From fortepianonj@yahoo.com Tue Dec 06 19:28:35 2005
Subject:Re: fair CX-3 price

This is an interesting discussion. One shouldn't
begrudge a retailer (especially in the music biz) for
making a profit where they can. It's a tough business
and even tougher to keep it profitable. It's important
to have music stores around which support the
customers, that fix/repair instruments (for free or
not), and that support the musical community. We
should realize that these stores may not be around
much longer unless they can adapt, create a niche
business, or find a way to compete in new competitive
marketplace.

With the internet competition, the catalogs, wholesale
clubs, GC, Walmart, and now Best Buy, it is almost
impossible to run a brick and mortar music store
profitably anymore. Small mom & pop music stores are
now faced with critical decisions. Even larger music
stores are struggling with how to compete in this
arena. Some stores are finding a way to compete and
others are just giving up.

Perhaps some of you will also find it interesting that
in 2004 more than 200 music stores in the U.S. went
out of business. This is unprecedented.

Today's music retailers cannot make enough profit to
sustain their businesses or themselves. We should
support the "little guys" as much as possible and let
them make some money.

FP

--- Barry wrote:

> Yeah... My music dealer is a really nice guy,and
> I've bought tons of stuff
> from him. I have to admit, when I find out how much
> he pays for stuff, I'm
> surprised what he sells it for - he doesn't make as
> much on it as I would
> have thought he did. Not only does he pay the
> wholesale price and shipping
> and all other expenses, he pays rent for his store,
> his workers' salaries,
> etc. Then, if anything goes wrong with new
> equipment, he fixes it for free,
> often paying for parts himself. When my VK-7 died a
> couple of years ago, I
> know he had to invest a lot to get it working again,
> and charged me nothing.
> And, he works 6 days a week (7 in the holiday
> season), and supports his
> family on what he makes. I think music dealers like
> this are a gift to our
> collective passion.
>
> ----- Original Message -----
> From: "Bruce Wahler"
> To:
> Sent: Tuesday, December 06, 2005 3:23 PM
> Subject: Re: [CWSG] fair CX-3 price
>
> Hi,
>
> >Most of the products at retail stores have a markup
> of anywhere from
> >50% to 300% of the wholesale price.
>
> This is one of the oldest and most misunderstood
> "truths" in music retail.
> I'm a music dealer, and I know better.
>
> If one is talking about no-name drumsticks,
> knock-off brands of school or
> orchestra and band instruments, etc. then your
> statement may be true. If
> the product in question is a piece of used gear that
> the store practically
> stole from an unsuspecting owner, then it might also
> be true. If, however,
> you are talking about the mainstream products from
> major brands (Fender,
> Roland, etc.) or boutique products (Speakeasy, MIDI
> Solutions, etc.) the
> markups aren't nearly as big -- unless they happen
> to be closeout items.
> Yes, that $99 "Christmas Special" guitar set might
> have cost the dealer $50,
> but that Fender Twin or Motif 6 in the window is not
> in the same category.
> If it was, the new prices on eBay would be so low
> that used gear couldn't be
> sold there anymore. (Many of the "new in box" items
> offered for sale on
> eBay are direct warehouse-to-customer deliveries
> where the seller is more
> than happy to pocket $15-25 per sale, since he/she
> has exerted no more
> effort than to write an ad,
> and then email the manufacturer with the shipping
> info.)
>
> If a name product has an SRP of say, $200, I can
> pretty much guarantee that
> dealers are paying more the $50-75 that your
> statement implies. After that,
> shipping costs, credit card fees, etc. come out of
> the dealers side.
>
> If someone bought a brand new $2595 SRP CX-3 for
> $550, and the dealer wasn't
> just dumping a line that wasn't selling, then a fair
> amount of used gear
> went into the sale, too.
>
> Regards,
>
> -BW
>
> --
> Bruce Wahler
> Ashby SolutionsT http://music.ashbysolutions.com
> 978.386.7389 voice/fax
> bruce@ashbysolutions.com
>
> At 04:18 PM 12/6/2005 +0000, you wrote:
> >retailer has to make a profit to stay in business.
> The markup is
> >determined by how much competition the retailer has
> and/or the
> >availability of the product. There is nothing
> wrong with making a
> >profit. And if the retailer is not competitive on
> their price they
> >won't be is business for long. That's Economics
> 101.
> >
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