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Thread: Are Music Stores in Trouble? Retail Sales Flat for Musical Instruments

  1. #26

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    Quote Originally Posted by drummer View Post
    It's interesting that many are comparing B&M to online stores. I have done marketing for many online stores for years, not just in the music industry, and I can tell you that we shouldn't be thinking about it in terms of 'B&M vs. online'. It is mostly online and B&M stores vs. Amazon. Three of my smaller online accounts have closed up shop and I'm aware of hundreds more outside of my direct industry that are struggling and they all say the same thing... "Amazon".

    Amazon is negatively affecting even the mammoths like GC, Sears, Macy's and this list is too long to mention everyone. They have literally changed the landscape of retail in this country and unfortunately have put so many treasured American businesses out of business.
    After the buy out of Whole Foods Inc., Amazon cut prices by 45%

  2. #27

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    Just got more news.....................

    A case in South Dakota will be the quickest way to relief for B&M stores to level the field.
    The state enacted new laws that said if a seller did "X" amount of business in the state, then they had "nexus", a connection (rather than requiring a physical presence).
    The on-line sellers sued the state and the court held for the defendants. Now the case is at the state Supreme Court and if it also fails there, we will have a case at the US Supremes maybe next year, should they decide to accept the case...................

    South Dakota is attempting to have the U.S. high court ruling reversed. The state filed a lawsuit against several remote retailers in 2016 based on a law passed that year that requires out-of-state sellers who exceed revenue or transaction thresholds to comply with state sales tax laws. A state judge sided with the defendants in March.
    In its brief to the South Dakota Supreme Court, the state acknowledges the “unusual” law is contrary to the 1992 decision and asks for a swift loss so the case can be appealed to the U.S. Supreme Court. The defendants’ brief calls it an “awkward, unprecedented, and unfair manipulation of the court system.”
    Max Behlke, director of budget and tax policy at the National Conference of State Legislatures, said other states including Alabama, Indiana, Maine and Wyoming have similar laws.
    “The fact that it is one decision away from ... petitioning to the United States Supreme Court is by far further along than any other state,” he said. “The state tax world’s eyes have all been on South Dakota.”
    The state says in its brief that the U.S. Supreme Court would only be able to decide the case by June 2018 if the state high court rules by about this time. It takes four U.S. Supreme Court justices to vote to hear a case, or grant certiorari.
    If the Supreme Court overturns the 1992 decision, state tax collectors would be able to reach across their borders to impose sales tax obligations on businesses who sell to residents in their states, said Steve DelBianco, executive director of NetChoice, an e-commerce trade group.
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  3. #28

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    Quote Originally Posted by late8 View Post
    I tried to persuade the manager of the family owned music store to meet the current price point for the Eco-X snare and he flatly refused to budge on the price. I was told over the phone and again in person that he could not go below "cost". So it appears that $499.98 was their cost? My loyalty will always be for the family owned store because they support their community in so many ways besides being a brick and mortar store but in these tight economic times, I rather get the best bang for the buck and wait for the brown truck to roll up to my front door.
    If retail is $1100,there's about a 70% markup,so cost is probably $330.
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  4. #29

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    Quote Originally Posted by late8 View Post
    I'll go out on the limb. I think the brick and mortar music stores will be a thing of the past. The biggest local indie store in my area closed one out of three retail locations due to lack of sales (Modesto CA). I don't see their second location lasting beyond this year (Elk Grove CA). The "flagship" store has been in business for over 35 years (Sacramento) but I think a high enrollment in their music program is keeping the foot traffic flowing.

    Thanks for chiming in Mike. I was wondering how the Canadian music stores are fairing. I know the exchange rate can make a big difference when buying U.S. products through and online retailer but can it be a "deal" breaker on a lot of the high priced gear?
    The only guitar centre I've been to was in Minneapolis. I took a look around, bought b8 hi hats, a huge bag of reject sticks and a Neil Peart DVD. The price of the hi hats came out to be around the same price as in Canada. I've turned to Amazon for a lot of drum products now. The Gibraltar cymbal stand I got was way cheaper online.
    Quote Originally Posted by rickthedrummer View Post
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  5. #30

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    I didn't read every response so I apologize if this is repetitive. However, being in a primarily brick and mortar retail business, I personally think it play out like this...B&M will never go away altogether but there will be a considerable amount of consolidation. The biggest will get bigger. And for these companies to continue to be relevant they will have to master the online shopping experience along with being good at B&M. Bottom line...to survive they will have be a great omnichannel business.

    My two pennies worth.

  6. #31

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    Quote Originally Posted by pgm554 View Post
    If retail is $1100,there's about a 70% markup,so cost is probably $330.
    I've never seen anything with a 70% markup. Markups are really not as high as most people think.
    19pc Yamaha Maple Custom Vintage | 12pc PDP X7 | 9pc Ludwig Jr. | 8pc Pork Pie ZebraWood | 6pc Sonor | 5pc Orbitone |4pc Sonor Martini | 5pc Gretsch Energy | 41 Snare drums and growing!

  7. #32

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    When I was in college, a friend of mine worked in the best music store in town as a sales clerk.
    He told me that (as one example) if the Ludwig catalog had a snare drum listed at retail for $100, his employer could get that drum from Ludwig for $50.
    The store would then price it at 65% of MSRP (in this case, $65) and would accept 60%.
    I could get anything in the store at 60% of MSRP.

    Not sure that still holds today for most sellers but it appears to be close.....................here is one great example:

    I just found a beautiful new 5X14 Ludwig Supraphonic on a website with a MSRP of $849 and the ask-price was $549................exactly 64.66%.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  8. #33

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    Quote Originally Posted by SpazApproved View Post
    I won't go into any details.. but since I work at a small family own music store I can tell you we are in serious debt.
    One of the only thing keeping us alive is that we have a huge contract with a lot of schools for music instrument rentals and repairs. We rent out hundreds of instruments during the school year.

    The other saving grace is our lesson program. We have 10+ teachers to cover all the different instruments. Hundred students which is good money for the store.

    As far as inventory it's seriously extremely tough to keep things in stock people want because everyone has such different taste. We have two or three high end kits that have sat for years because people around our town are cheap. Or they want something different then what we have if they are serious musicians ready to spend the big bucks. Parents around my area want $300 throw away kits and then complain when they don't last. Fake cymbals that just bend and break. Plastic factory heads that don't last a week. I mean you get what you paid for!! But they can't grasp that concept. I constantly ask my boss if we can keep this in stock and keep that... and we should order this or that... but he always responds with we just don't have the funds to keep them in stock.

    It's sad to see but we are barely keeping are heads above the water.
    The selection at the Madison (now actually in Middleton) GC is in the same boat. Throw away kits, the same 2 DW kits that have been there forever, and not much for mid level kits. The local 5 star shop seems to be holding on by a thread. I'll drive to Milwaukee or Kenosha to go to a music go round if I actually want to look at drums or cymbals.
    Mmm... Saturns.

  9. #34

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    I went to Atlanta Pro Percussion today and bought heads top and bottoms for all my toms and a snare batter. While shopping I was told Ed the owner is closing the shop and retiring. He's been open for 30+ years. He came in as I was getting ready to check out and just said that it's time.

    The store is full of his own sets that he has for sale now. a lot of antique stuff. lots of Ludwig and Slingerland sets. I thanked him for all the service over the years that I've visited the store.

    Sad to see these gems of stores go. The thought of going to GC or SA kind of sucks. Probably will do all shopping on line from now on.


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  10. #35

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    Here in Australia, I found the internet to be a godsend for musical instruments. I have never found a guitar in one store which I couldn't find a similar or better brother or sister to online for a much lower price. Anything from the US comes over here and has 40% tacked onto it. Even with the exchange rate as it is, it's still cheaper to buy via ebay than at any of my local music stores. I thought they would have started competing with the reality of online years ago, but nope. The store model just can't compete. I guess luck played a part too, but all of the instruments I have chanced online have been gorgeous and vibey.

  11. #36

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    Quote Originally Posted by SpazApproved View Post
    I've never seen anything with a 70% markup. Markups are really not as high as most people think.
    A lot of shops here in Arkansas do a 70%-100% mark up. Granted many will work with you, especially if you are a customer they know, but that is the mark up range I have seen here.
    Six piece birch Mapex kit, a Black Panther Blade snare drum, Sabian cymbals, and Vater Drumsticks.

  12. #37

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    Rather than blaming one institution or the other I will point out a few things. I support my local shop as much as I can mostly when I see something and have to have it now. I purchased an inexpensive used snare on Ebay for $75.00 shipped to my door. Than same snare sits at my local shop used for $229.00. In today's economy where money isn't exactly falling out of the sky it would be stupid of me to pay $150+ more. A set of congas that I know for a fact have been on their floor at least 5 years are still being sold as new even though they are scratched and everybody and their mother has played these things as the skins are quite dirty and still at the new price. Ask for a discount ok sure we will take $20 off. No thanks. Drum kits out on the floor being sold as new and have been played on for years! I love my local shop but this is the reality. An order took me a month to get with them when I could have had it in days from Swee****er with no sales sales tax and free shipping. And of course that order was pre paid so I was stuck waiting. I asked about a new kit with them the other day which is $1599 online with free shipping, I was told it would cost $1649 plus tax after giving me a discount. I asked how long to get it? well its another month lol. A well used and pitted supraphonic was $499 and no it was not a pristine 60's version A new supra is around $549. Sales tax is a local reality so you know maybe sweeten the deal by offering a discount and maybe throwing in a couple of heads to offset things a little and I would say to myself stick with the local guy. Also in today's day and age I can Sit at my home computer and research the living crap out of different kits and compare them and get real information as opposed to wrong info or in some cases a blatant lie. Most costumers are just trying to get the most out of their dollar and theres nothing wrong with that.

  13. #38

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    good post vlopez, i use the net so much for reviews before i biy something. the more the better. sometimes i take my chances but then again most things are returnable
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  14. #39

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    Quote Originally Posted by Ricardo View Post
    When I was in college, a friend of mine worked in the best music store in town as a sales clerk.
    He told me that (as one example) if the Ludwig catalog had a snare drum listed at retail for $100, his employer could get that drum from Ludwig for $50.
    The store would then price it at 65% of MSRP (in this case, $65) and would accept 60%.
    I could get anything in the store at 60% of MSRP.

    Not sure that still holds today for most sellers but it appears to be close.....................here is one great example:

    I just found a beautiful new 5X14 Ludwig Supraphonic on a website with a MSRP of $849 and the ask-price was $549................exactly 64.66%.
    That's a 23% Gross Profit Margin...sounds about right. In Industrial Distribution, that's about where margins are. We always figure it takes 17% to 20% gross margin to keep the doors open and the electricity on. I don't know how the Music industry operates, but the higher volume the distributor has, the more buying power they have. Usually, it comes in the form of rebates...as opposed to giving the distributor a lower price up front. That keeps the appearance of a "level playing field" between distributors and helps keep the sales force from cutting margin up front and screwing up the market....usually. One of the reasons I recently quit sales and went to operations. No one values service anymore and I couldn't be competitive unless I got special deviated pricing from the manufacturer for even the smallest accounts.
    -Brian

    "Too many crappy used drum stuff to list"

    Play the SONG......not the DRUMS!!!

    "I think that feeling is a lot more important than technique. It's all very well doing a triple paradiddle - but who's going to know you've done it? If you play technically you sound like everybody else. It's being original that counts." ~ John Bonham

  15. #40

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    Quote Originally Posted by vlopez1130 View Post
    Rather than blaming one institution or the other I will point out a few things. I support my local shop as much as I can mostly when I see something and have to have it now. I purchased an inexpensive used snare on Ebay for $75.00 shipped to my door. Than same snare sits at my local shop used for $229.00. In today's economy where money isn't exactly falling out of the sky it would be stupid of me to pay $150+ more. A set of congas that I know for a fact have been on their floor at least 5 years are still being sold as new even though they are scratched and everybody and their mother has played these things as the skins are quite dirty and still at the new price. Ask for a discount ok sure we will take $20 off. No thanks. Drum kits out on the floor being sold as new and have been played on for years! I love my local shop but this is the reality. An order took me a month to get with them when I could have had it in days from Swee****er with no sales sales tax and free shipping. And of course that order was pre paid so I was stuck waiting. I asked about a new kit with them the other day which is $1599 online with free shipping, I was told it would cost $1649 plus tax after giving me a discount. I asked how long to get it? well its another month lol. A well used and pitted supraphonic was $499 and no it was not a pristine 60's version A new supra is around $549. Sales tax is a local reality so you know maybe sweeten the deal by offering a discount and maybe throwing in a couple of heads to offset things a little and I would say to myself stick with the local guy. Also in today's day and age I can Sit at my home computer and research the living crap out of different kits and compare them and get real information as opposed to wrong info or in some cases a blatant lie. Most costumers are just trying to get the most out of their dollar and theres nothing wrong with that.
    The internet cuts both ways. Your local shop owner might have $75 in a used Supra that they took in on trade. They could sell it for $150 and double their money, but they look on eBay and see that they are selling for more, so they tag it at $230 with no other considerations. Then, it sits there for years with their capital tied up in it.
    Mmm... Saturns.

  16. #41

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    I have never bought anything musical on line. I'm most likely done buying anything much other than heads and sticks. Maybe another snare at the most. But every drum and especially every cymbal sounds slightly different and I insist on hearing and feeling what I'm adding to the palette.
    It's a little disturbing to see so many posts here decrying the decline of local retail shops while the posters admit they are engaging in the very same activities they describe as causing the decline.
    To me the few percent saved by buying blind and deaf online is not worth it. Sadly money seems to be the biggest if not only driving factor for most buyers. Reap what you sow...

  17. #42

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    When I lived in Rochester, NY for a while, I bought my Collectors and all my ancillary accessories from Cadence Music. Now I'm back in New Hampshire and will drive 1.5 hours to DCP to shop. The drive prohibits going out for a set of sticks but between the awesomeness of the DCP experience and waiting until I need a few items, it's worth it.
    Which brings me to the fact that as mentioned elsewhere in this thread: the brick & mortars have and will continue to consolidate and the bigger will survive and run an online presence (DCP) along side the physical store.
    I understand how money is tight and accept that many buyers need to extend their dollars, and I buy a lot of stuff online, but as I said in the previous post that doesn't work for me on instruments. Just my personal priorities.

  18. #43

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    Quote Originally Posted by noreastbob View Post
    It's a little disturbing to see so many posts here decrying the decline of local retail shops while the posters admit they are engaging in the very same activities they describe as causing the decline.
    To me the few percent saved by buying blind and deaf online is not worth it. Sadly money seems to be the biggest if not only driving factor for most buyers. Reap what you sow...
    Ding, ding, ding.... we have a winner!
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  19. #44

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    Nobody can compete with Amazon. Buy today, at front door next. Any product.
    That being said, I spoke to an owner of 35 years of a major 5* Pro shop. He is considering locking the door. his reason, "can't compete with on-line retailers"

  20. #45

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    The drums in our store have not rotated much at all... if at all... the only kits that seem to sell are the super super crappy cheap $300 kits that come with pie tin cymbals.

    All of our top end Pearl Masters, Yamaha Birch Custom and etc get looked at but no one is willing to pay it for a great kit.
    19pc Yamaha Maple Custom Vintage | 12pc PDP X7 | 9pc Ludwig Jr. | 8pc Pork Pie ZebraWood | 6pc Sonor | 5pc Orbitone |4pc Sonor Martini | 5pc Gretsch Energy | 41 Snare drums and growing!

  21. #46

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    Quote Originally Posted by BackStreetDrums View Post
    Nobody can compete with Amazon. Buy today, at front door next. Any product.
    That being said, I spoke to an owner of 35 years of a major 5* Pro shop. He is considering locking the door. his reason, "can't compete with on-line retailers"
    Sickening................................just last week ,the Supreme Court in South Dakota upheld the lower court ruling that confirms the "Quill" case of 1992.
    This was the case that said states could not force on-line retailers to collect sales tax revenues...........which as you know gives the brick & mortar stores a disadvantage.
    In 1992, the mail-order and on-line business in the USA totaled $35 billion.......................this year the estimate is $534 billion................nice growth rate.
    Now that the SD court has ruled (the case was actually designed for defeat so that a state could get an appeal sent to the US Supremes) we should have a case next year for the USSC to consider overturning the Quill decision and get things back on a level playing field.

    Quote Originally Posted by SpazApproved View Post
    The drums in our store have not rotated much at all... if at all... the only kits that seem to sell are the super super crappy cheap $300 kits that come with pie tin cymbals. All of our top end Pearl Masters, Yamaha Birch Custom and etc get looked at but no one is willing to pay it for a great kit.
    There are people that play musical instruments.....................and there are people that play at them.
    Gretsch USA & Zildjian
    (What Else Would I Ever Need ?)


  22. #47

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    Toys R Us filed for bankruptcy last week. Those guys were so over priced, I'm not surprised by that move. Gone will be the days where you can take a stroll down an aisle to touch and feel the toys. It must take a mint to keep the lights over all that square footage!

  23. #48

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    Just to add to my post and to keep from being misunderstood I buy a lot of my gear at my local shop in the last year I have spent at least $2000 there. But the fact remains that I cannot justify paying $229.00 for a used pearl sensitone steel snare (not the elite) that is well used when that same snare used came to my door for $75.00. I bought my cymbals locally because I want to hear them and that makes sense. And again $499 for a supraphonic that is not in great shape when I can get it new for $549? It's not even about the taxes for me I can deal with that but the pricing is way off as well. My biggest complaint is gear on the floor that has sat for years and beat to hell being sold as new. You also have shops that refuse to take part in internet sales. Well locally people are not buying a new kit every couple of months so you need a larger audience for your products. And when you buy on the internet lets not forget that the business you are dealing with is almost always LOCAL somewhere in the US. And a lot of Amazon sales are in fact those same music shops selling on Amazon. You look at a product and it says seller is music xyz and fulfilled by amazon. So it goes round and roundWe have a local shop that is not drum related they sell most brass and woodwinds and honestly that are so incredibly overpriced they are a ripoff. I play trumpet as well and some of their stuff is sometimes $200 more for the same instrument on the net. Now as hard as people work for their money why would you spend so much more? For 24 years I have served the public and risk my health and in a few instances my life to do my job I value every dollar I earn and theres just some things I can't do.
    Last edited by vlopez1130; 09-28-2017 at 10:16 AM.

  24. #49

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    Quote Originally Posted by BackStreetDrums View Post
    That being said, I spoke to an owner of 35 years of a major 5* Pro shop. He is considering locking the door. his reason, "can't compete with on-line retailers"
    I heard his story from the owner of my local Five Star Pro shop ... small world ...

  25. #50

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    I can't say much when it comes to big purchases like a new kit. I've only purchased 2 new kits in my life, one from GC and one from MF. When I bought a new guitar, I went to my local mom&pop music store...because my knowledge of guitars was elementary at the time and I wanted service.

    That said, 90% of my instrumental purchases are from my local Music-Go-Round. They are local owned, you get to hold what you buy and the prices are a steal. It also supports local musicians by providing an outlet to buy/sell/trade equipment at prices musicians can afford.
    -Brian

    "Too many crappy used drum stuff to list"

    Play the SONG......not the DRUMS!!!

    "I think that feeling is a lot more important than technique. It's all very well doing a triple paradiddle - but who's going to know you've done it? If you play technically you sound like everybody else. It's being original that counts." ~ John Bonham

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