Guitar Store mark-ups ?

Discussion in 'Miscellaneous [BG]' started by Handful, Apr 13, 2001.

  1. Handful


    Apr 13, 2001
    If anyone *out there* has ever done purchasing for a guitar store - or even just may have worked at one can answer this question.

    What is the average mark-up on an instrument at a guitar store. If an instrument is priced at $2100, with case, how much padding is in that price?
  2. Blackbird

    Blackbird Moderator Staff Member Supporting Member

    Mar 18, 2000
    Welcome to the board, Handful.

    It really depends on how large the store is. Larger stores like Guitar Center, which buy and sell at a large volume, can afford to charge less per unit because they get a better deal on wholesale. It is my understanding that GC marks their merchandise (basses, at least) at 30% below list price. Assuming they pay ~50% of the list price in wholesale, that means they make a 20% profit per unit, although somehow this seems kind of a low profit margin. I worked in a furniture store and our profit margin on merchandise was 100%.

    Smaller stores that buy less units on wholesale have less play when it comes to setting prices, so their prices usually are closer to list price and their profit margins are lower. Whatever you do, don't pay the list price unless it's a one of a kind, hard to find, custom made product. I don't know what $2100 instrument you're contemplating, but I'd assume that in this price range the case should be included in the price of the instrument. I'd say you're looking at a 50% or so price hike, so feel free to haggle.

    Will C.:cool:
  3. rickbass

    rickbass Supporting Member

    Welcome to TB, Handful. Haven't been a purchasing agent for one of the superstore chains, but I have been inside St. Louis Music, guitar wholesaler and Ampeg source, as well as a large store. As a generalization, I find what Big Wheel quoted is a good assumption, 30-33% lower is what I know of.

    There are some drawbacks to the superstores. IME, they either don't like your trade-in will offer you diddley for it, or they have a no trade-in policy. Since you are buying at the higher end, $2100, another thing to consider is that they buy in bulk and all the offerings of a particular model they have in stock can differ in playability, finish, fret dressing, etc. The small dealer tends to pick and choose the finer examples of a given model and will reject those with imperfections.

    What Big Wheel said about haggling is true, too, but for an additional reason. When you hammer on price or talk about payment options, the smart salesman, (usually the small dealer again), knows you are very serious about purchase, unlike all the kids you see in the superstores.

    One last thing about the small dealer - they can really cut you a good deal in some cases because they aren't governed by "company policies and pricing guidelines." If the small guy is having a hard time coming up with the lease money this month, for example, they have the freedom to beat the superstores. Moreover, they don't have to be authorized dealers for a given line they sell and don't have to adhere to a maker's/manufacturer's M.A.P., Minimum Advertiseable Price, and some don't even allow full list price advertising on the web. I know of one small dealer who is a bassist and he has even told me not to waste my time considering a particular item in his store. He said, "I just carry those for the MTV crowd."

    Bottomline, don't rule out the little guy if you have the time to look around and find the right combination of factors.
  4. David-Adler


    Feb 28, 2001
    Bonn, Germany
    I`ll have to agree on that one.

    Over here in good old germany, I have two good music stores near the place I live and ones is large, one is small.

    Usually the larger one has a price about $150 to $200 under the price of the smaller one on the same unit (Ibanez Basses, for example).

  5. Taurus


    Feb 2, 2001
    I worked as a salesman at a high end audio store back in the early 80's and the prices were marked up 40-50% from cost price.Sometimes more,depending on the product,but never less.BTW,the typical product you buy in the store,whether it be washing machines or bass guitars,costs roughly 20% of the retail price you pay to manufacture it in the first place.
  6. bassics


    Nov 27, 2000
    Newark, Ohio
    I live in central Ohio, and we have a pretty large selection of music stores, including Sam Ash.
    I prefer do do all my business with the small "mom and pop" dealers, simply because they know what they are talking about if I have a question.
    I have a thread posted about the DeArmond Pilot Deluxe 6 That I am ordering, through a small dealer.
    Sheets and Sons music. All the people, and particularly the owner, John Sheets, have proven to be an excellent source of info and advice.
    Also, Mr. Sheets managed to knock the list price of $1099.99 down to $650.00.
    In my experience, the small shops are run by true-blue musicians, whereas the large chains are run by
    what I refer to as the "McDonalds" crowd, usually kids in high school, some of which can't tell a bass from a guitar!
  7. Handful


    Apr 13, 2001
    Just wanted to thank you all for revealing your trade secrets.

    I have found that the smaller (single location) stores will give a better deal straight off the bat - and then Guitar Center will chime in with:
    "Yo, brauh we'll meet that price!"

    maybe I should just give my $2K to the Mom/Pop
    for doing it solid the first time around.

    Thanks Again.
  8. All right, a fellow Columbusite! Hey bassics, what are a couple of the better mom and pop stores around here in your opinion? The Music Haus seems pretty good, the String Shoppe is decent too, I can't stand Sam Ash's salespeople though. Always looking for better places to hunt around in...