29th Annual Fifty Dealer Fifty State Review & Forecast
Is it safe to come out yet?
Years of economic drudgery took their toll on MI retailers across the country, but the attitude among hunkered-down business owners this year has finally begun to perk up. Several store owners reported significant increases in sales this year. Perhaps even more exciting is that many are beginning to make aggressive pushes toward expanding personnel, picking up new product lines, and enhancing every bit of technical involvement they can, from e-commerce platforms to point of sale systems.
Arkansas instrument shop Shuffield Music was among those who opted to grow this year. “Early in the year we moved to a larger location which more than doubled our retail space,” said owner Paul Shuffield, Jr. “This allowed us to increase our product offering by taking on a few more lines and expanding our lesson offerings. Overall, we have seen a positive increase in our business.” Parkway Music in New York also moved into a new 13,000 square foot facility this year, while Delaware’s Accent Music opened two new locations. In Minneapolis, Twin Town Guitars just completed a major effort to install a solar panel array on its roof.
Perhaps the best skill for any business hoping to make it to more prosperous times is that of adaptation. As Pender’s Music’s Richard Gore says in our profile of his shop in this issue, “As times have gotten harder, everybody needs to learn how to do more with less.”
West Virginia’s Clifford Hess agreed, noting that an increased attention to detail was of utmost importance to his store, Soundwaves Music. “Shrinking inventory levels and micro-managing every SKU in the store has been the key to survival,” he said.
Stores that depend on Band & Orchestra business or those such as Pender’s, which deals primarily in sheet music, may always be directly linked to the fates of school arts budgets. But smart shops have found ways to balance out those budgets with efficient repair and rental programs and new approaches to online sales.
Regardless, plenty of stores continue to see a downward trend in revenue, often linked to struggling local economies and school budgets. Many were able to make it work, though. Steve Harkey, at Accent Music, noted: “As the margins on commodity merchandise continue to deteriorate, they actually have less of an impact on net profit. Business lost at 15 percent profit can be replaced with business at higher profit margins such as rentals, school sales, lessons, repairs, et cetera. These services are what continue to set apart the independent dealer.”
This year, we made especially sure to check in with everyone about effects of the recent changes to the scope and enforcement of the Lacey Act, which led to a year of industry confusion over how to best follow these evolving regulations on imported woods. The results are enlightening – some are fed up with what they call a misguided attack on a well-meaning business, while others tentatively report no interference at all. In general, the industry seems eager for some clarification and consistency.
Looking to the future, the field remains optimistic. With another election under our belts, much of the uncertainty that marked the year’s market may finally subside, but that doesn’t signal a wildly optimistic approach to the MI business just yet. Nick Uhlik of Kansas’s Phil Uhlik Music perhaps put it best: “You see some glimmers, but you’ve still got to hold tight and watch what you’re doing,” he said. “It’s not like it used to be.”
Read the full report in our December, 2012 print issue, or click here to view the digital edition!