Jump to content
Gibson Brands Forums

Its a ****ing start...but im pretty happy!

dem00n

By dem00n
in The Gibson Lounge

Recommended Posts

Riverside

Riverside

Posted
Posted

For your convenience:

 

Henry wrote:

 

 

Posted 18 July 2010 - 10:07 AM

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.

Link to comment
Share on other sites
Riverside

Riverside

Posted
Posted

July 18, alot can happen in two months my friend.

 

Do you think the financial details/economic climate have changed so much?

 

I don't.

 

If they'll be selling through small stores (read: low product turn) it won't be economically feasible to provide the requisite service.

 

I have no doubt that someone could cipher a plan to "sell more" by increasing shelf space, but I doubt if it will be what (I think) you and I expect it should be.

Link to comment
Share on other sites
Jeff-7

Jeff-7

Posted
Posted

I really hope they do get back into giving local retailers a chance to stock their axes, I for one would be willing to drop an extra hundred or two if I know know some of that money will stay in the community. Then again maybe I'm weird, I avoid chain stores when I can.

Link to comment
Share on other sites
Riverside

Riverside

Posted
Posted

I really hope they do get back into giving local retailers a chance to stock their axes, I for one would be willing to drop an extra hundred or two if I know know some of that money will stay in the community. Then again maybe I'm weird, I avoid chain stores when I can.

 

It's a nice sentiment, but even the local GC doesn't carry a very good selection. Lot's of faded models, some two and three years old.

 

 

I doubt if the guy who eaks out a living renting trumpets and flutes to the parents of kids in the school band will carry much of a selection, either.

Link to comment
Share on other sites
Tman5293

Tman5293

Posted
Posted

I really hope they do get back into giving local retailers a chance to stock their axes, I for one would be willing to drop an extra hundred or two if I know know some of that money will stay in the community. Then again maybe I'm weird, I avoid chain stores when I can.

 

Gave you a plus one for this because Guitar Center already has enough money! msp_thumbup.gifmsp_thumbup.gifmsp_thumbup.gif

Link to comment
Share on other sites
Jeff-7

Jeff-7

Posted
Posted

It's a nice sentiment, but even the local GC doesn't carry a very good selection. Lot's of faded models, some two and three years old.

 

 

I doubt if the guy who eaks out a living renting trumpets and flutes to the parents of kids in the school band will carry much of a selection, either.

It's just how I feel about the situation, for all intents and purposes with the way our society is it just won't end up being very practical. And yes even GC's selection is pretty horrid. Think there were 3 SG's hanging on the wall when I got mine.

Link to comment
Share on other sites
Tman5293

Tman5293

Posted
Posted

Very cool.

 

Did you read Henry's post? What do you think of the business logic?

 

I thought everything he said was true. If you think about the average guitarist out there and how many there are, you realize that most of them are 1-3 year guitarists that have no idea what they're doing. They could care less where they get their guitar from and Guitar Center is everywhere. It's basically Walmart for musicians. Gibson is in the business to make money. They have to ship to the stores that are guaranteed to sell their guitars. Puts Mom & Pop stores pretty low on the food chain. If they can't keep up profits that benefit Gibson then why would Gibson ship their guitars there and lose money? It really does all make sense. The consumer controls how companies sell their stuff.

Link to comment
Share on other sites
Riverside

Riverside

Posted
Posted

I thought everything he said was true. If you think about the average guitarist out there and how many there are, you realize that most of them are 1-3 year guitarists that have no idea what they're doing. They could care less where they get their guitar from and Guitar Center is everywhere. It's basically Walmart for musicians. Gibson is in the business to make money. They have to ship to the stores that are guaranteed to sell their guitars. Puts Mom & Pop stores pretty low on the food chain. If they can't keep up profits that benefit Gibson then why would Gibson ship their guitars there and lose money? It really does all make sense. The consumer controls how companies sell their stuff.

 

And so with that, do you think he's going to start distributing guitars to small shops?

Link to comment
Share on other sites
rocketman

rocketman

Posted
Posted

Gibson is clearly in it to make money and Henry has his plan. But let's get the entire story here. Is Gibson selling their guitars to all retailers at the same rate? I was told to buy my guitar when the Gibson rep was visiting the store because I could squeeze another 100 bucks out of him. I'm not sure how many reps will be visiting the smaller stores. Do retailers get a discount when they buy in bulk? If the answer is yes to these questions, then the small market shop has no chance to survive against the big chains. What about PRS and Taylor? How do they find a lucrative market through small retailers?

Link to comment
Share on other sites
Riverside

Riverside

Posted
Posted

Depends, it takes some balls to bring back a company that was in the dirt doing bad.

 

That, and a sharp business mind.

 

Back to the other question - do you think is how he would release this info (talk to whoever in the broom closet so he could leak it MLP), or is there something else going on?

 

And if it really turns out that there's been a complete 180* turn in the last several weeks, just why would that make you happy?

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

Go to topic listing
×
×
  • Create New...