I think my Guitar Center is doomed

[KwadGuy]

 

The bigger the are the harder thay fall. Let them fall hard and fast.

 

 

If they do, you'll have fewer B&M options. And that will mean higher prices. Like them or not, it is in your best interests to have as many viable B&M chains as possible.

 

The truth is that for years, Guitar Center was propped up on a diet of improving gross sales without appropriate (any) attention to net margins. The loss leader upsale opportunity "FENDER (Squier) GUITARS FROM $99 DOLLARS" weren't the problem. In fact, those were about the only thing they did that made sense. The problems were A) the way below cost blowouts for no real reason; B) too much autonomy given to individual stores, which resulted in money losing sweetheart deals for "friends" that resulted in good grosses and terrible nets; C) too much product walking out the back door, or being sold in back door deals; and D) the general rule that "no customer should walk out of the store just because we couldn't make a deal.". There was previously a dictum, which came from high management, to "do the deal, no matter what the cost." Too many bonuses were being set on the basis of gross sales. The assertion made was that by first becoming the biggest baddest MF on the block through these money losing sales, Guitar Center would eventually rule the roost and be able to improve margins later on. That almost NEVER works except where the costs of entry into the field are very high and the competition is poorly capitalized. The cost of opening a music store/chain will never be prohibitively expensive, online etailers are a persistent problem and competitors like Sam Ash and (now) BestBuy are funded for the long haul. So the strategy is all wrong.

 

How Bain got sucked into this is a little bit of a head scratcher, since they are very smart guys. But regardless of why they were attracted to GuitarCenter, there's no question that the minute they got in and looked carefully at the books, they immediately put the brakes on that strategy of buying market share. They also SEVERELY curtailed the ability of the employees to negotiate on any product (even damaged floor merchandise), and put in stricter controls against shrinkage and sweetheart deals. I'm not sure buying GC was smart, but killing that strategy definitely was (from the owner's point of view). GC will NEVER go back to the "good old days" of buying your business. But since no one else is going to be dumb enough to try that strategy, either, it's not as if GC is now in a relatively disadvantageous position. Now they're just another retailer of music product. They do have the advantage of being the biggest one, which means they can negotiate better wholesale prices and get custom made gear that they can sell at attractive prices. If there's one advantage that being the biggest DOES have, it's that. But that advantage is not going to translate into $188 Hwy-1 strats ever again.

[guitarman3001]

so someone else can take their place and then we can just bitch about them until the cows come home.

 

What fun would the world be if no one had anything to bitch about?? :poke:

[RooSTER-b]

 

The Seagull was a clearance item, last one they had. The G-K bass head was used. Both were kickass deals, priced as marked.

 

 

Right.....they will still continue to mark stuff down at their convenience, but not yours.

[Oldskool Texas]

At the risk of being repetitive, I'll say it again:

 

SHOP at Guitar Center. BUY from someone else (Mom & Pop or Sweetwater).

[dcindc]

I've always been impressed that GC always had plenty of toilet paper stocked in the bathpoom.

[RooSTER-b]

 

I've always been impressed that GC always had plenty of toilet paper stocked in the bathpoom.

 

 

Not anymore. 1 slice per customer, and it's used.

[guitarman3001]

At the risk of being repetitive, I'll say it again: SHOP at Guitar Center. BUY from someone else (Mom & Pop or Sweetwater).

 

at the risk of being repetitive, I'll agree with this again.

 

Only time I'd buy something there is if I absolutely need it right away. Maybe something like a cable or strap or something like that. That said, I'll definitely go to sam ash before I go to GC again. Despite their guitar selection being a bit lacking, their amp selection is good and apparently they have a nice selection of accessories. I was shocked to find a visual sound double trouble pedal there.

[Cletus Spuckle]

There are seven Guitar Centers around the Chicago area. I wonder if that's too many to be profitable.

 

I've been to three of the Guitar Centers around town. A lot of their demo stuff is broken. That leaves me with a definate impression of the place.

[cjo]

Sam Ash, GC, MF, AMS, M123, Zzounds...whatever... I don't see much difference any more. I've usually done well at GC - I know a salesman who is exactly that - good at selling. He hooks me up with a more than fair price on what I'm looking for, so I continue to go there.

 

I did chck out the Best Buy music store here. Nothing to write home about - at least that was my initial thought. More of the same of what everyone else has.

[guitarman3001]

 

Sam Ash, GC, MF, AMS, M123, Zzounds...whatever... I don't see much difference any more. I've usually done well at GC - I know a salesman who is exactly that - good at selling. He hooks me up with a more than fair price on what I'm looking for, so I continue to go there.

 

 

consider yourself lucky! and if he keeps giving people deals below the marked price he probably won't be there long.

[cjo]

 

There are seven Guitar Centers around the Chicago area. I wonder if that's too many to be profitable. I've been to three of the Guitar Centers around town. A lot of their demo stuff is broken. That leaves me with a definate impression of the place.

 

 

We have four in the Mpls/StPaul area too... I think it's two too many, but the two newest stores are the "GC Jr. stores". Back when there was one, that place was BUSY, and always had a lot of cool gear going in and out of it. It kinda makes one think a little...

[cjo]

consider yourself lucky! and if he keeps giving people deals below the marked price he probably won't be there long.

 

I didn't say it was below. But it's as cheap as I'll find it anywhere. He's been there a long time as well. That's probably part of the reason.

[Doctor Morbius]

... my local store had some amazing blowouts (Highway 1 Strats for $188) ...

Ah yes, those were the days weren't they?

 

I thought they were $199?

[badone07]

wtf...double post from site maintenance.

[badone07]

I have no idea what Best Buy has. Haven't been in one in a while & really have no interest in checking them out. However, if you buy from them better check out the return policy. So far instruments aren't listed but wouldn't be surprised if that changed. You are getting a restocking fee. Plus anything over $250 paid by cash, check or debit & you're waiting for a mailed check from them.

 

http://www.bestbuy.com/site/olspage.jsp?type=page&entryURLType=&entryURLID=&categoryId=cat10004&contentId=1117177044087&id=cat12098

 

I'll basically go anyplace else but Best Buy.

[golias]

 

We have four in the Mpls/StPaul area too... I think it's two too many, but the two newest stores are the "GC Jr. stores". Back when there was one, that place was BUSY, and always had a lot of cool gear going in and out of it. It kinda makes one think a little...

 

 

And one of them (in Roseville) shares a parking lot with a Best Buy that has a music store.

 

The other Best Buy music store is in Bloomington, about a half-mile away from the Edina Guitar Center.

 

Best Buy is making no secret about what their plans are, once they go nation-wide. They're not looking to expand the market; they are looking to take it away from GC.

[guitarman3001]

 

And one of them (in Roseville) shares a parking lot with a Best Buy that has a music store. The other Best Buy music store is in Bloomington, about a half-mile away from the Edina Guitar Center. Best Buy is making no secret about what their plans are, once they go nation-wide. They're not looking to expand the market; they are looking to take it away from GC.

 

 

This could be a good thing. It might get GC to start haggling again and also to start carrying more and better inventory.

[cjo]

Yeah - Roseville is the one I've been to. Again, pretty craptacular in my opinion. I kinda hate BB though. "Can I sell you an extended service plan on your iPod case?"

[guitarman3001]

 

And one of them (in Roseville) shares a parking lot with a Best Buy that has a music store. The other Best Buy music store is in Bloomington, about a half-mile away from the Edina Guitar Center. Best Buy is making no secret about what their plans are, once they go nation-wide. They're not looking to expand the market; they are looking to take it away from GC.

 

 

on second thought, they have a LOOOOOOOOOONG way to go.

 

lmao @ their guitar and amp selection. Looks more like they're planning on competing more with KayBee Toys rather than with GC.

 

http://www.bestbuy.com/site//olspage.jsp?id=abcat0207003&type=category

[Doctor Morbius]

And one of them (in Roseville) shares a parking lot with a Best Buy that has a music store. The other Best Buy music store is in Bloomington, about a half-mile away from the Edina Guitar Center. Best Buy is making no secret about what their plans are, once they go nation-wide. They're not looking to expand the market; they are looking to take it away from GC.

I'm all in favor of competition as it is best for the consumer. However, I certainly don't want Best Buy (or Walmart for that matter) to become the next monolithic stringed instrument company either.

[KwadGuy]

 

on second thought, they have a LOOOOOOOOOONG way to go. lmao @ their guitar and amp selection. Looks more like they're planning on competing more with KayBee Toys rather than with GC. http://www.bestbuy.com/site//olspage.jsp?id=abcat0207003&type=category

 

 

The BestBuy selection of musical gear online is, indeed, craptacular. But their music stores carry an entirely different (much larger, much better) selection of gear.

[Doctor Morbius]

on second thought, they have a LOOOOOOOOOONG way to go. lmao @ their guitar and amp selection. Looks more like they're planning on competing more with KayBee Toys rather than with GC. http://www.bestbuy.com/site//olspage.jsp?id=abcat0207003&type=category

That's not what is available at the pilot stores Golias is talking about.

[Cletus Spuckle]

I don't understand what the big deal about haggling is all about. I think they should put out the best price they can and let you play deal/no deal. If they have damaged merchandise, they should mark it down up front or return it to their distributor.

 

The reason I don't like haggle-deals is that I get the impression that stuff is marked up too high and it's up to your arguing skills to to get the lowest price. If there's a no-haggle policy, then Guitar Center will find out sooner or later that customers are going elsewhere.

[golias]

I'm all in favor of competition as it is best for the consumer. However, I certainly don't want Best Buy (or Walmart for that matter) to become the next monolithic stringed instrument company either.

 

Well, I see this as a good thing for the mom & pops.

 

I relate it to the record store business. Back in the 70s, small record stores were everywhere. Then they got pushed out by the Sam Goody / MusicLand type empires, who not only set up shop in the malls, but had these massive music warehouses where they chopped everybody off at the knees.

 

Then Best Buy decided to enter the market. They started out slow, but once they got serious, it was a bloodbath for the album warehouse chains. They used every latest hit album as a "loss leader" and kept razor-thin margins, allowing the rest of their business to subsidize their CD section as it continued to lose money, but utterly cannibalize the market.

 

Once they took over, they let their prices slip back to normal. Wal-Mart overtook them eventually, but it didn't matter. The landscape had changed.

 

Here's why this was GOOD for the small record store:

 

There are segments of the music sales business which the big chains stayed committed to, but Best Buy has no interest in bothering with. Vinyl records, indie labels, rare imports, vintage recordings, and all but the most popular jazz and blues. Add to that the used CD market, and having discount department stores with limited focus replace the Musiclands as the big-time players opened up lots of FABULOUS opportunities for small stores to emerge. Now there are lots of little record stores all over town.

 

If Best Buy takes down Guitar Center, I see a similar future for the guitar market. The vast majority of small guitar stores near me did not survive the GC vs. Mars war, especially when Mars had their big bankruptcy sale. Many of those that remained, shut down their storefronts and just went on to eBay.

 

But if GC is pushed out of the picture, and Best Buy doesn't bother (as I suspect they won't) with a focus on value-added services, such as consignments, lessons, set-ups, repair, etc. etc., then it should be a golden opportunity for people to fill these niches and make a few bucks.

 

Also, in the meanwhile, the fight between Best Buy & GC could yield some OUTSTANDING deals for us bargain-hunters.

 

So I could not be happier about the coming price war.

[Doctor Morbius]

 

I don't understand what the big deal about haggling is all about. I think they should put out the best price they can and let you play deal/no deal.

My guess is the guitar manufacturers have set the prices on their gear so that every store has the same advertised street price.

 

If you've noticed at places like Victor Lizt Music during a sale they sell new items but they have to list them as used or blems to get around the manufacturers.