disillusioned with 'retail'

[wrench45us]

Thanks to an over sharing by a friendly independent music store employee, I now know what their costs run.

I was seeing what I could get for a hardly used bass bought at a common online price of $599 and hoping to get $400, but their cost for the same instrument new is $345, so they could hardly be persuaded to give me $400 used for something they could buy new for $345. So when these 20% and 30% discounts come along, even independent stores maintain some profit margins.

Recent sales of the same bass on the friendly talkbass classifieds are $275 and $250 -- bargains to be sure for a hardly used instrument. Given those numbers I'm probably just going to ship this to a friend, rather than try to sell it. Given I keep acquiring more instruments I will one day have to avail myself of ways to also sell off the discards through talkbass classifieds, e-bay or craigslist.

I imagine national chains instrument costs may be even lower than these independent stores. I don't know. I had to order this particular bass at my local mom and pop store and was happy, theyur were able to provide internet prices.
And yes, I realize there are overhead costs. My other local independent music dealer has told me everything he sells has to be 40% over his cost for him to cover his overhead and stay in business.
And it looks like $345 is about 60% of $599 so I shouldn't be too surprised, and yes I want these independent stores to survive so I do patronize them rather than the big chains.

Maybe I'm just a cheap guy and naïve and retail business model seems exorbitant and harsh, but hey more reason to buy used.

 

[iriegnome]

Most manufacturers have MAP (Minimum Authorized Price) limits that have to be met. If you don't like the price of something, don't buy it. It is usually supply and demand. You could have a CAR P Bass and not be able to sell it for $300, but at the right time, someone might pony up $700 for it. All is dependant on supply and demand. If you are looking to purchase inexpensive basses to flip them, then you need to be patient and wait things out. Sometimes you are not going to make anything others, you will get a good profit, but it falls back on supply and demand. It isn't the music stores fault you paid what you paid, they are in business to make money, not break even or loose money. People here on TB for the most part, know what fair pricing on their gear is. Sentimental value plays into many of the basses that go up for sale. While the sellers sentiment means really not much for the buyer, it does to the seller therefore some basses that should be lesser priced are not. That is the great thing about a global economy. Shop all over the world for the bass you want at the price you want.

 

[wrench45us]

I can't disagree with anything you say.

Still $400 for that bass in excellent condition also seems fair and may be fair on e-bay or craigslist or talkbass, just not in the retail arena where 40% margins are necessary.

To be fair, the fellow at the store was very nice and suggested selling online and then even took my name and number and may try and shop the bass around to people he knows outside the store who could be interested, which is way beyond expectation. But then I don't really expect to hear from him either.

 

[iriegnome]

Well, you can always post as a supporting member here to trade the bass for a bit more than you would be able to sell it for. Also, I have not had much luck selling anything via Craigslist. E-bay you can list your item for free until it sells using the Buy It Now feature and you may luck into someone really hot after what you have in your bass and will pay your price. Sorry I don't have much better advice for you. We all have paid too much for a bass.. I know how you feel.. Good Luck

 

[JimmyM]

So businesses are in business to make money? You don't say!

 

[bholder]

I have no problem with how retail markup works, as others have said, the decision to buy or not is always the purchaser's. What does annoy me is how little retail stores will typically give for trade-ins, which they'll usually also mark up substantially to resell. Same scam as with used cars, basically - almost always better off selling the old one to another player yourself rather than dealing with a store.

 

[TechJunky]

I have no problem with how retail markup works, as others have said, the decision to buy or not is always the purchaser's. What does annoy me is how little retail stores will typically give for trade-ins, which they'll usually also mark up substantially to resell. Same scam as with used cars, basically - almost always better off selling the old one to another player yourself rather than dealing with a store.

Not a scam. Frustrating? Yes. Disappointing? Yes. But it's just business. Any used reseller out there will do the same, regardless of market. Used instruments, used cars, used stereos, used whatever. If an item can be sold for $500 by an individual, a store owner can also only sell for the around same amount usually, but also needs to pay the overhead. So for them to buy said item for $500 and turn it around for the same cost simply isn't sound business practice. So they will buy the item at the lowest cost they can, and mark it up a bit. If they sell at a higher cost, good for them and shame on the customer for not shopping around or knowing it's too high, but more realistically, it will either be an average price or be negotiated down to the average price. This way, the business gets to remain open, more people have access to buying the item, and the original owner made the decision themselves to sell at the lower amount.

I've done it before, and while sometimes it was disappointing to get so little, the majority of the time I knew full well I could likely sell for more elsewhere or individually, but the time and effort simply weren't worth it. I'd rather take the hit and sell low to quickly get rid of an item and get the money. Sometimes, the item was worth low enough already that my time and effort to find a buyer and ship would actually cost more than the hit I took selling to a store. I also never did this with anything worth more than a couple hundred bucks. If I knew I could sell for X and they would only offer me 50% of X, there came a point where the difference was worth the time and effort to sell, package, and ship elsewhere. Or, they offered me even less than I anticipated, and simply left with my item and kept it. You're not forced to sell anything you own. Heck, a few times I even came out ahead and ended up getting what I paid or a little more simply because I got a good deal when I bought the item, and somehow they thought it was worth more than I did.

 

[bholder]

Yeah, I've done trade-ins (on instruments and cars) simply because I didn't want the hassle of selling myself. An awful lot to pay for convenience, though. I don't care so much whether the auto dealerships succeed or fail, but I do try to patronize the good local music shops, I'd miss them if they failed. The car places, well, one dies, another pops up...

 

[Coolhandjjl]

Most manufacturers have MAP (Minimum Authorized Price) limits that have to be met.

MAP = Minimum Advertised Price. That's why the ads often state "Call for better price', 'Email for better price', or 'Add to cart for better price'. They can still sell the stuff for whatever they wish.

When doing a trade in, you are paying (getting less for your old one) for the immediacy of the transaction. For some people, that is more important. For those who can wait, you will always do better selling it yourself.

 

[Smooth_bass88]

Thanks to an over sharing by a friendly independent music store employee, I now know what their costs run.

I was seeing what I could get for a hardly used bass bought at a common online price of $599 and hoping to get $400, but their cost for the same instrument new is $345, so they could hardly be persuaded to give me $400 used for something they could buy new for $345. So when these 20% and 30% discounts come along, even independent stores maintain some profit margins.

Recent sales of the same bass on the friendly talkbass classifieds are $275 and $250 -- bargains to be sure for a hardly used instrument. Given those numbers I'm probably just going to ship this to a friend, rather than try to sell it. Given I keep acquiring more instruments I will one day have to avail myself of ways to also sell off the discards through talkbass classifieds, e-bay or craigslist.

I imagine national chains instrument costs may be even lower than these independent stores. I don't know. I had to order this particular bass at my local mom and pop store and was happy, theyur were able to provide internet prices.
And yes, I realize there are overhead costs. My other local independent music dealer has told me everything he sells has to be 40% over his cost for him to cover his overhead and stay in business.
And it looks like $345 is about 60% of $599 so I shouldn't be too surprised, and yes I want these independent stores to survive so I do patronize them rather than the big chains.

Maybe I'm just a cheap guy and naïve and retail business model seems exorbitant and harsh, but hey more reason to buy used.

Well...hard to say here what the answer is.

 

[Joedog]

Try trading in a vehicle! Like most things dealers MAY take in trade, you can almost always do much better selling on your own. NO biz owner wants your stuff if they can't make money on it. Common sense, no? What would YOU do in their shoes?

 

[kevteop]

The internet should have taken retail entirely out of the equation by now. If manufacturers can sell directly to us (which they clearly can) then why are we still dealing with retail mark-up?

It makes no sense. Clearly the manufacturers don't want to de-value their products by admitting that a large percentage was just the retail cut, but at the same time they weren't earning that cut anyway. I guess it would be difficult, contractually, to dump all of their global retailers simultaneously, but really what are the retailers doing except making products more expensive?

 

[JimmyM]

The internet should have taken retail entirely out of the equation by now. If manufacturers can sell directly to us (which they clearly can) then why are we still dealing with retail mark-up?

It makes no sense. Clearly the manufacturers don't want to de-value their products by admitting that a large percentage was just the retail cut, but at the same time they weren't earning that cut anyway. I guess it would be difficult, contractually, to dump all of their global retailers simultaneously, but really what are the retailers doing except making products more expensive?

Giving you a place to try them out. Giving you instant gratification. Giving you things you may need in an emergency situation. There are still quite a lot of reasons IMHO. OTOH, that's no reason you shouldn't go internet or direct if you're so inclined.

 

[kevteop]

Yeah I get that, but while it's nice to have somewhere to buy a drum head or a cable or a set of strings on a day when you really need them, it's not really a justification for a business existing.

 

[RED J]

Rewind to pre-internet and big box days, and Mom and Pops hung instruments on the rack at list price, cut you a discount if you were a good or regular customer, took a shine to you or were in a good mood. There were some ( not many ) high volume outlets around the country that cut everybody a discount because they sold high volume and were in an urban center and didn't really care about elsewhere. Some of us have been around long enough to remember.
Those businesses lasted decades and they made a good living. In the last 15 years, they have died like flies because of the internet and big box mega stores.
That's how the world economy we live in now rolls, like it are not.
In my experience, the retailers still making it are very diverse in their goods and services as well as maintaining a few focused specialty product lines that can't be undercut.

 

[buldog5151bass]

As to stores not paying as much as you would like for a trade in, remember that they give cash, and may or not be able to sell it. How many of us have had things on classfied for a while, and unable to sell it, or able to get as much as we think fair. You want retail $$$ for it, put in the time, expense, and hope to sell it. Want the cash up front, you take a hit - simple as that. Not many stores getting rich selling musical instruments right now.

 

[Obese Chess]

I have no problem with how retail markup works, as others have said, the decision to buy or not is always the purchaser's. What does annoy me is how little retail stores will typically give for trade-ins, which they'll usually also mark up substantially to resell. Same scam as with used cars, basically - almost always better off selling the old one to another player yourself rather than dealing with a store.

Yeah, I recently got offered $75 for a Made in Korea SRX505 that I paid $350 for last year. I just laughed and walked out.

 

[JimmyM]

Yeah I get that, but while it's nice to have somewhere to buy a drum head or a cable or a set of strings on a day when you really need them, it's not really a justification for a business existing.

Yeah, well not like they need one as long as they make money and can pay their bills. There are still music stores out there that do OK and aren't owned by GC or Sam Ash. They learned how to adapt and survive in new ways, though.

 

[Johnny Alien]

The internet should have taken retail entirely out of the equation by now. If manufacturers can sell directly to us (which they clearly can) then why are we still dealing with retail mark-up?

It makes no sense. Clearly the manufacturers don't want to de-value their products by admitting that a large percentage was just the retail cut, but at the same time they weren't earning that cut anyway. I guess it would be difficult, contractually, to dump all of their global retailers simultaneously, but really what are the retailers doing except making products more expensive?

Manufacturers are not set up to sell direct. They would need to add a whole new business model onto their existing one as well as hire tons of staff to take care of orders, customer service, shipping, returns, etc. They would need to build and maintain internet stores which would require IT staff, servers, security services to handle the secure information. And all of that would cost the manufacturer money that would drive the price up to what you pay retail anyway. It's much easier to sell at cost to someone else who IS already set up to take direct orders. The retailers are doing many things that the manufacturer cannot and does not want to do.

 

[wrench45us]

The cash upfront for the used instrument may well be a big part of it. The same store made a much better deal for me on a used effects box when I traded it in on another effect.
And they did seem to have a lot more on display than last time I was in. I just figured they'd geared up for the holidays, but if their stock isn't'the moving I can see why they'd be reluctant to add to that.

And I really do want these smaller independent stores to survive. But the used instrument nationwide inventory and risk free return policy that guitar center manages online is where I look first these days.i'd never buy that bass new if I knew then what I know now.