Equipment Prices

[Thunderbird]

I am going slightly of topic here but you hear all these firms moaning about there trade suffering and that they can;t compete with on line firms but yet the directors and bosses all seem to live in big houses and drive big sw***y cars so things obviously are not as bad as they make out. And also it is not just about Thomann being cheaper they have great customer service unlike many shops here that dont give a monkeys about the young kid with a tenner to spend on strings and just want to sell high end gear at a nice profit I am afraid lots of so called music shops are there own worst enemy

[molan]

[quote name='Thunderbird' timestamp='1420919278' post='2655113']
I am going slightly of topic here but you hear all these firms moaning about there trade suffering and that they can;t compete with on line firms but yet the directors and bosses all seem to live in big houses and drive big sw***y cars so things obviously are not as bad as they make out. And also it is not just about Thomann being cheaper they have great customer service unlike many shops here that dont give a monkeys about the young kid with a tenner to spend on strings and just want to sell high end gear at a nice profit I am afraid lots of so called music shops are there own worst enemy
[/quote]

Which firms are moaning and have owners living in big houses and driving sw***y cars?

Just interested because I've never met any of them. I'm not doubting they might not exist just interested to know who they are?

[skej21]

[quote name='molan' timestamp='1420924645' post='2655202']


Which firms are moaning and have owners living in big houses and driving sw***y cars?

Just interested because I've never met any of them. I'm not doubting they might not exist just interested to know who they are?
[/quote]

It's interesting how differently those within Music Retail are viewed by those who aren't! All these false ideas about huge profits, bad attitudes to customers and everyone living like Premier League footballers.

I don't think anyone who has ever been involved in music retail would ever support those ideas as they couldn't be further from the truth.

My friend worked for a VERY big UK music retail multiple and they used to have their lunch on the shop floor as they couldn't afford to have lunch away from customers as they needed the tiny commission percentage to top up their wages (which were substantially lower than a living wage!). Luckily, my experience was with a music retailer who paid a salary which meant I got paid the same whether I took £10 or £10k in a day :-)

[Thunderbird]

[quote name='molan' timestamp='1420924645' post='2655202']
Which firms are moaning and have owners living in big houses and driving sw***y cars?

Just interested because I've never met any of them. I'm not doubting they might not exist just interested to know who they are?
[/quote] Many firms even big firms where I have worked say the have no money but bosses and directors always seem to do all right in general IMO

[taunton-hobbit]

Horses for courses i guess - Jeff Lewis runs Matamp out a shambolic old and cold mill up t'north. His executive transport is a old white van - he's not making a million quid a minute, but he loves his work & does his best to keep customers happy. I don't think there's many firms that you can call on Boxing Day morning & talk to the Guvnor (I did) - he gets my vote every time...........



Oh yes - the kits bloody impressive too............

Edited January 10, 2015 by taunton-hobbit

[molan]

[quote name='Thunderbird' timestamp='1420925408' post='2655222']
Many firms even big firms where I have worked say the have no money but bosses and directors always seem to do all right in general IMO
[/quote]

And they all run music retail businesses and sell high end gear and don't care about youngsters wanting to buy strings?

Edited January 10, 2015 by molan

[Thunderbird]

No but that some are and I know from a lot of the young people I help out they feel intimidation from going in most shops around here as they get ignored or the piss taken out of them etc I know not all shops are like this so please forgive my generalisation

[molan]

[quote name='Thunderbird' timestamp='1420926286' post='2655247']
No but that some are and I know from a lot of the young people I help out they feel intimidation from going in most shops around here as they get ignored or the piss taken out of them etc I know not all shops are like this so please forgive my generalisation
[/quote]

Sorry, I'm not not trying to be difficult here but, just to be clear, from what you've followed up saying, you don't know anyone in the music retail industry that complains about online retailers whilst living in large houses, driving flash cars and not caring about new young customers?

[Thunderbird]

[quote name='molan' timestamp='1420926633' post='2655255']
Sorry, I'm not not trying to be difficult here but, just to be clear, from what you've followed up saying, you don't know anyone in the music retail industry that complains about online retailers whilst living in large houses, driving flash cars and not caring about new young customers?
[/quote] Yes some are if you re read my post I said" no not all but some are"and some music shops I know of treat youngsters appallingly I have seen it and pulled the owner up and not used the shop again .For what its worth I don't think you are being difficult you are only trying to voice your views the same as I am Anyway sorry for my thread derailment guys

[molan]

[quote name='Thunderbird' timestamp='1420927274' post='2655261']
Yes some are if you re read my post I said" no not all but some are"and some music shops I know of treat youngsters appallingly I have seen it and pulled the owner up and not used the shop again .For what its worth I don't think you are being difficult you are only trying to voice your views the same as I am Anyway sorry for my thread derailment guys
[/quote]

I don't understand why you won't say who they are then?

[JTUK]

I am quite impressed with the young couple of local muso's who have taken over our local music shop.
They have been quite lucky in that 1 competitor has moved out of the town centre and gone 'elsewhere'
and the other moved his shop to his music school premises out of town so the town only appears to have
one high st presense. They work very hard and they go thru strings like nobodies business. Plus, they
seem to have a noticeable turnover ..esp acoustic gtrs as there are always spaces on the walls not long after
a restock. I used to go and chat to them but they always seem to have cutsomers..

[skelf]

45% profit margin is the land of dreams. If the margin in retail is bad it is the promised land compared to builders. Again there is a huge disconnect between the perceived money made by the builder and the actual amount made by people who have no understanding of how a business actually works.

With regard to trying gear. For eight years I have run the Moffat Bass Bash which will be the largest and most diverse selection of bass gear in Scotland which you are free to try out at your leisure. Amps and cabs that you can fully crank up in an actual live setting. Over 70 basses last year all available to try. But the number of people from the central belt that turn up to take advantage of this is pretty poor. So while I see on the forum much complaint about lack of opportunity to try stuff particularly in Scotland the one event that gives that chance struggles to attract any punters.

[kodiakblair]

Here's a thing I've noticed about " price fixing " if that's the right term.

Go to Guitar Centre and set the country to UK.
59 basses come up. No Fenders or Squiers but 22 MTD and 11 Rogue are listed.

You get the same result with Sweetwater and Musician's Friend. It's in the t & C if you look.

Protects the dealers over here but also tells me if the US store with overheads can sell items at $299 say where are all the £240 deals for us.

Squier VM Jaguar SS costs $179 at GC that's £119 but it's £191 from PMT even allowing for 20% VAT that's £48 more. Remember GC have
already included their costs in the $179 and US employees are subject to minimum wage and benefits too

25% more to buy a Squier in the UK then and the main reason I'll not buy any Fender products,it's the same with the other big players.
They don't get my money either.

[skelf]

Having imported a fair bit of wood from various parts of the world VAT is only the starting point with regard to the costs so allowing for 20% does not in anyway cover the import costs. There is import duty which on guitars runs at 4% which they add VAT on top of. Nor does it cover the transport costs to the port nor from the port in the USA and the various taxes applied. Equally when you see the list of charges that bringing anything into a port in this country which include things like a security charge, a fuel charge a DTI charge for what I have no idea. On my last import there was a VAT adjustment which meant they add £1600 to the value of the goods then charged me the VAT on it. If you are unlucky to have an inspection of the container then you get charged for that. If you are in a part container you get charged with unpacking your stuff from it. The list is almost endless. So 20% does not even begin to cover it. As I said if you don't have any idea of the actual process then it appears that people are making loads of money. This is my experience of importing into this country it is not cheap and cheerful at the level I work on. Most of this experience comes from bringing in a full container so I assume it represents the general approach to all containers. The part containers are worse.

[kodiakblair]

Skelf

You know as well as I do Fender ship containers over to Europe and the orders go out from there.
Shops don't contact Fender for stock directly they use the rep.

What you're describing is different.Importing raw materials from overseas is not the same as ordering from
a central depot.

Here's a link to the USPS/Fender service.

http://www.prnewswire.com/news-releases/ups-worldwide-logistics-tunes-up-fender-guitars-european-supply-chain-74657872.html.

[skelf]

As far as I am aware these costs apply to imported items into the UK someone has to pay them. Different codes apply to different goods but charges apply to everything as far as I am aware. As a general rule the end customer picks up the costs. The example you gave and that VAT does not account for difference is not taking the other costs into account. Even the import duty alone makes your calculation wrong. I would also assume the distribution via the rep must add a cost as well. The link does not appear to work.

Edited January 11, 2015 by skelf

[kodiakblair]

Right I'll find the link again.

Even allowing for 4% import duty that was still a £40 price difference I quoted and that was with the VAT removed.As you know
VAT is pasted on to the Buyer in country,you buy in Germany you don't then pay VAT in the UK.

We're not talking about unique items here but stock goods. Fender have distribution centres in both the UK and Germany so
shipping is greatly reduced though it will be costed for.These centres supply the whole of Europe and that's a lot of basses.

I showed two companies selling the same item,both with overheads and staff to pay yet the UK store charges £72 more or
£40 once VAT and duty are removed.Remember these are store prices so all costs are ready included.

Do you really think it costs anything like another 20%. I'm not singling out the UK shop it was the first I compared with GC.

Try that link again

http://www.prnewswire.com/news-releases/ups-worldwide-logistics-tunes-up-fender-guitars-european-supply-chain-74657872.html

It's basically USPS ship Fenders to Europe then give them a Set-Up before they go out to stores. That might eat into the 20% but it
also comes out of the staffing costs so swings and roundabouts.

[timmo]

As a matter of interest, has anyone bought from on online company, and sent some stuff for trade? If so, were the trade deals better from the online company than the local shop?

[skelf]

Based on my own experience yes I do think 20% can be accounted for through expenses mentioned and things like the exchange rate.

[ead]

I have imported (an exported) a fair few containers in my time. Import duty, VAT, customs charges, inspection charges, storage, fuel (I could go on) are very real costs and all go on top of the shipping cost from where ever you ship from. In my case eastern europe and the far east mostly.

Clearly the more stuff you have in a countainer the lower the unit cost of all the above will be. I used to ship 40ft containers of fabric around, so light, a bit bulky but you can get a lot in so my unit cost was less than £1. But clearly a different situation, as from a shipping perspective less to go wrong in transit.

Take a bass, in a box, in a container then the unit cost will spiral upwards to a significantly higher value. Not that up to date on shipping costs (it used to cost me around USD1,500 for a 40ft container from China) so can't speculate but I suspect the unit cost would be around £30-£40 for a container stuffed full of instruments. I could be a bit out here as I said.

Also to note that the US have a sales tax that varies from state to state which is analagous to our VAT. If you are exporting you knock that off and check charged at the point of entry to the EU at the rate prevailing.

[kodiakblair]

Okay

Skelf we'll agree to differ.

[molan]

We bring a lot of stuff over from the USA and there's always a lot more than 20% VAT to add on top.

The latest one we were hit with was a £55 charge for the importing company levied on us for admin to pay the various import duties and customs clearance charges.

The total bill on 4 basses ended up at £1,550!

The other one that we often get hit with is fuel surcharges for collection at point of pick up and delivery from the airport to our shop.

One recent charge was £25 from Heathrow which is only 20 miles away.

Insurance on instruments is a bitch as well

It never ceases to amaze me just how many additional charges there are over and above simple core shipping cost and VAT.

[kodiakblair]

Molan

There's no way I'm going to ask what the order was for. That's company business alone.

Judging from the products for sale the charge could be on products retailing at £2000 odds and the company would go bust

up to a retail value of £32,000 where it's about 5%. That's still a lot of money but in line with normal business practise.

Import duty is 3.5% and Customs Clearance is £8 so the importing company's fee isn't high.

As the VAT is pasted on to the customer it's not at issue here nor is the cost of importing and insuring small quantities of valuable
instruments.

My problem is Fender,Gibson et al banning companies from selling direct to the UK and forcing us to pay prices they set, not what the UK
shops have to charge.It costs no more to ship a container from the Far East to the UK than it does to ship to the US. That's why I used the
Squier example.

I said those companies won't get my money not the shop used as an example. Hope that's clear, this is not a dig at UK shops.

[ead]

I think I'm going to agree to differ with you kodiakblair.

[molan]

[quote name='kodiakblair' timestamp='1421008726' post='2656176']
Molan

There's no way I'm going to ask what the order was for. That's company business alone.

Judging from the products for sale the charge could be on products retailing at £2000 odds and the company would go bust

up to a retail value of £32,000 where it's about 5%. That's still a lot of money but in line with normal business practise.

Import duty is 3.5% and Customs Clearance is £8 so the importing company's fee isn't high.

As the VAT is pasted on to the customer it's not at issue here nor is the cost of importing and insuring small quantities of valuable
instruments.

My problem is Fender,Gibson et al banning companies from selling direct to the UK and forcing us to pay prices they set, not what the UK
shops have to charge.It costs no more to ship a container from the Far East to the UK than it does to ship to the US. That's why I used the
Squier example.

I said those companies won't get my money not the shop used as an example. Hope that's clear, this is not a dig at UK shops.
[/quote]

I think you're missing point that those big guys simply can't ship to the UK for free and there are loads of costs you're ignoring in your calculations.

Most of the big guys send to a Central European warehouse. I know Fender CS go to Holland but not sure if this is the same for Squier or lower end Fenders. There's a significant overhead in maintaining this warehouse and also a sizeable cost of stock held waiting to be ordered.

Individual UK shops can order single units to meet demand or block order larger consignments. Either way there's a further cost of shipping from the warehouse to the UK - plus we're an island so this cost is generally going to be higher than internal freight inside continental Europe.

There's then a further cost in running a full, locally based, returns, warranty and repairs team (also with additional courier charges). Again I only know how the UK CS operation works but any warranty issues are dealt with promptly, returns are sent to Haywards Heath for assessment, you get a fast response and they either fix the issue on site or request a replacement.

There's an additional network in place for rarer items whereby Fender UK can approach Holland or Germany (where a lot of instruments at also held).

All of this costs money and there will be an inevitable tickle down effect in h cost of every instrument sold.

Of course the US will have similar systems but their costs of transport are way lower than European costs and setting up a secondary infrastructure for shipping, storage, distribution, sales etc is almost certainly higher in Europe than in the States.

All,of those costs quickly add up and are reflected in the price differential between US and UK prices. As soon as you add the increased average price of a UK retailer's overheads then this exacerbates the final consumer price difference even further.

I could be wrong but, based on our experience, the margins aren't great on these instruments. I genuinely don't think UK consumer is being purposefully screwed on price, it simply costs more to get them in their hands than it does for US customers because the core business base has been set up to service the 'domestic' market as a priority.

NB - The ones at I never quit understand are some European (including British) brands that are available at lower prices in the the US than over here. We had a recent example where it was cheaper for our customer for us to buy a European brand of pickups in the US from another retailer, ship them over here, pay duties and VAT and then pay UK postage costs. We actually undercut a 'large German online retailer' this way and the product we bought was made in Germany!