Looks like Guitar Center is in some money Trouble

Discussion in 'Bad Dog Cafe' started by tazzboy, May 11, 2012.

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  1. soulman969

    soulman969 Telefied Ad Free Member

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    LMAO! Well if they do have any fingerprints on them they're probably not traceable to any employee. The other thing I always wonder about is why anyone would take the guitar to a GC tech for a setup when it seems they can't even setup what they have on the rack very well.

    The one near me has some decent guys working there but the biggest problem is that the lions share of whatever discount they're gonna use to close the deal will get added right back in to the deal as local and state sales tax. It's just far cheaper to buy online.
     
  2. Deadcenter

    Deadcenter Tele-Meister

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    I can get 6 sets from MF for the price of 2 at my LGS. I try to throw them some support when I can ... but if they don't have what I want when I want it, I'm going elsewhere. :neutral:
     
  3. T Prior

    T Prior Poster Extraordinaire

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    "Founded in Hollywood by Wayne Mitchell in 1959 as The Organ Center, a retailer of electronic organs for home and church use, it became a major seller of Vox electric guitars and guitar amplifiers, changing its name to The Vox Center in 1964. Toward the end of the 1960s, Vox—whose sales derived largely from its association with The Beatles, who made extensive use of its amplifiers—fell in popularity as Marshall amplifier users Eric Clapton and others captured musicians' imaginations. Accordingly, Mitchell once again changed the name, this time to Guitar Center."


    Quite a history....

    GC is a success story..doesn't much matter what we think or say here. GC , just like Best Buy..sparked others , Sweetwater..etc...Internet stores, Amazon.com ,Ebay , Craigslist etc..

    The business model was correct for the time, today it's not...you cannot compete with strings for 50% less on Amazon.com, free shipping, Millions of USED amps and guitars, a market flooded with Chinese made Instruments/amps which have no value after the initial purchase, American guitars at 3x the price or more..then add a lazy or uninformed sales staff and you have a root failure, but it wasn't always like this...

    When Best Buy started, the next day we all had PC's . Now, 10 PC's later I don't need Best Buy and have not been in a store for over a year...But they had the right model at the right time, just like GC... GC has been in business many many years...which makes it a success story, GM>Govt bailout, Chrysler>Govt Bailout..Banks> Govt Bailout...etc..GC..NO Bailout...

    GC is now facing what millions of other businesses and small businesses are facing..products that people really don't NEED...just want...if they can't figure out how to capture an active shopping audience they will go the way of Best Buy, the era is coming to an end because of economic and social shopping habits of those with money to spend.

    To somehow assume that GC was a bad business is nuts..they were a great business model for the time window. We could walk into a GC and see 100 guitars on the wall...Mom and Pop stores we were lucky to see 5...Now we go into GC, try out a guitar or amp, then buy it used or from an on-line dealer....Just like PC's and DVD's..we don't need Best Buy anymore and we only need GC to do our research, then buy somewhere else...

    15 years ago nobody wanted a $500 Iphone with a $100 / month service fee...today everyone wants one and will GET one...many families have multiple connections, phones and charges..but the INCOME has not changed. Kids now want a $120 Squire guitar..how much profit do you think there is on a $120 Squire guitar ? When was the last time we bought our kids a US Telecaster for Christmas ? When was the last time you bought an I Pad or I Phone for your kid for Christmas ?


    This is what I am talking about..the era has changed dramatically...it was only a matter of time before outlets like GC, Best Buy etc...come to the end of the road....

    Stores like GC are mostly competing with used markets now which are flooded with products that are in tip top condition...look at our own threads here.."you can get a mint HR Deluxe Used for around $300, a new one from GC is what, $600 ? And we are wondering why they are going under and we are saying they are a bad business ? No business can survive under similar circumstances.

    I'm guilty as well, but at least I have made about 6 or 8 USED purchases from GC stores around the nation..but I can't recall when I bought anything new...

    Then add the "Walmart style " return policy...sell $100,000 in Sept, give back $100,000 in Oct...how do you pay the bills ? How do you support the Inventory ?

    GC is a success story....a very good one for it's time... but their time is nearing the end of the window..., the era changed...again...
     
    Last edited: Dec 8, 2012
  4. LongLiveRock54

    LongLiveRock54 Tele-Holic

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  5. Doug 54

    Doug 54 Poster Extraordinaire

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    All I can say is the Cincy GC has some good employees with knowledge.

    Other ones... yeas they fit that box store syndrome
     
  6. Uncle Joe

    Uncle Joe Friend of Leo's

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    I don't know about GC, but if the market doesn't tank in the next six months I'll be shocked.

    I hope I'm shocked.
     
  7. T Prior

    T Prior Poster Extraordinaire

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    regarding sales tax..in a not so distant future we will be paying sales tax on ALL Internet purchases..guess why....a certain group of "people" think they own the internet...and invented it for us...Payback is a "B"...
     
  8. NETeleholic

    NETeleholic TDPRI Member

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    It's a zero sum game. And taxes gotta come from somewhere.

    The GC bricks and mortar business model is dying and online retailers are winning, and this is playing out in most retailers. So, states are losing an incredible amount of sales tax receipts.

    Either tax Internet sales, or raise state income taxes, or cut state budgets. It's math, not a conspiracy.
     
  9. Mjark

    Mjark Doctor of Teleocity Silver Supporter

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    I went to GC today. I hadn't intended to but I need to kill an hour. They have a big sign outside that says "we beat internet prices". I was talking to the assistant manager who I've known since he was a kid at the local M&P here. He maintains they're fine and still opening new stores. It wasn't exactly brimming with people but it was before noon.
     
    Last edited: Dec 9, 2012
  10. bossaholic

    bossaholic Friend of Leo's

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    It's actually going to be implemented to level the playing field for physical stores who have to collect sales tax. I was against an internet sales tax at first, but Amazon and other online retailers are clobbering retailers, both big and small. It really isn't fair.
     
  11. DrumBob

    DrumBob -------------------------

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    From what I could make out after reading that report, GC doesn't appear to be going down the tubes immediately, but their longterm outlook isn't good.

    I had a very interesting discussion with a GC sales guy the other day. I won't mention which store or his name, but what he said to me in so many words was, "GC came into the market like gangbusters and put the moms & pops out of business, and that's too bad, because as a musician myself, I like going to a variety of music stores to shop and look around. Now, that's gotten harder. All we sell is the most common stuff available. There's nothing esoteric or unique. That's discouraging."

    He agreed with me that the general backlash against GC by musicians has been good for the stronger mom & pop stores that stock instruments and items GC doesn't bother to sell.

    On salesperson turnover, he said, "The whole compensation system here is ridiculous. They hire kids and pay them a draw at minimum wage. Very few of them make any money. It comes down to them earning maybe $3-4 an hour in the long run, then, deduct the cost of food and gas. They're making nothing. I do OK, because I've been here for years and work in the guitar department, but most of the kids bail quickly for better paying jobs or get fired."

    On the infamous GC noise level, he said, "When I leave here after working all day and night, I go home, and all I want is complete quiet, which sucks, because I don't even want to play my guitars or listen to music!"

    I encouraged him to look elsewhere, like a good mom & pop music store!
     
  12. coloradojeff

    coloradojeff Tele-Holic

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    If I remember correctly, the CEO of Guitar Center used to be the CEO of Fender (but he does not play guitar)...and IF I remember correctly, Fender is GC's biggest creditor...so IF GC bites the dust, Fender gets hit hard too.

    I do all my business with the smaller guys. The GCs have all become a joke.
     
  13. NETeleholic

    NETeleholic TDPRI Member

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    Think about Tower Records and Strawberries Records and Tapes. 10 years ago they sold locally and collected state sales taxes. Now, people either buy at iTunes, Amazon.com, or sign up at Pandora or Spotify or something and get all their music that way and never pay taxes.

    Same for Blockbuster and now Netflix or iTunes.

    While they may be trying to protect the local guys in the short run, in the long run, the states will have to make up the lost revenue as these business models shift.
     
  14. cowboytwang

    cowboytwang Poster Extraordinaire Silver Supporter

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    iTunes, and Amazon, both charge me tax when I download music???
     
  15. NETeleholic

    NETeleholic TDPRI Member

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    No they don't. That's my point. Record stores did. All those tax receipts are gone.
     
  16. Shango66

    Shango66 Friend of Leo's

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    This is a long thread and not sure if its mentioned previously.

    GC purchased Claptons blackie and cherry red cream era 335 for some very serious coin.

    http://youtu.be/leNbuaTqZYI
     
  17. T Prior

    T Prior Poster Extraordinaire

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    It's not about having a level playing field...


    Sales tax was never collected when you did business in another state and the product was mailed.... Sales tax does not go to the merchant, it's not about merchants or internet sites.., it's all about the revenue...paying sales tax on an Amazon.com purchase or an internet site does nothing for a local merchant.


    Sales tax is not the reason local retailers are getting clobbered...although on high ticket items it does have an effect, the total ticket price and convenience factor is the "clobber" factor.

    If you have to drive 45 minutes to get a set of strings, the gas cost more than the strings...

    Brick and mortar overhead costs, labor costs,inventory costs..etc....even GC has these same costs and cannot be competitive anymore. The era has changed...

    So once Internet Sales tax is collected, how is the state by state tax administered ? Who gets the money, who reports it, who do they report it to ? Certainly not the Feds....they have nothing to do with state Sales tax...( YET)

    Now think EBAY....they do more business day to day than probably anyone on the net...

    t
     
  18. dan1952

    dan1952 Friend of Leo's

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    Most of the major manufacturers put all their eggs in the GC basket years ago, apparently unable to learn from the MARS fiasco. Sorry about their luck...
     
  19. dennyman

    dennyman Tele-Meister

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    "...All we sell is the most common stuff available..."

    And this is why I haven't bought anything new from my local GC in many years.
     
  20. BiggerJohn

    BiggerJohn Friend of Leo's

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    Bain? Man that says it all.

    Sweetwater gets my business.
     
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