Category Archives: cheap

No more Haggling at Guitar Center: Employee Comment Follow-up

As a follow-up to my Guitar Center bought by Mitt Romney’s Company: No More Haggling Allowed I recently received a good comment from a Guitar Center employee. It provoked me to delve further into the whole Guitar Center issue. I was going to email this person, but I felt the comments were valuable, and merited posting in the main blog, including my wordy responses.

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…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.

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How long will that last? I wanted to get a job at Guitar Center because I was pretty sure that I knew more about guitar stuff than most of the people on the floor, and therefore I felt I would do a good job informing people and selling guitars, earning a good commission by developing a dialogue with them. Incentive being that I could take the price down and get them coming back. Without commission, it wouldn’t matter at all if the person knew anything about guitars, a wage job is a wage job.

It’s like most big name stores without commission; salespeople don’t go around asking people if they want anything, they just sit at the register waiting to check someone out. There’s no incentive or reason for them to ask, so they just sit around waiting. Deals and commission were all about incentive. Incentive to work at Guitar Center, incentive to sell, incentive to buy, incentive to get a deal.

Now Guitar Center can’t have the whole friendly vibe, or at least there’s no point to it. I went in to the store that day looking for the guy I knew, and he knew me.  He would give me good deals on things and I wouldn’t waste his time with other people, i’d ask for what I wanted and pay. Instead, if I go I can just buy whatever from whoever and know i’m paying full price, and the salespeople no longer matter. People with knowledge won’t matter, they’ll just show it on the computer if someone asks for information.

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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.

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That was the thing, it was the only reason I went to Guitar Center. By creating a haggling atmosphere, it was an entirely different entity and it was the reason I didn’t go to mom and pops. If I have the option now of paying full price at Guitar Center or at a small store, i’m going to the small store. I feel my money is going to better use, i’ve had a better experience, and i’m making sure they’ll be there by supporting their livelihood. Before this new price set thing was in action, I would care if Guitar Center left. Now not so much. Unlike technology stores and emporium stores, there’s still a grassroots guitar store movement out there, and if Guitar Center is just another one of the options, i’ll let them go.

I was willing to buy more things overall because I knew I would get good prices on things I wanted, and by talking to people for hours who gave me a deal, i’d always come back and give them my business. Unlike a Car Dealership, you don’t just go to Guitar Center once. Most people have more than one guitar, amp, pedal, and accessories. If I know your name, and I know you treat me well and give me good prices, i’ll just keep talking to you and probably buy things I don’t need, but get them just because it’s a good price. Same reason I went in there in the first place. Obviously this doesn’t apply to everyone. Tourists, beginners, rich people with money to burn.

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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.
-Z-

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Guitars are a store driven market, and Guitar Center was the only big chain out there. I feel no loyalty to a Best Buy or a grocery store because those are things I need. More people need and buy cell phones, cameras, TVs, computers, and food than they ever buy guitars. It’s why Panasonic, Sony, Samsung, Toshiba, SHARP, and so forth are household names and brands, while i’d give a guess and say that if you asked someone to name a guitar company, you’d be lucky with a “Fender”, “Martin” or “Gibson.”

They don’t offer haggling because they don’t have to. Guitar Center is purely luxury items for a specific market, and in order to captivate an outside, seemingly uninterested market, there needs to be some (back to square one) incentive that will cross the mental barrier of them wanting to spend money. Guitar Center is all over America, but the consistency was that we could get good deals at all of the stores if there were good people there. And the salespeople were unique instead of just a clan of blue-wearing khaki pants robots. As I said, people wanted to work there, and Guitar Center knew it. It has/had an extremely high employee turnover rate because GC knew if someone wasn’t performing, they could get another worker in quick.

So here’s an open question to employees and readers alike:

What sets Guitar Center above anyone else now?

Give your comments and thoughts.

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Filed under center, cheap, complaining, electric guitar, Fender, Fender Guitars, Gibson, guitar, guitar center, Guitar Hero, guitar player, guitar rant, Guitar store, mitt romney, music, Nay-saying, negativity, story

Guitar Center bought by Mitt Romney’s Company: No More Haggling Allowed

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.

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“Music is a Business”: A Longwinded NAMM Recovery Story

I’ll probably get some flack here, but in this case, not from the people who I usually get it from. I am making plenty of assumptions, and most of these ideas are based off of opinions and views I have seen. Having said that, I don’t feel like i’m going out on a limb here. I think i’m verbalizing things we hoped weren’t true, but I don’t feel I originated these feelings.

These are my thoughts after going to NAMM. It’s been 3 months, and it’s taken about that much time for my euphoria to wear off, and ideas to settle in, or at least have some effect on me. So lets get going.

Going to NAMM was a life changing experience for me. It really was. Being someone who wants to spend their life involved in musical instruments and music, experiencing something like NAMM was valuable and necessary. And while the experience NAMM gave me was inevitable, i’m glad it happened early in my life. Rather than dancing around it with pseudoartistic jabber, I might as well just come out and say it:

Music is a business.

You hear those words spoken – “Music Business” is household fodder for future (un)employees – but it took a very large event for it to set in.

My pre-namm experience was involved in blogs and magazines, seeing all the new gear surrounded by musical A-listers and scantily clad women who wouldn’t know a Fender from a Gibson if the booths were right next to each other. And if you’ll excuse the self-righteous NAMM booth humor (something I’ll try to avoid it from now on) you’ll get a slight glimpse at what I mean by “business.” All I knew about NAMM were in journalist pictures and magazines, but they don’t show you who is really there, and why it’s really there.

I’m going to guess that 99% of the people there are just lookers, gawkers, rubberneckers and the like, enjoying the new eye candy of musical instruments that are being created. And out of a tens of thousands of people that go to NAMM, those (we, actually) aren’t the people that matter much. We are dressed in musical oriented clothes, walking shoes, and our wallets don’t have much in mind except for the food.

And then you see the people and sights they never show you in the magazines. The suits, ties, briefcases, back rooms, two-story booths, soundproof rooms, velvet ropes, business schedules, meetings, power lunches, special areas, the entire hotel 1st floor bought by Yamaha, the Roundtables with the candy dish in the middle, the paperwork, and the nicely combed hair. Guitar World/Player/One would never show you that. Well, why would they? It’s not like it would sell issues (Re: Business).

You start to realize that the stores that sell a lot of guitars are not guitar meritocracies. The best guitars aren’t sold at Guitar Center, Samash, Musicians Friend or Music123. They are merely (I should say “probably, because this is all hearsay now) there for their name, and the amount of money they bring in. For instance, a Fender Relic, now the basis for all things overpriced in the guitar industry, costs a few thousand dollars to sell. Chances are, that guitar cost the exact same to make as the Made In Mexico 70’s reissues, and even they are overpriced.

So the manufacturers sell them wholesale to one of these big musical instrument selling companies for a low price, and then the company sells them to us for a higher price. I’m going to make an educated guess and assume the reason all of those guitars are at the big-name stores, is solely because they bring in the most money. Thus reducing your guitar buying options at the big stores to profit margins, rather than quality. Gibson, Fender, PRS, ESP, are only known brands because the people buy them, and the retailers get a good deal. You’d probably never see a Suhr or a Vigier at a big namer because they probably couldn’t turn a good profit.

I think what solidified my ideas that it’s a business was being in the ESP booth. It was all rock-and-rolled, videos playing, cool guitars on the wall. Then I standing in a certain place, and a door opened. Out of the door came around 8 men in business suits, shaking hands and smiling. Not a single one looked like a guitar player, or even a guitar player in disguise. I am in the room which is a large upstairs conference room, dressed to the nines in the finest in metal regalia, and there went what looked to be wall street’s finest. They probably just sold a couple thousand guitars in futures, or made a deal with an overseas manufacturing company to lower the manufacturing costs of parts fifteen percent.

That’s when it dawned on me to look at everything there in a different light. All of the manufacturers of cheap guitars probably couldn’t play one if handed to them. They were there for a profit, and turning plywood, lumber scraps, and cheap mass produced parts into money was why they were there.

You go to a hardware store, and there are rows and rows and rows of screws, big and small, costing a couple cents. Metal door brackets and hinges, a few dollars. Plastic knobs and plates for switches, a dollar or two. Lumberyard’s full of wood, a couple bucks for large pieces. All of these mass produced parts parallel to guitars. Tuners, bridges, knobs, switches, plates, and all of the simple things don’t add up to the cost of a Squier strat, especially when they are being mass produced. Necks, bodies, pickups, and everything but painting and assembly are automated, but we are still paying big bucks. It’s what we expect, as guitar players.

Want something with a clear finish? Extra 70 bucks. Gold plated hardware? 50 bucks. Floating bridge? 200 bucks. Hollowbody? Upper range. Thin nitro finish? Upper range. Locking tuners? Extra 100 bucks. New pickups? 70 bucks. You all know this, and you’ve come to expect this.

But knowing the details is not very rock and roll. This hobby of mine was born and raised in the ear canals of rock and roll Venice, and I didn’t want it to be sold to the lowest bidder. I didn’t want to know that the reason Guitar Center had my Gibson SG was because they probably made a huge deal of money off of it. I didn’t want to know that my gear heaven known as NAMM, is really just for big businesses to make deals. I didn’t want to see the Chinese manufacturers sitting at a table, waiting for one of the big companies to come to them so they could make the most profit.

You try and justify the price you pay that there’s some guy working in a factory on your guitar. That the measly 400 dollars you spend on a Mexican Strat is worth it. Then you realize that there are a good amount of people who specialize in that part, and they spend the better part of 5 minutes on it. Bolting on a neck, clamping the sides, installing tuners, drilling holes, removing things from giant machines. They get paid wage a few bucks above minimum, if not minimum. Aside from the paint and finish drying, it probably spends very little time in someone’s hands. Probably a good 15 dollars out of the company’s pocket worth of labor, and that’s pushing it. 20 bucks total for the parts, pushing it again. Manufacturing has been paid off, so probably a dollar or two for maintenance of the machines. We’re talking anywhere from 8 to 30 times the profit for something people yearn for.

The problem is there’s no competition. I’m beating the dead horse of my ill-fated “Why I Hate Guitar Center” post, but unlike the computer industry all prices just keep going up for us while quality drops.

I saw NAMM. I saw the celebrities paid to be there. I saw the small companies trying to break into the market. I saw the new gear, the booth babes, the lights, the smells. I got the blisters from walking, I saw Johnny Demarco (!!!), I saw the elaborate booths. And I realized that none of it was for me. Any guitar player would be happy with a booth full of guitars, and had the bar not been set so high, i’m sure that’s what NAMM would’ve been like. Instead it was the largest building i’d ever been to, enormous booths, louder than hell, and it was an overload.

But what does it all mean? Will it change a thing that I know this? Nope. I’m still going to go to Guitar Center, i’m going to pay 1700 dollars for the Eric Johnson Strat (someday…) which cost probably under a hundred to make. I’m going to keep on truckin through the business part of it. Pay a dollar for a song, 2 for a ringtone,
50 for a doorknob or whatever I buy, and continue to realize that music is a business. But so is everything else, so I should shut my mouth because some day i’m going to be in this business, and you’re going to pay for my Eric Johnson strat.

The end.

I await loads of criticism, both foreign and domestic. Including the job offers from Fender and Gibson for a billion dollar a year contract for me to sit around in the Charvel office or the Gibson Supreme office being the guy who criticizes everything, but still enjoys it all.

Me and music, we have a love/hate relationship. I love all of this stuff, but I hate seeing people in suits.

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