Impact of Internet Guitar Sales on Local Guitar Shops, Everywhere, USA

[ThermiteTermite]

Originally Posted by JonHBone

I don't think most people knock on shopping around for a good buy. It's a reasonable thing to do. All I'm saying is there are other things to consider in being a responsible consumer other than saving a dollar. It's also reasonable ...and the responsible thing to do... to consider unethical business practices when making a purchase. There is value in that.

I question the ethics of any business that attempts to get a consumer to pay more for the product than he/she could elsewhere by alluding to any factor other than the value of the product/price to the consumer.

On one hand, the vendor with the lowest price on reverb may simply be more efficient than his 'ethical' competitor, on the other hand he may have stolen it and is fencing it.

Each consumer isn't going to draw his or her ethical line on exactly the same spot on that continuum. It could also be that the vendor with the higher price is gouging or 'unethically' fleecing the consumer.

If the added value consists of intangibles like:

better service later on,
being able to try the instrument,
getting a good feeling from supporting local business,
national pride,
an enhanced sense of ethics, etc.

OK fine, those factors should be considered and given their proper weight in the purchase, but that weight will differ with every distinct consumer.

[DesertTwang]

Originally Posted by ThermiteTermite

They are businesses, not charity cases. I go to whoever can give the best deal, regardless of how many poor hungry little urchins the local shop owner or Jeff Bezos have tugging at their trouser legs.

So let me ask you this: If Amazon is not a charity, how come I read in the news the other day that the company paid $0.00 income tax?

The truth is that there is something in between being a business and a charity. A business can be sustainable and community-minded without being a "charity." Healthy communities can only arise and stay if there is a healthy mix between the two.

The only reason Americans and people in other wealthy nations enjoy cheap prices is because there are less fortunate people in poor countries making the stuff at prices that would never be possible if everybody involved was payed a fair price for their contribution.

If I always give my business to the cheapest bidder, I have no business complaining about my employer outsourcing my job to China, because they're simply following my own logic. And if you think this to the end, you will arrive at the conclusion that in the end, everybody here (minus a select few whose wealth is protected) will end up in the same economic situation as some poor Chinese factory worker. (Which, incidentally, appears to be the way several of the wealthier countries appear to be heading.)

When I learned about Amazon not paying income tax, I canceled my Prime membership and made a resolution to either buy local, or not buy at all, which is an often-overlooked, but ultimately very rewarding, policy.

Something to think about.

[JGinNJ]

I've only bought one guitar online, a demo D'Angelico archtop off Reverb. This was before GC started selling them, and no one near me stocked them. It turned out to be a great guitar, but I did have an issue with delays in shipping. Weather related, it was understandable to a point.

I greatly prefer to try in-person. Lots of guitars look good "on-paper", there's no substitute for a road test. I couldn't be bothered with back&forth shipping just to try something, and besides, too much can go wrong with that process. There have been guitars I've been tempted by, browsing on-line- until I tried it in a store!

Like live music, local shops need support, too, if there's going to be real-life world for musicians.

[ThermiteTermite]

Originally Posted by DesertTwang

So let me ask you this: If Amazon is not a charity, how come I read in the news the other day that the company paid $0.00 income tax?

The truth is that there is something in between being a business and a charity. A business can be sustainable and community-minded without being a "charity." Healthy communities can only arise and stay if there is a healthy mix between the two.

The only reason Americans and people in other wealthy nations enjoy cheap prices is because there are less fortunate people in poor countries making the stuff at prices that would never be possible if everybody involved was payed a fair price for their contribution.

If I always give my business to the cheapest bidder, I have no business complaining about my employer outsourcing my job to China, because they're simply following my own logic. And if you think this to the end, you will arrive at the conclusion that in the end, everybody here (minus a select few whose wealth is protected) will end up in the same economic situation as some poor Chinese factory worker. (Which, incidentally, appears to be the way several of the wealthier countries appear to be heading.)

When I learned about Amazon not paying income tax, I canceled my Prime membership and made a resolution to either buy local, or not buy at all, which is an often-overlooked, but ultimately very rewarding, policy.

Something to think about.

-- I will give it some thought--

[ThermiteTermite]

This gives what looks like a good breakdown of why Amazon did not pay federal tax in 2017:

https://www.snopes.com/fact-check/am...al-taxes-2017/

I see no issue with Amazon taking some of its hard earned money and paying (probably handsomely paying) tax lawyers to look through the legal code in order to minimize the company's tax burden.

It's no less ethical than when I pay a tax specialist to look through my records and ensure I benefit from any legal tax deduction for which I am eligible.

They invested in the attorneys (unless the attorneys were part of some business/charity hybrid ) who (hopefully) provided a good return on the investment.

They'll continue to get my business any time they provide the best value.

[ThermiteTermite]

They are businesses, not charity cases. I go to whoever can give the best deal, regardless of how many poor hungry little urchins the local shop owner or Jeff Bezos have tugging at their trouser legs.

Originally Posted by DesertTwang

So let me ask you this: If Amazon is not a charity, how come I read in the news the other day that the company paid $0.00 income tax?

The truth is that there is something in between being a business and a charity. A business can be sustainable and community-minded without being a "charity." Healthy communities can only arise and stay if there is a healthy mix between the two.

I said 'charity cases' sir, not 'charities'

[KevWind]

Originally Posted by Manothemtns

I've had a Reverb shop for seven years and closely follow consumer markets for contemporary new, used, and vintage guitar sales. In the third quarter of 2016 the market began to flip from strong, well established retail-type pricing to a huge drop in pricing across all segments, electric, acoustic, new, and used with the exception of vintage guitars. Japanese collectors have cleared the isles on that chunk of Americana. Chicago Music Exchange owns Reverb and attempts to operate the site as a truly separate entity but, what began as a fun member- based buying and selling forum predominantly for individual players, collectors, and a community comprised primarily of musicians has morphed into a place for larger guitar shops and wholesale retailers to advertise their complete inventories free of charge at the expense of the very community that got Reverb off the ground in the first place. Interestingly, while allowing bigger online retailers to list entire inventories for free (Music 1,2,3, Musician's Friend, and Sam Ash) Reverb does not provide advertising space for Guitar Center. I believe this is because Reverb has grown to a point so huge (as has it's parent company, now the largest combined brick and mortar and online guitar "shop" in the world) that they view Guitar Center as its primary competitor. While the area of global economics fascinates me, my little Reverb shop has gone from being a fun and, believe it or not, profitable experience, to something I seldom anymore spend my time on. The reason is because I can't compete with a saturated market. Secondary guitar sales (including thousands of impulse buys from Guitar Center) have literally flooded Reverb to the point of complete market saturation. Subsequently, prices almost across the board have plummeted and Reverb has become a buyer's market...with every Tom, Dick, and Harry advertising their wares combined with providing de facto entry for large retail chains...again, all but Guitar Center who's primary market is in guitars that sit in closets, unplayed, for years until they are (seemingly) unleashed en masse on Reverb, GBase, and eBay. All of this has led to Reverb being antithetical to its own mission statement and charter as written back, I believe, in 2010. To paraphrase loosely "...where individual musicians and guitarists can come together in a forum that charges less than eBay and share a far cooler overall buying and selling experience..."; anyway, something akin to that type of language. Like a runaway train, Reverb couldn't now slow down and reassess itself even if it, as a company, wanted to. These changes have impacted people everywhere, in every facet of the music retail industry, from small brick and mortar operations that have been family run and in business for fifty years to luthiers attempting to launch their own luthieries, to buyers, sellers, and traders alike. There's simply not enough room for everyone to play in the same sandbox anymore. But there is something that can be done about it.

I wonder how many of you on AGF have noticed these pernicious changes and their impact on guitar retail shops located in Everywhere, USA and even abroad. Shops are closing their doors forever because they simply can't compete with online guitar sales. Some of the larger stores have bridged the gap and seem to be doing fine because they've bolstered their "in-house" sales with ample internet sales but, still, the margins are very small affording only companies with a decent amount of staying power to make what is nothing short of a mind boggling shift in their business paradigms. The rest of our country's street corner guitar and Main Street music stores are failing, with more falling victim to change...change that came summarily so fast most were simply unprepared for it...certainly not on its present scale.

I suppose I'm writing this so that the next time you're on Reverb or in a Guitar Center you think twice about the purchase you're about to make. Sure, some of these little stores are of little consequence in the grand scheme of things but, when donning your special "See Reality More Clearly" glasses, go into that little music store and look around. Is there not something in there that you could buy to help out that struggling retailer? Chances are his or her staff's collective knowledge will blow your typical Guitar Center child "salesperson" out of the water and you'll share communion together in talking guitars. However you look at it, knowledge is always a good thing. Why not be willing to pay the extra 5% to 15%, depending, to have a harmonious buying experience while leaving your anonymous self behind to watchover your computer? Our nation's economy relies on better judgement and making "informed" and wise purchases. Who do you want as your neighbor, the "Hey, dude" sales child from Guitar Center or the extremely gifted guitarist who's cobbling together a living as a highly knowledgeable and altogether great guy sales rep for Guitar Shop #12345 by day and gigging at your favorite watering hole by night?

It's time to make a stand a spread business revenue out in a way that helps many and not just the few. It has become a matter of principal.

So, I'd like to hear some of your points of view. I signed-on to AGF because I did my homework and found it to be what I believe is the best, most informed forum out there. I'd love to hear that others feel as strongly about helping out small business owners while starving the corporate giant's at least to a point where regulation need not be the only answer...gosh forbid.

As I understand it Guitar Center owns both Musicians Friend and Music 123 so I guess you could say Reverb does allow GC to sell goods... I do not make purchases from any of them.

Also I believe in terms of revenue it is actually Sweetwater that is the largest combined brick and mortar and online music equipment retailer, by a significant margin Some $507 million in 2016 to CME's 37.8 million

[ancient tones]

Originally Posted by ThermiteTermite

This gives what looks like a good breakdown of why Amazon did not pay federal tax in 2017:

https://www.snopes.com/fact-check/am...al-taxes-2017/

I see no issue with Amazon taking some of its hard earned money and paying (probably handsomely paying) tax lawyers to look through the legal code in order to minimize the company's tax burden.

It's no less ethical than when I pay a tax specialist to look through my records and ensure I benefit from any legal tax deduction for which I am eligible.

They invested in the attorneys (unless the attorneys were part of some business/charity hybrid ) who (hopefully) provided a good return on the investment.

They'll continue to get my business any time they provide the best value.

Sure it's absolutely correct to pay as little tax as possible.

I agree completely that we all need to act in our best interest. But what is really our best interest as people of our country...and of the world?

I think a thriving world is best for all involved. I want to live in a community with healthy and happy people.

If one group of people accumulates most of the wealth and health, while the minority has not.....who are they going to sell to?

[Manothemtns]

I've gotten way more responses and stirred-up way more fervor than I'd anticipated. For the record, I spread my money around and won't look any great opportunity...Craigslist, eBay, Reverb, down. Mostly, I buy through my regional guitar shops that have both a great brick and mortar and online presence. I'll even buy online but pickup and have a new guitar setup and worked on with any future problems with one of my area shops. I do not buy from Guitar Center but realize that I'm fortunate to live in a region with a plethora of great independent, one-off shops so I'm not at the mercy of GC. I think it's simply about spending with a conscience...not always buying based on price and price alone but using your dollar to command superior service thereby paying homage to both the past and the present. Unlike the case with Walmart, small, independent but very good shops are still in business and it's not too late to help save them. If you don't, it won't be long before you've very few places to play before purchasing and you'll be passing on getting that great, one on one buying and future service experience.

[merlin666]

This is an interesting thread with some insight into the instrument buying and selling side. As for local businesses suffering, I don't disagree, but we never know if we can "blame" external factors such as online stores or if it's intrinsic to a local store making unwise business decisions.

I live in a smaller city that has a few music stores, and is also blessed with a top notch luthier who is also a dealer for several known brands. I visit his store several times a year to get service for my instruments, events, buying accessories, or to chat and mingle with the local musicians that hang out there. He is active on social media, goes to NAMM to check out new brands, and I think he is doing well. Mentioned expanding the store. Since I met him about six years ago I have bought several higher end guitars online (eBay and forums), and none in his store. This is not because he has higher prices, but simply because I have an eclectic taste in guitars and prefer fairly unique pieces and he did not inventory what I was looking for. However, I have ordered one of his first ukuleles which should be done in the next few weeks.

[Steadfastly]

This is not a guitar company but one my company does business with. They are going bankrupt. The reason is the one the OP mentions is hitting the music store business. From this and other examples, we can see it's not just music stores but other brick and mortar businesses as well.

https://www.cbc.ca/news/business/pay...ores-1.5024739

Payless, founded in Kansas in 1956, grew to become one of the biggest shoe sellers in the world, selling more than 110 million pairs a year in its heyday. But the company has been hit by the same maladies attacking many bricks and mortar retailers right now, as the rise of online shopping moves consumer spending away from them.

[gmel555]

I look at Reverb more as a place to look for used instruments, which might be a specific model with specific specs or finish, a certain year(s), condition, etc. In those cases I'm looking for something pretty specific which might only be avail at one or 2 places(retailer or private) at any given time.

If I'm buying new, ALL of my purchases in last 15 years have been from local, independent shops (except a $199 starter guitar for my son). I might use Reverb to check out what new models/specs are out there and pricing, but only as it makes me a more informed buyer when working with my local shop. I guess all this means I'm a loyal "local" buyer regarding new guitars. If I wanted e.g., a D-28, I would wait 4 or 8 weeks for my local guy to get one in for me, before I'd buy one immediately on-line from another retailer. I do this because I want to have a local shop to visit, play instruments at, get service done, etc. (BTW: I don't find this causes me to pay more, perhaps "sometimes" when adding tax, but not always.)

[Manothemtns]

Originally Posted by gmel555

I look at Reverb more as a place to look for used instruments, which might be a specific model with specific specs or finish, a certain year(s), condition, etc. In those cases I'm looking for something pretty specific which might only be avail at one or 2 places(retailer or private) at any given time.

If I'm buying new, ALL of my purchases in last 15 years have been from local, independent shops (except a $199 starter guitar for my son). I might use Reverb to check out what new models/specs are out there and pricing, but only as it makes me a more informed buyer when working with my local shop. I guess all this means I'm a loyal "local" buyer regarding new guitars. If I wanted e.g., a D-28, I would wait 4 or 8 weeks for my local guy to get one in for me, before I'd buy one immediately on-line from another retailer. I do this because I want to have a local shop to visit, play instruments at, get service done, etc. (BTW: I don't find this causes me to pay more, perhaps "sometimes" when adding tax, but not always.)

Good for you! This is precisely what my original post is getting at. I do exactly the same thing and have purchased many used guitars through eBay, Craigslist, and Reverb. These purchases are related soley to specific guitars and or gear that would be virtually impossible to find elsewhere. For instance, my "Lawsuit Era" Takamine 370SK...high-grade sitka spruce over solid koa...one of perhaps just a hundred examples ever made. I found that guitar on eBay and paid just $699 to an individual selller...including shipping. The guitar required a bit of work that my local luthier pal did for me at a fair, agreed upon price. That's money direct to the pocket of an independent seller (individual) and to my good luthier friend...and not to some maga-chain's CEO's wallet...where I never would have found such a guitar anyway. Probably my biggest lifetime guitar"score". The guitar is incredible! Otherwise, on new guitars I buy either from smaller independent shops with an online presence or from one my favorite local brick and mortar operations. I don't simply buy from a corporate guitar online wholesaler or at one of the corporate giants (GC has the greatest overall impact on smaller competing independents) with price being the lone qualifier.

[Condition1]

Honestly, I buy from where I can get the best value for my money. Business models change, businesses either adapt or get out - Blockbuster, Yahoo, Barnes and Noble, Banks, Vinyl/CDs,...you name the business...even currency now is getting a boost from bitcoin .

I work my money, it is not given to me. Same principles apply when I spend it.

If I go to a store and they ask the same price (or just a few dollars over) as an online dealer, I give them the business, otherwise I buy online.

[Manothemtns]

Who do you have work on your guitars? This is one area that helps independent guitar shops considerably. Buy there and get great, lifetime follow-through.