besides the high prices. And if that ever becomes my only alternative with Gibson, online or otherwise - I will stop buying Gibsons.

I do though want MY guitar NOW, not when it comes in next week, or next ??? (read the post about the sailor who got hung up, or all those people who ordered 50s tributes - stuff happens). When I shop at my local store(s) I look at stuff they have in their inventory (occasionally can get one new in the box), and get to try out each and every one 1st - including THE ONE I am taking home with me (of course a good NIB is the best situation). If a particular piece has been...'heavily sampled' like in your GC example, then I simply don't buy it...THAT gives the dealer incentive to keep his stuff from being abused. So there is almost always enough of a nice new selection to find something worth buying - the tough choice is usually deciding 'which one'. On the rare occasions they don't have something I like, I don't buy anything.

Obviously alot of this is 'me'...I just don't have the patience, and especially not the desire to have a new guitar get shipped ground to me. I just haven't wanted any one guitar that much to worry about the extra aggravation that would entail with ordering and waiting and shipping/receiving and hoping it will be OK...and THEN having to deal with problems when it isn't - and it won't always be. My best experiences involve spending lots of time browsing and trying them all, and then bringing one home knowing it is 'just right'.

I think generally it hurts sales when people can't get what they want immediately - when they are all ready to spend the money on themselves or on their kids. When shopping for just about anything I hate hearing "no, we don't have it, but we can order it for you". To me it makes the store sound...'small' and here that would actually be the case because they can't afford in-stock inventory.

I realize that not having Gibsons at all is a worse alternative, and 'samples you can have drop-shipped' is a possible solution. I just know it wouldn't work for me.