Dr. Vegetable
New member
Re: Mesa Boogie + Guitar Center = no more?
Mesa Boogie + Guitar Center = no more?
- Thread starter B2D
- Start date
some_dude
Raging BB Gunologist
Re: Mesa Boogie + Guitar Center = no more?
No small dealer will commit to stocking an expensive Mesa amp if they know that GC will buy Mesa's on bulk discount and undercut them. It's not about maintaing the integrity of the product but maintaining the integrity of their dealer network.
While your plan may be good for the consumer it's terrible for the business owners.
Mesa has always used a build-to-order system. Mesa has no warehouse full of completed amps waiting to be sold. If a dealer wants to restock 10 Rectos the order is put in the production queue and when Mesa does another run on Rectos his order gets built and shipped off immediately. It lowers their overhead and they can afford to be creative since an unpopular idea doesn't leave them with shelves full of old stock.
Dealers also own all their own stock. I don't know if GC got a special deal but for a regular mom-and-pop they have to pay for the amp in full up front and make their money back when they sell it. I've kind of wondered if this policy is why Mesa has stopped doing business with GC? If GC can't afford to pay cash up front and Mesa's not willing to give them stock on credit they're at a bit of an impasse.
No small dealer will commit to stocking an expensive Mesa amp if they know that GC will buy Mesa's on bulk discount and undercut them. It's not about maintaing the integrity of the product but maintaining the integrity of their dealer network.
While your plan may be good for the consumer it's terrible for the business owners.
Mesa has always used a build-to-order system. Mesa has no warehouse full of completed amps waiting to be sold. If a dealer wants to restock 10 Rectos the order is put in the production queue and when Mesa does another run on Rectos his order gets built and shipped off immediately. It lowers their overhead and they can afford to be creative since an unpopular idea doesn't leave them with shelves full of old stock.
Dealers also own all their own stock. I don't know if GC got a special deal but for a regular mom-and-pop they have to pay for the amp in full up front and make their money back when they sell it. I've kind of wondered if this policy is why Mesa has stopped doing business with GC? If GC can't afford to pay cash up front and Mesa's not willing to give them stock on credit they're at a bit of an impasse.
UberMetalDood
New member
Re: Mesa Boogie + Guitar Center = no more?
WRONG. Mesa Boogie and most other makers don't undercut their own dealers. GC can't just come along and out buy small dealers so they can sell cheaper. That doesn't even make any sense. Even with price structures like Gibson, dealers can sell cheaper than the robot chain stores and through increased sales qualify for bulk pricing. Negotiation is an advantage for small local dealers because the large chains play the price matching and discount games, never really cutting their profit to increase sales. By the time stuff a GC goes to clearance, it's battered and bruised and isn't the same value it would have been if they would have made a deal in the first place.
Car dealerships do it all of the time. Lots of businesses negotiate prices. It's what creates competition and competition is good for business. Let's say a dealer pays $1200 for an amp that has a MAP of $1999. Figure in shipping with the dealer's cost and you have an amp that might cost the dealer $1250. That leaves about $750 of profit margin that dealers can play with. If a buyer seems interested in the amp but doesn't want to spend that much, he's going to compare the cost to what he will pay with his little 10% Guitar Center coupon thus has a spending range of around $1800. If the dealer says, well I'll give you 15% right now, that means he has to sell about $100 cheaper than Guitar Center. HOWEVER, even if he sells $100 cheaper than Guitar Center, he still makes a profit of about $450.
If the amp shop sold only 1 amp per day, they would make $3150/week. That's $12,600 per month. Therefore, indeed small dealers can compete with the giants and be very profitable. A dealer who would rather let a customer walk away rather than make $450 profit is either stubborn or a retard.
Remember, what is good for the customer is good for business.
WRONG. Mesa Boogie and most other makers don't undercut their own dealers. GC can't just come along and out buy small dealers so they can sell cheaper. That doesn't even make any sense. Even with price structures like Gibson, dealers can sell cheaper than the robot chain stores and through increased sales qualify for bulk pricing. Negotiation is an advantage for small local dealers because the large chains play the price matching and discount games, never really cutting their profit to increase sales. By the time stuff a GC goes to clearance, it's battered and bruised and isn't the same value it would have been if they would have made a deal in the first place.
Car dealerships do it all of the time. Lots of businesses negotiate prices. It's what creates competition and competition is good for business. Let's say a dealer pays $1200 for an amp that has a MAP of $1999. Figure in shipping with the dealer's cost and you have an amp that might cost the dealer $1250. That leaves about $750 of profit margin that dealers can play with. If a buyer seems interested in the amp but doesn't want to spend that much, he's going to compare the cost to what he will pay with his little 10% Guitar Center coupon thus has a spending range of around $1800. If the dealer says, well I'll give you 15% right now, that means he has to sell about $100 cheaper than Guitar Center. HOWEVER, even if he sells $100 cheaper than Guitar Center, he still makes a profit of about $450.
If the amp shop sold only 1 amp per day, they would make $3150/week. That's $12,600 per month. Therefore, indeed small dealers can compete with the giants and be very profitable. A dealer who would rather let a customer walk away rather than make $450 profit is either stubborn or a retard.
Remember, what is good for the customer is good for business.
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Condemnedsoul
Active member
Re: Mesa Boogie + Guitar Center = no more?
"Even with price structures like Gibson, dealers can sell cheaper than the robot chain stores and through increased sales qualify for bulk pricing. Negotiation is an advantage for small local dealers because the large chains play the price matching and discount games, never really cutting their profit to increase sales."
Here is an old wound that I'm sticking a knife into and twisting.
This might be really missing the boat and this isn't a comparison of Gibson and MB, but I would like to remind you of some ancient history. Some years ago, Gibson [and my memory is really bad on the details] required dealers to stock a large quantity of both Gibson and Epiphone guitars. Smaller stores like a couple in Memphis Tn that sold Gibson gave up their distributorship because they couldn't afford to buy or keep on hand stock that Gibson required.
So how did Gibson help the low volume dealers?
How is MB helping the low volume dealers?
When I bought my small and bastard recto stepchild, the MB Express, the sales staff and the store owner and gave me their time and effort and actually made me feel like a pro.
MB needs to keep quality products and dealers.
"Even with price structures like Gibson, dealers can sell cheaper than the robot chain stores and through increased sales qualify for bulk pricing. Negotiation is an advantage for small local dealers because the large chains play the price matching and discount games, never really cutting their profit to increase sales."
Here is an old wound that I'm sticking a knife into and twisting.
This might be really missing the boat and this isn't a comparison of Gibson and MB, but I would like to remind you of some ancient history. Some years ago, Gibson [and my memory is really bad on the details] required dealers to stock a large quantity of both Gibson and Epiphone guitars. Smaller stores like a couple in Memphis Tn that sold Gibson gave up their distributorship because they couldn't afford to buy or keep on hand stock that Gibson required.
So how did Gibson help the low volume dealers?
How is MB helping the low volume dealers?
When I bought my small and bastard recto stepchild, the MB Express, the sales staff and the store owner and gave me their time and effort and actually made me feel like a pro.
MB needs to keep quality products and dealers.
some_dude
Raging BB Gunologist
Re: Mesa Boogie + Guitar Center = no more?
No sh*t.... that's not what I said.
And at this statement, I'm just going to walk away shaking my head...
No sh*t.... that's not what I said.
And at this statement, I'm just going to walk away shaking my head...
UberMetalDood
New member
Re: Mesa Boogie + Guitar Center = no more?
Neither one of you can seem to get it yet both of you seem to think you know something about business. That's ironic. I'm done trying to discuss this sensibly. Think whatever you want.
Neither one of you can seem to get it yet both of you seem to think you know something about business. That's ironic. I'm done trying to discuss this sensibly. Think whatever you want.
some_dude
Raging BB Gunologist
Re: Mesa Boogie + Guitar Center = no more?
I get it, I just think the concept is stupid. Large chain stores use volume of sales to allow them to operate on minimal margins that mom-and-pops can't survive on. That you think a mom-and-pop can succeed by operating on an even smaller margin than the chain store can survive on shows that your argument is poorly thought out.
I get it, I just think the concept is stupid. Large chain stores use volume of sales to allow them to operate on minimal margins that mom-and-pops can't survive on. That you think a mom-and-pop can succeed by operating on an even smaller margin than the chain store can survive on shows that your argument is poorly thought out.
UberMetalDood
New member
Re: Mesa Boogie + Guitar Center = no more?
I saw a wall of brand new Marshall 4x12 cabs on sale at a local shop for $700 each yesterday.
I saw a wall of brand new Marshall 4x12 cabs on sale at a local shop for $700 each yesterday.
Edgecrusher
Well-known member
Re: Mesa Boogie + Guitar Center = no more?
You really think they can drop the price and offer a discount and nothing else will change? The margin on Mesa products is already small. To offer a discount they would have to cut corners somewhere. Why does everyone think that quality comes cheap?
You really think they can drop the price and offer a discount and nothing else will change? The margin on Mesa products is already small. To offer a discount they would have to cut corners somewhere. Why does everyone think that quality comes cheap?
Re: Mesa Boogie + Guitar Center = no more?
+1. The fail was strong in that post. I sure hope he doesn't run or manage a retail operation.
+1. The fail was strong in that post. I sure hope he doesn't run or manage a retail operation.
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Grindspine
New member
Re: Mesa Boogie + Guitar Center = no more?
The local GC here has never been a Mesa dealer, so I would have had to go to Indy to find a GC that carried them. Fortunately, Sweetwater picked up Mesa several years back!
I am just glad I got to use a Mark V to demo my latest guitar purchase.
The local GC here has never been a Mesa dealer, so I would have had to go to Indy to find a GC that carried them. Fortunately, Sweetwater picked up Mesa several years back!
I am just glad I got to use a Mark V to demo my latest guitar purchase.
L
Little Pigbacon
Guest
bpeel
New member
Re: Mesa Boogie + Guitar Center = no more?
I have actually worked at GC...I know. I know. I'm not really proud of it. While I was there it seemed that Boogie never really had that good of a relationship with GC anyway. Only certain store locations (very few) could sell them. If a customer called me and wanted to order a Dual Rec or anything Mesa I would have to go through another employee who worked at a location who was "allowed" to sell Mesa. GC sold Mesa online and in a few stores. Boogie finally cutting ties with GC completely would be a good thing in my opinion. Mesa probably is tired of clueless sales people attempting to sell their product and giving them a bad name in the process. They probably also don't like their gear getting dusty and broken while it sits on GC shelves waiting to be sold. GC employees for the most part don't care about keeping amps in good, clean working order. Although it doesn't always seem like it, Mesa Boogie is still a smaller "boutique" type company who's products are better off being sold by the little guys. Good job Mesa.
I have actually worked at GC...I know. I know. I'm not really proud of it. While I was there it seemed that Boogie never really had that good of a relationship with GC anyway. Only certain store locations (very few) could sell them. If a customer called me and wanted to order a Dual Rec or anything Mesa I would have to go through another employee who worked at a location who was "allowed" to sell Mesa. GC sold Mesa online and in a few stores. Boogie finally cutting ties with GC completely would be a good thing in my opinion. Mesa probably is tired of clueless sales people attempting to sell their product and giving them a bad name in the process. They probably also don't like their gear getting dusty and broken while it sits on GC shelves waiting to be sold. GC employees for the most part don't care about keeping amps in good, clean working order. Although it doesn't always seem like it, Mesa Boogie is still a smaller "boutique" type company who's products are better off being sold by the little guys. Good job Mesa.
Re: Mesa Boogie + Guitar Center = no more?
I've worked for GC over two separate periods. I never had a problem with certain stores or people being allowed to sell Mesa product, but what was difficult was that no one seemed to keep any Boogie stuff fresh in the box. And if you can't budge on the price, 9 times out of 10 a customer is going to want a NIB item. They're not gonna pay full pop for a floor model. I can sympathize... I would (and on the other side of the desk, do) feel the same way were I to buy a new Boogie piece for full pop.
The Mesa reps were pretty attentive in my store, anyways. Good guys, very knowledgeable, good to talk to. However, they're also very concerned about how the demo gear is being maintained as well, as they should be, since that's their job. Finding an amp with missing accessories (covers, footswitches), missing parts (my store in particular had a problem with fuses being stolen - seriously who the eff does that?), and broken/burned tubes was cause for many a scolding from the reps to the management staff.
The gear on the floor gets beat up so bad sometimes - if not from handling then from people (customers and sales associates alike) who don't know enough how to run a tube amp properly - powering it up and down incorrectly, plugging it into incorrect loads, etc. Some simple training would solve this, but store management would usually refuse to allot hours in the mornings to set aside some quality training time. And when they DID, nobody wanted to come in early either because they felt it was a waste of time or they didn't wanna clock in and write money against hours that no customers were in the store. At one point I suggested putting some signs up that would prompt customers to ask a sales associate for help in properly/safely powering up or assembling a tube rig to help cut down on damaged gear but that idea was shot down as "unfriendly to customers". Yeah... don't be proactive in providing them with help or preventing damaging gear but push push push that Pro Coverage and the GC Credit Cards.
It was a situation that was SO damn hard to win with, and it wasn't because of anything Boogie was doing, I'll tell you that much.
I've worked for GC over two separate periods. I never had a problem with certain stores or people being allowed to sell Mesa product, but what was difficult was that no one seemed to keep any Boogie stuff fresh in the box. And if you can't budge on the price, 9 times out of 10 a customer is going to want a NIB item. They're not gonna pay full pop for a floor model. I can sympathize... I would (and on the other side of the desk, do) feel the same way were I to buy a new Boogie piece for full pop.
The Mesa reps were pretty attentive in my store, anyways. Good guys, very knowledgeable, good to talk to. However, they're also very concerned about how the demo gear is being maintained as well, as they should be, since that's their job. Finding an amp with missing accessories (covers, footswitches), missing parts (my store in particular had a problem with fuses being stolen - seriously who the eff does that?), and broken/burned tubes was cause for many a scolding from the reps to the management staff.
The gear on the floor gets beat up so bad sometimes - if not from handling then from people (customers and sales associates alike) who don't know enough how to run a tube amp properly - powering it up and down incorrectly, plugging it into incorrect loads, etc. Some simple training would solve this, but store management would usually refuse to allot hours in the mornings to set aside some quality training time. And when they DID, nobody wanted to come in early either because they felt it was a waste of time or they didn't wanna clock in and write money against hours that no customers were in the store. At one point I suggested putting some signs up that would prompt customers to ask a sales associate for help in properly/safely powering up or assembling a tube rig to help cut down on damaged gear but that idea was shot down as "unfriendly to customers". Yeah... don't be proactive in providing them with help or preventing damaging gear but push push push that Pro Coverage and the GC Credit Cards.
It was a situation that was SO damn hard to win with, and it wasn't because of anything Boogie was doing, I'll tell you that much.
xxxplorer
Well-known member
Re: Mesa Boogie + Guitar Center = no more?
My family runs and operates a mom and pop pet store... And I can assure you that the big box stores WILL beat us on pricing a lot of the time. We have service and knowladge that is unparalleld... That's how independant stores survive. Running on less than a 1.5 profit margin is not viable for a small buisness. Overhead is increasing tremendously... We don't happily spend 1,300 to make only 500, but we do it on some items, but lower margin items are not the bread winner and when box stores undercut us, it can be a big pita. Amazon.com is a whole other nightmare for us lol. I respect MesaBoogie... Coming from a buisness perspective. If I want a deal, I look for used! They service used and they are among the best in service
My family runs and operates a mom and pop pet store... And I can assure you that the big box stores WILL beat us on pricing a lot of the time. We have service and knowladge that is unparalleld... That's how independant stores survive. Running on less than a 1.5 profit margin is not viable for a small buisness. Overhead is increasing tremendously... We don't happily spend 1,300 to make only 500, but we do it on some items, but lower margin items are not the bread winner and when box stores undercut us, it can be a big pita. Amazon.com is a whole other nightmare for us lol. I respect MesaBoogie... Coming from a buisness perspective. If I want a deal, I look for used! They service used and they are among the best in service
thespricket
New member
Re: Mesa Boogie + Guitar Center = no more?
I worked for the Queens store and they were one of the few GCs that carried Boogies. Speaking as a GC employee, it's really tough to sell those. The main reason is that we are only given one MAYBE two of each model. And you better believe they get all kinds of shop worn, seeing how they're the only really high end amps in the place.
And since Mesa products can't be discounted it makes it very hard to get someone to buy one in such condition.
Certain stores are given certain brands to sell. I'm currently working for the Brooklyn store and we no longer carry high end PRS for the same reason. Also certain brands cannot be discounted, Mesa, Apple, Bose to name a few.
Also, yes a lot of GC guitar salesmen don't know diddly about gear. Other departments are usually better staffed. But at every store there will always be a couple of really knowledgable, honest, and cool salespeople than can help you.
Remember, there are some salesmen who work there for minimum wage. The company needs to pay their salespeople better, so they can hire better people who won't work for minimum wage.
I worked for the Queens store and they were one of the few GCs that carried Boogies. Speaking as a GC employee, it's really tough to sell those. The main reason is that we are only given one MAYBE two of each model. And you better believe they get all kinds of shop worn, seeing how they're the only really high end amps in the place.
And since Mesa products can't be discounted it makes it very hard to get someone to buy one in such condition.
Certain stores are given certain brands to sell. I'm currently working for the Brooklyn store and we no longer carry high end PRS for the same reason. Also certain brands cannot be discounted, Mesa, Apple, Bose to name a few.
Also, yes a lot of GC guitar salesmen don't know diddly about gear. Other departments are usually better staffed. But at every store there will always be a couple of really knowledgable, honest, and cool salespeople than can help you.
Remember, there are some salesmen who work there for minimum wage. The company needs to pay their salespeople better, so they can hire better people who won't work for minimum wage.
