Is it just me?

[Sifu Ben]

...or are instrument retailers taking the p***. I had an email from GAK the other week saying that Gibson prices would be going up due to the unfavourable exchange rate, and there's a similar notice on allparts' homepage. Now I appreciate that times are hard, but these people weren't passing savings on to us when the rate was more favourable. Indeed, between 2003 and 2008 (when the dollar was dropping against the pound) the price of a Les Paul Standard rose about £100 on average.
 I can understand that in the current financial climate people don't feel they can do as good deals, but I resent them claiming that it's somehow not their fault  :shock:

[mikeluke]

It isn't all their fault - the price to the importers is very strictly controlled (e.g. by Rosetti) and they don't have a lot of latitude to fiddle with prices - retailers offering deep discounts on Gibbos tend to find their supplies get 'interrupted'...

[Twinfan]

Rosetti don't distribute Gibsons any more, Gibson UK do  ;)

I agree with you though Ben, it only works one way for a lot of shops.  That's why it pays to shop around and find the dealers who give better pricing.....

[Philly Q]

I think RRPs are bound to go up due to the suddenly unfavourable exchange rate.  There won't be anything the distributors can do about that.

But the next couple of years are going to be very tough for sellers of "luxury goods" like musical instruments, so the retailers are going to have to make bigger discounts just to survive.  I think we might see some smaller shops suddenly becoming more competitive with the big bulk dealers like GAK.

[Twinfan]

I think so too Philly.  Lots of smaller dealers may not survive though  :(

The ones best placed to get through the next few years will be the smaller guys with cheap overheads and a variety of stock, those that can react quickly to the market changes and whichever area is selling at that moment (e.g. Fender guitars, Marshall amps, Boss pedals etc) the quickest.  Sounds Great springs to mind as someone who should make it through.

A smaller 'Mom and Pop' Fender/Marshall only dealer will struggle.

[ToneMonkey]

At least Deflation might sort that out  :lol:  And the cut in VAT means that a £1000 Gibson will now cost about £960, still hardly seems like a bargin.

[dave_mc]

I agree with you though Ben, it only works one way for a lot of shops.  That's why it pays to shop around and find the dealers who give better pricing.....

+1

i thought one of the reasons behind our high prices was to hedge their bets against currency fluctuations... yet when there is a fluctuation which isn't in their favour, prices have to shoot up.

with any luck, though, as philly says, if people stop buying prices will have to fall.

[FELINEGUITARS]

Rosetti always had favoured dealers - it was never an even playing field .
Some dealers were able to sell Gibsons and Epi's cheaper than other dealers could buy them in for and that simply isn't fair.

That's all changed now that Gibson are done via Gibson Europe/Uk but there will be less dealers but they may carry more of a range.

The exchange rate does affect any importer/ distributor of foreign made goods

I import lots of Earvana nuts etc and my recent order cost me 25% more than last time - and it hurts!

So that price has to be passed on otherwise there is little point in running a business if you are not able to make enough money to pay the rent/staff/bills. etc.


Believe me - it's not all as one sided as some of you suggest.

Distributors frequently don't lower prices when the £ gets strong against the dollar, until there are way too many grey imports  hurting the marketplace as players get wise to buying in from the states.
I stock Seymour Duncan and EMG as well as BKP and I can tell you that the cheap prices of stuff being bought from the states has meant that my sales of those products all but dried up
Another reason I am so glad that I stock BKPs (other than them being bloomin fantastic pickups)

As far as retailers go - Business has slowed down a lot but wages etc. still have to be paid

How would you guys feel if your employers asked you if you would take a wages cut?
Not too happy I guess.
How about being made redundant just before Christmas? Not great eh?

I myself know how it is to go without wages for months to make sure my staff get paid, and it's no fun!

[Lew]

I would be sympathetic to these arguments if the prices actually related.

It's not just Gibson that do this, but when the dollar was nearly at 2.2 to a pound dealers didn't sell guitars for half of what they cost in america. They just made a fat profit on markup... and raising the prices for those same companies is just keeping that markup. The greedy ####!!s can starve for all I care  :lol:

They aren't all like that of couse, I got both my Suhrs from Sounds great for a price relative to the exchange rate, in fact 6 months on because of the rising dollar I part-exd one of them for frighteningly close to what it cost me new.

It's a visious cycle, the more the prices rise the more we can't afford them and the more the prices have to rise to accomodate for the companies loss.

Who the smeg wants a Gibson anyway? :lol:


EDIT: Just to make it clear I'm not pisssing on guys like Jonathan who have a reasonable price to start with. Companies like Gibson and Mesa that have an overvalued UK cost when the dollar is equal to the pound is what I'm talking about.

[Will]

The greedy ####!!s can starve for all I care  :lol:

The shame is that its not the greedy people that will starve, its the people at the bottom of the line, not the fat cats.
Not that losing a £50k salary is going to mean that they would starve anyway. Its the people struggling at the bottom.

[Lew]

Yup it's sickening...

[FELINEGUITARS]

I would be sympathetic to these arguments if the prices actually related.

It's not just Gibson that do this, but when the dollar was nearly at 2.2 to a pound dealers didn't sell guitars for half of what they cost in america. They just made a fat profit on markup... and raising the prices for those same companies is just keeping that markup. The greedy ####!!s can starve for all I care  :lol:

Who the smeg wants a Gibson anyway? :lol:

EDIT: Just to make it clear I'm not pisssing on guys like Jonathan who have a reasonable price to start with. Companies like Gibson and Mesa that have an overvalued UK cost when the dollar is equal to the pound is what I'm talking about.

I think you will find that a lot of the problem stemmed from having a distributor taking a hefty slice and maybe not shifting the price when the exchange rate went in our favour. The dealers merely made a standard percentage markup. The thing that I saw that was unfair was that deals were done with some shops  and not others and it slowly became a bit of an old boys network and more about who played golf with who than trying to make things fair.

The Suhr guitars are more sensible in price because Sounds Great deal direct with Suhr and then sell direct to the public

One of the reasons that Gibson went to Gibson Europe (and FEnder went to Fender Europe ) was to reduce the importer / distributor markup. I agree that Mesa amps have always seemed unfairly expensive over here . I know that sipping costs add to it to a degree.

What irks me more is when goods made in the UK can be bought cheaper overseas than they can here in the UK - I think of Rover cards in the 80s and 90s. How the hell did that happen.

[dave_mc]

EDIT: Just to make it clear I'm not pisssing on guys like Jonathan who have a reasonable price to start with. Companies like Gibson and Mesa that have an overvalued UK cost when the dollar is equal to the pound is what I'm talking about.

definitely agreed. Also, I'm not necessarily talking about the shops, I'm talking about the distributors as well. Someone somewhere is making a packet out of it, whether it's the manufacturer, the distributor, or the shop (or a combination of those).

I'd also agree that the distribution deal which Jonathan was talking about was unfair.

what also makes me less sympathetic to shops (not just guitar shops; i mean shops in general) is that when things were going well they weren't cutting prices by 50%, but when things get hard, they can.

[FELINEGUITARS]

EDIT: Just to make it clear I'm not pisssing on guys like Jonathan who have a reasonable price to start with. Companies like Gibson and Mesa that have an overvalued UK cost when the dollar is equal to the pound is what I'm talking about.

definitely agreed. Also, I'm not necessarily talking about the shops, I'm talking about the distributors as well. Someone somewhere is making a packet out of it, whether it's the manufacturer, the distributor, or the shop (or a combination of those).

I'd also agree that the distribution deal which Jonathan was talking about was unfair.

what also makes me less sympathetic to shops (not just guitar shops; i mean shops in general) is that when things were going well they weren't cutting prices by 50%, but when things get hard, they can.

I think you will find that many shops are actually taking a loss on what they are selling at 50% off - especially in the musical instrument industry. (I know what the markups are on these products - so I can be pretty sure)
They are just trying to liquidate stock into cash because they still need to pay wages and rent etc and are hoping to still be around long enough to see through to the other side of this recession. I fear that many won't be.
But maybe it starts to reveal the wholesale price for some goods in the big stores.
Landlords are not giving discounts on rent I must add- mine certainly isn't!

[Jonny]

Am I able to get away with saying market forces? Some economical terminology.

Basically if people don't want to buy, the suppliers just cut back so they won't sell anymore than they have to, so the price remains the same.

And it works the other way, to keep the price the same.

Really if you want to get the better prices you need to look out for when the prices rock up, you buy. When they rock down, better keep the notes in your pocket. If you do buy something during the prices rocking up then there's not really much point selling at that point, you'll just have to wait with it till the price goes down. It always does. Just depends how long it takes.