LarryUK Posted July 15, 2017 Share Posted July 15, 2017 I went into Birmingham (UK) centre today and decided to go look at some Les Pauls. I went to the 3 main stores. One didn't sell them and the other two only had about 10-12 each store. Yet walls of Fenders at both. Both Gibson dealers had more Gretsch than Gibson. Quite sad. Link to comment Share on other sites More sharing options...
merciful-evans Posted July 16, 2017 Share Posted July 16, 2017 Thats pretty disturbing. Especially for somewhere like Birmingham. Link to comment Share on other sites More sharing options...
Rabs Posted July 16, 2017 Share Posted July 16, 2017 Yeah. From what I know its because of the amount Gibson expect the shops to take on each year.. Its just not sustainable... Link to comment Share on other sites More sharing options...
Twang Gang Posted July 16, 2017 Share Posted July 16, 2017 Not sure what Gibson's floor plan is for a dealer. Maybe someone who has owned a guitar shop can shed some light on it. A huge store like Guitar Center, Sweetwater, or Sam Ash here in the US probably gets a little better financing deal than a small shop because it is anticipated that they will sell a larger volume. If it is like other high ticket retailers (auto dealer, boat dealer, high end furniture etc) the inventory is financed by the manufacturer and when the product is shipped to the retailer an invoice is created. But the retailer doesn't pay the invoice in full when they receive the product, they pay a set interest rate on the balance due. When they sell the item, they pay off the principal amount of the invoice. (Hopefully keeping some profit) So you might have 10 Les Pauls that for example have average wholesale cost of $1800 each (retailing for $2500 to $3200), so you are financing $18,000. Interest rates are very low right now so maybe the interest is 3% or 5% annually. So for $18K at 5% the retailer is paying $75/month interest on that inventory. On the other hand if you had 45 Fender guitars at an average wholesale cost of $400 (retailing $700 to $1200) that is the same $18,000 being financed. So for the same $75/month finance fee you can carry 45 Fenders, or 10 Les Pauls. My numbers (cost and interest rate) may be way off here, but you get the idea. If the cost of the guitar is lower you can afford to carry a lot more of them in your inventory. I knew a small dealer in Illinois that carried Taylor acoustics for years. Taylor came out with it's new solid body electric guitars in about 2007 or 2008 with a lot of marketing hype and I asked him if he was going to carry the new solids. He told me he couldn't afford it because Taylor wanted him to commit to $10,000 of inventory on a rotating basis which would have been maybe 10 to 12 guitars. Based on the demographics of his customers he didn't think he'd sell enough of them fast enough to be profitable. They would hang on the wall for a long time while he's paying interest on them every month and as soon as he sold one Taylor would ship and bill him for another (to keep his minimum inventory at the agreed upon level). It is tough for the small retailer, and even Guitar Center is laden with huge debt from what I've read. Rather than be disappointed (I take it you didn't find what you wanted or we'd be looking at a NGD post) perhaps you should feel lucky you could try 20 Les Pauls in person in one day by hitting 3 different shops that were in the same town. Link to comment Share on other sites More sharing options...
Rabs Posted July 16, 2017 Share Posted July 16, 2017 It is tough for the small retailer, and even Guitar Center is laden with huge debt from what I've read. Rather than be disappointed (I take it you didn't find what you wanted or we'd be looking at a NGD post) perhaps you should feel lucky you could try 20 Les Pauls in person in one day by hitting 3 different shops that were in the same town. Well all this plus you have Gibson say who decided than rather than just stick the auto tuners on a few models and after failing in 2015 to force it on us.. They now have TWO of each model an HP and a T... Then you have all the customs and Ltd Editions.. and that's just from one manufacturer. When you then add in Fender, PRS and all the others. It just saturates the market therefore devaluing their own product... I think I read somewhere that Gibson make 1200 guitars a day, and that's just the USA division... Where are all these guitars supposed to hang in a shop, theres only room for so much and shops can only afford to invest so much or their own profits go down for that year... Its a bonkers corporate way of doing things where all they care about is that profits go up and the share holders get their bonuses.. They should be reading the market better.... Whats wrong with profits staying the same??? When did that become unacceptable in business? These days they should be thankful they are still in business. Link to comment Share on other sites More sharing options...
Rookery Posted July 16, 2017 Share Posted July 16, 2017 I'm not sure if it's related to the original point but I went into a fairly sizeable music shop in the North Midlands a month or two ago and they did not have a single Epiphone guitar. I gather from one of the techs that it's due to 'contractual issues'. Link to comment Share on other sites More sharing options...
Pinch Posted July 16, 2017 Share Posted July 16, 2017 Wonder how many HPs they sell... My prediction is stores will have to have clearance sales, just like with the 2015 line. Inevitably, with this business model, fewer stores will carry Gibson guitars. It's not a sustainable business model. IMHO. I'm all for new bursts and such (actually no, but it fits into my rhetoric hete), but stop trying to re-invent the wheel. Upping the QC and being more lax about how many guitars retailers have to carry will bring more profit and a better company image. That's what I think, anyway. Link to comment Share on other sites More sharing options...
charlie brown Posted July 16, 2017 Share Posted July 16, 2017 My favorite Gibson dealer, in Wichita, has dropped all but the Gibson Acoustic line. They're a 5-Star dealer, for Gibson Acoustic's, but a lot of what they were required to carry, for both Gibson and Epiphone electrics, they simply couldn't sell, regardless of the awesome deals, they normally give. Most customers want the "tried and true" LP's, SG's, ES-335-355. Along with the Epiphone versions, of those iconic models. The other models, they could special order, for awhile, but at some point "Gibson" decided, FOR my dealer, what they had to stock, whether it sold well (or, at all) or not! This is not the first time, Gibson has done this. My dealer has had to drop them, a couple of times, in decades past, prior to this most recent episode. So, they don't know if this time is "permanent," for just another "bump" in the rocky road, of dealing with Gibson Corp. It's sad, on many levels, but especially for my dealer's fiercely loyal customers, who love Gibson and Epiphone. :( We're all hoping Gibson will modify it's requirement(s), sooner than later, so my dealer will be able to sell Gibson/Epiphone electric's once again. CB Link to comment Share on other sites More sharing options...
LarryUK Posted July 16, 2017 Author Share Posted July 16, 2017 The stores were national stores. There were easily a 100 Fenders. What got me about one store was, it's just expanded its store and before it had a wall of Gibsons. At least 60 plus. Link to comment Share on other sites More sharing options...
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