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kebob

Another reason to loathe Guitar Center

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Ok, I'll bite. Say they offered $1,200. They resell it for $1,600 (a very good price). $400 profit for the store.

 

I'm certain there's more to it than this because that makes too much sense to me.

I don't know the values of the guitar in question. But assuming it retails at $1,600. They can get a NEW ONE for $800. So again, WHY would they pay you $1,200. for a used one?

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I don't know the values of the guitar in question. But assuming it retails at $1,600. They can get a NEW ONE for $800. So again, WHY would they pay you $1,200. for a used one?

 

It retailed for $2,400 -- Martin no longer makes this model. A regular D-18 right now retails for $2,300.

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It retailed for $2,400 -- Martin no longer makes this model. A regular D-18 right now retails for $2,300.

I'm not trying to spar with you. Just telling you how it is. I think 100% markup is outrageous. But it is what it is.

BTW, You can get a D-18 cheaper if you know where to look. I paid as (I recall $1,800.) for my 2013 1935 Burst D-18.

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I'm not trying to spar with you. Just telling you how it is. I think 100% markup is outrageous. But it is what it is.

BTW, You can get a D-18 cheaper if you know where to look. I paid as (I recall $1,800.) for my 2013 1935 Burst D-18.

 

No one is sparring. You stated you didn't know the value of the guitar in question so I stated it. The 100 percent markup is more than I thought for sure. Plenty of places to try and sell so no biggie. Also plenty of places to buy gear other than my local GC.

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If you feel you are being Ripped off.. stay away from the place.. just remember.. every new guitar you buy.. is way over priced.. and you will take a loss.. if its from 1996.. they wont give you 2000 era prices.. they will give you a portion of the value from 1996 .. dont think a 1990s guitar is worth the same as a new one.. there not old enough to be collectible, and there still in plenty of supply..

 

Thats why I Dont buy many new guitars.. only the ones I like and thats it.. There high end enough i wont take a bath on them when and if its required to let them go , I know what to expect.. ..

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That 800 dollar figure is the WHOLESALE value of your guitar.

 

Just as retail is always more than private party. Retail, being, the average standard selling price, as opposed to "list".

 

A store, a business, NEEDS to make money. It's only fair. You can't walk into a guys house and buy whatever you want, so for the privilege of being able to shop, there is a price, a higher price than buying from a private party. That's not being ripped off.

 

But SELLING to a shop is also a service. Trading it in is no different than selling it to them. The math is exactly the same.

 

But back to the wholesale deal: it's a real price, a real figure. It doesn't mean anything like you or I can expect to buy your guitar for 800 bucks, because on a fair market, it's more. But wholesale IS "fair" as a value to a store, franchise, or whatever as a value place in "stock" for goods.

 

We all like to think of guitars as commodities, but they aren't. It's good to consider your collection as value in wholesale prices if you are thinking of converting to cash.

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Well...other forums are also complaining that at GC, you can negotiate your sale price, and at the checkout, they try to charge you extra for the case??? Even though the case came with the guitar and the manufacturer does not allow them to sell the case separately ...just another reason to loathe GC....lol

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Well...other forums are also complaining that at GC, you can negotiate your sale price, and at the checkout, they try to charge you extra for the case??? Even though the case came with the guitar and the manufacturer does not allow them to sell the case separately ...just another reason to loathe GC....lol

Lol...

 

Guitar Center INVENTED the concept of separating the case from the guitar.

 

If they didn't do that, I would think the sky is falling and the end of the world was here.

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I don't see why a 100% markup is outrageous, whether we're talking new or secondhand. There are plenty of areas of the general retail market where markups are higher. It's all down to overheads and turnover time. In the UK the markup on well known brands is nowhere near 100% and it makes it hard for businesses to survive when there's a dip in sales and turnover slows down. Making 20-30% markup is fine if you can turnover that guitar once a month - if you're selling one every three months it's really not enough.

 

In the case of Guitar Center part exchanges, I suspect someone has taken a look at overall sales of second hand guitars, calculated how quickly the average guitar sells and what the average discount off ticket price is, and imposed a simple rule of 50% for all purchases. That makes it easy for a chain to control pricing, but there will be winners and losers when it comes to the customer. A small business with an owner or a manager with the authority to make purchasing decisions can look at you guitar and make an offer based on how easily the guitar will sell so, depending on your guitar, you might do better with a local store.

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Ya but, this is pretty much the way it goes with any store, not just GC.

 

Having spent sometime teaching and getting to know (quite well) the store owners of a local chain, [at least in this case where I was] I found that they really don't like taking trades, as it's now a two way transaction. To sell one, they have to take one in. It's not ideal for a store who's main goal is to sell off the inventory.

 

So - yes, they will purposely try to fleece you on a trade, if you're that desperate for the next new shiny item, they'll happily take advantage of you, and in time, they win you loose, but you're at least happily going off with the new axe.

 

The simple approach is, Just don't do it unless you are willing to take a bath.

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snip:

 

I think 100% markup is outrageous. But it is what it is.

 

Just a little insight on business 101. Markup & markdown have to be the same percentage. It is REALLY 50% markup on the "Selling" price. Think of it this way, $1000.00 (retail sell price) marked down 50% is of course $500. $500 (cost) marked up 50% is $1000. That is 50% on the selling price and you need to either divide the "Cost" by .5 or use a calculator made to add true gross profit margin. Can't tell you HOW MANY bushiness have failed that didn't know this simple figure & diff on cost on selling price and Markup. I could go into great detail on the accounting aspects and why's but really not necessary.

 

Now for the "outrageous" part. You can't make it retail wise for much less than 50% margin. With any business, you have someone working on the floor, doing daily bookkeeping, CPA for taxes & business health, paying rent, (last time I checked when we moved it's over $9/sq. foot for rent plus sometimes prop. taxes & some costs like snow/lawn etc), telephone, business insurance, utilities to heat/cool and too many more to list. This doesn't even cover the local, State, and Feds yet. With just 4 employees (say making $32,000/yr). You've got a $200,000/yr overhead just to BREAK EVEN. You have to sell at least $400,000/yr or about 33 - $1000 git/month (ave. price) JUST TO BREAK EVEN and still not make ANY MONEY YET. Not too many want to work for $32K/yr anymore either. I have some great staff and some slacker staff too. They'll watch others work till they drop and won't think to help unless they are beckoned to do so. Then you've got Unemployment expenses, work comp etc. This is why most businesses belly up in the 1st 3 yrs. Latest stats show that even making it past 5 yrs, 60% of ALL BUSINESS are NOT PROFITABLE. Not slapping you down Strat, but 50% is just minimum to survive. Manuf. end it's even closer to 4x-5x cost to produce to make the bus. profitable.

 

Been there, done that now for 31 yrs. now. Not crying the blues, cuz that's what I chose to do. But most businesses, esp. smaller businesses (under 1 million $/yr) are just not profitable. Big ones, like GC and other chains, either have been, or on the brink of closing way too often these days. Sears, Best Buy (was all but dead now coming back), KMart, even Target now is in some troubles. If you get into what WalMart pays & then sells for, you'd poop your pants at some of the margins they get and then couple that with HIGH volume too. Even a Guitar Center or Mus. Friend doing high volume doesn't come close to that.

 

Just a thought.

 

Aster

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You don't understand the retail guitar market. There is a 100% retail markup on guitars. That Right...100%. That means you pay TWICE what they paid for it. So why would they give you even 50% of retail for a used one? The standard offer is somewhere in 40% range. You are WAY better off to sell your guitars & gear privately.

 

Not sure where your info comes from, but NOBODY sells any musical instruments or related products at "Suggested retail prices".

Typical margin is about 25-30%.

 

What new d18's are selling for isn't relevant. You can't compare a new guitar price to a used guitar price. Here's what Guitar Center is getting for a used Martin D18-V
They have it listed for $1600. That's what they're asking for it-they haven't "gotten" it yet, and they may never get that much for it.

 

I do this stuff all day long at a small music store. We give fair WHOLESALE prices on trades and also sell items on consignment.

We always tell a customer that they'll put the most money in their pocket by selling it themselves.

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If you loathe the place why keep going back?

 

To find another reason to loathe Guitar Center? [tongue]

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To find another reason to loathe Guitar Center? [tongue]

 

^ [lol] ^

 

Hey, I shop at Lowe's at least once every couple weeks and every time I check out I swear I'm coming back only to burn the place down, so I can appreciate the whole GC hate thing.

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Aster….isn't your math off….Yes $1000 marked down is $500. but $500 marked up 50% is $750, as 50% of $500 is $250. $500 marked up 100% is $1000….just saying…...

 

Just a little insight on business 101. Markup & markdown have to be the same percentage. It is REALLY 50% markup on the "Selling" price. Think of it this way, $1000.00 (retail sell price) marked down 50% is of course $500. $500 (cost) marked up 50% is $1000. That is 50% on the selling price and you need to either divide the "Cost" by .5 or use a calculator made to add true gross profit margin. Can't tell you HOW MANY bushiness have failed that didn't know this simple figure & diff on cost on selling price and Markup. I could go into great detail on the accounting aspects and why's but really not necessary.

 

Now for the "outrageous" part. You can't make it retail wise for much less than 50% margin. With any business, you have someone working on the floor, doing daily bookkeeping, CPA for taxes & business health, paying rent, (last time I checked when we moved it's over $9/sq. foot for rent plus sometimes prop. taxes & some costs like snow/lawn etc), telephone, business insurance, utilities to heat/cool and too many more to list. This doesn't even cover the local, State, and Feds yet. With just 4 employees (say making $32,000/yr). You've got a $200,000/yr overhead just to BREAK EVEN. You have to sell at least $400,000/yr or about 33 - $1000 git/month (ave. price) JUST TO BREAK EVEN and still not make ANY MONEY YET. Not too many want to work for $32K/yr anymore either. I have some great staff and some slacker staff too. They'll watch others work till they drop and won't think to help unless they are beckoned to do so. Then you've got Unemployment expenses, work comp etc. This is why most businesses belly up in the 1st 3 yrs. Latest stats show that even making it past 5 yrs, 60% of ALL BUSINESS are NOT PROFITABLE. Not slapping you down Strat, but 50% is just minimum to survive. Manuf. end it's even closer to 4x-5x cost to produce to make the bus. profitable.

 

Been there, done that now for 31 yrs. now. Not crying the blues, cuz that's what I chose to do. But most businesses, esp. smaller businesses (under 1 million $/yr) are just not profitable. Big ones, like GC and other chains, either have been, or on the brink of closing way too often these days. Sears, Best Buy (was all but dead now coming back), KMart, even Target now is in some troubles. If you get into what WalMart pays & then sells for, you'd poop your pants at some of the margins they get and then couple that with HIGH volume too. Even a Guitar Center or Mus. Friend doing high volume doesn't come close to that.

 

Just a thought.

 

Aster

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^ [lol] ^

 

Hey, I shop at Lowe's at least once every couple weeks and every time I check out I swear I'm coming back only to burn the place down, so I can appreciate the whole GC hate thing.

 

 

What is that definition of insanity - doing the same thing over and over and expecting a different result.

 

My thought - we continue to walk into GC, Lowes or McDonalds because of the ritual. You know just what the place will look like and what to expect and we take great comfort in that.

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What is that definition of insanity - doing the same thing over and over and expecting a different result.

 

Like practicing every day and expecting that my playing will actually improve? [tongue]

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Not to muddy the water, but to expand on OWF's good point - 'markups' and 'markdowns' are not interchangeable concepts with one being additive and the other negative - but with the same % and $. . A markup is generally defined as the amount or % added to cost to get to the listed sales price. A markdown is normally called a discount on sales price. Cost is a much guarded proprietary secret - so few wholesalers are going to tell you how they arrive at their sales prices. They do not usually apply the same 'markup %' to every item. In general, the higher the cost of the item, the lower the markup%. Competition also affects markups. And, a 25% discount off of sales price obviously doesn't get you back to the cost. Markups and Discounts are two different concepts applied under different circumstances.

But, this is a tempest in a teapot. GC has no desire to become a pawn shop. They cannot afford to take in a used guitar every time they sell one. So, they discourage the practice. Their business model is to identify which brands and models they can turnover quickly as new. They aren't a 'vintage guitar' shop either. And, they can't take the risk of having sales associates mistakenly accept a trade in of a guitar that is not what it is being presented as. Either a good knock off, or one that was left in the rain the day before.

So - it is unrealistic to expect any retailer to operate as a non-profit. And accepting a trade thinking they can sell it quickly for a measly $200 gain is expecting them to operate like a non-profit.

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I have taken 2 high end Gibsons to GC, on separate occasions, to see what they would offer as a purchase. They never seem to have anything I am interested in as a trade. Anyway, both times, after my guitar disappears into some back office for 20 mins., they reemerged accompanied by offers that were insulting at the very least. I detected a pattern after the second time and never went back.

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IMO most of the Guitar Center loathing is the result of being associated with Bain Capital. Who is associated w/a certain public figure who is actually the root of it. Every few weeks it seems we get an article or news story from someone waiting & praying with baited breath that GC is going belly up. And of course it's Bain Capital's fault. Never a mention of high unemployment and a bad economy that has flooded the market w/used guitars to the extent that it's a buyer market and ALL guitar sales have gone soft.

I love GC. Even though I know (online) places to get a better deal on high end guitars. It's the place I go if I want to sample one. And I get my string there at generally a 3 for the price 1 anywhere else price.

The fact is that they are the Wal Mart of guitars/musical instruments. They have the ability to buy from the manufacturer in MUCH larger bulk than the vast majority of vendors. And that as a rule translates to savings for you. AS long as they're there. They get at least some of my business.

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Its funny how people over value something they are selling, yet de-value something they wish to purchase. [blink][lol]

 

I'm amused when I have something for sale and a prospective buyer stands there and runs it right into the ground. I've gotten so irked that a couple times I've said, "If it's as bad as you say it is, I better not try to sell it to anyone!".

 

It's one thing for a store or dealer of ANY kind to lowball us right out in front of God and everyone, but there are some sneaky dirty things that go on. Case in point: in 1984 my father had a 1970s j200 that he loathed. Loathed. He chatted with a dealer 200 miles away and the dealer offered $650 cash and a new Yamaha CJ something or other. So we made the trek. Once we got there, the guy opened the case and said "ooooooh, this isn't a '73 or '74 like you said, it's a 1978" or whatever he said... like THAT was going to make any difference. I pointed out it was an "A" followed by six digits, which made it '73 to '75. He conceded that but added, "Ooooh, but if it was a '72 or older it would have been rosewood, not maple!" I then pointed out that rosewood J200s hadn't been made since before WW2, which wasn't EXACTLY true but close.

 

So no deal was made. He simply used the old bait & switch, in this case offering a price he had no intention of following through on. Sadly I have had that same experience with a certain well known dealer in Lansing Michigan. They've made crazy offers, only to reneg once they have the trade-in in hand.

 

Like I said, if they make an offer that's insulting, then it's easy to walk away but when they pull sneaky switchy things on me, they'll get the chance to do it ONCE.

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Not to muddy the water, but to expand on OWF's good point - 'markups' and 'markdowns' are not interchangeable concepts with one being additive and the other negative - but with the same % and $. . A markup is generally defined as the amount or % added to cost to get to the listed sales price. A markdown is normally called a discount on sales price. Cost is a much guarded proprietary secret - so few wholesalers are going to tell you how they arrive at their sales prices. They do not usually apply the same 'markup %' to every item. In general, the higher the cost of the item, the lower the markup%. Competition also affects markups. And, a 25% discount off of sales price obviously doesn't get you back to the cost. Markups and Discounts are two different concepts applied under different circumstances.

But, this is a tempest in a teapot. GC has no desire to become a pawn shop. They cannot afford to take in a used guitar every time they sell one. So, they discourage the practice. Their business model is to identify which brands and models they can turnover quickly as new. They aren't a 'vintage guitar' shop either. And, they can't take the risk of having sales associates mistakenly accept a trade in of a guitar that is not what it is being presented as. Either a good knock off, or one that was left in the rain the day before.

So - it is unrealistic to expect any retailer to operate as a non-profit. And accepting a trade thinking they can sell it quickly for a measly $200 gain is expecting them to operate like a non-profit.

 

 

Yep, they probably want another guitar like they want a hole in the head.....make their day! Also probably like to sell their new versions, ie new D18, instead of the used competing.

 

And 40YP - an old employer of mine had his secret price code: "Think of a number and triple it" seemed to be how it worked and the greatest acoustic guitar shop in this country appears to work on a similar formula, but I keep going back now and again because they import direct, getting better prices than I could import a guitar through the dreaded Customs here with there row of extras (last time added 55%), and also because they give some thought to us poor neglected fingerpickers that want wide nut fingerstyle guitars and resophonics and other non mainstream acoustics, some needing a Lotto win to even give a test run..... They also have the capo of the month and relative needful things that the chain stores forget.

 

 

BluesKing777.

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