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  #76  
Old 09-18-2014, 12:50 PM
Earwitness Earwitness is offline
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Originally Posted by bohemian View Post
"Okay. How much is left of that $400 after paying the rent, the utilities, insurance, and the employees? Come on Frank, you can't be serious. "

'After they pay their rent, insurance, salaries, commission, absorb breakage and damage losses from careless customers. . . "

You left out "shrinkage" which is, more often than not, employee generated.

...

But, hypothetically, I would think profit on the above described quote and guitar..$400 is right at 40% gross profit...........I would bet $350 or more, and that would be net.... 35% net, and that is obscene.
Are you estimating that for $1000 worth of sales, the store only spends 5% ($50) on overhead, including renting a large commercial building, heating/air-conditioning/lighting/cleaning it, paying all utilities and taxes, hiring a workforce, paying the related insurance, benefits, salaries, social security, workers compensation, unemployment, advertising, commissions, supplies, credit card fees, attorneys, accountants, plumbers, (plus all the things you already listed) etc., etc., that it takes to run a large store?

Some merchandise sits in a store for years. Some never gets sold before it's obsolete or broken. What about all the people who return items in condition that cannot be sold again as new?

What would demonstrate "obscene" profits would be that other companies could (and would) easily move into that business in competition to sell the same products for less while still making good profit. I just don't get the sense that music stores are cashing in big, even if you think they pay too little or sell for too much on some particular guitar.
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  #77  
Old 09-18-2014, 01:26 PM
pgilmor pgilmor is offline
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Originally Posted by penguin71 View Post
And as for those who would "take advantage" of the seller with no knowledge at the rural garage sale but take umbrage with "taking advantage" of someone at a store in the city, I am having difficulty understanding what the difference is between the two scenarios (not being snarky - genuinely don't see the difference). In both cases, you have an uninformed seller not understanding the potential value of what they are selling. Am I missing something?
I think the difference is that by going to a store, a customer is actually making an effort to do research by asking professionals who should know. If they mislead her, it is basically theft, no more and no less.

In the scenario of a garage sale find, the seller is telling you what he wants for it. Question his valuation if you like, or not. If he wanted to be more informed, he could have been.
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  #78  
Old 09-18-2014, 01:54 PM
GeneK GeneK is offline
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Originally Posted by pgilmor View Post
I think the difference is that by going to a store, a customer is actually making an effort to do research by asking professionals who should know. If they mislead her, it is basically theft, no more and no less.

In the scenario of a garage sale find, the seller is telling you what he wants for it. Question his valuation if you like, or not. If he wanted to be more informed, he could have been.
I don't disagree with these concepts, but I am not sure that offering your guitar to a store owner constitutes the appropriate "research." You KNOW they don't have your best interests in mind. It would be like me doing "research" on the value of my car by taking it in to sell it to the dealership. Clearly that is preposterous.

Last edited by Glennwillow; 09-18-2014 at 02:47 PM. Reason: Rule #1
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  #79  
Old 09-18-2014, 01:55 PM
penguin71 penguin71 is offline
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Originally Posted by GeneK View Post
I don't disagree with these concepts, but I am not sure that offering your guitar to a store owner constitutes the appropriate "research." You KNOW they don't have your best interests in mind. It would be like me doing "research" on the value of my car by taking it in to sell it to the dealership. Clearly that is preposterous, since car dealerships are mostly (to put it nicely) lying scumbags.
Was going to respond with the same comment. Now, if you took it into the store for an appraisal - different story.
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  #80  
Old 09-18-2014, 02:06 PM
frankmcr frankmcr is offline
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Originally Posted by GSM View Post
MINUS what you originally paid, right?

Nope. We're not talking about long-term averages or any of that stuff. We're talking here and now. Upon completion of the sale in question, you have $1000 in your pocket that wasn't there a minute before the sale.


No, the music store has $1,000 in its pocket, just like the private seller above, right? MINUS the $600 they paid = LESS invested into it, equalling a larger profit.

No. Here and now, the store had to spend $600 to acquire something that brings them $400 profit after they sell it.

I'm confused: Does "money in your pocket" mean actual bills in your possession or PROFITS made? Because your analogy is unclear. If we're talking about two different entities making a one thousand dollar sale, they both have a thousand dollar (dolla) bills (ya'll) in their respective pockets.

The music store made more profits, because of their lower initial investment.

No. Their initial investment is the $600. However much the seller paid for the guitar doesn't affect that at all.

The way you worded it sounded like the private seller has a huge advantage in your hypothetical situation, which they do not.
"Private seller has a huge advantage"??? The seller in the example is a "private seller" whether he sells to an individual or to a store. He'll make closer to street price selling to an individual because that individual wants the guitar to use. The store just wants to sell the guitar on to a third party, and they're not going to stay in business buying guitars at street price and selling them at street price or buying guitars at street price and trying to sell them above street price.
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  #81  
Old 09-20-2014, 11:12 PM
jaybones jaybones is offline
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Quote:
Originally Posted by Ted @ LA Guitar Sales View Post
This is a great question of course but in truth the OP lost me with the 10% commission the store was supposedly paying their sales staff, how is that even possible? Also, how is it that he didn't get fired when he blew the buy for the store? Not only does he get to keep his job but he gets to take home a guitar he purchased wholesale using the stores account.

Oh well, what do I know.
Well, I'm pretty sure that Larry was going to put $100.00 in the till, and take the guitar home for himself. He was known for cherry picking the trades. Plus he told me that was exactly what he had planned. Sucker.

10% commission was what I got for selling guitars. Don't know what the actual sales staff got.

You're right though. I did get to order a guitar from the factory on the store's account - although I paid factory rep directly. He would have it delivered to the store on the regular deliveries.

I also got to order band mates instruments with the "wholesale + 10%" deal. Drummer bought $3K worth of drums - no cymbals or stands, he had those already.
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  #82  
Old 09-20-2014, 11:36 PM
jaybones jaybones is offline
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bohemian - True story, and I am....

And you know what they say about opinions - every body's got them nd they all stink.
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  #83  
Old 09-21-2014, 10:47 AM
GSM GSM is offline
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Originally Posted by jaybones View Post
bohemian - True story, and I am....

And you know what they say about opinions - every body's got them nd they all stink.
"Opinions are like kittens, everyone's giving them away" (Modest Mouse).
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  #84  
Old 09-29-2014, 04:25 PM
jaybones jaybones is offline
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Ha ha ha!

No, they're like a holes, everybody's got them and they all stink!

And my personal addition to that nugget - The less you hear from them the better off you are!
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  #85  
Old 09-29-2014, 07:01 PM
Steel_Soldier Steel_Soldier is offline
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About 8 years ago a friend of mine was at a Flea Market. guy had some junk and in a box was , as I recall, a 55 Les Paul, completely disassembled and in need of serious restoration. But it was still valuable. He asked the guy how much he wanted, the price was ridiculously low. Say more than 50 but less than 200. He told the guy, you know, this box of junk is really valuable. He was an honest guy, especially considering he was a Pro Broke Guitarist, Music Teacher and his car was broke down. He told the guy like 3 or 4 times until the guy just said he didnt care, didnt play a guitar, didnt know anything about guitars and if he wanted it to take it or he was going to throw it in the back of his truck, because he was leaving and it would be sitting in the rain. After a couple of "Are you sure's" he ran and borrowed the "more than 50 but less than 200" and took it home.

Called around and a well known buyer and restorer of antique, old Vintage (Whatever you want to call them) Guitars closed the deal.

He had to ship it so the guy could look and make sure it was right. He did and in exchange he received $12,000 and a brand new Gibson BB King Lucille. Considering that it needed complete restoration, and he was completely honest about the whole thing, I was glad to see he found it and after a little research that seemed to me to be a good deal. If I would have seen it I probably wouldn't have took a second look at the box of junk.
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