Bigger = Better…?
There are some musical instrument brands out there that everybody knows. They have had, and still have, their names on the instruments played by some of the biggest artists in the world.
However, should this name and reputation mean that you should only be able buy their products at the biggest stores?
Here is a case in point: Gibson, one of the Big Two in the guitar world, decided to drastically cut back on their number of dealers and only allowed those that agreed to a stringent set of regulations to continue selling their Gibson and Epiphone brands. Some that agreed to this decided that it wasn’t effective and left the programme; others said that it was a success. However, the stores that decided against going along with Gibson in the first place didn’t go out of business - they just sold different competitor brands!
Gibson, however, filed for bankruptcy in May 2018, following years of debt, has recently ousted Henry Juszkiewicz as CEO (October 2018) and has only just had half a billion dollars-worth of debt cancelled by bondholders in a rescue package designed to keep the brand afloat (October 2018). These facts are not necessarily linked to their dealership structure (many other factors at play here) but it is good evidence to suggest that no single brand is indispensable.
Equally, it shows that music stores can and will survive without certain brands in their stock profile.
Get It Off Your Chest
Why am I discussing this now? Well, it is simple really. Two major manufacturers, this week, have shown a similar level of short-sightedness when it comes to treating their dealers with respect. I will not name either of them, however, one has decided to impose a pan-European stock buying profile of c.25,000 Euros per annum on dealers without warning or explanation, whilst the other is trying to tell me that 10% off RRP is what now constitutes a ‘trade price’. When I pointed out to them that I could buy their product from a well-known on-line retailer for 12% less than their ‘trade price’, and save another £10 on delivery, I was stone-walled and told that all dealers have the same discount.
I make no judgement on either but, suffice it to say, I have already contacted their competition and have new dealerships in place.
No brand is indispensable but, if they want to sell their product, their dealers are - whatever their size.