Really local bad news.....for guitarists that is.....

[BluesKing777]

Could someone that has worked in a music shop explain?

 

As a guitarist, we go in the shop, look around, go eeh, aaahh, yuk, wow!

 

But how the stock gets there, I have no idea, so I am gathering that someone has to order a set amount of Taylors, Martins and Gibsons and pay a deposit?

 

 

BluesKing777.

[modoc_333]

Could someone that has worked in a music shop explain?

 

As a guitarist, we go in the shop, look around, go eeh, aaahh, yuk, wow!

 

But how the stock gets there, I have no idea, so I am gathering that someone has to order a set amount of Taylors, Martins and Gibsons and pay a deposit?

 

 

BluesKing777.

 

 

 

sort of. Almost all brands have certain requirements for stocking and yearly buying. some are easier than others. some are more public. in the end, we order what we thing will sell. in almost all cases you are ordering a model and have no idea what the individual will be like when it shows up. most manufacturers give reasonable payment terms. rarely is a deposit required, and rarely is the bill due immediately. when it does come due, it's usually not the entire bill. one thing most people don't realize is how long we wait for gear. guitars, pedals, amps, accessories... they all take different amounts of time but that thing you see on the wall or on the shelf may have been order a week ago or 6 months ago and just now arrived. nothing is ever billed until it is shipped though.

 

 

as for stocking requirements, everyone is different. almost all have an initial buy in requirement. after that, some just have a number they want you to hit each year. some of the bigger names are more specific. Martin can be easy and tough. they don't require a huge number, but they make you buy from several different series of guitars. some of these don't sell very well but it doesn't matter. you have to take it anyway. sometimes they require you to buy a specific model if it's one they are trying to push... whether it's a stupid idea or not. taylor asks a lot, but not unreasonable. all brands have their quirks. most dealers agree that if all brands just gave us a $$$ amount to hit each year and left it at that, then it would be easier and we would sell more guitar overall. that doesn't help them with production predictions or balance though so it's actually more profitable for them to sell less guitars in a more controlled way.

 

as for Gibson......... sure, there are some tough parts to it. it's not as bad as all of the newly gibson-less dealers make it out to be and the internet rumors don't help clear it up any. for example: that earlier comment about 16:1 isn't accurate. as a matter of fact, Gibson never tells you how many guitars to buy. it's all based on dollars. you are required to buy less acoustics than electrics though so depending on which pieces you buy, it COULD come out to that ratio, but it doesn't have to. there is a dollar amount you have to hit for each division and that's it. the part that makes Gibson tough isn't the amount (unless you aren't really selling guitars and have no business carrying them anyway. that would just build up old stock from year to year). the part that makes Gibson tough is the schedule. every dealer has a certain time of year when it's time to re-up the dealership. they are all different. we are fortunate that ours comes up in August so we are able to get gear in and stock up for Christmas. a dealer that had to do it in January would have the cash built up, but no way of selling them quickly having already missed the Christmas season.

basically we pick what we want and Gibson will ship them out over the next several months. we can break it down however we want as long as it's reasonably balanced. in the past, the numbers were tougher. no one would order anything for a couple of months before their time because they knew they would have to order so much. now they will count any recent shipments and recent guitars on the wall toward our number. that helps.

sure we would love to just have one total number to hit at any point in the year. or to even have a total number we could hit at the time we re-authorize the dealership. we sell a lot of acoustics and would like a larger % dedicated to that. it's not how it works though and we deal with it. Gibson can't just sell from one division and they need to plan ahead for production. guitars take more than a few days to build. getting materials, tooling up, building, etc takes months. It sucks for us, but i understand.

they don't tell us what models to buy though. they want us to buy things that will be ready to ship in the month we want it, but is that really unreasonable? not if they have lots of options available which they usually do. many other popular brands are WAY tougher about which models we have to stock. they are more relaxed about when we order though. this causes a problem for them.... they can't predict production so they always end up with pieces they can't move. this leads to deals for dealers on those pieces. sounds great, right? not really. it means those companies are barely staying afloat. that's bad business and ends up hurting the stores in other ways. it means longer backorder times on other pieces. it means less flexibility in custom pieces and higher prices when they are available. it means smaller profits for the builder and the dealer. it means lower quality as they have to move more production to China just to keep up.

i think it's hard to look at the entire picture sometimes as just a consumer. sometimes as a dealer too. we all want to be able to buy anything we want, at a lower price, while getting a higher quality product and the best service. a lot goes into making that happen though. and everyone has a different idea of what that means. in the end, the manufacturer, the dealer, and the customer all have to come to some sort of middle ground. the maker and the seller MUST make a profit or there is no reason to be in business. they don't exist just to provide gear as a charity service. if they don't make a dollar, then they won't be around tomorrow. the customer must pay money, but not TOO much. if the cost is too high or the quality too low then they won't be able to buy anything or won't be able to be a repeat customer. none of the 3 sides can gouge the others too bad or it all falls apart. sometimes its a delicate balance. dealers thing the builder is asking too much. we want it easier and cheaper. customers think the dealer is asking too much. they want more for less. at some point, that race to the bottom will actually hit bottom and everyone loses. the opposite can also be true. if the builder asks too much, then the dealer drops them and the builder loses. if the dealer is unfairly high or doesn't provide good service, then the customer leaves and the dealer collapses. business 101... sounds simple. it's not.

[modoc_333]

Not sure if the info I got from my local dealer is correct but I was told that Gibson required the purchase of sixteen electrics for every acoustic they ordered. End result, they dropped the line after only having it for about six months. Just a bit out of hand for any mom and pop business.

 

 

 

this doesn't make sense to me. if they did the initial buy-in, then they are an authorized dealer for a full year. why drop the line half way through? you could just decide to not re-up next year. order what you want for the rest of the year, and then end it. the only reason to drop off after 6 months would be because you didn't pay your bill on the stuff and got cut off.

[modoc_333]

My local Guitar Center carries no Gibson acoustics in the store itself, except for the hummingbird pro model which was made for GC. And they told me it is because of Gibsons rules of sales. Gibson is shutting itself out of the market except for internet sales. Disappointing to say the least.

 

 

nonsense. that is GC's stocking decision in that store. they could stock it if they wanted to. what rules of sales are they talking about? Gibson doesn't care what you do with the inventory when selling it off the floor. And actually one big complaint for dealers is that we CAN'T sell online very easily due to the rules.

 

I should also add that in a big corporation like GC, the salesman on the floor is rarely, if ever, really informed as to the deeper side of the business dealings between the store and the manufacturer.

[modoc_333]

The store did not ratchet up the rhetoric or bad mouth Gibson, just that they could not get along with the new requirements and large quantities of cheap Epiphones that they were required to stock and display (They just don't sell in this area for some reason.(There is a lot of competition from Guitar Center for these el cheapo's Epi's, so they just don't sell at this location), and, oh yeah, that there was NO room for negotiation. I'm guessing that Gibson has a better rate of return on off shore made items than their American made acoustics.This store is very happy with the new offerings from Guild, and feel that they will be fine in the higher end acoustic offerings for their clients....

 

 

 

this IS the problem with the model. if stores could order whatever they wanted across divisions and just hit a number then it would be better. your local store could have kept carrying the acoustics without getting so deep into the Epiphone which they have trouble selling. I hate it for the store and the customers in this particular case. I am glad to hear that they didn't take the low road and just start bad mouthing though. That sort of class keeps a lot more customers than bashing. Sounds like a respectable shop to deal with.

[Buc McMaster]

I've been away from the business for many years now and things have perhaps changed a bit, but the goal for all parties involved remains the same. When I was the buyer for a family owned retailer (late 80s thru the late 90s) Gibson presented us with guitar "families". The Les Paul family, the Bass family, etc. I can't recall them all but there were perhaps 6 or 7 different families. We had to buy particular numbers of instruments from each family, say 8 Les Pauls of whatever model we wanted......Standards, Customs, etc. This was the annual "re-up" order to retain the dealership and it might be as many as 30-40 guitars with no say in the shipping schedule. We'd generally have to swallow 75% of that in one fell swoop. Ouch. And the sales rep of course leaned on us throughout the year to buy this or that special deal, and the NAMM shows were serious arm twisting events. Gibson was not and I'm sure is still not the only manufacturer to want its' share of the store's inventory dollars, but it was and still is difficult for a mom & pop music shop to have a diversified product mix when folks like Fender, Martin, Marshall, Peavey and others are all making big commitment demands.

[modoc_333]

I've been away from the business for many years now and things have perhaps changed a bit, but the goal for all parties involved remains the same. When I was the buyer for a family owned retailer (late 80s thru the late 90s) Gibson presented us with guitar "families". The Les Paul family, the Bass family, etc. I can't recall them all but there were perhaps 6 or 7 different families. We had to buy particular numbers of instruments from each family, say 8 Les Pauls of whatever model we wanted......Standards, Customs, etc. This was the annual "re-up" order to retain the dealership and it might be as many as 30-40 guitars with no say in the shipping schedule. We'd generally have to swallow 75% of that in one fell swoop. Ouch. And the sales rep of course leaned on us throughout the year to buy this or that special deal, and the NAMM shows were serious arm twisting events. Gibson was not and I'm sure is still not the only manufacturer to want its' share of the store's inventory dollars, but it was and still is difficult for a mom & pop music shop to have a diversified product mix when folks like Fender, Martin, Marshall, Peavey and others are all making big commitment demands.

 

 

these days they break it down by divisions of the corporation: Montana, USA, Memphis, Custom Shop, Epiphone and Gear (accessories, etc). similar idea though. NAMM isn't bad and the rep (at least ours) doesn't hit us too hard. Gibson actually has relaxed about how much of our store they expect to be devoted to them. (they used to care, now they don't). it can be tough with ALL of the manufacturers get in on it and want their own piece of the pie though.

[BluesKing777]

sort of. Almost all brands have certain requirements for stocking and yearly buying. some are easier than others. some are more public. in the end, we order what we thing will sell. in almost all cases you are ordering a model and have no idea what the individual will be like when it shows up. most manufacturers give reasonable payment terms. rarely is a deposit required, and rarely is the bill due immediately. when it does come due, it's usually not the entire bill. one thing most people don't realize is how long we wait for gear. guitars, pedals, amps, accessories... they all take different amounts of time but that thing you see on the wall or on the shelf may have been order a week ago or 6 months ago and just now arrived. nothing is ever billed until it is shipped though.

 

 

as for stocking requirements, everyone is different. almost all have an initial buy in requirement. after that, some just have a number they want you to hit each year. some of the bigger names are more specific. Martin can be easy and tough. they don't require a huge number, but they make you buy from several different series of guitars. some of these don't sell very well but it doesn't matter. you have to take it anyway. sometimes they require you to buy a specific model if it's one they are trying to push... whether it's a stupid idea or not. taylor asks a lot, but not unreasonable. all brands have their quirks. most dealers agree that if all brands just gave us a $$ amount to hit each year and left it at that, then it would be easier and we would sell more guitar overall. that doesn't help them with production predictions or balance though so it's actually more profitable for them to sell less guitars in a more controlled way.

 

as for Gibson......... sure, there are some tough parts to it. it's not as bad as all of the newly gibson-less dealers make it out to be and the internet rumors don't help clear it up any. for example: that earlier comment about 16:1 isn't accurate. as a matter of fact, Gibson never tells you how many guitars to buy. it's all based on dollars. you are required to buy less acoustics than electrics though so depending on which pieces you buy, it COULD come out to that ratio, but it doesn't have to. there is a dollar amount you have to hit for each division and that's it. the part that makes Gibson tough isn't the amount (unless you aren't really selling guitars and have no business carrying them anyway. that would just build up old stock from year to year). the part that makes Gibson tough is the schedule. every dealer has a certain time of year when it's time to re-up the dealership. they are all different. we are fortunate that ours comes up in August so we are able to get gear in and stock up for Christmas. a dealer that had to do it in January would have the cash built up, but no way of selling them quickly having already missed the Christmas season.

basically we pick what we want and Gibson will ship them out over the next several months. we can break it down however we want as long as it's reasonably balanced. in the past, the numbers were tougher. no one would order anything for a couple of months before their time because they knew they would have to order so much. now they will count any recent shipments and recent guitars on the wall toward our number. that helps.

sure we would love to just have one total number to hit at any point in the year. or to even have a total number we could hit at the time we re-authorize the dealership. we sell a lot of acoustics and would like a larger % dedicated to that. it's not how it works though and we deal with it. Gibson can't just sell from one division and they need to plan ahead for production. guitars take more than a few days to build. getting materials, tooling up, building, etc takes months. It sucks for us, but i understand.

they don't tell us what models to buy though. they want us to buy things that will be ready to ship in the month we want it, but is that really unreasonable? not if they have lots of options available which they usually do. many other popular brands are WAY tougher about which models we have to stock. they are more relaxed about when we order though. this causes a problem for them.... they can't predict production so they always end up with pieces they can't move. this leads to deals for dealers on those pieces. sounds great, right? not really. it means those companies are barely staying afloat. that's bad business and ends up hurting the stores in other ways. it means longer backorder times on other pieces. it means less flexibility in custom pieces and higher prices when they are available. it means smaller profits for the builder and the dealer. it means lower quality as they have to move more production to China just to keep up.

i think it's hard to look at the entire picture sometimes as just a consumer. sometimes as a dealer too. we all want to be able to buy anything we want, at a lower price, while getting a higher quality product and the best service. a lot goes into making that happen though. and everyone has a different idea of what that means. in the end, the manufacturer, the dealer, and the customer all have to come to some sort of middle ground. the maker and the seller MUST make a profit or there is no reason to be in business. they don't exist just to provide gear as a charity service. if they don't make a dollar, then they won't be around tomorrow. the customer must pay money, but not TOO much. if the cost is too high or the quality too low then they won't be able to buy anything or won't be able to be a repeat customer. none of the 3 sides can gouge the others too bad or it all falls apart. sometimes its a delicate balance. dealers thing the builder is asking too much. we want it easier and cheaper. customers think the dealer is asking too much. they want more for less. at some point, that race to the bottom will actually hit bottom and everyone loses. the opposite can also be true. if the builder asks too much, then the dealer drops them and the builder loses. if the dealer is unfairly high or doesn't provide good service, then the customer leaves and the dealer collapses. business 101... sounds simple. it's not.

 

Thanks a lot for taking the time for a great reply, Modoc!

 

Much appreciated.

 

 

BluesKing777.

[onewilyfool]

Well....I think that this top-down, dictatorial model just isn't the best in my opinion. Manufacturer's should want their dealers to be successful. You know, win-win. Not Manufacturer's win, outlets lose. Letting stores tailor their stock to what sells in their market or have some negotiation with the marketing, would make the store the most successful, and in the long run, the manufacturer most successful. Lots of stores have dropped their dealerships, both locally AND over the whole spectrum, I don't see how this can be good for Gibson in the long run. As others have said, going to Guitar Center, to ask some ignorant pimply faced teenager, about products which they know nothing about, can't be the best foot forward for Gibson. I guess having to do paper work for hundreds of small stores, or just a few 5-star dealers and a few mammoth box stores is worth it. Consumer loses again.....By the way, I got CONSISTENT quotes from my local dealer for music stuff that were better prices than the Big Box stores, even with 20% off coupons from places like Musician's Friend........ again....a big loss locally for musicians and Gibson lovers....

[onewilyfool]

......

[modoc_333]

Well....I think that this top-down, dictatorial model just isn't the best in my opinion. Manufacturer's should want their dealers to be successful. You know, win-win. Not Manufacturer's win, outlets lose. Letting stores tailor their stock to what sells in their market or have some negotiation with the marketing, would make the store the most successful, and in the long run, the manufacturer most successful. Lots of stores have dropped their dealerships, both locally AND over the whole spectrum, I don't see how this can be good for Gibson in the long run. As others have said, going to Guitar Center, to ask some ignorant pimply faced teenager, about products which they know nothing about, can't be the best foot forward for Gibson. I guess having to do paper work for hundreds of small stores, or just a few 5-star dealers and a few mammoth box stores is worth it. Consumer loses again.....By the way, I got CONSISTENT quotes from my local dealer for music stuff that were better prices than the Big Box stores, even with 20% off coupons from places like Musician's Friend........ again....a big loss locally for musicians and Gibson lovers....

 

 

oh I agree. I'm definitely no GC fan either. I agree with the win-win idea and I mentioned how the product mix is the hardest part for a dealer to handle.

 

 

Keith

[ParlourMan]

Something we've heard a lot here, I've even used it myself..... "Gibson sell everything they make"...

 

Two points:

1 ) Maybe that's because some lines are forced on those choosing to remain as dealers

2 ) Does Epiphone?

 

Seems one thing that's cropped up this time (again), it cropped up last time also, Dealers being forced into carrying Epiphone lines, or all the lines across the Corporation I guess. Surely if your market is J-45's and the odd J-200 you could order what you're after (or obliged to) from only those lines you can actually sell.

 

If they have models in the line that aren't shifting, surely it would be easier to shelf the model, or offer it as custom only and ramp up the lines dealers want and ones they can actually sell.

 

Now, another facet of the discussion has yet to creep up this time... dont the big-boy's, GC, MF etc (ie one parent company) demand certain exclusive rights from Gibson? So in effect is Gibson doing MF's dirty work for them to keep big orders rolling in? Now I think BBG mentioned about protecting fairly exclusive brands, good point and one that must be considered by every prestige manufacturer, but what comes across better; big box stores and online ordering or the hand selected 'mom n pop' type store. From practically thousands of existing threads we can gather that GC/MF etc are not the ideal places to buy your Gibson when compared with the persona touch offered by some stores who are no longer dealers, or are 'lesser' dealers etc...

 

We can all wax lyrical about it, short straw is while its nice to have mom & pop stores here there and everywhere, it's the antiquated way to do business, they are not owed a living by us, while I'm not unsympathetic about it, I wont cry about it either. The small stores have to do more to entice the customer until people get sick of corporations slowly moving into monopoly positions and act/react accordingly. We can also wax away a whole night talking about ethical shopping, products and support for ethical business causes but I bet your house is full of less than ethical purchases and slave/child labour products.

[blindboygrunt]

Mom and pop stores can't sit and blame the state of the world on the fact that they're doing less business. The world turns and they have to at least try and keep up.

You simply can't run a shop in 2013 without the trimmings that a modern day customer expects.

Much as I love them , small family run business do tend to get complacent and stay in their little rutt quite happy with the excuse of 'the world isn't what it used to be'

I can't think of a single person I have eve met who prefers to use a large corporate company to buy anything from. So why are they still there ?