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

[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.

[fazool]

Search AGF forums for the info you seek. Tons and tons of threads on this topic.

[Manothemtns]

Thanks for your comment.

[M19]

The five guitars in my house were bought as follows:

Cordoba-Guitar Center (Local Big Box)
Taylor 562-Twin Town Guitars (Local Independent)
Taylor Custom-Special Order-Guitar Rodeo (Local Independent-now defunct)
Martin 00-18 SH-Special Order-Cadenza Music (Local Independent)
McIlroy-Shoreline Music (Internet)

Regarding the McIlroy, there are no MSP McIlroy dealers. I KNOW I paid more for the 562 than I could have gotten on line, but to have the actual guitar in my hand before I bought, and to support a local business, I gladly paid a few % more.

Question-Could Reverb legally exclude the big retailers?

[Manothemtns]

Originally Posted by M19

The five guitars in my house were bought as follows:

Cordoba-Guitar Center (Local Big Box)
Taylor 562-Twin Town Guitars (Local Independent)
Taylor Custom-Special Order-Guitar Rodeo (Local Independent-now defunct)
Martin 00-18 SH-Special Order-Cadenza Music (Local Independent)
McIlroy-Shoreline Music (Internet)

Regarding the McIlroy, there are no MSP McIlroy dealers. I KNOW I paid more for the 562 than I could have gotten on line, but to have the actual guitar in my hand before I bought, and to support a local business, I gladly paid a few % more.

Question-Could Reverb legally exclude the big retailers?

Thanks for your reply. I see you like to spread your money around...always a smart policy...even willing to pay a moderate premium to buy locally. I am the same. I appreciate your comment. As far as Reverb as a corporation not allowing GC entry into the forum the legal answer is yes. The can do business with whomever they choose. We live in a free market society. I figure GC doesn't "need" Reverb, GBase, or eBay as they're already so huge they don't have to shop for exposure...particularly with Reverb, as owned by CME, they're direct competitors.

[thomasinaz]

Aren't Guitar Center and Muisician's Friend related in some corporate way? GC has B&M stores and MF doesn't. So to follow your logic wouldn't shopping at a local GC be supporting a local store? Or a Sam Ash store, because they also have local B&M shops? I've had good experiences in guitar shopping in both the local Sam Ash and Guitar Centers. Each of them have their share of less than knowledgeable sales people, and I've talked with them on visits to the stores. But I've done business with some very knowledgeable guitar reps in both stores also, who had good information to share on specific guitars I was interested in. I'd be willing to spend a little extra money to support a small local business, but not over 30% more. That's what I found when looking for a discontinued model of guitar I was shopping for a few months ago. I found the same guitar for 33% less at a large internet store.

Internet shopping has affected more than just guitar shops; low overhead and high volume sales result in lower consumer prices.

[Manothemtns]

Originally Posted by thomasinaz

Aren't Guitar Center and Muisician's Friend related in some corporate way? GC has B&M stores and MF doesn't. So to follow your logic wouldn't shopping at a local GC be supporting a local store? Or a Sam Ash store, because they also have local B&M shops? I've had good experiences in guitar shopping in both the local Sam Ash and Guitar Centers. Each of them have their share of less than knowledgeable sales people, and I've talked with them on visits to the stores. But I've done business with some very knowledgeable guitar reps in both stores also, who had good information to share on specific guitars I was interested in. I'd be willing to spend a little extra money to support a small local business, but not over 30% more. That's what I found when looking for a discontinued model of guitar I was shopping for a few months ago. I found the same guitar for 33% less at a large internet store.

Internet shopping has affected more than just guitar shops; low overhead and high volume sales result in lower consumer prices.

Great response. I'm not aware of any ties between the companies you mention but that could be. I've just had the misfortune to watch a friend...and very astute guitar shop owner have to go out of business. The economic relationships are complicated, for sure. When I speak of "smaller" guitar shops I'm speaking of shops where it wouldn't take much business from GC, et al, other major chains to breathe new life into these shops...many of which have been around for decades. Employee turnover at the chain stores is far higher that at your small but established guitar shop where people often remain employed based on values such as loyalty. These people tend to be authorities on what they sell...in this case guitars and related assorted gear. All other things being equal, I'll buy from the affable sales rep that knows his or her business before I give a dime to a store who's employees are, dare I say, clueless.

[Brent Hahn]

Originally Posted by Manothemtns

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?

It wouldn't be an issue if we didn't have the sales tax inequity. That's the real problem. Getting rid of it is ultimately in everyone's best interest, as counterintuitive as it may seem.

And speaking of "best interest," when you type out something as dense and wordy as your first post, you're asking a lot of people to actually read it. And it might also be in your best interest to put it in the appropriate forum. This one's mainly for putting up links to things you've recorded.

[Manothemtns]

Originally Posted by Brent Hahn

It wouldn't be an issue if we didn't have the sales tax inequity. That's the real problem.

Very good point. I'd not factored that into my thinking. Thx.

[joemcg]

Nothing unique about guitar sales. Look at office supply, hardware, pharmacies, etc, etc. if you want a very similar hobbiest driven economy check electronics and amateur radio. There is exactly one B&M retailer left for the Ham - Ham Radio Outlet. Every other is either out of business or has been purchased by HRO.

[GCWaters]

Pretty sure GC owns MF, as well as a number of other companies (like WWBW.com)....

[Manothemtns]

Nope, not since Walmart came to town.

[Manothemtns]

Sorry, I'm new to the forum. Show and "Tell" seemed appropriate. I'm not forcing anyone to read anything.

[Manothemtns]

Originally Posted by GCWaters

Pretty sure GC owns MF, as well as a number of other companies (like WWBW.com)....

All the more reason to patronize the competition...the Small Guitar Shop, Anywhere, USA. I can understand if there's not an alternative to GC in certain locales.

[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.