- Jul 3, 2004
- 1,300
- 641
- Disclosures
- Endorsing Artist: Ernie Ball MusicMan Guitars
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New "FENDER DIRECT" article
- Thread starter Bassmunnky
- Start date
Seems like a smart move to me, I hope they survive and prosper. The internet has really been like an atomic bomb to consumer culture. I understand that Fender needs to maximize profits, but damn its ugly.
After 25 years as a Fender dealer, we had been struggling with constantly evolving requirements we had to meet, as well as the way in which they were prescribed.
I wonder what the requirements are?
After 25 years as a Fender dealer, we had been struggling with constantly evolving requirements we had to meet, as well as the way in which they were prescribed.
I wonder what the requirements are?
And they have to buy what fender wants to sell then regardless if they want it or can sell it.
Chef
In Memoriam
Thanks for posting that.
All makes sense, from the retailers point of view.
Eliminating the ability to play before you buy is really a drag. They better have a solid "trail period," or I'm out on any future purchases.
All makes sense, from the retailers point of view.
Eliminating the ability to play before you buy is really a drag. They better have a solid "trail period," or I'm out on any future purchases.
Went to GC yesterday and they had a Danelectro 12 string front and center prolly gonna be their replacement brand
Chef
In Memoriam
I'd never even pick up any Dan Electro I've ever seen.
Not a great "Fender replacement," IMO.
Not a great "Fender replacement," IMO.
Fender's buy-in to become a dealer is very substantial. I spoke with the owners of a new local MI shop, and they were saying that the Fender startup buy-in was so costly that if they had gone through with it, they likely would not be able to carry many other lines at all. Is that a shrewd business move on Fenders part? They're a dominating force in the field, for certain. And a business practice like that has served to edge out some of the competition at brick & mortar retail. But in this instance it kept this new shop from launching with Fender as one of their cornerstone brands. To do so would have been too costly.
I've also heard from a MAJOR independent Fender dealer and what they're going through. It's a small chain with three outlets in the NY metropolitan area. They sell A LOT of Fender instruments. They carry a good amount of Fender Custom Shop stock. And they've been cited as one of the highest volume Fender retailers outside of the major chains. But the new deal that Fender has been pitching to them has been prohibitive. Their cost per unit has gone up, and they're not able to discount as much to the customers. This chain has routinely been able to beat MAP pricing, but that may change now. And they also used to have a deal where Fender picked up their freight costs. Well, not anymore.
Personally, I think this move is going to backfire on Fender. I understand what they're trying to do. They want to completely eliminate the middle-man and rake in all of the profits. I understand that from a financial perspective. But from a marketing perspective? If they continue down this road they could end up eroding their customer base. If you diminish the opportunities for a kid to try out an instrument in person, then you also diminish the likelihood of them becoming a loyal customer for years to come. That first experience in a musical instrument shop is one that can hook a kid who wants to learn bass or guitar or drums. It's a much more visceral experience that you can't replicate by buying an instrument on a website.
I've also heard from a MAJOR independent Fender dealer and what they're going through. It's a small chain with three outlets in the NY metropolitan area. They sell A LOT of Fender instruments. They carry a good amount of Fender Custom Shop stock. And they've been cited as one of the highest volume Fender retailers outside of the major chains. But the new deal that Fender has been pitching to them has been prohibitive. Their cost per unit has gone up, and they're not able to discount as much to the customers. This chain has routinely been able to beat MAP pricing, but that may change now. And they also used to have a deal where Fender picked up their freight costs. Well, not anymore.
Personally, I think this move is going to backfire on Fender. I understand what they're trying to do. They want to completely eliminate the middle-man and rake in all of the profits. I understand that from a financial perspective. But from a marketing perspective? If they continue down this road they could end up eroding their customer base. If you diminish the opportunities for a kid to try out an instrument in person, then you also diminish the likelihood of them becoming a loyal customer for years to come. That first experience in a musical instrument shop is one that can hook a kid who wants to learn bass or guitar or drums. It's a much more visceral experience that you can't replicate by buying an instrument on a website.
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BurningSkies
CRAZY BALDHEAD
- Feb 20, 2005
- 27,956
- 20,348
- Disclosures
- Endorsing artist: Dingwall Guitars
I knew more than a few 'indie' owners and they all had problems with Fender's program. They'd have to carry stuff like like Fender PA gear and/or Fender acoustic amps that they'd never sell. They'd also have to tie up a whole bunch of cash in models/price points they didn't want or need.
If you add that in with the discount rate that Fender was strong armed into providing for people like GC/MF it makes no sense.
If you add that in with the discount rate that Fender was strong armed into providing for people like GC/MF it makes no sense.
We've always known that larger retailers can more easily meet the buying requirements and that smaller stores have been getting squeezed out. I think if a mid-size retail chain were to make this sort of move (even if able to meet Fender's requirements), it would be far more of a "shots fired" type of deal, where they could honestly say "we fired Fender".
I'm sure Larry's Music would have preferred to keep Fender under more favorable terms - so "firing Fender" is a little bit of creative wording. "We gave up on Fender" is probably more accurate.
I'm sure Larry's Music would have preferred to keep Fender under more favorable terms - so "firing Fender" is a little bit of creative wording. "We gave up on Fender" is probably more accurate.
BurningSkies
CRAZY BALDHEAD
- Feb 20, 2005
- 27,956
- 20,348
- Disclosures
- Endorsing artist: Dingwall Guitars
True, and this situation has been happening for decades. I heard these complaints back in the early 90's from small dealers. I know I've also heard similar complaints about Gibson, so it's not limited to just this. I pinged Eric Garland on this article and he's in total agreement, but says that plenty of the people AT Fender aren't happy with the leveraging that is being done on their 'financing' side (aka the guys who own the shares) who are making some of these moves necessary and/or required.
If the requirements are anything like what my local L&M stock is, it might be something along the lines of "stock these new promo items, stock a few low end Squiers, stock ZERO MIMs, and Stock 6 MIAs (but only in Black or red with rosewood boards). -_- It's kind of a PITA. My local store has had the same guitars on the wall that they did 2 years ago, save for 1 white MIA Jazz that a customer ordered in and a promotional Dlx Jazz that came in last month.
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How about, "We finally decided Fender was more trouble than it was worth?" From reading this thread, it looks like Fender is following the trail Gibson blazed decades ago, and they may reap similar rewards: minimal or no retail representation. But unlike with Gibson, there is NO WAY a shortage of Fender basses -- "used" ones. That market will be healthy for a long time.
Hmmmm......tightening up their already rigid retail deals AND considering direct sales?
Looks like Fender has a plan to increase profits which, Ok, they are in it for profits like any other company but the lack of real Fender instruments in shops is a loss to all consumers, IMO.
I may not be their typical customer, but if I pick up a Fender and it has that magic that some do, I really consider the purchase. If I don't buy that instrument on the spot, I never forget that experience and might possibly buy it down the road.
Looks like Fender has a plan to increase profits which, Ok, they are in it for profits like any other company but the lack of real Fender instruments in shops is a loss to all consumers, IMO.
I may not be their typical customer, but if I pick up a Fender and it has that magic that some do, I really consider the purchase. If I don't buy that instrument on the spot, I never forget that experience and might possibly buy it down the road.
How about "We don't sell enough to meet quota". B&M stores are the showrooms for online retailers or ebay. They aren't competitive because of sales taxes. They don't have the resources to carry everything under the sun so players can try them out & purchase for a cheaper price either online or used. From what I can tell, very few people value the dealership experience enough buy locally vs. saving a few dollars online. Bad management practices aside, this is the primary reason GC is in so much trouble. I can't begin to count the number of times I have waited on help while others tie up sales staff trying out new gear, they think it's great and play it good while only to walk out the door. Some are tire kicking but IMO the majority are buying online.
No idea. The only MIM they've had in stock for over a year (in the bass section, they have a few guitars) is a used MIM Jazz lefty that was a trade in.
It's nothing to do with sales taxes. It's all about overhead. They have retail store rental fees to pay, showroom employees, too. I'd be willing to bet that a B&M's overhead takes a lot of the profit out, compared to an online store that just needs a warehouse (or direct orders from the mfr).
