M&SR: Guys, you walked the show floor for three days at Summer NAMM wearing IMRA/MSO buttons. Were you treated differently by manufacturers because they knew you were in a dealer group?
Johnson: Since I’ve been in MSO, I’ve been treated very differently. And the treatment is better from NAMM because they know we’re partners. When I went to the vendor booths at the show, they saw my button and asked about MSO. I’m probably the newest dealer here and don’t have the experience of all of these people. But MSO allows me to get help from experienced people.
I can tell someone I’m having a bad day and can ask for support.
Wilcher: We are being treated differently by manufacturers, which is cool. But you can walk the walk or even talk the talk. I just want to make sure we are not getting lip service. In three months from now, when I call and say, “I’m the member with that badge,” what will happen? We’ll see. We don’t know what will happen.
Lovell: We saw the treatment improve going back to Austin [at the 2007 Summer NAMM]. Manufacturers were starting to take note.
Gillum: I was handed a letter from a manufacturer on the Summer NAMM show floor—I won’t say who it was—who has paid attention to independent music retailers. I walked by the booth and the man there said, “Hey, Harry, I didn’t know you were a member [of IMRA/MSO]. I have a program for you.” He hands me a letter which says “Independent Dealer Network.” The letter went on to say, “Summer NAMM ’08 to October 1, ’08,” when the program ends. It proceeds to give you quantity pricing, special prices, freight; all off-sheet pricing. And to give you an idea, standard wholesale costs—and you’ll have to do the math—at $66, is reduced to $45 for an independent music dealer. And it is addressed to “Independent Dealer Network.” They think the network is a buying group. Not a coalition of several dealers. So someone took the initiative to type this letter up and looked for identifiers of independent dealers to hand it out to.
Biernacki: From my perspective on this, most of the guys who do that are looking for business. The [biggest manufacturers] are not going to give you that letter.
Wilcher: A national sales manager of a major manufacturer stopped me and said, “Gordy, congratulations on MSO. I think it’s great. You guys now have more stores than a big chain.” His perspective was MSO was a chain of stores.
Lovell: I think manufacturers are concerned about indies uniting because there is no benefit for them…initially.
M&SR: So what do you want to see happen in the next few years?
Lovell: I’d like to see manufacturers clean their act up. Of course, we have our parts to do and we’re busting our butts to do it, but manufacturers could do things that would make major differences. But I don’t think they will until it’s put in such a way they have to.
Gillum: I think we first had to accept e-commerce as a part of business. Dot com made every dealer an authorized dealer to sell products anywhere in the world. If you’re a brick and mortar, there are restrictions: service requirements and stocking requirements. Even though some of the dealer agreements are amended with a dot-com franchise, if you look at what the dot-com agreement states, If you do e-commerce with certain manufacturers, your inventory stocking requirements are much higher, and you have to stock every product that you list on your Web site. So there’s an advantage to having a dot-com e-commerce-dealer agreement.
M&SR: OK, let’s talk about the great manufacturers. Which suppliers are really in tune with your needs and are independent-retailer friendly?
Gillum: Before you name those, you’re making that decision on: No 1, profitability; No. 2, salability; No. 3, integrity, No. 4, credit worthiness. All of these things are tied to our vendor survey that we want to see the highest scores on. That makes that vendor get a positive response from us. OK, now we can mention the names since we know the pecking order.
Lovell: I like it if a vendor loves me. Yorkville. It has a special bond with its dealers.
Wagoner: Somebody who we have to mention that has been great to a lot of people at MSO is Crafter Guitars USA. Crafter has done a lot for many of our dealers, especially the guys in smaller communities. Other manufacturers approached us and said, “We have a really nice line and you only need to buy $30,000 worth. That would be about $3 for every person in my community! However, Crafter is interested in our business and is not in the chain stores. It wants to be allied with people like those who are in MSO. They have walked the walk. They have stuck with what they told us they would do. I can think of about 15 dealers who have signed on with Crafter because of MSO.
Ulrich: There’s a really good supplier named The Music People. It’s a privately-owned family company. It provides an incredible array of accessory products that are custom made and designed for community-based music stores. It’s a very highly profitable accessory line. And the company loves independent merchants.
Lovell: I agree.
Johnson: I’m very happy with Ventura Guitars. Tom Oliphant of Sound Ideas, LLC is great. The company has great service and loyalty to small dealers. In fact, somebody called him about something they found on eBay and he took care of it immediately.
Bankhead: I have two companies to mention. Eastman Band Instruments is the first. The company makes high-quality products, is easy to deal with, and offers excellent turns, excellent margins, and excellent people to deal with. My second company to deal with might be a surprise, but it meets all of the qualifications that Harry mentioned. Before I say the name, let me say I understand it may not be the right choice for most small dealers. But honestly, if you look for a brand that has good turns, good salability, good profit margins and good customer support, Gibson has been a good company for us. Yes, the company has some quirks, but it’s an exclusive line now and is a flagship line. If you can afford the buy-in, you can make a lot of money, which is rare for a big line like that.
Biernacki: I’d pick two larger companies: Ludwig and Mapex. Both companies are really interested in the smaller dealers. The product quality is good, the profitability is good and the customer service is good. I can’t say enough good things about both.
Gillum: You notice everyone is talking about profitability. That’s what keeps us open. I like Davitt and Hanser, BC Rich, and Kustom Amplification. Their MAP program is fair to the dealer. The customer service is good. It doesn’t require $10,000 to $20,000 buy-ins.
Wilcher: Some people disagree about Donovan’s point about Gibson. But I want to point out it’s one of the things that makes the IMRA/MSO group special. Let’s look at whose sitting at this table. You’ve got Harry, who has 33 employees. Then there’s Bill and Janice Wagoner, who are a “mom and pop” store. I have five employees. Maureen has two. Even though some might disagree with some of Donovan’s comments, what works for him doesn’t necessarily work for me. But, that’s OK. I’m happy for whatever works for Donovan.
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