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Yay! or Stay Away!! ??????
http://www.luthiersforum.com/forum/viewtopic.php?f=10101&t=44039		 Page 1 of 1
Author:  Michael Anthony [ Tue Aug 26, 2014 12:03 pm ]
Post subject:  Yay! or Stay Away!! ??????
I have a question: I was recently displaying some of my guitars at a guitar festival and an area rep for a "big-box" musical instrument retailer approached me about hanging my guitars in their store that's closest to me. I asked how much $$ he wanted of my hard work and he replied "35%". Now, he does represent a retail chain that everyone on this form has heard of before. So my question is this: Should I be excited about this opportunity or should I tuck tail and run?? Anybody have experience with selling through a big-box store?? idunno

Any and all thoughts will be appreciated.
Thanks in advance!
Michael
Author:  Alex Kleon [ Tue Aug 26, 2014 12:27 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
I think 35% is a little high, unless they are going to really work hard to sell your guitars. Maybe he is hoping to make a good buck by hanging it on the wall and hoping it sells itself.
If you go for it, mark up your sticker price by 10-15%, more if you are willing to take less than the asking price.

Alex
Author:  Rodger Knox [ Tue Aug 26, 2014 12:30 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
Are you building guitars faster than you can sell them?
If you are, you should consider the offer. They may sell faster hanging on their wall, but they also may be damaged.
If not, then why bother?
Author:  Chris Ensor [ Tue Aug 26, 2014 1:05 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
The only time I hung a guitar in a big box store chain, it got damaged beyond repair- A guy scratched all the way through the finish and into the top. I put a black pickguard over it and sold it for cost to a friend. So be careful. They aren't going to be guarding your guitar.

Also, consider that you don't want to be the highest priced guitar in the store- especially if you don't have a colt following. People think, "I have never heard of that brand. And look at that price. I would rather go with (fill in big factory name here) that I know and trust for less money."
Author:  meddlingfool [ Tue Aug 26, 2014 1:24 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
It could be a good deal for you. 35% is a steep cut. It hurts, but it could help. You can make as many guitars as you like, but if you can't sell them, that's a problem.

At 35%, the assumption would be that the store is buying them outright from you. At which point, they are very invested in reselling your guitars to get their ROI as soon as possible, which can lead to reorders. So the exposure and credibility you could get out of that situation might be worth the 35%.

I'd seriously consider it, though I would try to get them to 30%. But I'd want a minimum 4 piece order of different models to have a larger brand presence on the showroom floor. And would require a deposit.

What is your building structure like? Can you do multiple piece orders? How many guitars do you build a year/month? What's your base price?
Author:  maxin [ Tue Aug 26, 2014 1:34 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
I believe if you check it out -- retail margins on consumer goods are normally 40% This a simple consignment deal no risk for the retailer. Most music stores will gladly put your work on display (no cost to them) even used instruments. I would guess that the idea is not to sell your stuff but to establish a highish price point to make other comparable factory items more appealing. Especially imports which can have mark ups as much as 60%
Author:  Jfurry [ Tue Aug 26, 2014 1:58 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
35 is the going rate at most guitar stores. I don't know what price range your stuff is at ,but if your in the 3 to 5 k range you have little or no say in where your stuff is displayed. If you are in the 5 to 10 k your say in display gos a ways up. If your stuff is in the 10 to 20 k range it can be handled by only certain people. Sign a damage agreement. You scratch it you bought it. If your in the higher range you should sign an agreement that lets certain people take things on trial basis. ( only way to do well with very high end guitars ). It's great exposure for your product if that is what you need.
Author:  meddlingfool [ Tue Aug 26, 2014 2:53 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
35% is definitely not a consignment rate, which is usually 15-20%.

35% is a purchase price. At which point the guitars become the stores property, and responsibility as well. It is therefore in their best interest to handle them with the usual care, and to try to sell it, as they own it.

I don't think a big box store is getting 35% on their strats and les Paul's. Maybe the waldens and such, or cheap Yamahas. So if they're getting 35% off your guitars, that's even more incentive to push them. (And 35% could be a starting negotiation point, I'd still try to get 30%)...
Author:  maxin [ Tue Aug 26, 2014 3:13 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
So was this proposed as a consignment deal? If so I think we all agreed that 35% would be ridiculous.
Author:  Cal Maier [ Tue Aug 26, 2014 3:45 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
I think the key words here are "selling through a big-box store??" and not selling TO a big box store.
I'd say we're talking consignment and that would be an outrageous fee. My vote is Stay Away!!!
Cal
Author:  Andy Birko [ Tue Aug 26, 2014 4:03 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
meddlingfool wrote:
35% is a purchase price. At which point the guitars become the stores property, and responsibility as well.

....

(And 35% could be a starting negotiation point, I'd still try to get 30%)...


The fool has it. Definitely try to sell your guitar to the store rather than consign it. I'd avoid consignment if at all possible. There's just too much risk to the instrument and not enough incentive for the store to sell it.
Author:  Jfurry [ Tue Aug 26, 2014 4:18 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
If its a store like Sam ash or gc ,what would be incentive for an employe to sell your guitar? Unless the think its the sh.. How could they possible keep the doors open lights on without getting 35%. Most consigned guitars pull 35%. The way to doing it well ( selling them there )is to have the people hyping them. With high end putting them in the hands of people that can afford to buy them. Getting 65% and selling wholesale is pretty good numbers.
Author:  maxin [ Tue Aug 26, 2014 4:59 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
It might not be a bad idea to have a sacrificial sample (lots of labels and logos) at the store perhaps the savvy shopper will note that you are a local maker and have the sense to cut out the middle man and go directly to you.
Author:  phil [ Tue Aug 26, 2014 5:22 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
This conversation has happened here before and the response always seems to be that a hand builder has very little to gain through this kind of arrangement - especially with a big box store. The boutique shops have a very different relationship with the people who build for them, and they have a very different clientel.
Author:  Haans [ Tue Aug 26, 2014 6:44 pm ]
Post subject:  Re: Yay! or Stay Away!! ??????
NUTZ!
That's highway robbery...I wouldn't tuck tail and run, I would tell him he's out of his mind unless he is buying them outright from you. If you make some sort of outright buy deal, you dictate the price that you want for the instrument.
These guys that roam festivals are always looking to get something for nothing and promising that they can do "big things" for you. All they are doing is hoping to suck you in cheap and then unload your guitars, tell you how good they did and "When can you get us some more". Once they suck you in and sell a guitar, you will want to raise your price, but they will do all they can to convince you that the best they can do is 10% per year and that you are an unknown and blah, blah, blah.
They are salesmen and their only concern is turnover. They could give a you know what about you...
Colorado has small handcraft stores, I'm sure. Find a good one, take one of your best and just talk to them about consignment, prices, and feel them out. If you don't like what you are hearing, tell them you will think it over, and go find someone you can talk to.
Author:  Pwoolson [ Wed Aug 27, 2014 7:32 am ]
Post subject:  Re: Yay! or Stay Away!! ??????
Very early in my career, I was in the exact place you are. I was approached by a big box to display in their shop. They convinced me how good it would be for my image to be displayed in their store. So I went for it.
Here's what I learned:
1) they have ZERO incentive to sell your product. Assuming they sell Taylor/Martin etc., they have to meet monthly minimums for those companies. Why on Earth would they put your guitar in a potential customer's hands when they can make a lot more $$ from putting a Taylor in their hands?
2) Be prepared for a total loss of your guitar. Mine hung on the wall for 6 months virtually untouched. Yet, when I went to pick it up, it was scratched all to heck. I had to sell that guitar as "used" and lost my keister on it.
3) It will NOT do good things to your image if the guitar sits in the store for more than a month or so. Those big box stores have very repeat customers. If they keep going in and the inventory has rotated, with the exception of your guitar, their thought will go to, "what's wrong with that one that it won't sell?"
4)Keep in mind that unless your guitar is PERFECT, and I mean PERFECT, it will look like crap hanging next to robot made guitars. Even if people know it's hand made, you are still in competition, for their attention, with a Taylor that is absolutely flawless. You won't win that battle.
My advice: run, don't not walk, from this deal. It's a lose/lose for you.

edit: 35% is high even for them to purchase the guitar. 30% is more in line with the norm. For a consignment, you should be looking in the 15-25% range.
Author:  Jfurry [ Wed Aug 27, 2014 7:47 am ]
Post subject:  Re: Yay! or Stay Away!! ??????
Could you guys that are seeing 15 and 20 % consignment rates please share where this is. ?
Author:  B. Howard [ Wed Aug 27, 2014 7:51 am ]
Post subject:  Re: Yay! or Stay Away!! ??????
I will only go 35% if they buy them outright. If he is talking commission I typically will do 20%, I have gone 25% to a shop that actually really "sell" my guitars. They also sent me 50% of their repair work.

I have also had guitars come back from shops after 6 months and they were a total loss. Got one hanging in my dining room right now as a reminder........I have also hung guitars and the shopkeeper put them with the valuable guitars that were "ask to play only" and stopped back a few moths later to find my guitar hanging amongst the low priced student guitars and taking a real thrashing. I have shops that also take excellent care of my guitars, not all shops are the same.

Big box stores and me don't get along. I have been thrown out of my local GC and have not been back. I did lodge a formal complaint with corporate and received a nice hollow apology from the snotty little store manager.To them it's all about margins....none of them I have talked to were even intereted in quality or tone, solely marketability and margin.
Author:  jfmckenna [ Wed Aug 27, 2014 8:26 am ]
Post subject:  Re: Yay! or Stay Away!! ??????
I hung one of mine in a local shop when I first started building and iirc they wanted 15%. This was a mom and pop not a big box store. But like others said it sat there for 6 months or so and just ended up scratched to hell. I can't even imagine how these shops can sell guitars when people come in and abuse them so badly. It seemed like every time I came into the shop one of the employee's was playing it LOL. But anyway, as a result of doing that I did end up selling 3 guitars and built up a local reputation, that one for some reason never sold and I kept it and still play it till this day. Unfortunately thanks to big boxes and the Internet those stores are all gone now.
Author:  Terence Kennedy [ Wed Aug 27, 2014 10:15 am ]
Post subject:  Re: Yay! or Stay Away!! ??????
Try Victor Guitars in Denver. If you by chance do find a respected high end store that likes your work and endorses you on their website it can be huge. If supportive they can be a very positive factor in the evolution of your instruments.
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