Taylor Guitars : Direct to Consumer

[zeebow]

Originally Posted by soups

Maybe the “strategically placed warehouse” is actually a dealer.

someone brought that up as an idea - but that theory was shot down in another forum.

the lack of transparency leaves the customer in the dark about what’s really going on.

[leew3]

Originally Posted by fitness1

Has anyone considered the fact that many of the small "mom and pop" dealers may have closed in the last couple years.

To me, it seems like a pretty wise move.

I would add that some of them closed, in part, due to the requirements from Taylor to remain a dealer that they couldn't afford.

[KevWind]

Humm some amount misunderstandings afloat

Generally the reason a Mfg who has been operating on the typical dealer network model , starts to sell direct, is that the current production is out pacing the dealer ordering/sales for some or all of the model line.
When manufacture inventory increases beyond normal production inventory, it will start to increase the manufactures cost of doing business.

When this happens there are 3 basic business based options.
#1 increase wholesale price to make up the difference
#2 cut back on production which often results in employee layoffs
#3 try to increase sales by selling direct



If Taylor is selling at MSRP then they are not "undercutting their dealers" per. se. Yes they may be competing with some dealers to some degree but that may not be as detrimental to the dealer as say an increase in the wholesale price . Not to mention online sales also service a large segment of the population that do no have any local independent or big box dealers...

Taylors minimum dealer order policy may indeed cause a dealer to no longer carry Taylor (as also happened with Gibson ) but that is not the reason a dealership goes out of business.

Given Taylor is a privately held company that does not have the constant share holder pressure to increase profits -- Direct sales based on simple greed for increased profit is not near as likely a reason for direct sales as simply the logistics of trying to balance production with sales ratio...

[$ongWriter]

I do not understand...especially in California...how a company even stays in business. They should re-locate to Tennessee...would save them thousands in taxes, fees...etc....and probably would even pay lower wages....I also don't see how a brick and mortar store can afford to stay in business competing with the big online stores. It's a much more pleasant experiencer ordering from Sweetwater than it is going into a Guitar Center....and...if you buy a new guitar you have a few days to try it out and send it back if you don't like it. Times are and have changed....I guess they understand that the big stores where people go in are on life support....AND...as good as Taylor's quality control is...most folks would be good buying one online without holding it first....just my thoughts...

[phavriluk]

I suspect that Taylor benefits greatly from having a very short communications path to its gotta- be-high-volume Mexican satellite factory campus that pays wages at a fraction of what it pays its production staff in El Cajon. They make what i suspect is an order of magnitude more guitars in Mexico than in California. Their overall cost of doing business may well be rosy compared to the costs of stretching communications. And being employee-owned, from what I infer, is being owned by an employee-owned trust, suggests to me that the owners would be reluctant to move to any wildcat country and give up their SoCal lifestyle and families.

[jjbigfly]

I do NOT know the current dealer discount on instruments, so do not quite quote my numbers as fact.

Let’s say I am a dealer and the manufacturer sells me an instrument for $1500. In the normal course of business I am going to sell it for $3000. I make $1500 profit….
Now, the manufacturer is making a profit by selling the product TO ME for $1500 (don’t know how much), but at a profit.
If the manufacturer is willing to sell direct to the consumer at retail price, they are making an ADDITIONAL $1500 PROFIT….plus whatever their normal profit is.

We can all come up with all kinds of reasons to buy direct, but the profit margin goes way up there. Way up. And the support chain (retailers, shippers, so on) is no longer needed….hurts everyone BUT the manufacturer.
There is a good deal of top notch gear out there for sale and the quality is not going to drop by selling direct (hope not), but the slow erosion of the supply chain hurts the industry itself in the end. Some do not see this because it happens slowly. But it happens. I would rather buy better gear for less $, but that is not going to happen. The retail price is not going down….the profit is going up. At the expense of the industry that brings us the instruments we love.

And further…when a manufacturer HAS TO GENERATE MORE PROFIT and has done everything possible to increase profits, then labor and materials get looked at….
As a consumer I will pay what I have to for a nice guitar. But if I am looking to use my $ wisely, I may look at brands that that support the industry a bit more.

I know I may be out there, but I am use to it now.😆

[tommieboy]

Originally Posted by jjbigfly

.....Let’s say I am a dealer and the manufacturer sells me an instrument for $1500. In the normal course of business I am going to sell it for $3000. I make $1500 profit….
Now, the manufacturer is making a profit by selling the product TO ME for $1500 (don’t know how much), but at a profit.
If the manufacturer is willing to sell direct to the consumer at retail price, they are making an ADDITIONAL $1500 PROFIT….plus whatever their normal profit is.

I agree with those numbers. I've seen more than a few "dealer" invoices (from various guitar manufacturers) over the years, and it is not uncommon for the dealer's invoice price to be 50% of the MSRP.

Tommy

[nellatrab]

Originally Posted by KevWind

Humm some amount misunderstandings afloat

Generally the reason a Mfg who has been operating on the typical dealer network model , starts to sell direct, is that the current production is out pacing the dealer ordering/sales for some or all of the model line.
When manufacture inventory increases beyond normal production inventory, it will start to increase the manufactures cost of doing business.

When this happens there are 3 basic business based options.
#1 increase wholesale price to make up the difference
#2 cut back on production which often results in employee layoffs
#3 try to increase sales by selling direct


If Taylor is selling at MSRP then they are not "undercutting their dealers" per. se. Yes they may be competing with some dealers to some degree but that may not be as detrimental to the dealer as say an increase in the wholesale price . Not to mention online sales also service a large segment of the population that do no have any local independent or big box dealers...

Taylors minimum dealer order policy may indeed cause a dealer to no longer carry Taylor (as also happened with Gibson ) but that is not the reason a dealership goes out of business.

Given Taylor is a privately held company that does not have the constant share holder pressure to increase profits -- Direct sales based on simple greed for increased profit is not near as likely a reason for direct sales and simply the logistics of trying to balance production with sales ...

You are totally correct, my friend works there...the other issue is Taylor's are just not selling as well since covid and the bracing changes. Hence giving a second GS mini Taylor at a huge half price discount if you buy one of their other regulars for a limited time....I know one large dealer who has nearly a hundred of used Taylor trade ins at very good discounts. Dealers are sitting on a huge amount of new inventory. The company is now also employee owned via ESOP. But the big three will still take a cut of the profits.

[davwir]

I personally think it's so helpful and useful for customers to have good relationships with dealers. I get that some of us have little access to good local places with decent stock (myself included now that I moved away from a major city). But I do have great relationships with non local dealers too, from previous purchases.
I could see the appeal for customers of buying guitars direct if the prices were significantly better, or there was something you could not actually get elsewhere..
Not currently the case, though.
Ill stick with the dealers (the good ones at least, hard to like most Guitar Centers these days)..

[ScottSD]

Originally Posted by davwir

I personally think it's so helpful and useful for customers to have good relationships with dealers. I get that some of us have little access to good local places with decent stock (myself included now that I moved away from a major city). But I do have great relationships with non local dealers too, from previous purchases.
I could see the appeal for customers of buying guitars direct if the prices were significantly better, or there was something you could not actually get elsewhere..
Not currently the case, though.
Ill stick with the dealers (the good ones at least, hard to like most Guitar Centers these days)..

That's the thing. I haven't been impressed by any of the chain music stores, or at least not my local ones. I much prefer the Mom and Pop stores; the major brands seem to have spurned them long ago...

Scott

[rllink]

Originally Posted by phavriluk

I suspect that Taylor benefits greatly from having a very short communications path to its gotta- be-high-volume Mexican satellite factory campus that pays wages at a fraction of what it pays its production staff in El Cajon. They make what i suspect is an order of magnitude more guitars in Mexico than in California. Their overall cost of doing business may well be rosy compared to the costs of stretching communications. And being employee-owned, from what I infer, is being owned by an employee-owned trust, suggests to me that the owners would be reluctant to move to any wildcat country and give up their SoCal lifestyle and families.

I think this is right on, they are strategically located for what they are doing and have a pretty good setup. And no offense to our Tennesseans here, SoCal has a lot to offer. I realize that a lot of people in the sticks look at SoCal as hell on earth, but SoCals like it there. I can't see Taylor's workforce pulling up stakes to live in Tennessee.

[Glennwillow]

As this discussion has progressed, I think it's very possible for Taylor to find ways to sell direct to their customers where the process does not materially hurt their local dealers. At the same time, the potential for doing harm exists, and it's quite obvious to many of us.

When things don't make sense, it's generally because we don't have all the information. I feel pretty sure that's the case here. We will have to wait and see how this works out for both Taylor and their dealers.

- Glenn

[Talk2Me]

Originally Posted by GCWaters

Slightly more than one word:

https://vehiclewisdom.com/why-cant-c...-to-consumers/

And yet completely unnecessary wordiness as if you want to buy a car directly from the manufacturer you can...as long as it's a Tesla. My point was clearly missed that it IS possible to buy direct. Those dinosaur fueled vehicles notwithstanding (part of the old economy and stuck somewhere in the 20th Century due to archaic laws that apparently only still apply to them).

[savannahmay]

Dunno how good Taylor direct customer service is . . .


IT works for a customer if the company customer service is there if you buys direct . . . and order comes in, no problem

If not it's hassle to get in touch or deal with customer service . . .




Order Direct; convenience, get it faster, but no support,


Order from a Dealer / Store: takes longer as they don't have stock as large as manufacturer's warehouse / storage
but you do get better support / customer service (well dealers vary quality in this but if it's a good shop, they will take care of you).





background:



The guitarist in my band ordered a Tele straight from FEnder , and of course the order was borked (he got a custom order tele from someone elses order) and it was a hassle. Two weeks later, after getting ghosting and run around from Fender CS (customer service not custom shopppe), he had to invoke "karen" privileges and still denied.

Finally went to our local shop / FEnder dealer who contacted his POC @ Fender who knows regional distributor . . . to get someone on Fender's customer side to look at it. Took around 3 weeks to get Fender to fix it and get the return shipping. Then one more week for them to send the Tele, and this time it was good.


Direct: 3 weeks before problem was addressed and 1 week to take care of it.


So if he would have ordered from our local Fender dealer, he would have gotten same item, but longer wait as if the store doesn't have it, they'd have to get it . But if he had a problem, he could go the next day, they work on it, and get it addressed in one day, instead of having to run around for weeks trying to get help for the order. And the only time spent would be waiting for the dealer to send out wrong guitar and receive the new one.

Dealer: One day before problem is addressed and 1 week to take care of it.



Usually Fender customer is better but my BF's band's bassist had similar issues with their Fender custom P & J bass 5 string . . . ordering direct vs going local dealer . . .

So it's not like sweetwater (good) quality

[Talk2Me]

You can in no way compare Fender and Taylor's Customer Service. Taylor is always there and happy to answer questions. Fender just wants to know when you'll be ordering your next guitar from them. My experience as well as many friends over the years. YMMV.