Dealers Map New Directions in Fretted Brands

The results of an email survey of more than 4,600 U.S. storefronts (both full-line and specialty guitar shops) showed a majority actively cultivating new sources of supply in guitars, basses, and other fretted instruments.

Nearly 80% of respondents report adding brands in the electric and acoustic/acoustic-electric segments over the last two years, while just under 60% are merchandising electric basses with new brand names. This adventurous spirit is less evident in non-guitar fretted products where more than 70% have made no additions over the last 24 months.

Having a line not stocked by the competition (indy, national, and Internet retailers) was cited by 76% of respondents as a reason for taking on new fretted brands, followed by price/quality considerations (64%), and margins (60%.)

Will the trend continue? Apparently: Over 90% say they will continue to consider new brands in the future.

Dealers Speak Out
We asked retailers for comments on the current fretted market as well as their views on the role of newer or lesser-known brand names within the category…

The new electric brands we have added provide options to the customer outside the big three. The “upstarts” offer great colors, configurations, and value to our customer and the chance to have something that is still somewhat unique at a very reasonable price.Instead of throwing ridiculous buy-in requirements at us, these newer companies are just thrilled to do business with us. What a very refreshing change of scenery indeed!

Terry Lewis
Firehouse Guitars
Grandville, Mich.

We would like to see brands that support people getting involved in playing music, not just the aspect of selling commodities … and try to make it profitable and fun as well.

Dave Miller
Buddy Roger’s Music
Cincinnati, Ohio

I sell Fender accessories … why don’t they have an electric guitar (import) student line with the Fender name somewhere on it for the independent stores? They do it for Sam’s Club, Best Buy, Bed Bath & Beyond, Target, etc.

Vincent Ruffini
A-K Music
Lower Burrell, Pa.

We use MI SalesTrak info to find out what’s selling and then work backward to what we have available that matches the price point or feature set of the popular time. Seems to work well and doesn’t force us to have too many vendors to keep happy.

Peter Sides
Robert M. Sides Family Music Center
State College, Pa.

Logos sell, but an okay instrument that looks slick and professional outsells brand names that look like a turd. Of course, it still has to be a decent instrument …

John R. Giovannoni
The Music Room
Palatine, Ill.

I’m surprised by the quality and variety of fretted instruments — primarily guitars — that are being made in China. The customers are very willing to try and buy these instruments, not tomention the price point is much better than some of the other major brands.The laminates don’t go over very well in our location, however.

Cindy
Pickin’ Porch Music Store
Conway, Ark.

The bass guitar market is much more accepting of new products than the guitar market. While there is more acceptance in the guitar market than in the past, it is still dominated by a handful of very common product types (single-cut, Strat/Tele-style …)

James Bethea
The Perfect Bass, LLC
Baton Rouge, La.

Too many Stratocasters from all brands.

Fred Shuman
Durdel’s Music
Toledo, Ohio

With the non-music box stores — Costco, Target, Toys R Us, Sam’s Club — and department stores (Sears, Penny’s, etc.), it has all forced the real music stores to become more aggressive through brand development on a personal market level.

The suppliers all realize the Internet has been good and bad. While the brick-and-mortar stores are struggling to stay open, we see a decrease in storefronts each year. With the present trend, we may see the implosion take place sooner than expected — too much product and not enough space to offer it for sale. Not until we have real franchises for local markets will this industry start to grow again. We sign a franchise that states our territory, yet any one can buy online and have products delivered into our backyard at a savings and pay no sales tax.

Harry Gillum
Showtime Music
Bridgeport, W. Va.

Have you added any brands of electric guitars in the last two years?

Most mentioned among 62 brands reported:
Greg Bennett/Samick/Silvertone – Michael Kelly – Reverend Hagstrom – Ibanez – Schecter

Have you added any brands of acoustic and/or acoustic-electric guitars in the last two years?

Most mentioned among 52 brands reported:
Ibanez – Michael Kelly – Blueridge – Takamine

Have you added any brands of electric basses in the last two years?

Most mentioned among 42 brands reported:
Ibanez – Stagg – Roscoe – Musicman – Warwick – Washburn Dean

We might have to add more lines if Fender and Gibson don’t stop selling guitars to Bed Bath & Beyond and other box stores.

Robert Tompkins
Alto Music
Wappingers Falls, N.Y.

It’s very hard to make a living selling just frets and MI-related products in today’s world. I’m in my 40th year and had to make some BIG changes to make that milestone. I’ve always been a combo MI store, but we also now do the Lowrey Music Wellness Program. A very good and profitable business.

Don Middleton
Don’s Music Land, Ltd.
Peoria Ill.

Customers need to know that buying a fretted instrument from a reputable dealer is the key to getting a “better deal” and ultimately a better instrument. A local dealer will provide the added value of setting up a fretted instrument. An Internet competitor will more than likely not do so and just ship the customer what’s in the box they received from the manufacturer. Typically, the problem with brand names is that people think that the brand name alone will assure them quality and value. In reality, a non-brand name product that is set up properly may very well exceed the playability and tone of a market leader.

Brand names do, however, bring customers into the store and they will undoubtedly be hit by any Internet search engine.

Michael Ferrucci
Fine Fretted Friends
Livermore, Calif.

Have you added any brands of other (non-guitar) fretted instruments in the last two years?

Most mentioned among 21 brands reported:
Hohner – Goldtone – Kala Ukuleles – Deering

I have added fretted instrument brands for the following reasons:

I love the history of those name brands I carry, but cannot turn the numbers on them to make any money and they are not historically the same instrument (although sometimes better) that they were. And we must remember we are not museums: we need to sell what we can make a profit on!

Greg Weast
Columbia River Music
The Dalles, Ore.

We have eight or nine music stores on this island that carry guitars, so we try to get things no one else is carrying. Most of the stuff from China is getting so good it almost doesn’t matter what the brand is.

Mark Scrufari
Coconut Grove Music
Kailua, Hawaii

Margins need to be better. I have a music store in a small town competing with the Internet and catalogs. The manufacturers really don’t care if the dealer sells the instrument to a customer face to face or if the dealer has to resort to selling online to “dump” the product just to pay the invoice. I think dealers dumping on eBay just to keep numbers up to get better margins are only hurting the value of the manufacturer’s product. Lots of dealers get around selling for MAP on eBay buy simply listing the [new] item as “like new” or “mint condition” … which makes my product on my showroom floor valueless.

Joe Thurman
Thurman Music
Fort Madison, Iowa

The key to survival for independent stores will be the ability to add value to lower-priced and lesser-known instruments through in-house set-up and personal guarantees of warranty. I can repair every instrument I sell — fretted or otherwise — and as owner and repairman, extra costs to the business are minimal. My personal guarantee of EVERYTHING I sell has allowed me to prosper for 28 years. As I tell my customers, “You get to yell at the same person every time.”

Dave Caldwell
Caldwell Connection
Whitestone, New York City

I would consider adding new fretted instrument brands in the future.

I read all the trade magazines and see so many editorials written by store owners who are trying to understand why some manufacturers seem to be moving away from small independent stores. I have finally decided that they just don’t feel they need our business. To me, applying a “one size fits all” policy in terms of buy-ins and stocking requirements is not practical or good for my business (or the manufacturers).

We are all familiar with the 80/20 rule: 80% of business comes from 20% of our customers. In my experience, regardless of the type of industry, this rule applies. But, jeez man, that still means there is 20% to be picked up from all of us “little guys” …

Again, the only thing I can assume by this is that the collective 20% of business that small, one-store independents can bring to a company is just not worth their time. I know this is just “business.” But let’s face it, those of us who have been in this industry for any length of time (myself 24 years) have seen our fair share of major blunders and very poor decisions made by supposed “industry leaders.” Remember Mars Music? I can’t tell you how many of my reps told me, “Mars is going to change the way we all do business.” Hmmm, maybe they were speaking of all that distressed inventory that became available during the bankruptcy!

The fact is our industry is trying to model itself after other, completely unrelated industries. It seems fewer and fewer manufacturers of MI products are being run by execs that came up through this business. With a few exceptions, most of these established brands have turned to “outsiders” who are more interested in running up stock values so they can make a load of money before they sell out than they are in developing a long-term plan to grow their business.

One final comment. Recently I was approached by a longtime customer who likes my set-up work on guitars. I had set up a Strat for him and a friend of his loved the way it played. This was a garden- variety U.S. Strat. This friend had bought a PRS Custom at GC (120 miles away) and if this PRS had ever been set up, one couldn’t tell. My customer told me his friend wanted to trade his PRS for my customer’s Strat. He asked me if I could make the PRS play any better. I guaranteed him that in about 20 minutes I could have it practically playing itself. My customer made the trade and I did what I told him I could.

The point of that story is that there is now a fellow in my town who feels a $1,000 Strat is a “better” guitar than a $3,000 PRS. Why? Because my shop provides expert service, personal attention, and support that a mega-store like GC simply cannot. We are not selling toasters here, folks. Our customers need guys like us on the front lines making sure they get the most out of their purchase. I will always feel that placing a properly set-up instrument into a customer’s hands AND providing a place he can continue to receive service is the only way this business will survive. But, once again, that is making the assumption that some of these companies are looking at long-term success.

Mike Andarakes
Great Neck Guitars
Wichita Falls, Texas

We will not survive in this industry working with a 20 to 33% margin that the manufacturers expect us to work with. We are changing most of our lines to reflect a 40 to 45% margin. And it is working! I have been in business for 36 years and quite frankly I cannot believe how some of the manufacturers are treating us! We built them to where they are, and now they have no respect for who got them there. With one major guitar builder, in order to stay a dealer we are required to have on the wall 22 pieces of their choosing (including guitars over $5,000.) Yet, in asking why GC doesn’t have but four guitars in each of their two stores, we only get, “We’re working on that.” Do you know how many times I have heard that? We have been stocking 18 different guitars in that line, yet it is not enough for them now. We were one of the first dealers in the state, we were instrumental in building the brand, and this is what we get? I have lost respect for many of big-name brands the last few years, and it’s no wonder.

We survive in a city of 48,000 people. A farming community, we have been in a drought for five years, had two major floods last year that completely isolated the town for a time, and in January of this year we had an ice storm so bad that we once again were declared a disaster area by FEMA. Our economy is, and has been, bad, to say the least. We will survive by looking at other brands, because the major manufacturers are no longer willing to understand and work with us when we are down a bit. Plus, our credit rating is and has always been ABSOLUTELY PERFECT! They always get paid first!

Steve Hanson
S.M. Hanson Music Inc.
Salina, Kan.

Providing new and higher-end options for customers gives us a way to stand out from the crowd.

Brian Meader
Chuck Levin’s
Washington Music Center
Wheaton, Md.

We really like working with some of these new suppliers. They don’t sell to big-box or on the Internet. They don’t give “special prices” to GC. Reverend Guitars are, in my opinion, the new Fender. And so easy to work with!

Shannan Wilkinson
SEACO Music
Sumter, S.C.

There are many very good guitar lines out there and they all have their niches, but we are forced to choose what gives us the most coverage for the inventory dollar. We as retailers are catering to such a small portion market that it’s impossible to do justice to all the brands that may be deserving. We have selected those we think are harmonious with one another and that cover as many types of players as possible.

Jim McDonald
Samuel Music
Effingham , Ill.

Still running with mostly known brands, but will consider any brand/product to achieve goals of better profitability and turns.

Russ Beacock
Beacock Music
Vancouver, Wash.