They’re A Continuing Profit Center, Sitting Alongside Regular Sales
The desire to make music and share one’s art—whether you’re a member of a rock ‘n’ roll band, you’re a gigging DJ or you fall anywhere on the spectrum in between—is simply irrepressible, which means music product retailers can rest assured that the market’s long-term future remains bright. But, as we continue to climb from the most recent recession, a confluence of factors—among these ferocious Internet competition and consumers spending money a bit less readily—have caused many retailers to draw from their well of creativity and entrepreneurial spirit to seek ways to maximize their profits and find success in a challenging business climate. It is in this context that we observe retailers starting to establish rental programs that extend well beyond funneling band and orchestra products to schoolchildren. Far from being a “consolation prize” for not having made a sale, these rental programs actually complement stores’ sales efforts and serve as a separate, and quite viable, continuing profit center. The Music & Sound Retailer sought insights from Jack Long, Chairman, Long & McQuade; Alfred Gonzales, ADJ Sales Manager, ADJ Products; Tim Marshall, Marketing Manager, Yorkville Sound; and Brian Dowdle, Marketing Director, ADJ Products.
Long & McQuade, Canada’s largest chain of musical instrument retailers, began renting products back in the late ’50s, not long after the company’s creation. At the rental program’s inception, Long & McQuade essentially improvised as it went along; over time, however, it strove to improve and refine the system, work that continues even to this day. These continuing efforts pay off handsomely: Rentals contribute significantly to Long & McQuade’s enviable success, and programs such as its can contribute in equal measure to virtually any MI retailer’s bottom line if done right. “The business has changed in the last few years, and it has probably become more difficult for the independent music store to survive,” Long remarked. “But the demand for rentals has continued to grow and, for our stores, it has been a steady source of revenue.” In fact, revenue from renting a product can actually exceed that from selling it; renting it out a couple dozen times almost assuredly will bring in more revenue than a one-time sale could deliver.