# Profit margins at L&M (and other music stores)



## greco (Jul 15, 2007)

I was talking to a friend and GC forum member (@GTmaker) today about the possible profit margins at L&M. 

I indicated that I thought their typical/average margin would be about 30%. 
He felt it would be much more. 

What do you folks think (or know)?


----------



## vadsy (Dec 2, 2010)

paging @Steadfastly


----------



## Chitmo (Sep 2, 2013)

It's actually around 5-7% for the retail side of things believe it or not.


----------



## LanceT (Mar 7, 2014)

30% may be overall markup. Gotta think overhead is pretty substantial.


----------



## gtrguy (Jul 6, 2006)

LanceT said:


> 30% may be overall markup. Gotta think overhead is pretty substantial.


Exactly.


----------



## Granny Gremlin (Jun 3, 2016)

Markup is more than 30% (especially for smaller items - there is a sliding scale strings and picks are a silly high markup, top of the line guitars and amps much less, as a percentage of their cost). The margin on that though, I have no idea (what LanceT said; overhead etc).


----------



## greco (Jul 15, 2007)

I guess we have to define profit margin vs markup vs gross margin vs operating profit , etc.

*Let's stay with basic markup on wholesale to retail.* This will obviously vary depending on the item, so let's stay with stating your opinion of an average percentage.

EDIT: I was typing while the last two entries were posted.

@Granny Gremlin What do you think the AVERAGE markup would be?


----------



## greco (Jul 15, 2007)

Chitmo said:


> It's actually around 5-7% for the retail side of things believe it or not.


What would the average markup percentage be to get that figure?
(assuming you don't mean the 5-7 % to be the markup)


----------



## Chitmo (Sep 2, 2013)

greco said:


> What would the average markup percentage be to get that figure?
> (assuming you don't mean the 5-7 % to be the markup)


5-7% is profit overall was my understanding. Mark up varies on product. The largest profit items being Yorkville produced and distributed and things like CS Gibson and fender having the smallest margins. I can't tell you exact mark up but I remember being shocked how little the discount was when a buddy purchased a new Gibson (with his staff price being cost)


----------



## greco (Jul 15, 2007)

Chitmo said:


> Mark up varies on product. The largest profit items being Yorkville produced and distributed and things like CS Gibson and fender having the smallest margins.


Any guess/thought as to the AVERAGE markup?


----------



## Wardo (Feb 5, 2010)

Couple of weeks ago I got a Firebird for 20% off the floor price which was already knocked down from the list as it always is. They said they couldn't go any lower o/wise thay'd make nothing on it. I've usually been able to negotiate down from what the asking price is - don't make a song and dance about it just I'm willing to buy this can you do anything on the price. Traynor AM Custom 225 acoustic amp was 1,200 at L&M - called one store offered a grand they said no - called another and they said yeah we'll sell you that amp for 1000. Same with Martin guitars - make an offer tax in and go from there. If you don't come across as some kind of jackass most times they will try to find a number. It's all about moving inventory.

So, with respect to markup, they were able to knock 20% off the Firebird and still make something.


----------



## Chitmo (Sep 2, 2013)

greco said:


> Any guess/thought as to the AVERAGE markup?


Hard to say... and I don't really want to speculate and provide inaccurate information.


----------



## colchar (May 22, 2010)

Chitmo said:


> 5-7% is profit overall was my understanding. Mark up varies on product. The largest profit items being Yorkville produced and distributed and things like CS Gibson and fender having the smallest margins. I can't tell you exact mark up but I remember being shocked how little the discount was when a buddy purchased a new Gibson (with his staff price being cost)



Staff get a discount, but they don't get things at cost.


----------



## Kerry Brown (Mar 31, 2014)

Wardo said:


> So, with respect to markup, they were able to knock 20% off the Firebird and still make something.


Old inventory costs a store money. I’ve owned several retail businesses. Inventory turn is a key metric. Most inventory is financed and the goal is to sell it before it comes due. On a typical gross markup of 20 to 30 % anything that is on the shelf after 90 days is costing you money. Note this is in general terms. I am talking turn over enough inventory to pay your cost plus overhead plus salaries before the term of the overall inventory financing is up. This means you have a sliding scale for markup. Things that move fast tend to have a higher markup and are hardly ever discounted. Things that move slowly have a lower markup, to help move them quicker, and are often discounted, especially if they have been sitting for a while. It is not uncommon to sell high ticket items at or below cost if they are old stock. You need cash and the high ticket item was paid for from the profits of the quicker moving items. Fast moving inventory pays to keep the store running. High ticket slow moving items are the profit.


----------



## Chitmo (Sep 2, 2013)

colchar said:


> Staff get a discount, but they don't get things at cost.


Depends on the product... they actually get 10% below cost on some items


----------



## Granny Gremlin (Jun 3, 2016)

@greco I couldn't tell you - never worked at L&M or another music store specifically. I'm sure the concept of loss leaders applies (which Kerry alluded to). Not sure average markup is meaningful, but it could likely be broken down by product catagory (like I said before the highest markup would be consumables like basic picks and strings ) and that could be meaningful and useful info.


----------



## Steadfastly (Nov 14, 2008)

Sales people often speak about markup whereas accounting people speak about margin of profit. Here is the difference using $100.00 as the retailer's cost.

$100.00 x 40% markup is 100 x 1.40=$140.00

$100.00 x 40% margin is 100/.60=$166.67

When I was running branches for my company in the HVAC business, we needed to sell most thing at 40% margin to stay in business. Some things we would sell for less to be competitive on large volume items and some things we would sell at a higher margin of profit to try and make up for the lower margin of profit items. 

To stay in business and flourish, we needed to be above 30% margin of profit across the board. Some companies need more that that 30% and some need less if there volume is higher than average. I would think the music stores need to be above 30% to stay in business and experience some growth. That is my thoughts based on my past experience. Am I right? Maybe. Maybe not.


----------



## vadsy (Dec 2, 2010)

thanks, Stead


----------



## Diablo (Dec 20, 2007)

I think big stuff would be between 15-30% markup...accessories like cables and things much more.
When I worked for HP I dealt with a lot of retail stores like Bestbuy...theres a reason why they always push you to buy USB cables etc when you buy a printer, computer etc....markups can be 100%+. Its easier to hide /inflate the markup on that stuff. So I think you have to look at "average" more than "typical". Costco had a different approach...most of their printers had a USB cable bundled in...so they could say they gave you a $15 value for something that cost maybe a buck, which theyd actually make the OEM pay for anyways. that was the thing about Costco, if you had products for sale at other retailers, you always had to give them something a little special to get the contract. I cant say things are the same today or not.


----------



## mhammer (Nov 30, 2007)

Pricepoints (and associated markup) can be expected to vary with how much of that inventory one can expect to move. And the amount you can move will, in turn, depend on pricepoint. So if something that a retailer expects to sell a lot of can have a 50% markup without pushing the envelope in terms of what the consumer is willing to pay, then the retailer would be foolish to NOT leap for that 50% markup. Particularly since that item can help to offset, and effectively subsidize, a 10% markup on another product that has a much higher pricepoint and won't sell many units very quickly.


----------



## greco (Jul 15, 2007)

Thanks to everyone for their comments.


----------



## mawmow (Nov 14, 2017)

As I compared many solid wood acoustics in the 2-3k$ range during the past year, LM had the highest prices but the stores and sellers announcing lower prices did not necessarily have the guitars in store. When I found LM lowered the price of the Gibson L-1 1928 Blues Tribute I wished, they had to get it from another store (Ont. or NB).

LM acquired some reknowned well established independant stores in Quebec in the recent years. So, I guess the have quite high investments to face. 

The local independent store hold a huge inventory and match LM prices.

So, I don't know where stands LM in profit margin, but, I do not really see any other store with as great inventory with better prices.


----------



## Kerry Brown (Mar 31, 2014)

I forgot to add in my previous post that a store may need some high end inventory in order to sell the low end stuff where they make their money. The manufacturers may force them to carry a full line and it does help to attract browsers who may buy some strings or cables while they are looking at guitars they will never buy. When I sold stereo gear I would let some really high end stuff sit around a long time because it generated traffic and was a conversation opener. It’s hard to sell something when your opener is “Can I help you?” If instead you see them eyeing up that really high end item you can start with “Have you seen how this works?” and start a conversation.

.”


----------



## _Azrael (Nov 27, 2017)

L&M/Yorkville is in a unique position because they're not solely dependant on retail sales and have multiple revenue streams. Manufacturing, importing/distributing, financing, lessons, rentals... probably some other stuff I'm forgetting about.

With L&M being the distributor for some fairly major brands they're making money off many of their retail competitors.


----------



## luker0 (Apr 18, 2017)

Steadfastly said:


> Sales people often speak about markup whereas accounting people speak about margin of profit. Here is the difference using $100.00 as the retailer's cost.
> 
> $100.00 x 40% markup is 100 x 1.40=$140.00
> 
> ...


Close but not quite. 

$100 cost plus 40% markup = $140

$100 with 40% gross margin means it cost me $60. Sold at $100 though. 

In both cases my gross profit is $40.

Sent from my SM-T813 using Tapatalk


----------



## Lola (Nov 16, 2014)

colchar said:


> Staff get a discount, but they don't get things at cost.


They don’t get it a cost. I know one of guitar teachers at our local L&M. I think, don’t quote me but it’s 50% off the MSRP. Still making a profit.


----------



## Steadfastly (Nov 14, 2008)

luker0 said:


> Close but not quite.
> 
> $100 cost plus 40% markup = $140
> 
> ...


Actually, that is not correct. Markup and Margin are not the same thing. Your post is interesting, though. I had to explain this to one of my bosses who was a very smart man, much more so than me but had only worked on markups all his life. He got mad at me one time because I sold a big job at 14% margin. He thought it was markup. When I explained it to him, he admitted he would have sold it for the same price. I mentions this because many people don't understand the difference even though they have been in business for years. Here is a link based on my example. $84.00 for the item, ,not $100.00

Margin Calculator - Omni


----------



## luker0 (Apr 18, 2017)

Steadfastly said:


> Actually, that is not correct. Markup and Margin are not the same thing. Your post is interesting, though. I had to explain this to one of my bosses who was a very smart man, much more so than me but had only worked on markups all his life. He got mad at me one time because I sold a big job at 14% margin. He thought it was markup. When I explained it to him, he admitted he would have sold it for the same price. I mentions this because many people don't understand the difference even though they have been in business for years. Here is a link based on my example. $84.00 for the item, ,not $100.00
> 
> Margin Calculator - Omni


Your calculator actually proves me right.









Sent from my SM-T813 using Tapatalk


----------



## colchar (May 22, 2010)

What is the difference between gross margin and markup? | AccountingCoach


----------



## Steadfastly (Nov 14, 2008)

luker0 said:


> Your calculator actually proves me right.
> 
> 
> 
> ...


Actually it proves you wrong depending how you look at it. We were originally speaking about a cost of $100.00, not $60.00. If you use the original example of $100.00 the item has to be sold at $166.67 for a profit margin of 40%.

If we take your example above and multiply it by 1.40, which is markup it only comes to $85.40. ($60.00 X 1.40=$85.40) My original explanation is just to show the difference between margin of profit and market. They are two different things.


----------



## jb welder (Sep 14, 2010)

luker0 said:


> Your calculator actually proves me right.


And your example actually proved his formula (divide by .6) right.


----------



## luker0 (Apr 18, 2017)

Steadfastly said:


> Actually it proves you wrong depending how you look at it. We were originally speaking about a cost of $100.00, not $60.00. If you use the original example of $100.00 the item has to be sold at $166.67 for a profit margin of 40%.
> 
> If we take your example above and multiply it by 1.40, which is markup it only comes to $85.40. ($60.00 X 1.40=$85.40) My original explanation is just to show the difference between margin of profit and market. They are two different things.


Re-read my post I was very clear on cost. The markup example has a cost of $100 and a sale of $140. And the margin example has a cost of $60 and a sale of $100. That was done on purpose to show the same profit amount in both cases. 

Sent from my SM-T813 using Tapatalk


----------



## Steadfastly (Nov 14, 2008)

jb welder said:


> And your example actually proved his formula (divide by .6) right.


Yes, that will give you 40% margin of profit. It's always *divide* for margin of profit and *multiply* for markup. However, he used $60.00 as the cost whereas we were speaking about a cost of $100.00 which may be confusing to some if they didn't notice the two different costs being used. I just wanted to make sure no one was confused by the two different costs. It is confusing until you get it all fixed in your mind.


----------



## Steadfastly (Nov 14, 2008)

luker0 said:


> Re-read my post I was very clear on cost. The markup example has a cost of $100 and a sale of $140. And the margin example has a cost of $60 and a sale of $100. That was done on purpose to show the same profit amount in both cases.
> 
> Sent from my SM-T813 using Tapatalk


No, the profit of margin is not the same. It can't be. If your cost is higher and your profit margin is 40%, your profit amount has to be higher. That is simple mathematics.

$60.00/.60=$100.00
100.00/.60=$166.67

^^ These are both 40% margin of profit but there is $26.67 more profit in the item costing $100.00.

JB Welder just pointed out to me an error in the above line and he is correct. It is 26.67 more profit in the item costing $100.00. (Late at night math.)


----------



## luker0 (Apr 18, 2017)

Steadfastly said:


> No, the profit of margin is not the same. It can't be. If your cost is higher and your profit margin is 40%, your profit amount has to be higher. That is simple mathematics.
> 
> $60.00/.60=$100.00
> 100.00/.60=$166.67
> ...


Are you unable to read English? I said the same AMOUNT. In both cases I made $40. Of course the profit PERCENTAGE is different. That is simple math.

Sent from my SM-T813 using Tapatalk


----------



## jbealsmusic (Feb 12, 2014)

*MARKUP VS MARGIN*
As has been said. Markup and margin are not the same. This is the easiest way I can think of to explain it.

Let's say you have a product that costs you $100, and you sell it for $150. The markup is 50%. The gross margin is 33.3%.

Markup = The percentage of the original cost that has been added to the price. Final selling price was $150, cost was $100, so the markup was $50. $50 is 50% of the original cost of $100. Therefore, the markup was 50%.

Gross Margin = The percentage of the final selling price that was profit. Final selling price was $150, cost was $100, so the profit was $50. $50 is 33.3% of the final selling price of $150. So the margin was 33.3%.

If the same $100 cost product sold for $200, markup would be 100% and margin would be 50%.

If the same $100 cost product sold for $1000, markup would be 1000% and margin would be 90%.

Hopefully you can now see how the 2 are very different. Each has their use in the backend operations of a business.

*EDIT*: Please note that margin is ALWAYS expressed as a percentage. Likewise, markup is nearly always expressed as a percentage. You can discuss markup in terms of dollar value, but it just isn't useful. I don't know why the above conversation is happening... Best guess is that we're all trying to say the same thing just in different ways, so everyone is talking past one another by mistake. Oh, the joys of communication (especially on the internet).

*AVERAGE MARGIN*
As for the original question, it has already been answered to some degree. The answer varies substantially depending on the product.

*MAP PRICING*
You can bet that if the price is the exact same at nearly every store you check, there is a MAP policy on that product (retailers aren't allowed to list the price any lower). Margin on MAP stuff is 20%-35%, depending on the brand, and a few other factors (buying power being one). A smaller store may only get 10%-20% margin on certain items because they just can't buy enough to qualify for better pricing.

I have a friend who owns a small music store and asked my advice about carrying "Brand-X" products. I gave him suggestions about the best sellers and he got some of what I suggested. I was astonished when he shared the invoice with me. His margin on some of the stuff was nearly non-existent. His cost on one product was $425 before taking shipping into account. At that time, MAP price in Canada for that product was $499. If you want to price competitively, you price at MAP. Sadly, you can't maintain a business on margins like that.

I can think of a ton of brands and products like that which I've overheard people bring up in conversation saying, "Why doesn't anyone carry this stuff?" In most cases, there are very good reasons why no one carries it. Reasons that the average armchair music store critic wouldn't accept, but that most educated or experienced business owners would understand and agree with if they knew all the details.

*LOSS LEADERS*
Then you get into the conversation about loss leaders. In general, loss leaders and small/independent businesses don't mix. The entire concept is predicated on well trained sales staff who know what to upsell (to provide the most profitability) and how to effectively upsell it. The truth is, most small shops just don't have that kind of sales training available (if there's any sales training at all). If you carry loss leaders, but you don't upsell effectively, you are losing more than you're gaining by making the sale. Even if it earns you a new customer.

*SUSTAINABILITY*
Let's be honest here. These are not grocery stores or Best Buys. Music gear is a niche industry. With the "race to the bottom" pricing coming about thanks to the internet competition, it's honestly not sustainable for most music stores. That is why most of them (even the big guys) offer lessons, rentals, repairs, and other services. It's also why they push the more profitable accessories so hard.

Speaking of that friend who owns the music store. I have seen his books. He only sells gear because he loves gear. Truth is, the business is only sustainable because of the profits they make from the other services they offer.

*L&M's GENIUS BUSINESS PLAN*
L&M are in a more unique position. There's the obvious benefit of having 100 or so stores, which gives them massive buying power and sales volume. But L&M also owns Yorkville, which is both a manufacturer and an exclusive Canadian distributor for a number of well known brands. In essence, they make amazing profits when they sell any of that stuff, and they profit off of their competition because if other Canadian music stores want to sell any of those brands, they are forced to buy them from Yorkville, so L&M is still profiting off the sale.

So, in official response to @greco 's initial question, your friend is correct. Given their business model, it would be reasonable to assume that L&M's gross margin is at least 40%. That also means they have the most "room to move" on their pricing with anything under Yorkville's banner. Use that to your advantage. 

I love shop talk. I could do this all day!


----------



## RBlakeney (Mar 12, 2017)

This is a really great thread.


----------



## Steadfastly (Nov 14, 2008)

luker0 said:


> Are you unable to read English? I said the same AMOUNT. In both cases I made $40. Of course the profit PERCENTAGE is different. That is simple math.
> 
> Sent from my SM-T813 using Tapatalk


Actually, I was thinking the same thing about you but I didn't want to be rude.


----------



## greco (Jul 15, 2007)

jbealsmusic said:


> I can think of a ton of brands and products like that which I've overheard people bring up in conversation saying, "Why doesn't anyone carry this stuff?" In most cases, there are very good reasons why no one carries it.


@jbealsmusic Thanks for your long and very detailed post. Much appreciated.

Regarding the above quote. It must be very difficult as a business owner to decide on which products to "carry"/stock. 

In addition, as you have mentioned in the past, there is the issue of your suppliers being abel to keep up with shipping you product in a timely manner when your sales of that product are doing better than expected.


----------



## vadsy (Dec 2, 2010)

RBlakeney said:


> This is a really great thread.


Agreed, learning a lot about the retail music industry, hvac and business in general. The well at GC is deep and a good place to draw from. I hope we cover penny stock investment and men’s fashion soon.


----------



## Bubb (Jan 16, 2008)

vadsy said:


> Agreed, learning a lot about the retail music industry, hvac and business in general. The well at GC is deep and a good place to draw from. I hope we cover penny stock investment and men’s fashion soon.


What's the markup on an outfit like this ?


----------



## Bubb (Jan 16, 2008)

or this


----------



## 4345567 (Jun 26, 2008)

__________


----------



## jbealsmusic (Feb 12, 2014)

greco said:


> @jbealsmusic Thanks for your long and very detailed post. Much appreciated.
> 
> Regarding the above quote. It must be very difficult as a business owner to decide on which products to "carry"/stock.


It certainly can be. Some brands/products are well distributed in Canada, which is really awesome. For some others, it just isn't pretty... I have to admit I was a massive armchair critic of how music stores operated, even when I worked for them. Like everyone, I was convinced that I could do a better job than my bosses. I would carry cooler products, we wouldn't constantly be out of stock or needing to special order things, etc.  It wasn't until I was in management before reality set in.

Most people starting a business have a good idea of what they want to do and what they want to sell, which is generally the kind of products they love to use themselves (and maybe had trouble finding elsewhere). Let's say you're starting your own store and Brand-X mostly makes gear you aren't interested in, but it has a certain few products you really love and want to sell. Here are several possible scenarios:
1) It might not be possible due to pre-existing distribution restrictions. As in, when you contact the distributor for Brand-X they'll say, "Sorry, there's already another dealer offering Brand-X within X kms of your location." It doesn't matter that the other dealer they're referring to never actually stocks the specific products you want to carry.
2) It might be prohibitively expensive for your small store. "Sure you can carry Brand-X. First order must be $50K."
3) It might come with a bunch of other crap you don't want. "Sure you can carry Brand-X, but you have to purchase/sell their entire product line."
4) It might not be available in Canada because Brand-X is a US company that doesn't have a Canadian distributor. So you call Brand-X, and they respond with one of the following:
4.1) "We're not looking for Canadian dealers, but we are looking for Canadian distributors. Would you be willing to sell and distribute our entire product line?"
4.2) "Just buy it from a US distributor."
4.3) *no response* This happens ALL THE TIME. Many companies don't even consider the Canadian market to be worth a simple conversation.​5) Let's say you can get it and there are no restrictions. Yay! Turns out, your wholesale discount sucks. By the time you account for your shipping costs to get the product, you're making almost no money. And you don't have the buying power to buy enough to offset the shipping costs, let alone get a better discount. You can either sell them for next to no profit or be seen as a crooked thieving business owner gouging Canadian customers because your prices are 10% higher than the US competition.
6) Let's say you get lucky and there's a Canadian distributor with no restrictions, and great wholesale discounts. You think all will be well, then you place your first order. "Yeah you can order that stuff, sure. Wait time is 8-12 weeks." Turns out, the official Canadian distributor for Brand-X doesn't even stock Brand-X's products in their Canadian warehouse. They just accumulate backorders over time and do an order with Brand-X every few months to cover those orders. So, to avoid the ridiculous wait time, you try ordering straight from Brand-X only to be told to contact the Canadian distributor because they have exclusive distribution rights in Canada.
7) Finally, let's say you get REALLY lucky. There's a Canadian distributor with no restrictions, great wholesale discounts, and the product is well stocked and ready to ship. You think you're set and you place your first order. Then you sit on the stock for months, maybe even years. Turns out, you're in the minority. You absolutely love Brand-X's products, but most people just don't care for them.

*Retail business success 101: Don't sell what you love, sell what your customers will love.* It's a really bitter pill to swallow for most new business owners.



> In addition, as you have mentioned in the past, there is the issue of your suppliers being abel to keep up with shipping you product in a timely manner when your sales of that product are doing better than expected.


Yes. At a dealer level, the issue in point 6 happens a lot in Canada. Canada is not that big of a market, so it just isn't worth it for distributors to stock large amounts of every SKU from every brand they deal with. They may stock a handful, but it can still be a struggle for dealers to maintain their inventory on certain things.

As for Next Gen, history is repeating itself. Once again, I was an armchair critic of all other parts businesses who have come before me, certain that I could do better than our predecessors. Experience should have taught me otherwise, but I'm a stubborn bastard.
%h(*&

Now I'm learning a lot about the fun hiccups of the distribution side of business. Issues faced can include:
1) Some manufacturers don't stock anything at all, which can lead to 2 potential problems:
1.1) Their productions runs are small and are only done as needed. We only need a dozen units of some low volume item to cover us for 2-3 months but they will only do a production run if you order 100+ units. So we have to order 100 and just sit on the stock. Lots of capital tied up in one SKU for up to a year.
1.2) Worst case, they do production runs based on backordered needs. Maybe we need 1,000 units to cover us for 4 months worth of sales. So, we order 2000 in case of delays and to cover projected sales growth. Sadly, the minimum production run is 100,000 and they only do a run when they have enough orders to justify it. It could be 2 weeks or it could be 6 months. If it comes in 2 weeks, you run into the same issue as 1.1. If it comes in 6 months and you experience some unexpected sales growth, you could run out of stock and be stuck out of stock for a long time before you can get more in.​2) Some manufacturers do stock things, but their pricing structure is still based on volume. We may only sell 1000 a year of something, but we have to order 2500+ units to get a sustainable margin. Again, a bunch of capital gets tied up in one SKU that will mostly sit on the shelf for 2 years.
3) Margins in this industry aren't nearly as good as I thought. In my experience in the retail gear industry, parts and accessories generally had the best margins. However, parts that sold for $10 in the retail store sell for $5 in the competitive online parts distribution industry. There aren't really any high margin items to offset the low margin ones. You have reasonable margin items and "why the hell do we bother selling this stuff?" items. Maintaining a high volume of sales is paramount!

Naturally, all of the above only scratches the surface, but it gives people an idea of just some of the small challenges new Canadian business owners face in the music gear industry.


----------



## Steadfastly (Nov 14, 2008)

Very good points JB. Many people don't understand just how difficult the retail business can be and how cutthroat many of the manufacturers are. Most large manufacturers just don't want to work with a small company.


----------



## greco (Jul 15, 2007)

jbealsmusic said:


> *Retail business success 101: Don't sell what you love, sell what your customers will love.*


WOW!!...An amazing and informative read! Thank You! 
Stuff I had no knowledge of at all. 

I quoted the above as a strong reminder to all in business (or contemplating the idea).



jbealsmusic said:


> Experience should have taught me otherwise, but I'm a stubborn bastard.
> %h(*&


You are in excellent company.

Cheers

Dave


----------



## High/Deaf (Aug 19, 2009)

Steadfastly said:


> Very good points JB. Many people don't understand just how difficult the retail business can be and how cutthroat many of the manufacturers are. Most large manufacturers just don't want to work with a small company.


Yep, retail is tough.

And it doesn't help that some people actively promote buying in another country and having it shipped to Canada. Can you imagine?


----------



## 4345567 (Jun 26, 2008)

__________


----------



## Distortion (Sep 16, 2015)

Often wonder how they keep the doors open. Lots of staff and not much action at the till.


----------



## Steadfastly (Nov 14, 2008)

Distortion said:


> Often wonder how they keep the doors open. Lots of staff and not much action at the till.


Having served the retail industry for going on 20 years, January through to May has always been traditionally slow, Is this what you're seeing or are you speaking about what you are seeing on a year-round basis?


----------



## LanceT (Mar 7, 2014)

Steadfastly said:


> Having served the retail industry for going on 20 years, January through to May has always been traditionally slow, Is this what you're seeing or are you speaking about what you are seeing on a year-round basis?


Do you mean to say having served _in _the retail industry? I don't know much about retail but 5 months of the year of having slow sales would seem a good idea to find something else to do.


----------



## troyhead (May 23, 2014)

jbealsmusic said:


> There aren't really any high margin items to offset the low margin ones.


Ever thought of moving into a space that gives you some of the higher-margin products? You have a lot of great stuff that is aimed at people who have some skills building things, and that's great. But what about appealing to those a step down in skill level. You already have the parts, you could add some value, and then sell for a higher margin.

For example, you already have lots of electronics, perhaps you could sell completed wiring harnesses. You sell everything to make custom speaker cabinets except the wood, so maybe you could sell custom speaker cabinets. Or you could get into pickups, or bigger guitar parts like bodies and necks. I know that takes more resources and skills, but those are just some ideas to expand your market. And I know that there are options for stuff like this already, especially in the US, and a lot of that comes from cheaper Asian sources. But if you play to that, you could make it one of your strengths.

Anyway, I'm sure you've thought of that. I just thought I'd make a pitch for more products for "the less skilled".


----------



## jbealsmusic (Feb 12, 2014)

troyhead said:


> Ever thought of moving into a space that gives you some of the higher-margin products? You have a lot of great stuff that is aimed at people who have some skills building things, and that's great. But what about appealing to those a step down in skill level. You already have the parts, you could add some value, and then sell for a higher margin.
> 
> For example, you already have lots of electronics, perhaps you could sell completed wiring harnesses. You sell everything to make custom speaker cabinets except the wood, so maybe you could sell custom speaker cabinets. Or you could get into pickups, or bigger guitar parts like bodies and necks. I know that takes more resources and skills, but those are just some ideas to expand your market. And I know that there are options for stuff like this already, especially in the US, and a lot of that comes from cheaper Asian sources. But if you play to that, you could make it one of your strengths.
> 
> Anyway, I'm sure you've thought of that. I just thought I'd make a pitch for more products for "the less skilled".


The current challenge for both us and our customers is patience. Can't say much other than that we have many plans going forward.


----------



## Distortion (Sep 16, 2015)

Steadfastly said:


> Having served the retail industry for going on 20 years, January through to May has always been traditionally slow, Is this what you're seeing or are you speaking about what you are seeing on a year-round basis?


Year round. The one by me has probably 15 employee's on a Saturday. $14 an hour X 15 X nine hours and money going out adds up.


----------

