disillusioned with 'retail'

[joebar]

where I live ( a city outside of metropolitan Vancouver b.c.), an average house is 600K; in Vancouver, an average house is 1 million.
an average two income family making decent tradesman wages will drive this car and be in debt to their eyeballs. this is not uncommon here.

to me-
I drive cars worth less than 10 K and am perfectly happy living under my means.

I don't know how people do it.

 

[brianrost]

My ex-bother-in-law bought his cars like that.

He would get so excited that the payments on his new car were lower then the one he traded in. I tried to explain that if he just kept the old car and paid it off he would have zero payments instead of payments forever. He thought I was crazy.

Not long after my sister divorced him, he went into bankruptcy.

 

[ChefKen]

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.

If manufacturers sell direct they lose their distribution and warranty network. They lose advertising and product placement vs the companies that honor the agreements with retailers. Its how all business work. Small companies ala Alembic, MTD, Ect do not care about retail as they build to order and could not meet the volume demands of big business model if they wanted to which they clearly do not. Some do....PRS comes to mind.

Imagine if Dole wanted to sell pineapple juice direct at half price. Would the supermarkets care which juice they sold??

 

[Joe Kyle]

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.

You should NEVER expect a store to give you anywhere near what you'd like for your gear. You can get a little more clout with trading in, and your research as to market price should be done beforehand, possibly with some examples on your phone to prove.

Usually stores like GC/Retail just go on Ebay and look at 'average' prices of the item sold (very quickly done, usually no calculator involved).

That being said, and has already been said, for a bass that sells at $600 new, there might not be any demand for it at $400 used, especially if there are people willing to sell for $275. People want cash quick, and sometimes screw the whole market's pooch by doing so. If you were to put a slightly used 4003 up on the classifieds for under 1000$, people would be dying to grab it, and then it might colour their opinion of those asking the 1200 (which is also pretty fair for an expensive bass). I know that I've seen some prices on G&L basses that I thought were beyond fair, and it has changed my perception of what can be had at a given price level on the used market.

 

[obimark]

OP- check out my thread about this very same thing, there is a lot of good info there-to condense
- Fenders get typically 50-60% of the original price when sold used (doesn't matter whether it is in like new condition or not). Ricks get higher. Custom Carvins sold used will make you cry- all those fancy finishes will bring pennies on the dollar.

Other basses are probably even lower.
He who buys new takes the biggest hit when selling.
He who buys used takes a negligible hit (or none) when selling.
So the lesson, if you aren't 100% sure what bass you want or you are feeling GAS, check out used first. Which matches my experience- I bought a used Peavey Cirrus for a great price- like $600 (which had the nice stain finish)- found out I hated 35" scale necks (and the dual batteries) after a couple of months, and sold it for $790 for a profit.

 

[MegaSwing]

Rule of Thumb: a used instrument will NEVER retail again for more than dealer net, unless there is something exceptionally rare or collectible about it. (This is true of automobiles, cameras, and other high-dollar merchandise.) It is wise and realistic to adjust your expectations accordingly.

 

[Schlyder]

Think of trading anything in as going to the pawnshop. That's what you're going to get offered. Pawnshop value.

 

[Kmonk]

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.

What you are forgetting is that retailers have a tremendous amount of overhead. Rent, utilities. payroll, employee benefits, insurance and so on. They are in business to make a profit and base their prices on an analysis of their expenses, MSRP and what the market will bear in terms of retail prices. Years ago, I was a regional manager for a large retailer (not music related) and learned that retailers need to make between a 35% to 50% margin in order to stay profitable. This is total margin based on total store sales. Often times the margin will vary by manufacturer. We had one manufacturer who made every retailer charge the same price at a 35% margin. We had other manufacturers which did not control margins and we could sell at a 50% or even 70% margin. At the end of the day, retailers need to make a profit. A private seller does not have the overhead to deal with or stock holders and a board of directors to answer to.

 

[Robus]

...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....Recent sales of the same bass on the friendly talkbass classifieds are $275 and $250 -- bargains to be sure for a hardly used instrument.

So you bought the bass new at $599? Then you decided to flip it and realized the used price is less than half what you paid new? The store where you bought it gets them from the manufacturer at $345--but of course they won't give you that because they would have to resell it as used.

There is a thread right now posted by some guy who repeatedly bought new P basses hoping he would like them, then was shocked at the hit he took selling them on the used market.

Buy new to keep. Buy used to flip.

PS: What was the bass?

 

[bassinflorida]

Another reason to attend basic Economics in High School.

 

[wrench45us]

ok
I have been schooled.
When I bought that bass I was re-entering the retail music store world for the 1st time in a very long time.
Way back then, the place I shopped tended to have a lot of serial numbers etched off and deep discounts and gave top dollar for trade-ins.
Funny that business model wasn't sustainable.

On re-entry I was in the process of finding the fit and fee that worked for me. That's settled now and now I do buy used.
Chalk it up to experience.

As I mentioned if I knew then what I knew now, I would have shopped used. And shopping used makes the most sense when you are starting out and don't really have an idea if a given bass will be a keeper -- and you really can't know that when you're starting out.

 

[VigierUSA]

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.

Nail on the head. When I first started my job here at Vigier, I pushed for us to sell direct. As a small manufacturer in another country, we always have problems of scarcity, but selling direct wouldn't fix that. I'm working on building up our dealer network so someone in Des Moines can try a bass before they buy it.

Also, I did retail for almost a decade, I took this job to get out of it. It's a LOT of work dealing with customers. Dealing with supply side stuff is also a LOT of work. I don't want to do both; I couldn't do them equally well if I did. Of course, dealers don't want manufacturers selling direct and it really is an ultimatum in a lot of cases. We'll see how the Fender Direct program works, but I know a lot of heavy hitter dealers are turning their backs on a brand that was their bread and butter for a long long time.

Back to OP - you gotta do research. I buy/sell/trade a decent amount of gear... a lot is luck (magic $200 8x10, for instance), but a lot of it is knowing what I want, knowing what it's worth and monitoring the right sites to find it. On the opposite side, I know that a lot of times I paid below market value for something, so I don't mind letting it go for below market value (which makes it sell faster). What's the saying? Success is where luck and preparation intersect? That applies to buying and selling used gear.

It also helps to know your local store. My buddies work at a store about an hour from my house. I went in, noticed they had WAYYYY too many bass cabs and used that to make a trade that I felt was totally fair for both sides (I got a really clean Big Ben and an equally clean Henry the 8x8 for a somewhat beaten Megoliath that I paid $325 for). They were happy to unload a couple esoteric cabs in exchange for a more 'sellable' one of perceived higher value and get some floor space back.

Normally, the only way you can make out in a store is to trade in something for something else. As was mentioned in this thread, you can't give people what their stuff is worth in cash and just turn it around. The guys on the floor need to eat, the lights need to stay on, the taxes need to be paid. Like the quote from Jimmy above, you're paying a premium for the service of having somewhere to go where there's a lot of stuff for you to try.

 

[VigierUSA]

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.

I don't think that's always true. Mesa and other manufacturers had minimum sale prices (as of around 1999 when I worked at guitar center for a while) and we were not allowed to give discounts under any circumstances.

Yes and no. Vigier has MAP. I police it pretty hard, but I can't prevent an in-person handshake deal at a store and that's not necessarily what the intention is. You wanna give everyone a fair shot at a sale. You REALLY don't want store #1 sniping store #2's sale on price alone. That's the spirit of MAP... If store #2 spent a week in person, on the phone, over email trying to help a customer pick out the perfect instrument and the customer comes across store #1's website and it's $100 cheaper and he pulls the trigger on the spot... that just sucks.

You also want to make sure everyone is getting good margins because if they're not, then you won't have any dealers OR you'll only have 'online only' guys who have virtually no overhead. That's not so great for a visceral/emotional purchase like an instrument.

 

[wrench45us]

taking my bass there was part of cultivating a relationship with that particular independent store
and as mentioned they went out of their way to make sure I didn't walk never to return, so they know how all this works much better than I do

and as mentioned they did do right by me when I traded an effect in on another

so you're right it was basic lack of research that did me in. somehow I had $400 in my mind and I don't know really where that number came from. Maybe what I saw that bass for sale on e-bay for , but not what it had recently sold for. even then I should have known better having already been schooled about the 40% margin at another store.

 

[DavC]

Sales ... simply ... it is what it is ... I've spent enough decades on Both sides of the retail counter ... I believe it is up to me to set reasonable price points to buy/sell anything ... you are only disappointed when you have unrealistic expectations ... that goes for everything in life .. !!

 

[Gaolee]

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.

I think it is, but but what do I know.

 

[Slevage]

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.

I agree with everything above except the "scam" part.

 

[Slevage]

I think it is, but but what do I know.

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.

If you only buy when you really need the item--- be ready to pay the price. Either you sit on a spare drum head,cable, strings, etc. OR
the store does. Carrying inventory is a business investment.

 

[MegaSwing]

Think of trading anything in as going to the pawnshop. That's what you're going to get offered. Pawnshop value.

Disagree. 'Pawnshop Value' is 'salvage value'—the percentage you get from a junkyard for a wrecked vehicle, often next to nothing—and ought to be regarded as the last possible option, to use only if you are down to your last breath of luck and a handful of pennies in your pocket.

Every honest used price is based on the current 'dealer net' of that item, adjusted for condition, etc.. Everything else is a swindle or a fantasy.

Note: This does not apply to commodity items such as cords and stands or low-priced accessories. These aren't worth squat used, to buy OR sell. You can and should expect to either give them away or bundle them in bulk for low money.

 

[bholder]

If you only buy when you really need the item--- be ready to pay the price. Either you sit on a spare drum head,cable, strings, etc. OR
the store does. Carrying inventory is a business investment.

Yup, I get that too.