Music Dealer Resource Group – Taking the Anxiety Out of Importing

In the latest chapter of an industry career that has encompassed everything from teaching and performing to repping and wholesale, John Broermann has found a new challenge with Music Dealers Resource Group (MDRG.) The company, with offices in China and the U.S., is offering a unique service designed to ease the difficulties in importing music products from Asia for North American independent dealers, buying groups, and distributors.

MMR recently visited with Broermann at MDRG�s U.S. headquarters in Cincinnati to learn some of the details on the new enterprise �

John, in a sentence, what is Music Dealers Resource Group?
Music Dealers Resource Group (MDRG) was created to assist dealers, music product buying groups, and distributors with the development, packaging, importing, and distribution of fast-turn, high-margin products on a direct basis from Asia, helping them to compete in today�s challenging market.

What are the benefits to the independent music dealer when purchasing from MDRG?
The simple answer is we help take the anxiety out of importing their own products should they want to do that. We do the work, and they can then focus on managing the marketing and generating the sales.

How did this business get started?
Actually there really was no plan. I left my previous position to take some time off to address some family issues and to take a break. The closest thing I had to a plan was to buy some goods from �someone� in Asia, park them �someplace,� and sell them to folks I had come to know over the years and then buy some more.

People started calling and writing and the next thing I knew I was in China visiting friends I had made over the years.

Doors kept opening and I kept walking thought them. MDRG was taken to Summer NAMM last year — not as a completed project but to find out what dealers really needed and wanted. After that show, we brought back the information, and put together MDRG officially. We delivered our first containers shortly after that and we continue to move forward.

Who is your partner in China?
MDRG is partnered with Mingde Musik Ltd. located in Foshan, China. We have a staff of quality-control people on the ground and direct access to more than 15 factories. We are involved with factories manufacturing a wide range of products including cases, stands, bags, percussion products, amplifiers, guitars, and violins, as well as private-label and OEM products.

We also have warehousing in Foshan/Guangzhou, China, allowing us to combine different product groups for consolidated shipping. This means better buying and inventory mix for our customer. This can lead to better use of the customers� capital and allows them to better manage their inventory. MDRG also stocks 200-plus fast-turn items that dealers and distributors use on a daily basis to fulfill their customer�s needs.

I should add there is nothing fancy about MDRG. It is a very efficient operation designed to keep costs and overhead low so we can offer a good value to our customers and also be able to make a living as well. We base everything on turns, controlled inventory, and timely payment from our customers. We are still in a shake-out phase with this business, but we are very happy with our progress and acceptance in the marketplace so far.

Tell us about the �Dealer�s Advantage Club� you are introducing at Summer NAMM in Austin this year?
I am very excited about this. One component of the program is that MDRG has access to and takes advantage of special factory buys since our primary office is in China. We also maximize our relationship with our factory base to do special production runs when they have extra capacity. This helps them fill capacity in slower times and allows us to purchase goods at better-than- average costs. We then share these saving with our customers.

We also keep our costs low by providing only the fast-selling staple items and keeping our packaging and handling efficient. The Dealer�s Advantage Club takes this a step further by giving the dealer/distributor an opportunity to purchase goods and receive additional discounts by being part of our program. We really do not want to take the wraps off of this program until Summer NAMM, but dealers can pre-register with no obligation on our Web site or call us directly for more information. As they say, operators are standing by. Our Web site is www.mdrgusa.com.  MDRG can also be reached directly by phone at 1-888-372-8346.

We invite every MI Dealer/Distributor/Buying Group to register. After verification, we will provide them with the program details. We do this to protect the dealer from non-dealers registering, and we want to be able to answer any questions the customer may have about this free program.

What do you offer in your private-label program and OEM product development?
The main thing is our ability to handle �reasonable� quantities. Most dealers can�t afford or don�t have the turn capacity or space to buy a container of �same type of goods.� We have the ability to private-label for them as well as help them develop their own goods to build their own identity. Because of our warehousing in China, we can consolidate goods from multiple productions. It is a slower process, but it allows for a manageable mix of goods.

How can distributors benefit from working with MDRG? How can buying groups benefit?
Our goal was not to be in the distribution business. But we did need product on hand to service our customers for warranty, promotions, and samples. Also we were very surprised to find so many dealers who simply wanted to have a choice and were calling to purchase goods. So again, we walked through the door, developed a small catalog and it just keeps growing. We now do some distributor-to-distributor business. In most cases, we help someone cover stock-outs until their own goods arrive. It�s not big business and, of course, the margins are very tight in this format but it keeps the turns up and your associates tend not to be a risk or pay issues. We are also doing more and more order-fulfillment for dealers operating online stores. This is a growing trend.

Can you tell us a little about your background and how MDRG was created?
I have spent my entire life in the MI business just like most of our dealers have. I was a teacher, performer, worked the sales floor and warehouse for other local dealers, owned and operated two stores for 10 years, sold them, and moved into the rep business — when gas was less expensive. I also managed a sales division on two occasions for one of the major national distributors. I had the pleasure of representing lines such as JBL, Shure, Casio, Parker, Soundcraft, Martin Lighting, Aria Pro and many others. I visited Asia for the first time in 1994 and have loved working with the people there ever since.

Over the years I formed a friendship with Mr. Gerhard Schen of Mingde Musik Ltd. of Foshan, China. After leaving my position with the distribution company, I was invited to visit with him in China and one thing led to another. MDRG is the USA representative for Mingde Music Ltd. (www.mingdemusik.com). The founding of MDRG was based on friendship and our mutual love of the industry. We are not out to build an empire — we simply enjoy this industry and wanted to find some new and creative ways to participate in the very changing and challenging times.

What is Gerhard�s background?
Gerhard is just amazing. Multiple languages, great math skills, enthusiasm, drive, and honesty � I think it makes for a great team. He manages his QC and warehouse operations in southern China. We have been able to help each other expand our knowledge as we both bring different skills to the table.

For more information, contact: John Broermann, MDRG (Music Dealers Resource Group), 4004 Commercial Blvd., Suite 103, Cincinnati, OH 45245.

Phone: (888) 372-8346 or (513) 842-8346. Fax order line: (800) 575-4833. Web site: www.mdrgusa.com. E-mail: mdrgusa@fuse.net. Skype address: mdrgusa

Dealing Direct: The Downside
Who needs a middleman? According to MDRG�s John Broermann the answer is lots of independent music dealers.

�Almost every factory will sell direct now,� he comments. �Any dealer can find a FOB factory price — most likely, he has a stack of quotes already on his desk — and you can always find someone who will sell the product for less. There is so much capacity in China that most factories will cut a deal that makes no sense financially for them because they just want a piece of the market.

�The downside to the dealer trying to do importing on his or her own is the risk. Factories have production cycles, employee turnover is very high, there are shipping and customs issues and delivery and storage issues and there is always a percentage of goods on the container from any factory or supplier that is just not 100%. Our best customers are the people who have already tried to do this on their own. Several were successful, but found outsourcing it to MDRG was more cost- and time- effective. Others had difficulty and learned the hard way what can go wrong and can cause a lot of pain.

�Of course, we are also subject to those same issues, but with people on the ground and a partnership between the USA operation and the Chinese operation, we can reduce the risk and anxiety that is often associated with bringing in your own goods.�