It came to my attention today as I bought a set of pickups from a guy at guitar center who usually gives me good deals, that he wasn’t giving me a discount like he always did. I felt it odd, but for what I was buying I figured maybe they couldn’t do it with accessories, despite getting pretty big discounts on a single pack of strings. In my venture, I needed something from Radio Shack, and oddly enough, a former Guitar Center employee was there at Radio Shack. I asked him why he does work at Guitar Center any more, and he says:
“Mitt Romney’s Equity firm bought Guitar Center, and we’re not allowed to discount or haggle any more. All the prices that are on the tags are what you have to pay.”
I was taken aback, considering that’s my main reason for going to Guitar Center, is the thought of getting a better deal. I talked to the guy awhile, and I basically interpreted it as the commission guys can’t really make good money any more from giving people deals on gear, so what’s the incentive of staying at one of the most competitive companies with the highest turnover rate? Also, I hear that they might be doing away with commission altogether. At which point the guitarists, bassists, techies and everyone else with a specialty in music will have no reason to work at guitar center any more. If you don’t have to try to sell things to make more money,what’s to say Joe Everyman who’s doesn’t know jack about guitars doesn’t just come in for a part time job?
Commission was incentive to for musicians to work at Guitar Center. The more you know, the more convincing you sound, the more you sell.
As a background, Bain Capital, an equity fund that was founded by 3 people, including Mitt Romney (take that in whatever way you want), recently bought Guitar Center for 2.1 Billion dollars. Why people who own Burger King, Domino’s Pizza, Toys R Us, and Sealy mattresses (among a few other HUGE names in their specific markets) have anything to do with guitars is beyond me. I’m sure all of the companies felt the same way. Why are we all being managed by the same people? Bunch of marketing/financial geniuses who wouldn’t know a Squier from a Martin if you magnified the logos.
All of these companies started as small places, only to now be owned by some 50 Billion dollar equity firm. I’m sure they all originally had little secrets which customers knew. I knew that the prices at guitar center were flexible, while most others don’t.
What i’m thinking (dreaming?) is that this might bring back competition. I did find out that they are allowed to do price matching ,where they match/slightly beat a competitive price. It’s how I got my now retail 2089.99 SG Reissue for 1400 flat.
Will this be the return of the mom and pop stores? Will guitar competition return and prices drop naturally?
My guess is no. Guitar Center’s super management people will probably realize that this is a major screwup, and return to normalcy.
But if they keep it this way, it’ll turn Guitar Center into Circuit City or Compusa. Stores with even more lackluster sales people with no enthusiasm for what they’re selling, and they’ll start to close down.
As for me, I really have no reason to go there any more. If there’s no chance that I can get a really good discount, I might as well just go to a mom and pop store and pay normal price and give it to people who actually need the money.
Excuse me if my Guitar Center post-apocalyptic thought process was a little difficult, but I found this revelation to be a big mind changer. Understood it’s a slippery slope, but damn if it aint greasey on that guitar hill.
26 Comments
June 9, 2008 at 9:13 am
The reason these companies are bought is that they are not making any money. Someone is giving away the store. Kind of like what the Democrats do.
October 31, 2009 at 12:58 am
only an idiot would bring stupid politics into this…….Democrats give everything away? Really…….while Republicans have no morals, while preaching family values, and spend all our tax dollars on War………’thou shall not kill”
you’re a complete idiot
October 31, 2009 at 1:01 am
Mitt Romney and all those Mormons need to go to Utah, and build a fort to stay inside of……We don’t want you involved in our politics, or our finances……
June 10, 2008 at 7:01 am
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June 10, 2008 at 9:13 am
I have seen this same tight-ar$ed behavior now as well and read more dark news at GuitarCenterSucks.com
Sadly, these type chains come in like Wal-Mart, try and kill the locally owned music ops, do so many times and then they themselves go belly up like Mars ~ leaving the musician with no place but eBay, pawn shops and Craigs List to find gear.
Musician’s Friend used to be okay years ago but they got snapped up by Guitar (off)Center and now Romney et al grabbedg GC because GC was nearly belly up.
I predict, like Mars, Brook Mays, Pearson Music and the many other selling overpriced good gear and under-priced crap gear ~ Guitar Center will become a downsized dotcom only with no overhead and sadly no soul of the face-to-face music shop.
Thankfully some small ops like Music Loft here in NC still will haggle. Where else can you find a Peavey Classic 30 tube amp in great shape out the door for 3 bills? Not at Guitar Center!
June 11, 2008 at 4:40 pm
Earlier today, I stopped at a Burger King in San Antonio and ordered a Whopper with everything only to discover (after the third bite) that there was no tomato on the burger.
I took the sandwich back to the counter and complained about the apparent oversight, but the manager pointed to a business letter that was taped to the door that announced that BK would no longer be providing tomatoes due to recent reports of salmonella in the tart red fruit. “Isn’t this the place that used to say, ‘Have it your way’?”, I asked.
Actually, I had already done some research on this salmonella thing and I knew that only 17 or 18 states were involved in less than 60 incidents, and that none of the reports were in Texas. In fact, all reports were tied to Roma tomatoes that were grown in Florida. Basically, BK, the company that used to say ‘Have it your way’ is following the lead of Mickey D in using a mostly bogus food scare as an excuse to screw its customers out of ten cents worth of tomato.
June 14, 2008 at 9:52 am
I went to GC to buy a Gibson es 335 which has been in inventory in the store for well over a year. It is mis-labled, and thus priced $400 in excess of of the correct price for the same guitar which is on both Musicians Friend and Guitar Center website. I have called 3 different employees wanting to buy this guitar at the correct price. I was told by 3 different store employees that they would speak to mgmt. and call me back. None did. One I spoke with as I called the store for something else and I was informed mgmt would not lower price to what it should be. I have since ordered the guitar from another internet music company matching the offered discount from GC. Thanks GC for helping me get a great deal on this same guitar from another online music supply company that could make decisions.
June 16, 2008 at 2:37 pm
I feel like I need to comment on a few things that were said. First of all…I don’t buy that 3 employees wouldn’t sell anES335 for the correct selling price. That’s a huge sale, and that’s what the employees are there to do. I also find it hard to believe that you found an ES335 in 3 different GC’s that were improperly tagged for over $400. GC employees have weekly T.O.’s (to insure every price tag is correct and to make sure all of your ‘one of’s’ are on the floor). Sure, sometimes a piece is overlooked…but I find 3 of 3 very odd. I’ll sell you one $100 cheaper than you paid at the ‘other’ online music supply company. My question is….what REAL guitarist would buy an amazing instrument such as an ES335 without playing it first?? No offense, but I rest my case.
Secondly….yes….the prospect of the commission thing going away is quite probable. However, employees are and still will be REQUIRED to pass certifications on their knowledge. Also, despite not being a commission based job, you are still required to hit your goal (sales figures based on your skill/lenth of job/job title….all business’s have a daily goal people…not a huge industry secret). So, if you think that average ‘Joe Blow’ can just waltz in and get a job, think again.
People can whine all they want about having to finally pay what the instrument is worth. If you want to go to a mom and pop shop, that is your business and your right. GC is simply trying to get away from that archaic way of doing business. Car dealerships have been doing away with it as well. There are many flaws in the “haggle” way of selling. Look at it from a different perspective…..Let’s say you own a business, and you have to pay rent, utilities, insurance (public, employment, property), overhead (cost of goods and the cost to maintain those goods) and so forth…..and then you get Johnny McDouchebag coming into your store…. occupies 3 hours of your time, and then when it gets down to the sale, he grinds the hell out of you until you are 5-10% above cost. That 5-10% will not cover your overall costs of selling that piece. You actually lose money. Do you honestly think that is fair? Is it fair to the business? Without income, the business cannot grow. Is it fair to the employee who is trying to earn a living? If someone feels the need to grind me on a price, I feel like that person doesn’t care about my time, my livelihood or my knowledge and it’s disrespectful.
Obviously, I work at GC. I spend an enormous amount of my time learning all I can to insure that the information I give to someone is correct. I’m not very high up in the ranks (just an AM), but I do believe in the direction the company is taking. It will take some time to get all the bugs worked out, but believe me…I know what’s up the road and it looks good. Try not to be so negative people. GC is trying to make a change for the better. Yeah, sure, you may have to pay the tagged price now….so what? Do you haggle your groceries? Best Buy? Anywhere else? This is a business, and it has to be run as such. Why else do you think the company was in trouble before Bain bought it? We were giving away too much stuff below the price to cover our overall costs. I’ve seen the IBITA (your overall costs vs. profits…..that is if I spelled it right) reports, and it was UGLY. Cost was not outweighing our income.
Hopefully, a few open minds out there will see where I was coming from with this and perhaps see reasoning.
I’d be happy to discuss this if you have questions. Just post the comment here and I’ll check every few days.
-Z-
June 16, 2008 at 2:39 pm
Ah….I misread……you only found one ES335 at the same GC. I apologize for that Michael. If you want to tell me which GC it was, I can look into the problem, and I can insure you that you will get that guitar at the price it is supposed to be.
-Z-
June 16, 2008 at 3:37 pm
[...] Who is the Guitarist? Guitar Center bought by Mitt Romney’s Company: No More Haggling Allowed [...]
July 10, 2008 at 2:41 pm
Will the person who wrote this article still be happy to shop at the mom and pop when he realises they dont have any kind of selection to choose from? When they try and charge him list (not map) for his instrument. When he has to wait for months until his instrument arrives only to find they screwed up his order because they aren’t a professional business. Then what if he wants to return it? They cant afford to have inventory of special orders so he has to keep it. I think i will stick with Guitar Center. Better selection, better standards, more knowledgeable staff, fair and competitive pricing, peace of mind in the buying process. I am a business owner and use their professional division (GC Pro) multiple times per week. Without their high standards and massive inventory i would not be able to run my business as effectively. If this change means they can become even more efficient then i’m all for it.
July 12, 2008 at 11:44 am
joe kessel got a raw deal off that sob of a manager on his first day at guitar centre, dam , the guy drove 40 miles to work in the accessoire dept to be told to go home after a quick quizz and come back on the 28th of july.
joe kessel may go postal over this.
July 17, 2008 at 2:50 pm
Hey Z, I am glad you work at G Center, but I have spent over $15000 in the last 2 1/2 years there. I also work in the car business by day. We do not haggle on our prices when I sell a car, but we make sure we have a realistic low selling price that is fair. Guitar center has done nothing but continue to raise prices over that last year. I know some are to due to fuel costs. If they go no haggle they better be more realistic in there prices. I can get a Sennheiser Handheld 135 for $399 all day that they want $549 for. It’s Not realistic for me to shop there anymore. So ultimitely the pros at the store will be out of there. So you better stand up an ralley the troops. Get the a-holes at coorporate to set a realistic price everything then stop the haggling.
July 21, 2008 at 2:23 pm
I have had fairly good success with Guitar Center. When I bought my Yamaha 12 string, high G was broken. (You never really buy a “NEW” guitar from them, since a lot of people have played it – call it test guitars central…)
Anyway, they started by saying they would replace the string, I objected, and they immediately gave me a whole new set of strings. I didn’t use them cause I went out and bought ultra light Martins, but the effort was there.
When I bought my MIM Telecaster, it was on sale for $379 with a gig bag. I had read on the net that it would be the $19 junk bag, but to my surprise, the guy said they were putting the deluxe padded $49 bags with this one. They had about four units with that offer on the wall. All would get the deluxe bags. The Fender instruction manual and tools were in the gig bag, sealed in a bag and untouched. Nice…
I caught a Yamaha keyboard on sale for $30 less than Music123 or Musicians Friend.
My only complaint: The place is chaos. They allow every shredder within 100 miles to come in, pick out a guitar worth hundreds, maybe even thousands, plug it into the biggest Marshall stack in the store and just rail on. I asked a sales person one day how often these guys actually buy an instrument. He shrugged his shoulders and said, “About once a week one of these regulars comes in with $3-400 and buys the axe of his dreams, but comes in most weekends and tries out every $1500 guitar in the place”.
I ALWAYS inspect very closely the stuff I pick off the wall there, and more than one has been put back because of minor scratches, fingerprinted finishes that are just hanging there, aging, and once, a dented back.
But – I’ve bought two guitars off the net, and both of them…well, they just weren’t quite right. At least at GC I can try it out like all the other people there. And we all know how wooden instruments change – even within the same model.
August 7, 2008 at 1:07 pm
as a guitar center employee for the last 7 years i can say with great confidence that YES we still do deals, we will not however just drop the price because you exist and walk into a store.
i hope all you disgruntled hagglers realize that every penny we do discount comes directly out of our own wallets. are you going to offer to buy my baby’s diapers? are you going to reach into your wallet and pay for my gas? no and no…..so why exactly should we feel bad that we can’t give you our paychecks as arbitrarily as we used to?
August 7, 2008 at 3:20 pm
just so its clear…..the sennheiser EW135 gen 1 wirelesses are the ones that were 399. the new EW135 gen 2 ones are now 549 up from 499 because of rising costs.
you also can’t get 3 packs of string for 10 bucks anymore sorry…..they were 3.99 a piece to begin with and now (7 years later) they are 4.99 and 5.49.
you name me anything else that has stayed the EXACT same price over the last 7 years…..gas (hell no), houses….(lol), groceries…..how about just look at candy bars.
better yet why don’t the complainers work my shift for a few days and see how much profit (for your commission check) you can accumulate!
August 29, 2008 at 5:25 am
Over the years, the market for guitars and basses has declined. Stringed instruments just arn’t that popular anymore. That’s the main reason why so many shops are in trouble. Sad but true.
September 9, 2008 at 7:53 pm
As far as raising the prices goes – most vendors are raising their prices every week lately. Martin guitars are going up in October. Don’t blame GC, OK?
And, for the record, Bain Capital had nothig to do with the no-haggle prolicy. The policy has been tried and tested since the 80’s. GC finally decided to make it national and give it a real go.
If you’re the type to save your receipts, read the back of a receipt from years ago and you’ll see GC’s 30 Day Lowest Price Guarantee. That jargon was GC’s attempt to stick to firm pricing but they just never put a whole lot of effort into it. The idea was to stick to prices but guarantee that we’d protect your price for 30 days so you could feel comfortable with your purchase and that you got the best deal.
We still have the same verbiage on our receipts now. The only difference is we’re attempting to hold firm to our prices for real this time.
We still do deals on a daily basis. The difference is we’re not going to sell you a pack of strings at cost for no reason. If you make a large purchase, your salesperson most likely will be happy to throw in a strap or a cable, or put together a package price for something.
Now you just can’t walk in the door, act like a hotshot, and say, “I always get cost on strings because I shop here a lot.” We’re glad you shop here a lot. Help us make money by paying the extra $2 for your strings when you make your weekly visit. Make another big purchase and we’ll show you some love right back.
October 1, 2008 at 9:24 am
As another GC employee trying to help customers understand the reason for the “no haggle policy” is pretty simple. Its not the “customer” vs. “the employee” anymore. GC has ALWAYS price matched and guaranteed the lowest price on new gear. There are many people in corporate who do online research to assure this. If there is something wrong with a floor model, there is always the option to get another identical piece.
What the “average” customer gets from GC is customer service. Yes there are some “pro’s” out there who know what they need and need it asap, but on the whole regular GC customers need assistance in getting the gear they need. That is why the stores still physically exist. There are many facets to this business, but what are the odds of a customer who wants their 10 year old child to play guitar getting the everything they need to learn how to play without help from someone who knows the gear? Best Buy is starting to offer a lot of the same gear as GC… How much of a joke will it be when Johnny Bestbuy making 8.50 an hour tries to sell you a VOS Les Paul???
I understand that are a lot of employees at GC who may not know as much as some techie customers, but on the whole I am confident with people shopping at the store level.
As a career sales guy my commission checks have not suffered a bit since the price lock. My customers pay for my service andfor the most part I know they appreciate it. If you spend thousands of dollars with me, you will still be taken care of.
Its the customer that come in and says “Ive spent hundreds of dollars at GC over the years” that wont get 20% off for no reason…whoever started this thread should have done WAY more research before starting this. Bain is not running the company. The original GC big wigs are still there calling shots. Bain is there to hepl the company be more profitable. GC has been run by musicians, they have just sought after some of the best retailers in the world to better the company…
May 23, 2009 at 9:52 pm
OK one point at a time. GC cannot guarantee the lowest price. They will beat any ADVERTISED price, or written quote. Almost ALL advertised prices or written quotes are at MAP so that guarantee is 100% worthless. And to say that the reason for the no-haggle policy is to eliminate the adversarial relationship is 100% BS. That policy was brought in by Bain, not the old GC. Their old policy was, any deal as long as it makes a buck. The new policy exists to insure a margin that will guarantee a return on Bain’s 2.1 billion dollar investment. And look out GC employees, if Bain doesn’t see their money coming back to them in spades, they will splinter the company and sell it off. They have ALREADY stopped opening new stores. The old GC never carried ANY debt. They never owed money to anybody. At the time Bain bought them, they had amassed a debt load of 650 million dollars. That’s DOUBLE what Mars owed when they went bankrupt. Moody’s has lowered their rating considerably. Fortune put them among Blockbuster and Eddie Bauer as large companies whose future is not looking good.
Point 2, the reason the stores still exist is because they are profitable. They have a rep of having the highest profit per square foot of any music store in the world. How do they do that? By paying commission based on the profit, not the sale amount. Which pushes the salesman to sell the most profitable products, not the best for the customer. Also by having a very extensive marketing program. Bain has already messed with the tried and true old school methods by instituting new pricing policies and new ad campaigns.
Don’t worry about Best Buy, they will soon realize that opening a day care center and putting Les Pauls in there for the kiddies to play with while the parents shop is NOT a good idea. I give it a year.
Point 3, the original GC bigwigs are mostly gone. RS retired with a $110 million buyout. LT similar, is now on the board at Fender. Just about the same time that Fender had a roughly 25% price increase across the board. Coincidence? You tell me. MA is the only one left.
Bain is NOT there to help GC. They are there to make money. And if it turns out GC does not do that for them, they will take the money and run.
November 20, 2008 at 6:36 am
Cool post, maybe you dream fof writters?
___________________________________
Sry, hehe))
December 26, 2008 at 8:41 pm
Hey GC employes. Sorry but I don’t feel bad for GC center if they brake even or even lose money on a deal… THATS BUSINESS! More often then not you get people who pay the sticker… Sometimes you have to fudge the price tag to make the sale… THATS CAPITALISM! And price guarantee my pasty white ass. The reality is GC is not offering a price guarantee to protect the customer or to to eliminate hostility due to negotiation… They due it because the own 38% of the industry, because they can, because they are the whore of the music industry, and because they value making a profit more then their customers or ethically sound competition with their competitors. As Wal-mart is to the average Jo so is GC to the average musician. In short you guys can take your crappy nicked up, scratched, dented, not set up crap guitars and shove em. To Hell with GC
December 30, 2008 at 11:13 am
For example/I walk in to GC pick up a $1000 strat, plug it in-play it-fall in love and the only help I ask for is, “what is the best price out the door, where is the case and who will take my money?”
Leyla, I have spent over $45,000 at my local GC over the past several years, and this is what is expected of me as a consumer in your eyes?? Maybe your employer should pay you and not the guy bustin his balls for a dollar to pay his own way……
Leyla wrote
“Are you going to offer to buy my baby’s diapers? are you going to reach into your wallet and pay for my gas? no and no…..so why exactly should we feel bad that we can’t give you our paychecks as arbitrarily as we used to?”
*News Flash* My customers do none of the above and we do our jobs in the rain, cold, snow and don`t hold our hands out. You may want to consider a new career if diapers are out of reach as a GC employee.
For the record: My son worked for GC so I know whats up.
May 23, 2009 at 9:27 pm
Why would ANY musician EVER shop at Guitar Center? They are not musician owned. Their entire motivation is the bottom line, not the instrument quality. The commission drives the salespeople to sell the most profitable product. The customer’s best interest are NOT the goal. The turnover of salespeople is incredible. If you can’t sell enough, you get fired. Why would any artist support a chain that is owned by a Wall Street financial giant? Their weekly sales meetings do not focus on product knowledge. They focus on hard sales techniques! Just like car sales. Their prices are not great. They carry little to no boutique gear. They can only deal with manufacturers that can supply huge quantities.
I own a mom and pop shop. We compete with them on a daily basis. People shop there because GC spends a mint on marketing and advertising. Any local shop worth anything will gladly meet or beat GC prices. Their prices aren’t that great!
I know what I am talking about. I worked for them for 4 years. Ran one of their stores for 3 of those years. We averaged a turnover of about 100 employees per year, which was typical for the chain. And I made it my goal after that to provide guitarists with REAL service and product knowledge with my own shop. My average employee lasts about 5 years. Cmon people wake up already! Support your local shop. NOT Wall Street.
May 28, 2009 at 8:49 am
As a musician:
Before my current job, I shopped at GC when I had to. I dislike being treated like an inconvenience since I’m not dropping $2-3 grand on a drum kit or a guitar. GC hires musicians to do the selling, which makes sense, kind of. Their knowledge base, for a majority, is good-great. Unfortunately their customer service skills, for most of the interactions I have had, are lacking. This makes it hard for someone who enjoys playing but is not a die hard, professionally gigging musician, such as my self.
As a music retailer:
I currently work for the #2 musical instrument retailer in the country (it would surprise you who it is). I approach my customers every day as I would want to be approached when I am shopping, with respect and a willingness to help. People appreciate that, a lot. I think this is where GC has gone wrong. Their pricing is what it is, lack of competition for decades has let them do as they like. They do train their employees, but really, when you run a 90%+ turn over rate, what good d0es that do? In the time that their employees work there, they work on product knowledge and closing the deal. Problem with this is, where is the training on customer service? You get some when you are hired and the rest is dependent on whether or not you are good at it. I don’t know too many retail industries that rely on natural talent, do you?
October 19, 2009 at 6:31 am
I guess this is old news now, but its certainly news to me. I had no idea Romney’s company had bought Guitar Center out. That’s a shame about the room for negotiation, because that’s kind of how the old world, mom and pop joint works, and haggling is accepted in many cultures as the ONLY way to do business.
I think this particular business move is a sure way to put oneself in the “corner” with no way out.