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Guitar Center / Sam Ash


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Wow! has anyone else seen this?!?

 

 

Guitar Center / Sam Ash

Potential clients include anyone who purchased a guitar or other string instrument between January 2005 and December 2007 from Guitar Center or Sam Ash.

 

We are investigating potential price-fixing violations in the market for guitars or other string instruments purchased at Guitar Center or Sam Ash.

 

In March 2009, the Federal Trade Commission (“FTC”) issued a cease and desist order to the National Association of Music Merchants and settled charges that NAMM had “permitted and encouraged” acts constituting violations of Section 5 of the FTC Act among its members.

 

The FTC specifically alleged that between 2005 and 2007, NAMM organized meetings in which competing retailers of musical instruments were permitted and encouraged to exchange competitively sensitive information, strategies for implementing minimum advertised pricing, and restrictions on retail price competition.

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I don't get it. Please explain how and why the guys who sell stuff the cheapest are guilty of price fixing.

It is basically under the FTC fair trade practices and the UCC. It is not permitted to have competitors agree to a pricing level. It negates open market forces, which is ...well...Un-American! ;)

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It is basically under the FTC fair trade practices and the UCC. It is not permitted to have competitors agree to a pricing level. It negates open market forces, which is ...well...Un-American!
;)

 

Agreed...if that were the case. But from what I've read, the two recent lawsuits are about MAP (Minimum Advertised Price) and not price fixing. While I am not a fan of MAP, I don't see where it has conspired to set artifically high prices on musical instruments.

 

Besides, the whole MAP issue went all the way to the Supreme Court in 2007 and was deemed legal.

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BTW, daddymack: As moderator, aren't you concerned that these Legal Beagles are using their first post to advertise their B.S. contingency lawsuit?

With H-C being GC-owned , I assume the H-C mgmt wants to make extra certain they don't do anything to attract even more dumb-ass lawsuits. But, from where I sit, musicmusic157 is just a shill for a class-action suit of little merit.

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BTW, daddymack: As moderator, aren't you concerned that these Legal Beagles are using their first post to advertise their B.S. contingency lawsuit?

With H-C being GC-owned , I assume the H-C mgmt wants to make extra certain they don't do anything to attract even more dumb-ass lawsuits. But, from where I sit, musicmusic157 is just a shill for a class-action suit of little merit.

Scaf...apparently you did not notice my oh-so-judicious editing of that initial post earlier today:wave:

The discussion still open, but the spam is ...gone...:)

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All I know is yesterday I stopped by Sam Ash to pick up two pair of drumsticks and two packs of Gibson strings and it was almost $40 bucks!!!!

I usually get that stuff at my friends music store for a hell of alot less, but I needed some sticks right away and had a gift card.

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Uh, help me here friends and neighbors. Isn't it a charge of price fixing between the MANUFACTURERS and the retailers, not retail to retail?

 

According to memory of an article in a retail trade, fender is named to be in cahoots with GC. Am I understanding this correctly?

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The big box stores can be beaten by the little guys, and it's happening in every market segment, including musical instruments. If a Mom & Pop store has been making a living by offering a crummy selection with inflated prices, they're going to get killed - and they deserve it.

My day job gives me an opportunity to travel a lot and I have visited a number of great independently-owned stores that are thriving. The winners all have common traits: They are service-oriented and listen to their customers.

They thrive by providing some combination of lessons, rental gear, rehearsal space and repairs. That's four main areas where the big boxes are - by design -- lacking.

As for "product" -- the big manufacturers have so severely diluted their brands (Squires, EPIs, Gios, anyone?) that smart "little box" retailers are providing used instruments without all the hassle of stocking quotas, MAP and all the other horse{censored}. I visited one very successful Florida shop that had an amazing selection of vintage guitars and amps. Then, I noticed 5 brand new Fender Strats on the wall, complete with hang tags. I asked him if he was a Fender dealer, and he said "Hell, no. I bought those at Guitar Center. Their price was cheaper than the wholesale price I used to get. I sell 'em for 10% above cost, give them a proper setup and usually get a student or amp sale out of the deal."

He also had a local artist painting white Mexican Strats -- making perfect replicas of Eric Clapton's custom paint job. Again: he was buying them from GC, having them painted and selling them at a $100 profit!

Between his resales, a few interesting small brands, a large base of students, and a thriving vintage business, he was doing great.

Go to Nashville and visit Corner Music. They had a big box move in a mile away and they put it out of business in a couple of years. By concentrating on quality instruments with expert sales, service and repair, their business grew during the challenge.

There's a retailer in NC that does more than half their new instrument sales online. They have a very small storefront with a limited amount of stock, but they will get you anything you want. I walked in looking for a particular guitar (they were an authorized dealer) and he told me how long it would take to get it. I asked "how much" -- He pulled out the MF catalog from under the counter and said "They sell it for XXX - how about YY" (He beat their price by $150 ) and I gave him a deposit on the spot. This two-man operation does expert repairs and makes money selling instruments by not having to pay for a large staff, big rent, inventory, etc.

These are just three examples. Circuit City wasn't the first big box operation to crash and burn and it won't be the last. Now that everyone from Best Buy to Costco to Walmart is selling cheap instruments, specialty mega-retailers like GC and Sam Ash will have to step up their game to survive.

If all a store can bring to the value proposition is a low price, they will lose in the long run.

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Hey,

Small business pays the going Local tax rates with no breaks.

 

Box stores get major deals, usually including 5-20 YEARS of eliminated taxes just for them to put their store in the host township/city.

 

So how can mom and pop survive on the same profit margin? They can't. Yeah - those who sell the crap brands for high dollar are the first to go, but what about those who sell the ibanez, gibson, fender gear, for regular and the normal sale prices? The box stores all "price match", many will beat it by adding an addition % of price to effectively beat it. They can write off the additional discounts against the tax money they saved.

 

I know there's a lot of positives and negatives to both sides, but let's be honest with each other, the playing field is far from fair to small businesses, and for every ONE that does find a way to compete, or at least stay in business, I'm betting dozens more fail (any small business vs. big chain), for no other reason than being muscled out by the 'big boys'

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Hey,

Small business pays the going Local tax rates with no breaks.


Box stores get major deals, usually including 5-20 YEARS of eliminated taxes just for them to put their store in the host township/city. .......


...... the playing field is far from fair to small businesses ............

I'm betting dozens more fail ...(

 

 

well, yeah! Who ever said life is fair? If you're born Wolfgang Van Halen, Dweezil Zappa, Sean Lennon, etc. you get a running start. The Lucky Sperm Club gives a lot of people the connections, money, looks -- sometimes even talent -- to get ahead in this world without the blood,sweat and tears most of us need just to get by.

 

The tax breaks you're talking about (which are rare, BTW) are economic development incentives and are for taxes waived off building and infrastructure improvements and fixtures. When projects put other people to work (construction people, electricians, plumbers, etc.) and hire a lot of employees (hello payroll tax) communities will sometimes offer incentives. More typically these days, they're waiving a portion of the real estate tax, since most areas have a tremendous amount of vacant space that's not earning tax $$ anyway.

I have never heard of a single instance where a community waived taxes on retail sales. In fact, it's illegal in most states to do so.

And I can't really cry the blues for the mom and pops that get squeezed out. While I'm no fan of the big boxes, and frequent a lot of small music shops, the simple truth is that many of the mom n' pops out there deserve to go under because they don't serve their communities in any substantial way.

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The tax breaks you're talking about (which are rare, BTW) are economic development incentives and are for taxes waived off building and infrastructure improvements and fixtures. When projects put other people to work (construction people, electricians, plumbers, etc.) and hire a lot of employees (hello payroll tax) communities will sometimes offer incentives. More typically these days, they're waiving a portion of the real estate tax, since most areas have a tremendous amount of vacant space that's not earning tax $$ anyway.


I have never heard of a single instance where a community waived taxes on retail sales. In fact, it's illegal in most states to do so.

 

 

I was speaking of the realestate / property taxes. In my area, it's become the rule, not the exception, for townships to waive a standard 20-year "no real estate / property taxes" to box stores like best buy, target, wal-mart, and many other chains JUST to get them to put up the business in their township, in the hopes that 20 years down the road, they can finally make some tax $$ off them. It was once 2-3 year deals, but then townships started competing with each other. What we have now is townships FULL of box stores, and along side of them are just smaller chain stores - and the mom and pops are literally gone. (really, this is textbook facism.. but that's another argument).. So who IS paying the property (especially school) taxes? I will answer that by disclosing the *new* "per capita" school tax, assessable to EVERYONE (over 18) who lives in the township, regardless if they even have a job, or how much they make. So me and the housewife both get to pay "school tax part 2", even though we already paid it through the property taxes, but since none of the businesses pay anymore, gotta make up for it some where.

 

Am I not the only one who sees where it's leading. Rich get richer, pay less tax... poor get poorer, pay more tax...

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