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(Lto R) Chris Lovell, Gordy Wilcher, Harry Gillum,
Greg Farres, Mike Connolly, and Chris Basile. |
Our Fourth Annual Independent
Dealer Roundtable
It’s safe to say times are not as grim as the first time we presented our Independent Retailer Roundtable in 2006. But does that mean things are going well? Let’s find out. And this year, we have a special twist. Members of the iMSO group, who participated in our interview, brought on two manufacturers to participate in this year’s roundtable. Why did they do that? According to iMSO, these are two of the companies who really understand independent retailers. So Michael Connolly, VP of sales and marketing for Ultrasound Amplifiers, and Ken Fuente, vice president of sales for Korg USA, become the first non-retailers to be featured in this story.
The independent dealers interviewed were Gordy Wilcher of Owensboro Music in Kentucky, Harry Gillum of Showtime Music in West Virginia, Chris Lovell of Strings & Things in Tennessee, and Chris Basile of South Jersey Music.
The Music & Sound Retailer: Did manufacturers come by to talk to iMSO during Summer NAMM? What did they discuss with you?
Gillum: First, we should mention we are trying to develop relationships far and beyond just meeting with manufacturers and talking about price. We want our group to have a marriage between the manufacturer/vendor and the independent music store owner. With that in mind, there were several questions we asked of vendors who came to our meeting room
during the show.
Wilcher: We had a very productive show. Honestly, I was a little bit surprised—in a good way—by the turnout. It was better than I hoped for and all very win-win. Our meetings were very productive and very positive. Vendors came to us and asked how we can work with each other. How can we be partners? I want to expand on something Harry said. One of the main goals is that we want a long-term relationship. We don’t want to know what the special deal is this weekend. We’re looking for something that is a long-term solution. Not just a Band-Aid.
M&SR: You had an open house in meeting room 2008 at the Nashville Convention Center. How many new dealers were you able to recruit on Friday and Saturday of the show?
Basile: We had 16 new members who actually signed up and paid dues.
M&SR: iMSO now has more than 350 members. When you speak to manufacturers, are they acting differently now? Are they concerned about the strength of iMSO?
Lovell: The meetings we’ve had with manufacturers have been great. They’ve been easy. There’s no tension at all. We’re as eager about getting into their mindset as they are about getting into ours.
Gillum: The members of iMSO first and foremost are retailers. This year’s NAMM was so much different from 2008. Usually, we’ve scrambling around the convention center floor and talking to vendors, suppliers, and manufacturers. This year, we had the vendors, suppliers, and manufacturers come to our room to talk to us. It felt as though we were a booth vendor as opposed to a retailer. We really weren’t on the show floor at all. We also got to explain to independent retailers who we are and what we do.
Lovell: At one time, we had three vendors in our room with simultaneous meetings. We really had to hustle.
Gillum: We’ve made a concentrated effort to benefit all independent music store owners.
M&SR: To reiterate, even though you have become a large group, your focus will be to continue to support each small independent store owner.
Lovell: Absolutely. The second thing we have on our list is to “pay attention to the small dealer.” If we’re going to strike deals with manufacturers, we need deals that benefit both small and large manufacturers.
M&SR: This is the fourth independent roundtable we’ve had. But this year is different. You felt so strongly about bringing manufacturers. You brought Mike Connolly from Ultrasound Amplifiers in Iowa to join us and Ken Fuente from Korg, who will join us later on. Why bring manufacturers for this interview this year?
Wilcher: Why not? We’re all in the same business. We’re all partners. Mike Connolly and his co-worker Greg Farres of Ultrasound Amplifiers (also joining us during our interview) were one of the first manufacturers to step up and come to iMSO. They told us they liked what our group was doing and we wanted to be a part of it. We’re all in the same business and we all have the same goals.
M&SR: Mike, why did you approach iMSO and what is your current philosophy for independent retailers?
Connolly: We’re 100 percent about the independent retailers. We’re not in any big-box store. That’s by choice. I’ve known Gordy for so many years. iMSO is not like a new company. They’ve been resourcing so many things to their dealers. The group started out as a way to help each other as an independent dealer going up against the big guys. We got involved and found our company was a good fit because the philosophies are the same. Manufacturers often forget that once in a big-box store, you’re no longer special. A lot of manufacturers would be nothing without the independent dealers who first believed in their products. Not everything is about business. It’s about building relationships. I think what’s lacked here is that, as some of these companies get bigger and bigger, they forget the little guy. They forget the independent dealer, the ones who made it for them. This is a real opportunity for us. Watch what’s going to happen. People say iMSO is a buying group. It’s not. It’s about offering services to people so that they can get the same treatment that a huge chain can get, while hopefully getting the same discounts those chains can get just to survive.
M&SR: We’ve heard it before. Manufacturers declare they will only sell to independents. But suddenly, that changes later on. They say, “We couldn’t maintain that business model.” Mike, you’re here today. You’re the first manufacturer ever interviewed for this story. That’s historic. Can you guarantee you’ll stay with the independent dealers?
Connolly: I’ll tell you what. The reason that this country failed is because of greed. How much profit is enough profit? What’s fair? If you’re fair in your philosophy about what you want to make and to whom you want to sell it, you don’t need all of a sudden to be worth $20 million when $5 million is enough.
Lovell: The corporate mentality is that morality of any kind is no longer required. I don’t buy that.
Connolly: You watch what happens once this article gets out. All of these people who are beating up dealers and who stick to their $100,000 buy-ins are starting to see dealers run away. This interview is going to change the philosophies of the bigger companies because they forget the little guy. They even forget the medium guy. Some companies don’t sell to anyone but those big conglomerate stores. What’s going to happen to them? They forgot where they started. Everyone’s here to survive. It’s a tough industry right now.
Our meeting went well with iMSO. It’s structured. They have a protocol.
Lovell: We have a sheet we use. What’s the first word on that sheet? “Relationships.” We have no doubt we cannot work with some manufacturers.
Gillum: We have more than 350 retailers now. If we looked at the business they do in the U.S., it equates to more than $150 million in sales. That’s several thousands of lessons given by our group each year. We are not the places who sell customers a box and have you take them home and read the instruction manual. We are the largest chain of music retailers in America.
Lovell: We teach you to play it and we fix it when you break it. You can’t say that about a big-box store.
M&SR: Have you seen a “circling of the wagons” in the industry? Are manufacturers concerned about putting all of their eggs into one basket, so they’re coming back to you as dealers? If so, are you taking them back?
Basile: It hasn’t happened yet.
Lovell: I disagree. There are some that are. Korg USA is an example. Also, I have to admit, we’ve yet to meet with all of the companies in the group you’ve mentioned. We haven’t even asked to meet with all of them yet. If we met with every vendor at Summer NAMM, we’d need to have a staff of 200. We just can’t do it. We were swamped and we met with 20 manufacturers.
Wilcher: We asked to meet with some manufacturers. We were pleasantly surprised. Some came up to meet us on their own.
Basile: I finalized a deal with Cort Guitars and asked the company to meet with iMSO. I wanted to see if we could have the deal I received extended to all of our dealers. I did the same thing with N-Tune. I bought products from both companies. When I was finished, I said, “Come on up [to see us].”
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