SPECIAL ISSUE: WINTER NAMM SPECIAL ISSUE

January 15 2008
VOLUME 26 NO.01

THE MAGAZINE FOR MUSICAL INSTRUMENT AND SOUND PRODUCT MERCHANDISERS

 
 

   
 

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ConventionTV@NAMM 2011
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PHOTO GALLERIES
Music & Sound Awards
INSIDE NAMM 2011


Table of Contents
Digital Issue Download


FEATURE
Class is in Session
We feature many of the new, hot companies that exhibited at NAMM in January.

Gibson
Indictments Likely

Gibson Guitar is expected to face charges due to alleged illegal wood imports.

NRF Talks Jobs,
Jobs and More Jobs

The key to retailers' success for 2011 is, you guessed it, jobs. But a lot more was discussed at the 100th NRF Annual Convention.

It’s a Record!
We give you a huge review of last month’s NAMM show. Were retailers and manufacturers optimistic for the rest of this year?
MSR Exclusive Interview
Zildjian and Vic Firth have teamed up to form a percussion powerhouse. We met with Craigie Zildjian and Vic Firth at NAMM to give you all of the details about the merger.
Music Group's Master Plan
We get an exclusive look at the future of The Music Group, parent of Behringer, Bugera and more. We get an exclusive look at product launches, as well!

Knock it Off With the Knockoffs!
Counterfeit products are killing the MI industry. But one company is fighting back big time. We’ll tell you how badly knockoffs could affect the industry if left unchecked.

Music & Sound Award Nominees
We release the full list of nominees for Music & Sound Awards. See if your favorite product, person or company is nominated.

Taylor-Made For Europe
Taylor Guitars will sell all of its products directly to dealers in Europe beginning on Jan. 1. Find out why the big change was made and where Taylor’s European headquarters will be. We interview Brian Swerdfeger about it first.

We Cover it All!
For the second time, we honor instruments that get zero or little press...

A ‘Super’ Party on Kent Island
Experience PRS loaded up on celebrities, new products and much more. Get the full scoop...

‘Father of RMM’ Passes
Karl Bruhn, a tireless music industry devotee, mentored many and made awareness of health and wellness together a lifelong initiative.
Don’t ‘Skip’ this Story!
Skip’s Music Celebrates 30th Anniversary of its Special Event

I Just Wanna Bang
on the Drums All Day

Your One-Stop Shop For The Holidays!
Heathcare Provision Could
Be a Nightmare

America the Beautiful

Not Doubting Thomas
Mendello Retires, Thomas Named Fender CEO

Music City Myster
y

-The Latest, Industry, Dealers, People and Product Buzz and Showcases.

COLUMNS
NAMM in Photos
A lot happened at NAMM in January to say the least. We capture plenty of it within our three-page NAMM photo collage.
The Music & Sound
Independent Retailer

We cover the sad passing of two prominent retailers and another named the "Citizen of the Year."
Music & Sound Award
Dealer Winners

Our list of dealer winners for the 25th Music & Sound Awards.
Music & Sound Award Manufacturer Winners
Our list of manufacturer winners. And, this time, we got them to provide comments on the victories.
Five Minutes With
Learn tons about Yamaha with Takuya (Tak) Nakata, president of the company's USA division.
MI Spy
Spy took a long flight from the cold of New York to the less cold, but quite windy, San Francisco.
Appraisal Scene Investigation
Rebecca Apodaca takes another look at the legendary guitar builder R.C. Allen.
Sales Guru
Unfortunately, Gene Fresco couldn't attend NAMM for health reasons. But he does have great information about a topic he hasn't covered before. He will help you get into your own head and make you believe. Believe what? Gene will tell you.
Business & Marketing
Carl Mandelbaum will present tips on how to develop your Web site.
Veddatorial
Dan Vedda did attend NAMM. He has a lot of thoughts to share about the show.


FORMIDABLE FEMALES

Sharon Hennessey: Loves our industry, you will find out. She'll also tell you why she ultimately decided to join The Music People! And yes, she will definitely fill you in on her goals as a new NAMM board member.
Carla Alger: Being in the music industry is definitely the most exciting opportunity Carla Alger, chief financial officer at Two Old Hippies, has ever had. Find out why.
Dawn Werk
:Dawn Werk, Alpha Books’ director of marketing, heads a group that is responsible for 450 non-fiction books. Now that’s a lot! Music is a small, but very important, part of that catalog.
Sonia Vallis: Sonia Vallis might be an only child, but she grew up with a sibling that has now become like another child to her.-
Catherine Polk

Cyndi Fritz
Janet Deering
Kathy How
Sarah Heil
Sue Avant

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Weathering the Storm
[January 2008 - Page 1]

There’s no nice way of saying it. The economy stinks. You already have massive competition to deal with. How can the world add even more to the pile? But although it may feel like an avalanche of doom has reared its ugly head, there are answers.

How can you continue to make money during these awful economic times? We went to the one source who has the answers: you. We asked you two questions: 1. “With the current economy, in what ways are you changing your business philosophies? (For example, is your sales approach any different? Or are you expecting to see different types of customers?)” 2. “When customers come into your store, they most definitely want to escape the everyday realities of the world. What are you doing to promote an atmosphere so that they can ‘escape their everyday problems?’ ”

The response was overwhelming and we’d like to thank you for that. In fact, this is one of the greatest responses we’ve ever had for any story and responses came from everywhere. Some of you had to take drastic measures. Here’s how Greenwich Music’s Steve Smith responded: “How did we change the business to meet the horrible economy? We sold it. The transaction was completed three weeks ago. The business was not sold to beat the economy to the door, but was in progress since about March of this year.”

But for those of you who remain, there are plenty of suggestions to keep profits up. If you’re looking for ideas during these tough times, read on!

1. With the current economy, in what ways are you changing your business philosophies? (For example, is your sales approach any different? Or are you expecting to see different types of customers?)

“In the wake of our fire in September, where we lost our building and all of its contents, we immediately began to reevaluate the relationships we had with our suppliers. We reopened in a temporary location with a smaller inventory, partially due to economic uncertainty. In restocking the store, we gave suppliers opportunities to ‘step up’ and be a true partner with us in our rebuilding efforts. Through working with willing vendors, we consolidated some of our purchasing with suppliers who, through our tragedy, valued our relationship by allowing us to make a decent profit. Basically scrutinizing every purchase, big and small, and making smart purchases.”—Dan Kuse, Morgan Music, Kansas

“We are 90 percent lessons and only 10 percent retail, so we do well with our strings, drum sticks, tuners, books, practice pads, and small accessories that students need to be successful in their lessons. However, my philosophy today is the same as it was in the ‘90s when I started the company. Parents will go without things so their kids can still have them. Maybe not to the degree we have seen parents spending in the last six years, but try explaining the complexities of your 401k and its losses to your 12 year old. He/she does not care as long as their guitar lesson is not cancelled next week. We have had three or four parents tell us they just can’t continue to pay for lessons if their kids will not practice more, but we hear that even if the economy is booming. With that said, we tend to see parents taking a little longer to ‘pull the trigger’ and sign the kids up for lessons, but our numbers are up from 2007 and our phones still ring.”

—Billy Cuthrell, Progressive Music Center, N.C.

“In times of slow merchandise sales, service industries seem to thrive. We are concentrating on the ‘people’ side of the business. We have seen the price of stuff keep going lower, while the price of labor keep going higher. Therefore, anything you can do to increase the labor side of your business (repairs, lessons, consulting, in-home tune ups, etc.) will be a growth area. We are stepping up our lesson programs and ‘out of the store’ services.

—Gary Gand, Gand Music & Sound, Northfield, Ill.

“We have been stocking more brand name, value-oriented products versus products that have a high dollar tag and a pedigree. We have seen a big change of total ticket price across the board. People are still buying, but not buying their ‘dream’ instrument anymore. They buy what they can afford, and we have been doing well by accommodating our customers by stocking attainable instruments instead of high-end products.”
—Brenden Vanslyke,

Firehouse Guitars, Muskegon, Mich.

“While times are certainly challenging, we have been able to keep things rolling along reasonably well. For example, we had the second-best month in company history in August. However, things have certainly slowed down quite a bit since then and there is no doubt that the business atmosphere is very challenging right now. I don’t think we should change our core philosophy at all. If anything, we need to work harder to add value and do the right thing for our customers. Our approach has been to make an even greater effort to directly communicate with and relate to our customers because ultimately, it’s this relationship that matters most. We’ve weathered tough times before so we’ve seen the importance of maintaining a strong marketing presence and a high level of customer service. From the customers’ perspective, I think it’s more important to them than ever to work with a solid company they trust.”

—Jeff Radke, Sweetwater, Indiana


“Well the economy has certainly taken its toll on me. First of all, in July, as the impact of the economy was really starting to settle in, my store was broken into. Although the young man [who allegedly committed the act] was apprehended, I still faced the loss of a window, damaged instruments, and damaged display items in the window. He had just been discharged dishonorably from the Army (boot camp) and was trying to get items for resale. I have been shoplifted to death this past year. I decided to shut down the large retail store I had, move it and my repair business upstairs, and rent out my downstairs to several business that could split the rent. My retail space went from 1,800 square feet to 580 square feet. I had also been hit hard by mail order music stores. I now carry the basic supplies that most people will buy locally instead of ordering such as: picks, strings, cords, accessories and a few instruments. I have seen an increase in instrument repairs because people are keeping what they have and putting some money into them instead of trading them. I’ve also seen an increase in the private sale of individually-owned instruments. I get calls all the time from Baby Boomers (like myself) who are now disposing of their vintage instruments and getting ready for retirement. Also, Craig’s List and eBay are busy. I get calls all the time about values of instruments going up for sale. I have a charge for this service and also offer to help broker or inspect instruments purchased or going up for sale privately.”
—Ken Cartwright, Cartwright’s Music and Repair Shop, Stayton, Ore.

“The most significant change affecting our ability to do business is the rise in fuel surcharges. We would like to bring up the ugly truth that even though jet fuel has dropped significantly in price [recently], the major carriers continue to charge 33 percent surcharges. Last month, we lost over $2,000 by not factoring these ‘illegal charges’ into our shipping estimates. Once we got on the same page, we realized that the customer is really losing out. There should be an investigation into these practices.”

—Jim Duncan, SouthPaw Guitars, Houston

“There isn’t much difference in our sales approach in this soft economy. Our store already advertises on a national level with ads in trade publications (Five-Star Drumshop ads in Modern Drummer and others), and direct mailers. Direct e-mail contacts as well. I’m not sure if there is much more we can do differently. One NEW thing that we have done recently and is a first [for us]; we made a cable TV commercial for our local cable provider to hopefully stir up some business. Just trying to make our local area know we have been here for more than 30 years, [introduce us to] those who did not know we exist, and to reaffirm to those who know us that we’re still here for them with great deals, lessons and service/repairs. The only other consideration on the table is to try the eBay thing to move some used, vintage, or deadweight gear. We have never done it and are currently exploring the possibility of an eBay store. Our only hesitation is that there are SO many eBayers out there that we might not get an edge in. I feel it might already be oversaturated. We probably will try it, however. Any other new approaches can get tricky. I think the aggressive, hard-sell type of salesman attitude can be bad. But yet, in this bad economy, being too soft in sales tactics can be a failure also. It’s a fine line to try and read a customer and see what they are looking for out of the sales experience. Be pushy, lose the sale. Be easy going, lose the sale. Very sensitive issue.”

—Greg Allen, Long Island Drum Center of Nyack, Nyack, N.Y.

Steve Daugherty of Mountain Music, a recently joined member of IMRA/MSO, took more of a macro approach. “My store, Mountain Music, is in Chattanooga, Tenn., and I’ve been open five years. In that time, six local stores have closed. I’m an acoustic, folk store, with no band, no electric, no DJ, no rock, no PA/AMP, etc. Sales are up 100 to 200 percent a year. I routinely get customers who drive through Nashville, Atlanta, Knoxville, or Birmingham. I focus on only selling indie-friendly brands. Our problem is controlling growth. Right now, due to the explosive growth of our lesson programs, we are developing a ‘Folk School.’ Also, I reserve the teaching spots for people who buy their instruments from my store. The traditional distribution system for MI is dead, and there is a struggle for the big names to adapt and survive. Most of them won’t, and they deserve it. Those companies were built on the backs of the small retailer, and we won’t bend over again.”

“Fortunately, the only real affect the economy has had on us is with shipping costs due to the increase in gas prices. From the beginning, we have felt that reasonable pricing, customer service, and a high-quality product would take us all the way. Basically, it has. Even with the poor economy, our business has actually increased. We didn’t have to make any changes because we chose to take care of our customers right from the beginning. They can purchase a tool that they need for a low price that doubles as a promotional tool. Also due to our isolated location, we opted to open a store front to provide our community a place to purchase musical necessities, which has also been a big hit.’

—Bert LeCato, In Tune Guitar Picks, Onley, Va.

“We saw it coming a long time ago so we started to diversify by growing our music lessons program, our rental and production, our Internet sales, our service and repairs, and our used and consignment sales. We also started to specialize by focusing on guitars and sound products which is what we are best at. On top of that, we are in a position to put up a wall in the middle of our building and lease out the other part to a business that will bring more traffic to us and help with the overhead. Also, when we first felt [the pinch] coming via our cash flow, we eliminated most big corporate vendors who work against us more than for us. Then we searched for smaller, lesser-known lines that will give us a better return on our inventory investment. Along with this, since we are just a few short blocks from a Guitar Center, we began trying to carry brands that it didn’t carry. We’re trying to make us different rather than just a smaller version on a Guitar Center.”
—Rik Asher, Rik’s Music and Sound Inc.,

Knoxville, Tenn.

“The economy isn’t affecting institutional music as badly as recreational music, such as guitars and keyboards, so we don’t consider it horrible yet because school band and orchestra rentals are our foundation. Fretted instruments are just frosting on our cake.  Our number of school band rentals didn’t increase this year but stayed the same. Some pencil pushers would call that a loss but I call it remaining high and dry in an economic tsunami. I also believe we have better quality accounts this year because those who could barely afford to rent before are now in a category of refusing to rent at all, so our new renters seem more able to make their payments. Thus, we have less delinquent accounts already this season. Large chains from the big cities of Michigan north of us with much higher overhead are being forced to withdraw their road rep tentacles, lay off or relocate the reps, and exit less profitable (for them) distant school systems. As a regional company, we can acquire the small puddles of rentals in those school systems left behind.  People who don’t want to drive very far are ‘cocooning’ more and patronizing local establishments like ours. Area schools now are dependent on us for profitable repairs of their instruments. The lower-income parents feeling economic strangulation won’t rent but bring old instruments from family and friends to us for profitable repairs. The economy has boosted our accessory and strings sales as well as lessons. We opened a second store in Ohio in June and also bought out a music instruction school with eight teachers and a load of students. The second store is breaking even already because its main focus is lessons. We were conservative on our band instrument master orders for the upcoming season to play it safe but we can always add more in early Summer if the 2009 economy looks like it’s on the rise.”

—Mark Bilger, Allied Music, Temperance, Ohio and Allied Music of Ohio, Toledo, Ohio

“Our business philosophies have not changed, but expanded since we opened in 2004.  We have seen 16 percent growth this year by continually getting our customers involved with our store and school. Our business is made up of 80 percent school and 20 percent retail. If we grow the school, the retail naturally comes with it. Right now is the best time to bring people in for lessons. They are looking for something locally and home based now more than ever.”

—Donna Hall, New York School of Music and Rock Camp USA

“We are continually adapting to the changes brought on by the economic downturn and the intrusion of the M.I. chains with their ‘buy it in a box’ attitudes. We have well-trained and personable team members who educate potential buyers on the merits of various products that we sell. We have also expanded our repair and lesson programs.”

—Jeff Sims, Sims Music, Gainesville, Fla.

“We are simply continuing to work at meeting goals that we set out to accomplish starting a few years ago, but at a more accelerated rate. These include strengthening all aspects of the business that relate to marketing and service. We are constantly training our staff to compete with ourselves, not with the competition. The really great stores have all aspects of their business covered, but especially the customer service aspect.  Through NAMM educational sessions, and great organizations like NASMD and RPMDA, I find dealers who are ahead of me, and I borrow tips from them in areas where I see that our store can improve. This is the greatest challenge and what I enjoy the most!”

—Evan Jones, Bandland & Percussion Center, Clarksburg, W.Va.

“Here are a few things that continue to make our store successful. First we hire great people. I have not worked with a better sales staff anywhere. We continue to set goals and expectations to grow our business. We continue to take care of our store appearance, offering overtime to employees who want to help merchandise the store before or after hours (when we do this, everyone shows up even if it is not mandatory). We make sure through weekly sales trainings, monthly store meetings and monthly individual sales meetings that everyone knows what the goals and expectations are and how we are doing both individually and as a team. Our sales approach has not changed. We continue to take each customer and solve their individual problems. This may mean that they need a less expensive instrument or it may mean that we help them with financing. We now have three different financing companies we can use to get the customer a low monthly payment. We realize that each customer is different so we carry many options and price points. A huge part of our success is also due to having a great education center and rental program that helps drive business to the sales floor.”

—Ryan Smith, Beacock Music, Vancouver, Wash.

 

( continued, next page >> )

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