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How do they stay in buisness?
Posted: Sun Jan 19, 2025 12:49 pm
by andrewsrea
The big producers of instruments rely pretty much on the distribution and sales of the big retailers: Guitar Center (including Musician's Friend), Sweetwater, Zounds, etc. How the hell do they all stay in business?
A friend of mine and I went to our local GC yesterday to scope things out and play a few acoustics. For me, it was to try out flat radius Martins and Taylors to see if I could accommodate the flat feel (the jury is still out). We go into their acoustic room and start rummaging through their wares, which range from $250ish to $5K.
I notice it feels really dry, their humidifier is flashing an error code and it isn't running. I picked up a $2K Gibson J45 Studio and the neck is severely back bowed to the point you could not produce a note between the 1st and 13th fret. The guy across from me picked up a Gibson J45 standard and started making faces, sees me watching and hands it to me. Its neck has a twist and no notes could be produced on the 1st through 3rd strings, while the 6th string looked to be a good 2mm above the 12th fret. I move on to a cheap Martin and it could play. I moved on to the most expensive Martin and again, back-bow. I moved to an expensive used Taylor and the frets are so bad that the notes were all wonky. A woman and her daughter waked in and asked me about beginner acoustics or to buy electrics. I said it was important that they play easy, so the daughter would not be discouraged. The better sounding student guitars were horrible players (too high of an action or warped necks). I found one which played well, but sounded like a cardboard box with strings and I told them "You want it to feel like this, but sound like that one over there." Out of the 40ish guitars, 5 or so were in sales condition, IMHO.
A salesman walked in and offered help and I told him of what was going on and he immediately grabbed the J45 Studio and said "I am going to take this to THE guitar player on duty, to see if he can fix it." I asked him what instrument he played and he replied "I cannot play any instruments." I replied "I've never experienced that before in a music store," To which he replied that many employees could not play and instrument.
Last I went into their 'over expensive item mini vault.' 75% of the guitars there were the same guitars I saw their three years ago.
This is a horrible business system for the retailers and the manufacturers, many who are loaded with debt ratios which would sink normal business. I have no idea how they survive.
Re: How do they stay in buisness?
Posted: Sun Jan 19, 2025 1:51 pm
by BatUtilityBelt
That's really sad for the instruments, and it sounds especially bad for your local store. I don't think I've ever met a music store employee who wasn't a musician. They're not all good musicians, but I can't imagine any reason to work for a music store without the ability to pick up an instrument and play at times, or catch a wicked deal on trade-in or at least an employee discount. The job part is just not great for any I've ever known.
Re: How do they stay in buisness?
Posted: Sun Jan 19, 2025 4:09 pm
by sabasgr68
andrewsrea wrote: ↑Sun Jan 19, 2025 12:49 pm
The big producers of instruments rely pretty much on the distribution and sales of the big retailers: Guitar Center (including Musician's Friend), Sweetwater, Zounds, etc. How the hell do they all stay in business?
A friend of mine and I went to our local GC yesterday to scope things out and play a few acoustics. For me, it was to try out flat radius Martins and Taylors to see if I could accommodate the flat feel (the jury is still out). We go into their acoustic room and start rummaging through their wares, which range from $250ish to $5K.
I notice it feels really dry, their humidifier is flashing an error code and it isn't running. I picked up a $2K Gibson J45 Studio and the neck is severely back bowed to the point you could not produce a note between the 1st and 13th fret. The guy across from me picked up a Gibson J45 standard and started making faces, sees me watching and hands it to me. Its neck has a twist and no notes could be produced on the 1st through 3rd strings, while the 6th string looked to be a good 2mm above the 12th fret. I move on to a cheap Martin and it could play. I moved on to the most expensive Martin and again, back-bow. I moved to an expensive used Taylor and the frets are so bad that the notes were all wonky. A woman and her daughter waked in and asked me about beginner acoustics or to buy electrics. I said it was important that they play easy, so the daughter would not be discouraged. The better sounding student guitars were horrible players (too high of an action or warped necks). I found one which played well, but sounded like a cardboard box with strings and I told them "You want it to feel like this, but sound like that one over there." Out of the 40ish guitars, 5 or so were in sales condition, IMHO.
A salesman walked in and offered help and I told him of what was going on and he immediately grabbed the J45 Studio and said "I am going to take this to THE guitar player on duty, to see if he can fix it." I asked him what instrument he played and he replied "I cannot play any instruments." I replied "I've never experienced that before in a music store," To which he replied that many employees could not play and instrument.
Last I went into their 'over expensive item mini vault.' 75% of the guitars there were the same guitars I saw their three years ago.
This is a horrible business system for the retailers and the manufacturers, many who are loaded with debt ratios which would sink normal business. I have no idea how they survive.
Venezuela cannot get into the comparison game in regards to music stores, and although there are still a few here in Caracas, inventory rotation you can all guess is almost zero. Of the few I visited a couple of times over the last 5-6 years, I believe they have almost the same inventory, and mostly cheap asian brands and just a few of any of the big brand names we all know. Even though market conditions are very different here from that in the US - or almost any other region in the world -, I'm always making that question to myself: How do they still stay in business? Most of them offer instrument lessons, and I believe that's what is holding them there, but still, it's a mystery to me.
Having said that, and taking into account that market conditions are different there in the US, sometimes I ask that question to myself. When I see pictures of the stores you mentioned - Sweetwater, GC, etc. -, and see all those high walls full of guitars of any kind, basses, drum kits, electronic gadgets, etc., I wonder how much money is in there in those buildings? And what about all those warped-neck guitars? Money loss? Do they sell more than 50 items of anything every day?
And about that situation that employees cannot play any instrument, it's weird. Even if it is for demonstrating the instrument to a potential customer, they can't really play an instrument? Wow...
(But still, if I ever go to the US, you can bet I'll visit many of the guitar stores there!)
Re: How do they stay in buisness?
Posted: Sun Jan 19, 2025 7:55 pm
by Tonray's Ghost
I think Guitar Center has been a perpetually poorly managed business. It didn't help when they were acquired by a hedge fund, whose sole purpose was to suck out capital to make themselves richer, these funds operate on a suck the business dry credo. Whether the business fails eventually is not even on their radar.
Sweetwater, having a stellar reputation for service, I think does a much larger online share of business. GC's online offerings have always been hampered by a crappy website in comparison, again reflecting management's poor reaction to business conditions and inability or unwillingness to compete.
I hated GC when I lived in the States for all the reasons the original post stated, guitars were poorly maintained, staff was at best ambivalent or annoying, and it simply was not a pleasant place to shop, which is why they will eventually go under (IMHO)
Re: How do they stay in buisness?
Posted: Sun Jan 19, 2025 9:08 pm
by tonebender
There are three GC locations within reach for me and they all are okay. Coming from someone that absolutely loves the Gibson brand, it has been my experience that about 90 out of 100 in any store, anywhere I have been to, are horrible compared to other brands including Epiphone. When I made up my mind I wanted to acquire a Gibson I must have played at least 100 and did not find one that played as well as my Epiphone Masterbilt. It was frustrating to say the least. Then one day I walked into Sam Ash and they had two Gibson HP 415 models hanging side by side. One was used and one was new. The new one sucked as far as set up was concerned but the used one was just right. I finally found a Gibson acoustic that I would purchase. I think they only made the model for 1-2 years. Christmas season 2023 GC was loaded with acoustics like I had never seen before. I found a Gibson G-Bird that is awesome and added it to the stable. Both play and sound great but not quite the war mellow tone that I prefer. I am hoping they both will mellow with age but good grief I am old. What I really want is a nice J45 but so far the search has been futile. I have played so many I have lost count with no luck. Seven C Music can make anything play like a dream, I just needed it to have the tone I like and then I will drop if off with them. I have played a few J200s that meet the criteria but for some reason my mind is stuck on a J45, plus they were in the $5K range. So I continue to play the MIM Martin all mahogany acoustics and I am a happy camper.
My experience has found Martin better and Taylor even better as far as finding one that sounds and plays well at GC. Almost every acoustic in there on any given day, whatever the brand, is woefully in need of a set up or repair. I think Sweetwater makes sure acoustics that go out of their door are set up pretty well. I have bought a few from them and they all arrived ready to go after a string change to extra light gauge.
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 7:40 am
by tlarson58
Money laundering?
I kid, but there was a restaurant in town that stayed open with no patronage for three years.
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 2:43 pm
by andrewsrea
@sabasgr68 : "...all those high walls full of guitars of any kind, basses, drum kits, electronic gadgets, etc., I wonder how much money is in there in those buildings?" - Yep. Guitar Center is massively in debt because most of their inventory is required to be pre-paid. Years ago, many manufacturers would send a store stock for a 1/3d's down payment, with the remainder due upon reorder. Unsold stock went back to the manufacturer for a restocking fee. No longer they get their price breaks by paying upon receipt in bulk and all those guitars become the retail store's problem if an item doesn't sell well.
@tlarson58 "Money laundering?" - Could be where their 'debt' comes from.
@tonebender - I miss the days of the family-owned music store, where for the most part the gear was ready to gig and the workers were all accomplished musicians. There was a couple years remember in the 70's, where Gibsons and Fenders had horrible quality control, but I was a drummer then and only experienced that through my bandmates and the store owner's complaining. I saw the unboxing of a 1975 Strat to which the owner put it on top of the glass retail case and asked me to look at it. The guitar was on its back and the headstock was facing about 25 degrees to the high E string.
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 6:29 pm
by BatUtilityBelt
One of the ways they might stay in business occurred to me... by way overpricing some gear. Here's an example. Weeks ago I saw them selling this current model EKO VL480 gold top, but far over its brand new price, and EKO is still making this model. I like it, but never see it stateside, so when I saw GC list it overpriced at $750, I sent them links to several European shops selling the exact same guitar brand new for about $200 EU. They ignored me, and it's still overpriced. I think the business model is "find a sucker".
https://www.guitarcenter.com/Used/EKO/V ... -Guitar.gc
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 7:16 pm
by Rollin Hand
They should follow the model used by Long and Mcquade here in Canada: they are the Canadian distributors for many of the brands they sell. Also, they are a real estate company: they generally own the buildings their stores are in, and lease the rest of the space.
And most of their people are long-term employees.
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 8:57 pm
by sabasgr68
BatUtilityBelt wrote: ↑Mon Jan 20, 2025 6:29 pm
One of the ways they might stay in business occurred to me... by way overpricing some gear. Here's an example. Weeks ago I saw them selling this current model EKO VL480 gold top, but far over its brand new price, and EKO is still making this model. I like it, but never see it stateside, so when I saw GC list it overpriced at $750, I sent them links to several European shops selling the exact same guitar brand new for about $200 EU. They ignored me, and it's still overpriced. I think the business model is "find a sucker".
https://www.guitarcenter.com/Used/EKO/V ... -Guitar.gc
eek.jpg
"Find a sucker" lol
That must be the same 'business model' of one of the largest stores here - and they've always been on the overpriced side of market, even when market was in normal conditions many years ago -. I understand that 'normal market conditions' is not our current market status, you have to reinvent your business if you want to survive here, but this is just insane. A Boss ME90
for $900. Only a "sucker" will buy this from them. And that sucker must be wealthy. If that sucker is wealthy, he would get it himself online.
Anybody here in Venezuela could get it online from Amazon and having it shipped with a courier
to their door for less than $400. Their price tag is more than twice that. That's one of the stores that I don´t know how they're still open. They have been in business for almost 30 years if I'm not wrong. They have stores in several cities of Venezuela. Well, maybe I have a clue about how they're still open, but I just don't want to mention it in a public forum.
Pic.
Re: How do they stay in buisness?
Posted: Mon Jan 20, 2025 9:01 pm
by golem
That's the Bridgeton GC. They used to have more knowledgeable employees but they were primarily assholes. Yes, the setups they do at that shop are terrible.
https://www.guitarcenter.com/Used/Suhr/ ... -Guitar.gc
My favorite is the Suhr that I believe costs more than it would cost to custom order this guitar from Suhr
Re: How do they stay in buisness?
Posted: Tue Jan 21, 2025 10:13 am
by andrewsrea
Rollin Hand wrote: ↑Mon Jan 20, 2025 7:16 pm
They should follow the model used by Long and Mcquade here in Canada: they are the Canadian distributors for many of the brands they sell. Also, they are a real estate company: they generally own the buildings their stores are in, and lease the rest of the space.
And most of their people are long-term employees.
I think you are close, as I read GC does own buildings, but they have already been used as collateral for debt.
Re: How do they stay in buisness?
Posted: Tue Jan 21, 2025 1:34 pm
by Rollin Hand
andrewsrea wrote: ↑Tue Jan 21, 2025 10:13 am
Rollin Hand wrote: ↑Mon Jan 20, 2025 7:16 pm
They should follow the model used by Long and Mcquade here in Canada: they are the Canadian distributors for many of the brands they sell. Also, they are a real estate company: they generally own the buildings their stores are in, and lease the rest of the space.
And most of their people are long-term employees.
I think you are close, as I read GC does own buildings, but they have already been used as collateral for debt.
My nearest L&M has the store, a yoga studio, a bridal boutique and a kids' play place in the same spot. I am betting any profits for the store are pure profit because the rents from their tenants could cover the monthly nut.
Re: How do they stay in buisness?
Posted: Tue Jan 21, 2025 3:48 pm
by golem
Rollin Hand wrote: ↑Tue Jan 21, 2025 1:34 pm
My nearest L&M has the store, a yoga studio, a bridal boutique and a kids' play place in the same spot. I am betting any profits for the store are pure profit because the rents from their tenants could cover the monthly nut.
I mean... if they'd make more money renting the space than they do by selling stuff out of it you know that's going to be an issue.