Over the past several years, if there’s one thing that virtually all brick-and-mortar music products dealers have agreed on in conversations with The Retailer, it’s that the accessories category has become incredibly important to the success of their stores. Indeed, I’ve heard the phrase “musical hardware store” more than once as a descriptor for the approach that keeps indies in business in an era of fierce Internet-based and big-box competition. Given how crucial parts, pieces and accessories have become, it’s only fitting that we publish our interview with Dave Dunwoodie, President, Graph Tech Guitar Labs Ltd., in our second-biggest edition of the year: the Summer NAMM Issue.
Our freewheeling conversation blends equal parts humor, anecdotes and insight. I think you’ll enjoy it.
The Music & Sound Retailer: Let’s begin with your personal background. Trace your own history with musical products, the music industry and the creative field in general. Touch on what first captured your interest. During your earliest years, what steps did you take to pursue that interest?
Dave Dunwoodie: Well, I tried to learn guitar a few times when I was young, but I would quit after a couple lessons…really too boring for an ADHD kid. I tried again when I was 14 or 15. At that time, I had a great teacher. He taught me cool songs that I was into, as well as how to play by ear instead of reading out of a book.
Around the same time, my three best buddies in school and I talked about forming a band…basically to meet girls, I think, but nobody knew how to play. We went down to a pawn shop and bought a small Takt amp with tremolo and reverb, a bass guitar and a drum set, really cheap. It turned out the drums came with cymbals, but not with stands or a foot pedal. So, we hung the cymbals on ropes and, when they swung around, our drummer could take a whack at it. He used one hand to play the bass drum, as we didn’t have a kick pedal. He was actually a natural talent, and he picked up drums very quickly.
We had the guitar, bass and vocals all running through that little amp. Practicing “Jumpin’ Jack Flash” and “House of the Rising Sun” over and over and over, trying to get through them at least one time without any mistakes. We all picked it up pretty quickly and started writing our own tunes. An older guy started managing us, and we had our first paying gig in the parking lot of McDonald’s at lunch hour. We set up in the back of his five-ton van, and everybody in the parking lot would honk their horns for applause. [Laughs.] We wrote lots of songs. We would record a lot of stuff on a song reel to reel, and then bypass the erase head to add more tracks.
We almost got signed onto a record deal when we were 16. Three of the four guys, including myself, went on to play professionally for many years.
So, that got me started in music, sitting in my bedroom and practicing with a record player and slowing down the fast parts to 16rpm. [Laughs.] You had to be really patient to wait for that riff to come along again at half speed!
The Retailer: Graph Tech Guitar Labs was founded more than 30 years ago. Since then, it’s become a recognized industry leader in guitar parts and accessories. Tell us the story of Graph Tech’s founding. Detail how the company has evolved from its infancy to the present day.
Dunwoodie: Well, I came off the road after playing in a Hawaiian/funk band, which broke up when we had no gigs. My mom said there was a job in the paper, so I went in for an interview. It was to sell Filter Queen vacuum cleaners. Yikes! They talked me into trying out the job.
The first two weeks were awful. But, every day, two hours in the morning and one hour at night, you had sales training, learning your script and then doing one call in the afternoon and two calls in the evening.
One night, it all came together, though. All of a sudden, it was like being on stage! I could be funny and energetic, and I didn’t get lost anywhere during the presentation. I sold two vacuums to the one household and, from there, I was off and running, outselling everyone at the company by the end of my first month on the job. But the hours were long. Out the door by 10am and home around 11pm.
One day, I stopped in at the local music store I always hung around in before I dropped the music career. I asked the Owner if he needed help during Christmas. I told him I would work just on commission. He said sure and, so, I quit Filter Queen.
I outsold everyone else at the music store during the six weeks leading up to Christmas, although, admittedly, there were only two other people there. But I knew how to point out features and benefits etc., and I knew how to ask for the sale. I stayed there for five years. I even ended up bringing Schecter into Vancouver as an exclusive store, back when Schecter was bodies, necks and parts. So, I learned a lot about customizing guitars; the look, feel and tone of different woods; electronics and hardware; and painting bodies and necks.
I was rolling in money as a young 23-year-old, always working on commission and selling a lot to a good, loyal clientele. Then, I did something pretty stupid. I quit the music store to start a business painting bodies and necks and importing hardware from Japan with a buddy of mine, selling to music stores across Canada. Eventually, we ran out of money. (Or, should I say, my credit card was maxed out.) So, my friend quit. I stopped painting and just concentrated on selling guitar hardware, moving my office into the kitchen and living room of my home.
One of my products—I made it myself—was cutting sheets of laminated graphite into nut blanks. It was so much work, but lots of repair guys liked it. I could move my hardware pretty good, but I always had a hard time getting paid. One good month of sales meant three to four months of trying to collect.
Needless to say, when you are a one-person shop, there is a lot of down time. I always went to the library. I would read books or listen to audio tapes on business, selling, marketing, copywriting and advertising, self-motivation and engineering. If I really liked the book, I would just say I lost it and pay the library however much it cost. There weren’t many good book stores around back then.
One day, I tried to cast a mixture of graphite powder and epoxy in a silicone mold that I made in the lid of a mayonnaise jar. (I was so tired of cutting up those sheets of graphite fiberglass.) I had been reading a book about plastics and polymers and I’d learned about all the cool stuff that was just coming out onto the market for injection molding. There was a polymer that just came out with nylon, graphite and Teflon that caught my eye. Hmm…just what the doctor ordered!
I borrowed $5,000 from my mom, and I talked to a lot of the R&D people at GE, DuPont and others, who really helped a lot. A lot of guitar players worked in those R&D departments, which was super cool. After learning more about it, I finally settled on a formula.
I found a local mold-maker who would make me a three-cavity mold for $2,000 (one Strat blank nut, a Gibson blank and a string tree). So, I ordered 50 pounds of material for about $1,000, and I got a hold of Guitar Player to put in an ad. Well, the ad had to be in their hands two months before the publishing date, and it had to be pre-paid. And, if I was going to get into the next issue, I had to mail it to them in two days. So, I was off to my printer, and we came up with a name for the company and product: Graph Tech and the Graphyte nut. The printer was a big help. He laid out a 1/3-page ad in electro-set that afternoon, and I sent it to Guitar Player along with my check for $1,500.
While I was waiting for the material, the mold and the ad to come out, I designed some simple packaging and some mail-order forms to send to music stores in Canada and the U.S. The day we got our first order from Guitar Player, which was one Strat nut and a string tree, was also luckily the day we made our first Graphyte nut…and it worked! [Laughs.] This was March 1983…about the same time Floyd Rose came out. So, my hopes of taking over the guitar world with the first lubricating guitar nut—and that was black in color, to boot—didn’t take off the way I had imagined.
But the one thing I really did like was that all the music stores in the U.S. would offer to pre-pay, or just have me send the order COD. What?! No chasing after money?! Wooo…OK! I thought to myself, “I like this way better than importing guitar parts into Canada and spending most of my time trying to collect money!” So, from there, it was all about trying to come out with more products to sell to my slowly growing customer base. When I could finally afford to, I put another cavity in my mold and had another new product! Sales the first year were $18,000, skyrocketing to $24,000 in 1984.
Fast-forwarding a couple decades, up until 2000, my wife Cheryl and I still played in a band at night. In the daytime, she worked at a fashion store, and I looked after my two daughters, Theresa and Tarina, with help from my mom. I would package and ship orders all day long.
At Graph Tech, every product we’ve ever made has had a story: TUSQ man-made Ivory, String Saver Saddles, Ghost pickup system, TUSQ Picks, Pre-Play hand care, Ratio multi-geared machine heads…on and on.
The Retailer: You’ve now led Graph Tech for some 32 years. After all that time, what keeps the job exciting, fresh and new? What keeps you motivated and eager to come to the office each morning? What’s the very best part of your job?
Dunwoodie: Number one is finding a problem and then trying to solve it, or to solve it better than the competitor. It’s like a detective novel. You go down a lot of dead ends, talk to a lot of interesting people and you are always learning something along the way. Maybe that information wasn’t relevant right now, but it may come in handy in the future. Or, maybe that information sparks a whole new direction. I kind of feel like a moth flying around a light bulb, banging away and trying to get inside. “OK, not this way…how about like this? No? OK…this way. Ouch!”
So, whether it’s coming up with a new product, product name, patent, business process, marketing message, etc., they all fall under the same umbrella. By nature, I’m curious, and I always like to be learning something new. For most of my life, a lot of what I have done has never felt like work. I mean…gigging, managing the guitar department at the music store, building up relationships and bringing in new products, and, for the last 32 years, Graph Tech! This is fun, exciting and interesting, and I’m always learning something new. (And I’m getting paid? WOW!)
Number two—and this is close to number one—is getting to talk and work with people just as passionate as I am about the music industry. Whether it’s a guitar manufacturer, repair shop, musician, distributor…it doesn’t matter. They all have such a passion for making our industry better.
Number three is knowing that we have replaced the equivalent of 11,000 elephant tusks from being consumed in the guitar industry by producing a product superior to ivory and bone for nuts, saddles and bridge pins. As far as tone and vibration transfer goes, TUSQ nuts, saddles and bridge pins are truly a superior alternative to other nut and saddle parts on the market. It’s the reason so many guitarists switch and it’s just one of the reasons so many guitar manufacturers are moving to TUSQ parts for their guitars, along with the cost, marketing and efficiency benefits.
The Retailer: When you look at Graph Tech as it currently exists, what would you say you’re the proudest of? What makes the company stand apart not only from direct competitors in the accessories category, but also from companies in the broad MI industry? What’s the “secret sauce” at Graph Tech?
Dunwoodie: Oh, that’s easy! It’s about getting an e-mail, a phone call or being at a trade show and somebody saying, “Wow! This is the first time I ever bought something that actually does what it said it would do!” Graph Tech is all about that! There has to be a valid reason for every product we develop and produce. Whether it’s TUSQ, which really does increase harmonic content and richness a lot (you can measure it!), or String Saver Saddles, which really do reduce string breakage by at least 95 percent!
The secret sauce for us is developing products that respect the tradition of the guitar. You can only color so far outside the lines for guitar, as far as design goes. There are exceptions to every rule, but the basic look of the acoustic guitar hasn’t changed too much for over 300 years. The two most popular designs of electric guitars today were designed in the early 1950s. So, if you are going to put something on your guitar, it’s got to look right.
We were the first company to bring a black, self-lubricating nut to the world market…and just changing the color from white to black, even though it functioned way better for tuning stability due to the PTFE we impregnated into it, really brought up a lot of initial resistance from the industry. Now, it’s not an issue, but that took many years to overcome.
The same thing happened with our TUSQ nuts and saddles. We actually had a blind test at one of our trade shows: two sound samples of the same acoustic guitar, one equipped with a TUSQ saddle and one with a bone saddle. Eighty percent of the people at the NAMM show chose the TUSQ-equipped guitar! There was one guy who wrote on his ballot, “Sample B sounds better, but I know sample A is a bone saddle. So, I choose sample A.” [Laughs.] We call those people “bone-heads.” You’re never going to change their minds. But, fortunately, they are getting fewer and fewer. The younger generations of guitar players are growing up with the more harmonically rich sound of their TUSQ-equipped guitars and, when they hear a guitar with a bone saddle, there is something missing.
The Retailer: Over the past four years, numerous retailers have told me that accessories, parts and pieces have become their store’s bread-and-butter sales. Some have said they consider their shop a “musical hardware store.” Share your thoughts about the essential role that parts and accessories have come to play in MI retailing.
Dunwoodie: Well, it’s a pretty simple formula: accessory sales are consistently growing faster than the rest of the music industry, and they provide higher margins. So, the more a store invests in a good hardware and accessories program, the faster and more profitable it will grow.
Graph Tech is focused on fueling demand by educating musicians on the new technologies and installation process through print and digital marketing, videos, e-mail etc. That way, people understand the product benefits, why they work and how to get them on their guitar. Then, we work with retailers to build out an educated plan of attack for the parts they need to support the demand walking through their doors for parts and accessories.
We probably supply more guitar manufacturers around the world with one or more of our products than anyone else in the world. And, as a result, we have hundreds of parts and accessories that are originally equipped on brands that include Fender, Taylor, Martin, Godin, Schecter, Washburn, Carvin, Yamaha and Cort. This position allows us to offer retailers a powerful guitar-parts business solution, with technology and brands that are recognized by consumers as the best in the industry.
The Retailer: As you alluded to, Graph Tech has ongoing, healthy relationships with all the major guitar manufacturers. Describe the mutually interdependent partnership your company and you have forged.
Dunwoodie: As noted, we do supply most of the guitar manufacturers and a lot of ukulele manufacturers with something, whether it’s a NuBone XB saddle, Ratio multi-geared machine heads or the Ghost acoustic/MIDI pickup system. Definitely the most fun for us is when we get to be in at the start of a new product we develop with the manufacturer. We see ourselves as an external R&D department for the guitar manufacturers we’re partnered with.
Guitar manufacturers can come to us knowing that we’ll work to provide a part that fits within their cost requirements, fits their specifications, and adds significant performance and marketing value to their instrument. Our products do what we say they can do. That builds value and trust. For example, TUSQ nuts and saddles increase harmonic content by up to 200 percent over traditional materials, such as bone, and they’re far more consistent. Without getting too deep into this, the saddle determines what harmonics are transferred to the guitar top, what harmonics and energy remain vibrating on the string, and the rate of the vibration transfer. The faster the transfer determines the volume of the note, and the sustain of the note. The faster the transfer, the louder the note is, and the shorter the sustain. You can read about this in depth in one of our white papers, “The Science of Acoustic Tone.”
Another example of technology we’ve developed is our newly patented Ratio multi-geared machine heads. What we’ve done with our multi-geared patented tuning technology is adjusted the gear ratio of each tuning head to the specific needs of the core tension of each string. With these machine heads, guitars now tune with a predictable, precise response…on every string. No more sneaking up on the G string or winding like crazy on the high E string. One full rotation on any tuning key is the equivalent of one tone, for every string. So, tuning becomes way more intuitive. We’ve raised the bar significantly for machine head technology. We really believe this is the future of tuning for all stringed instruments. Everyone we talk to about it is blown away by how simple the idea is, but how much better the results are.
The Retailer: Discuss Graph Tech’s commitment to the brick-and-mortar MI store channel. Is working collaboratively with brick-and-mortar music dealers a key part of Graph Tech’s core philosophy and fundamental approach to doing business?
Dunwoodie: Well, I started my music industry life working five years in retail, and I loved it. “Parts and accessories” is one of the most profitable product categories in a retail store…even more so when you consider repair shop revenue. But, store managers and owners are busy, and it’s very difficult for them to focus on all the areas they may be missing out on. Working more closely with retailers to help them understand and grow their guitar parts business is a serious benefit to our retail partners. It’s one of the reasons why we’re the go-to source for retailers committed to capturing the most from the growing demand for guitar parts and accessories.
As the demand continues to grow for brick-and-mortar retailers to offer a significant parts and accessories section to their stores, we’ve come to realize that retailers that stock a program of SKUs that fits the hot guitar models within the industry tend to maintain that consumer loyalty to both our products and their store. So, we’ve started working on partnership programs that allow us to work more closely with retailers, ensuring they stock the parts that consumers in their area need and want while also driving leads to their store for our products. This ensures the consumer is happy: both with our company for pointing them in the direction of a store that will most likely have what they need, and for making sure that he or she walks in the door and walks out with a product. Nobody wants to walk out frustrated with a store for not having what’s needed.
Providing sizing guides and digital tools that make finding the correct Graph Tech component quick and easy have been major areas of focus for our marketing team. This allows the retail sales associate to quickly find the right part, with the best performance benefits, for any customer walking in the door, thus optimizing the sales associate’s time. That way, he or she can focus on what matters most: sales.
The launch of our new minimum advertised price (MAP) policy has been a big step in supporting our brick-and-mortar customers. As the marketplace continues to change on almost a weekly basis, we want to maintain the profitability of our products for all our partners. This MAP policy supports the guitar parts business our partners have been so focused on growing. We’ve partnered with an experienced software platform in order to successfully monitor and implement the new policy.
The Retailer: Is there anything the dealer channel could do that would be helpful to Graph Tech as a company? Do you have any suggestions for the dealer channel that would help retailers, in addition to helping your own company?
Dunwoodie: The best thing retailers can do is to give us feedback. We’re a team of problem solvers. Our products are unique, as they solve problems or introduce new benefits that haven’t been addressed before. When we speak with dealers and repair shops, we work hard to find out how we can make our products, marketing and services better, and to make their lives easier and more profitable. In turn, the combination of our team and our dealers becomes the problem solver for the consumer. Together, we build a reputation within the store’s local market as the go-to place to solve tuning issues and string breakage, and for tone improvement and increased string life.
As for suggestions that would help retailers…if you have a repair shop, look at it as a revenue generator and marketing differentiator for your store, not as a cost of doing business. We have a great program about to launch that proactively gets your repairs and upgrades out onto the sales floor and in front of your customers. As I mentioned, solving customers’ problems builds up a great word-of-mouth advertising engine in your local market. And that’s the most cost-effective and believable advertising you can get.
The Retailer: What does the future hold for Graph Tech? What can company-watchers expect over the coming years?
Dunwoodie: Well, you are always going to see us pushing the limits and defining new product categories and, of course, performance features. Our newest product about to launch, which works in conjunction with our Ratio multi-geared machines heads, is our InvisoMatch Mounting Plate system. Now, Ratio machine heads will fit most guitar headstocks without having to drill new holes and fill in the old holes. Just remove your old machine head, use the correct mounting plate for the machine heads you’re replacing and use the existing screw holes or pin placements. We have mounting plates that match the majority of existing machine heads on the market, and we include these plates in each set of our Ratio locking series machine heads. Not only do they make replacing machine heads clean and quick, but they also eliminate the huge number of SKUs a store has to carry for machine-head upgrades. It’s definitely a win/win for everybody!
The Retailer: Are there any other topics you’d like to discuss?
Dunwoodie: If you haven’t seen a solid overview of our products, it’s time. This is a very straight-cut statement, but we really work hard to differentiate our products in a way that solves problems in their respective categories. In turn, this helps you solve customers’ problems, which, in turn, builds a trust that yields years of loyalty from them. It also pushes our products to the top of consumers’ minds, to the top of the category’s food chain and to the top of the revenue-building ladder for our stores and repair shops.
E-mail me directly at dave@graphtech.com. I’m always listening, and our team is, too. Whether you’d like to discuss new product ideas and improvements, how you can improve your store’s parts and accessories business, or something else, I’d love to hear from you.