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How the hell does Guitar Center do it???????


Norton666

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I run a fairly small guitar shop in So. Nebraska. We are a dealer for Mesa, Marshall,Orange, Laney, ESP etc.. My bands bass player decided last week he was ready for a new rig. He played every Mesa I had in the shop , but he decided he wanted Ampeg(which I cant get). We decided we would road trip to the nearest Guitar Center(100 miles). He wanted the SVT Classic head and an 8x10. MF price on this stuff is $2600 combined with an additional $140 for shipping because it is so damn heavy. That is what Guitar Center had it priced at, which is a pretty good price IMO. I thought maybe if I haggled a bit I could get the tax included. We walked out of the store with the whole rig, new in the box for $2100 tax included!!!!!! I used to be an Ampeg dealer, so I know what my dealer cost on the stuff was, and if I would've sold it for that, I would have lost a {censored}load of money. They must buy enough of the {censored} to get a ridiculous price on their equipment. This was my first Guitar Center experience, so I thought I would share. I have discovered the GC secret, lowball the {censored} out of them and if they dont take it, WALK. You wont get anywhere near the door. BTW, the rig sounds KILLER.

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Stack em high, sell em cheap.

 

If it not in shop - order it in from one of the several hundered others that have the item in!

 

EDIT: There are 4 big shops in Glasgow with proper buying power. I am very lucky, because if their range crosses over - I can have them beat each others/ random internet store's prices. Works well for the customer on a budget.

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Every time I go to GC I walk out with something for cost. I know most of the guys that work at my local store...and they are always willing to hook me up. Even if I don't know them I'll haggle...they usually fold sooner or later.

 

The EBMM fretless I just bought was tagged at $999 used wo/ case. I asked what they could do on it and the guys says...$950...and I said I'll have to pass on that. Then he says...what will you take it for, and I said $800 out the door, no tax, and a case included. He said I can do it for $800 with tax and no case...cause it didn't come with one...so I walked.

 

Came back the next day...casue I slept on it and decided it had to be mine. Talked to a different guy...I said I'll take this bass for $800 out the door, no tax, and a case...and he goes..."Yeah, let's do it!" Turns out the damn thing did include a case, but then he says...yeah the case will just cost you like $50. I wasn't too happy, but I said fine. Then the other guy I was working with walked over and he said...tell you what, we'll sell you the case for $0.01 to make it an even $800...since we're selling you the bass for $799.99. I said "Ok!!!" So he just screwed his buddy out of $50 for me! I had a great time...and got my bass for a good amount money less than it would have cost. It is practically new...but it's a '99 which means...BIRDSEYE neck!!! Much nicer than a brand spankin' new one.

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I run a fairly small guitar shop in So. Nebraska. We are a dealer for Mesa, Marshall,Orange, Laney, ESP etc.. My bands bass player decided last week he was ready for a new rig. He played every Mesa I had in the shop , but he decided he wanted Ampeg(which I cant get). We decided we would road trip to the nearest Guitar Center(100 miles). He wanted the SVT Classic head and an 8x10. MF price on this stuff is $2600 combined with an additional $140 for shipping because it is so damn heavy. That is what Guitar Center had it priced at, which is a pretty good price IMO. I thought maybe if I haggled a bit I could get the tax included. We walked out of the store with the whole rig, new in the box for $2100 tax included!!!!!! I used to be an Ampeg dealer, so I know what my dealer cost on the stuff was, and if I would've sold it for that, I would have lost a {censored}load of money. They must buy enough of the {censored} to get a ridiculous price on their equipment. This was my first Guitar Center experience, so I thought I would share. I have discovered the GC secret, lowball the {censored} out of them and if they dont take it, WALK. You wont get anywhere near the door. BTW, the rig sounds KILLER.

 

 

 

Aren't MF and GC tied together in some way?

 

Pt

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On the other hand - I was in the GC neighborhood this weedend and needed a short speaker cable for my amp head....

 

I went in, told the guy who was stocking the cables I needed his cheapest, 1/4 to 1/4, 5 foot speaker cable...

 

he goes sure, here you go...and hands me one of their generic cables...not monster, not planet waves...just a cheap cable like I requested.

 

I didn't have my glasses so I asked him how much it was....

 

he says $20.00....so I give him a :eek: and a WTF are you talking about....

 

He looks at me like "what....?" so I asked him to double check the price. He says "yep - $20"

 

I slammed it down on the counter, told him he was out his f'n mind in a loud voice and walked out....

 

Went over to a mom and pop and got an Ernie Ball for $8.00....

 

Then I was really pissed at myself for not going there in the first place....:mad:

 

$20 my f'n ass....and the clerk couldn't understand what the problem was...:freak:

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I have found that GC (more about that abbreviation later) does not have good deals on some of their consumables, unless they are clearing them out. Cables for instance, are usually not dirt cheap. I frequently can beat the cost of cables at the local mom/pop store. On the other hand, MF always has cheap cables, so I keep track of what I need or what's crapped out on me, and the next time I order online, I load up on cables as well.

 

Oh about "GC" That's the medical abbreviation for Gonorrhea!:eek:

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because they, like most other big box stores, make their money on accessories.


they lowball, or even take a loss, on big stuff, but turn around and make appox 1000% margin on things like strings cables pedals, bags, cases, etc.

 

 

Yeah, most big box retailers are like this. I have family that worked for one of the big electronics chains. Their discounts were cost + a percentage. There was essentially no profit built into computers, printers, game consoles, cameras, etc, but ink, memorcy cards, games, etc, are pure profit.

 

THe last thing I bought from GC was as set of fender flats. They were probably 25% higher than I could get them online, but I wanted them now, and not a single mom and pop had them (I went to 4)

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It's hard to beat stores that deal in volume. Not only do they get product cheaper, they can also afford to sell some of them at cost and still make money.

 

Say GC can get one million pick packs for $1.00/per pack (including shipping and other overhead). They sell them for $3.00 and make 200%. Now assuming that they sold half a million pick packs, they already made their money back ($1Mil) PLUS a profit of half a mil. At this point, they can, if they want to, blow the rest of the pick packs out at $1.00 per pack without losing a single cent. Mom and pop stores cannot possibly compete with that.

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Realize also that the people on the floor, including managers, can only mark down so far. They can't sell "at cost" -- they can sell for a certain percentage above cost, depending on their pull and what the item is. For example, Live Wires cables typically can't be discounted any whatsoever, just like Mesa amps, etc.

 

If they paid $1800 for the head and cab, and the minimum charge is set to 15%, then you paid basically the least amount you were possibly going to get it for.

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I run a fairly small guitar shop in So. Nebraska. We are a dealer for Mesa, Marshall,Orange, Laney, ESP etc.. My bands bass player decided last week he was ready for a new rig. He played every Mesa I had in the shop , but he decided he wanted Ampeg(which I cant get). We decided we would road trip to the nearest Guitar Center(100 miles). He wanted the SVT Classic head and an 8x10. MF price on this stuff is $2600 combined with an additional $140 for shipping because it is so damn heavy. That is what Guitar Center had it priced at, which is a pretty good price IMO. I thought maybe if I haggled a bit I could get the tax included. We walked out of the store with the whole rig, new in the box for $2100 tax included!!!!!! I used to be an Ampeg dealer, so I know what my dealer cost on the stuff was, and if I would've sold it for that, I would have lost a {censored}load of money. They must buy enough of the {censored} to get a ridiculous price on their equipment. This was my first Guitar Center experience, so I thought I would share. I have discovered the GC secret, lowball the {censored} out of them and if they dont take it, WALK. You wont get anywhere near the door. BTW, the rig sounds KILLER.

 

 

Ampeg is made in China now. That is how they did it. Why aren't you an ampeg dealer anymore?

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One thing that a lot of folks are getting wrong here is thinking that if a store's cost of an item is $1800, and they sell it for $2100, then they make $300. Not true....not even close. In fact they probably lost money. They have SO many other costs beyond just their wholesale price. Business operating costs (labor, utilities, banking, rent, property taxes, sales taxes, shipping, insurance (a huge expense), shrinkage, advertising, maintenance, theft, etc., etc.) - these are real expenses and they cost big. When you figure in these "costs of doing business" many retail operations need to markup their wholesale costs as much as 60% just to break even (the average is about 30%). And let's not forget that they do need to actually make a profit in the long run.

 

So, back to the OP, how does GC do it? The previous answers did get a lot of that right. First of all, due to their high volume, market position, and other factors, they do often get their product A LOT cheaper than Mom&Pops (they did NOT pay $1800 for that item). Second, also due to volume, they get breaks on other costs like shipping and insurance. Third they very often do "lose money" on particular sales (it's called a loss leader and it's a technique that's commonly used on high dollar or high visibility items). And yes, they mark up the little stuff HUGE. They figure that they can lose $200-$300 on a $2500 sale while at the same time making $600-$800 on lots of $5-$50 sales combined and they come out ahead. And they figured right - it works.

 

Another factor is that large corporations can afford to operate at a loss for certain periods of time. This is due to their marketing power, their credit lines, etc. How often do you see big car companies and such reporting losses of hundreds of millions of dollars, yet they still manage to be their with doors open? Seems to not make sense.

 

The problem is that the Mom&Pop places are in such a position that they can't capitalize on such techniques, AND their wholesales costs are much higher, AND their relative expenses such as labor & rent are much higher. They can no way afford to operate at a loss and if they have a couple of down months they are gone. So their prices are higher, and then customers go to the big guys, and that just increases all the previous factors even more, putting GC in an even better position, and the cycle keeps going.

 

There is a lot more to it, but this is the dynamic that allows GC to just grow like a cancer while simultaneously making it a daily struggle for the little guys just to stay afloat. So keep this in mind when it seems like the prices at the Mom&Pops are high. Don't ALWAYS go for just the cheapest price. Those little guys often offer a lot more (in the way of advice, service, quality of service, peace of mind, etc.) than the big box stores and that IS worth something. Yes, there is a time and place for just buying at the cheapest price. GC has it's place (as do WalMart and other monstrosities) but has no soul. Please support the little guys when you can, and even sometimes when you can't.

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There is a lot more to it, but this is the dynamic that allows GC to just grow like a cancer while simultaneously making it a daily struggle for the little guys just to stay afloat. So keep this in mind when it seems like the prices at the Mom&Pops are high. Don't ALWAYS go for just the cheapest price. Those little guys often offer a lot more (in the way of advice, service, quality of service, peace of mind, etc.) than the big box stores and
that IS worth something.
Yes, there is a time and place for just buying at the cheapest price. GC has it's place (as do WalMart and other monstrosities) but has no soul. Please support the little guys when you can, and even sometimes when you can't.

 

 

amen. sometimes it's worth it to pay a little extra for what you get in return - support, endless advice (and usually from people who *know* what the f--- they're talking about, unlike most GC employees who end up getting an education every time any one of my friends goes to buy anything) and loyalty so that the next time you have a problem, they'll fix it and make it right.

 

we have two GCs in south florida and except for minor things that i need in a hurry, i bypass them both for a phenomenal private store that has knowledgeable, friendly staff and cares about keeping your business. i bought my bergantino cabinet there - because the people at GC had never even heard of it, and had no clue how to get one...

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You know, in the interest of being fair, I should give credit where due to the big box places too. I don't mean to sound so militant and anti-GC.

 

The big guys definately serve a purpose. A lot of times, getting super cheap prices IS important and it allows a lot of us to do things and get gear that would be impossible otherwise. Being able to look at 300 guitars all in one place is kinda nice sometimes. Being able to exchange faulty gear or bad purchases quickly and with minimum hassles can be handy. Longer hours are good. Some of the big guys even do things like provide for huge online forums and such (ahem.). There are lots of other reasons for the GC's and MF's of the world to exist. So no need to wave our fists and try to burn the places down (except WalMart - feel free to shake and burn all you want at them).

 

It's just that the little guys I think often deserve our business more, and they usually have more to offer in less tangible ways than just low prices. Not always, no - just BECAUSE they're small doesn't give them an automatic pass either. A small shop that has lousy staff, crappy gear, no selection, and sh*tty service, AS WELL as higher prices - forget it. But if they are like most small shops, spending a little more money there than you would at GC is usually worth it.

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Ampeg is made in China now. That is how they did it. Why aren't you an ampeg dealer anymore?

 

China????? It says all over the amp and cab "Made in the USA"?? The reason we stopped dealing Ampeg is because a lot of {censored} went down with their distributor St. Louis Music this last year, and it was becoming a serious headache. Most of their sales reps quit and it made it almost impossible to contact them about anything. Also, we just didnt move them like we had hoped.

We have a philosophy at the shop" If it doesnt move, dump it ". We just dont have the money to hold on to lines that dont move. Unfortunately, its lookin like Mesa may be the next casualty for us. They are awesome amps, but for some reason, I cant give the damn things away in my area. I hope we can make it work with Mesa though.We'll see.

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