Retail price with discount or lower sticker price?

Mr-M · 2011-06-29T15:25:39+00:00

There's been a lot of heated debate lately about SA prices for guitar gear. One of the things that kept coming up (aside from the obvious), is that a store's sticker price on the guitar/ amp/ pedal is always a non-discounted price. In other words you usually have to ask for your discounted price before you know what you'll pay. Some frustration was expressed at not being able to see up front what the price is just by looking at the price tag and some questions were raised as to why it is that way. The answer is simply because that's how it has always been. It's not like you can say to the guy in Incredible Connection that you saw the same laptop at Matrix for less and unless he beats the price, you walk. For non-guitar products, we usually find the product we want in the price range we're shopping in and pay the price without haggling. Strangely music shops still operate like 3rd world open air produce markets. The question to you, the average guitar player is this: would you prefer to see the lowest price advertised on the item up front? In other words, a similar system to the USA, where there is a Retail and Street Price - which is what you pay. I'm genuinely interested what guitarists out there think about this. Perhaps I can use your feedback to help change the industry for the better? Or do you prefer the current way of things - getting a good deal because the store gives you a discount? Many customers do genuinely prefer this, so if you're one of those, speak up. This is NOT ABOUT SA PRICES BEING TOO HIGH Therefore, no discussion on that please. It's been extensively covered elsewhere. Your opinions please?

chris77

And lets be honest, 99% of this forum are bargain hunters and DONT buy new gear anyway!!!

When last did some one here buy a Martin/Taylor/Larrivee/Gibson direct from a store? (I'm talking to the 99% here)
Sorry I just don't get what the fuss about all this is.. who cares? ?

[/quote]

Precisely. And that's maybe why Mr T, and hopefully some of the other players in the market, are trying to find a new approach to change this. Selling luxury goods in an economically stressed period has to be hell. I agree with your statement that only 1%, and maybe even less, of the market are able to buy the expensive stuff, and building a business on that small a base.... how can you possibly survive? And with the internet making potential buyers more aware of what's available elsewhere.... it must be a nightmare.

Mr T, Kudos for approaching the market and asking for input. I hope that with your know how and experience you can find a way to accomodate everybody and still run a profitable enterprise. Like I said, I live in a gear-barren wilderness and do most of my shopping online, so I am probably the last one qualified to offer my 2c in this thread - but every opinion helps when you're trying to guage the sentiment of a diverse group. Sterkte!

aubs1

chris77 wrote And lets be honest, 99% of this forum are bargain hunters and DONT buy new gear anyway!!!

When last did some one here buy a Martin/Taylor/Larrivee/Gibson direct from a store? (I'm talking to the 99% here)
Sorry I just don't get what the fuss about all this is.. who cares? ?

I agree ........ "The bargain-hunters' forum...... " ?

AlanRatcliffe

Maybe I should try and put this into perspective...
[Please note this is my take of what has happened in the industry in the last decade (and I've been outside it for more than that), so if anyone else with more info wants to chip in and add or correct anything, feel free...]

The local music industry used to have a strict, agreed-upon policy on discounting: no discount on credit, 10% for cash, 15% for pros, 25% for studios and broadcast. The only way you could get better discounts was to land an endorsement deal or work in a store yourself (which was often viewed as a kind of endorsement anyway - it's easier for a salesperson to sell an item if he owns one himself). Turnover was relatively small in those days and the industry would have collapsed if cowboy stores started selling at cost +10% the way they do these days - there just wasn't the turnover to keep the stores in business at those low gross profit margins (and generally higher overheads than other industries). So stores that did things like that would find themselves quickly unable to buy the products they were discounting too heavily once the distributor found out about it.

Manufacturers and distributors also had an interest in keeping the perceived value of a product up - if someone discounts heavily - the perception of it's value (both new and secondhand) takes a nosedive. The discussion here illustrates that principle only too well.

Things have changed a little now. We've been though a time when exchange rates plummeted and the price of imported gear (i.e. all of it) doubled and then tripled nearly overnight. The economy also took a hit and people were not making as much money as they used to. People hung on to what they had and only bought what was essential. The industry was forced to adapt just to survive. Stores started offering huge discounts to anybody just to get the sale, and while some of the bigger stores were slow to adapt this has become the new industry norm. But there are no standardised structures in place, so discounts are naturally all over the place.

Fortunately the market has picked up again, but it has still changed. So what we now have is stores selling at lower margins (on average), but fortunately they are selling more product, which helps even things out. On the other hand, overheads are up (if you move more product, all your overheads escalate - space, storage, staff, etc.). So they do need to make profit where they can (or does everyone now begrudge them earning a decent living?), and if they can maximise profit on certain sales, it helps them make up for the profit they are not getting on other sales.

What I don't get is we are getting relatively better prices than ever before and people are complaining about it. As buyers who are now able to command 25 - 30% discount we should be thankful for it. Not take it as evidence that someone, somewhere is being ripped off... Or would you prefer to go back to getting 15% (if you are lucky).

domhatch

my larrivee i bought new - sticker price 22k. i said i had only 15 to spend, and that's what i paid. my strat i bought new, about 10% off sticker, but i also bought the blues jr with it, and that was discounted too, to about the same degree - that after having traded in a whole bunch of stuff. the vox was on special, about 15% off what i guess was retail. all of these came from the same store. i go there quite often, and have bought bunches of stuff from them.

my prs i bought in oz, so that's out of the story, but it was second-hand from a store, and the price matched the levels i saw on the net pretty well.

having said all this, here are my thoughts. i would love to know, up front, what the store is expecting to get for 'this particular item'. i know, when i walk in, what i'm looking for, and what my budget is. i might very well walk out without talking to anyone if i believe i'm being ripped off over what i can get at another store; in fact i have done so before. i tend to stick with stores where i know i can get what i want at reasonable prices. but man, it would help if it was a level playing field out there, rather than having to do the maths in your head of sticker-less-discount from one store to the next.

just my thinkage.
dh

AlanRatcliffe

domhatch wrote i would love to know, up front, what the store is expecting to get for 'this particular item'.

And the answer to that one is always the same, regardless of where you shop: "as much as they can". ? They'll compromise to some degree, you probably will too, but at the end of the day you both need to be happy with the deal or it doesn't happen.

IceCreamMan

looking at the 6 flagshhip stores (excluding branches) within 10km radius of my house and having an inkling of business and normal profits etc i would say there is a nice mark up on equipment and one has room to haggle.

i often see 2nd hand used prices here an on gumtree higher than what i can get the item brand new for .... then they are advertised as being greatly priced ....

case in point .... on an amp made by a brand that rhymes with Fender the retail price was 5950 , after discount i was offered it at 4500 , with a bit of haggling the same amp was offered to me at 3590. scouring the classifieds here someone had bought the same model amp 2nd hand for 4000 and thought he had scored a fantastic deal. (which i spose he had). At 3590 the dealer was still making a margin as the amp retails for 299 dollahs and 239 pounds. importer pricing would of been keener.

i guess this market is a nice one to operate in as it gives the salesman room to manouvere and make decisions to close deals ....i like it to some extent as i believe i benefit from it.

do yr homeork ,,,, enjoy gas but dont be blinded by it ....

Mr-M

PeteM wrote The reason for this thread, as I understand it, is for Mr T, who is in industry, to get some kind of feedback from the consumer base... a micro qualitative research exercise if you like. I do hope the industry is looking at the replies so that they can get a clearer idea of what the consumers wants.

chris77 wrote Mr T, Kudos for approaching the market and asking for input. I hope that with your know how and experience you can find a way to accomodate everybody and still run a profitable enterprise. Like I said, I live in a gear-barren wilderness and do most of my shopping online, so I am probably the last one qualified to offer my 2c in this thread - but every opinion helps when you're trying to guage the sentiment of a diverse group. Sterkte!

Thanks! ? Both PeteM and chris77 are quite correct. That's exactly what I'm after. 8)

vic wrote This a lekka thread Mr T ? Are you any wiser by now ? ?

Very much so, thanks.

Every opinion counts and I would like to say thank you to everyone participating and offering their opinion on the issue at hand. :applause:

AlanRatcliffe

One thing that I don't think has been mentioned up to now...

One of the other main reasons for not having a "final & fixed price" on items is that it forces you to get a salesperson involved in the sale. As has been pointed out already, musical instruments and accessories are specialised items, so they do need more input to the sale from the salesperson than "cash or card?".

To coalesce a lot of what has been said already into one short sentence: the other big reason for not having a fixed price on an item is the price is not fixed or final (at least until you pay for it). Haggling is allowed, trade-ins may be accepted, you might have more pull as a buyer (for whatever reason), replacement of that item may be at a higher price or it may have been bought as a batch at a better price (allowing more wiggle room on the discount). And just because someone else paid more for the same item, doesn't mean they have been "ripped off".

PeteM

Alan Ratcliffe wrote And just because someone else paid more for the same item, doesn't mean they have been "ripped off".

That's what you might think Alan, but a big chunk think otherwise as is evident on this thread. And the point of this thread is to gleen consumer perceptions. I would have thought the comments passed here are invaluable info for the industry. They may choose to ignore them but I would suggest that might be somewhat shortsighted.

domhatch

Alan Ratcliffe wrote One thing that I don't think has been mentioned up to now...

One of the other main reasons for not having a "final & fixed price" on items is that it forces you to get a salesperson involved in the sale. As has been pointed out already, musical instruments and accessories are specialised items, so they do need more input to the sale from the salesperson than "cash or card?".

To coalesce a lot of what has been said already into one short sentence: the other big reason for not having a fixed price on an item is the price is not fixed or final (at least until you pay for it). Haggling is allowed, trade-ins may be accepted, you might have more pull as a buyer (for whatever reason), replacement of that item may be at a higher price or it may have been bought as a batch at a better price (allowing more wiggle room on the discount). And just because someone else paid more for the same item, doesn't mean they have been "ripped off".

quite so. after all, 'oh what a tangled web we weave when first we practice to deceive...' having had my say above, i think it's patently obvious to those of us who've spent even only a small while looking around for gear what's fair and what ain't. it would be nice to know exactly what the lowest common denominator is, store to store but, i concede, that would probably take some of the fun out of the process.

and the bragging rights too...)
dh

IceCreamMan

Alan Ratcliffe wrote One thing that I don't think has been mentioned up to now...

One of the other main reasons for not having a "final & fixed price" on items is that it forces you to get a salesperson involved in the sale. As has been pointed out already, musical instruments and accessories are specialised items, so they do need more input to the sale from the salesperson than "cash or card?".

To coalesce a lot of what has been said already into one short sentence: the other big reason for not having a fixed price on an item is the price is not fixed or final (at least until you pay for it). Haggling is allowed, trade-ins may be accepted, you might have more pull as a buyer (for whatever reason), replacement of that item may be at a higher price or it may have been bought as a batch at a better price (allowing more wiggle room on the discount). And just because someone else paid more for the same item, doesn't mean they have been "ripped off".

at the time of buying the buyer is prolly not feeling ripped off but believe me if we compare notes and i paid 20 % less than he did some sort of homeostatis wobble would occur and he would feel ripped off.
The concept of value and utility is not an exact science but everyone feels ripped if they paid more for the same item than their buddy.

StephenG

... and now , of course, this whole thing can come back to bite us in the arse, with the retailers, having read this thread, turning around and saying

' Sorry for all the price confusion in the past folks, from now on, the price you see is the price you pay, no more haggling'..

Bob-Dubery

PeteM wrote
Alan Ratcliffe wrote And just because someone else paid more for the same item, doesn't mean they have been "ripped off".
That's what you might think Alan, but a big chunk think otherwise as is evident on this thread. And the point of this thread is to gleen consumer perceptions. I would have thought the comments passed here are invaluable info for the industry. They may choose to ignore them but I would suggest that might be somewhat shortsighted.

How are they being ripped off? You and I go to the same shop and buy the same article. You, because you're a regular customer or because you're a teacher and send them lots of business, get an extra discount. That's nice for you or, depending on POV, what you deserve and I might be green with envy, but I haven't been ripped off. You got rewarded for your loyalty.

vic

StephenG wrote ... and now , of course, this whole thing can come back to bite us in the arse, with the retailers, having read this thread, turning around and saying

' Sorry for all the price confusion in the past folks, from now on, the price you see is the price you pay, no more haggling'..

That will be great imho as long as it is their "rock-bottom" price (The TRAD AFTER-DISCOUNT-PRICE) and not the inflated RRP......but even then they will leave room for discount to their "loyal clients".... ?.
Always remember there's a good "pre-owned" market outside of their walls...the most recent example being the mint VibroKing cab for sale at R3000 on this forum.... I was quoted a staggering R9600 (cash) for this here in CTown.

chris77

Alan's post hit the nail on the head. (As it always does ? ) The system isn't perfect but it's become the norm now. It will be hard for merchant X to price his products fairly if merchant Y isn't doing the same. Merchant Y will always then be able to beat X's price when confronted because, unlike X, he makes up his margin by selling at a higher price when the buyer doesn't know better. So it's here to stay folks, like it or not. Personally I don't.

Norman86

PeteM wrote
Tokai SA wrote But guitarists are inquisitive, they always ask what the retail price is so they can work out what discount they're getting...that's why I suggested both prices on the tag.
The industry has created this inquisitiveness because of the discounting practice... I suppose now it'll be difficult to reverse the process.

If the industry hadnt created this, customers would not expect this.

I still dont agree with many of the comments here. and neither do most people by the looks of it.
The internet has helped show what the price of items should be. so the price on the sticker should be close to the true value, not the completely inflated mark up.
If it isnt, people will just buy off the net anyway.
Leaving the whole argument void and null, because we wont need music shops anymore.
When people dont find what they want, they make a plan to.
Even if it means for example. buying Fender from the States, from a dealer there who is willing, and getting it here, shipped, at a fraction of the price.
After all, a saving is a saving.

And, when people are complaining how we dont support the local dealers, but are buying direct from the manufacturers because they have contacts there... Who isnt supporting the local shops???
People should follow their own advice i have seen on this thread, before talking down on the "common folk" who dont want to be taken for a ride!

Wizard

At the risk of fueling this fire again; does anyone pay the listed price for a guitar?

chris77

Well, after this nobody who has followed this thread ever will.... ?

AlanRatcliffe

Norman86 wrote Leaving the whole argument void and null, because we wont need music shops anymore.

I'm trying to keep it nice here, but to put it mildly: that displays a complete and utter ignorance of how things work.

If there are no local stores, where are you going to get your plectra, sets of strings (or singles), capos or any number of other smaller items? While VAT is only 14% on the rand value, customs clearance fees are R30 with the PO and +/-R150 per package with most international couriers - that makes ordering any smalls in low quantities unfeasable. Most stores who sell strings work on a minimum shipping charge, which means you have to obuy in bulk and pay a couple of thousand rand at a time before it becomes viable. What do you do when something goes missing in the post? Have you actually priced shipping an amp from the US? Or heaven forbid a speaker cab? Your PA? A set of drums?

What about the knock-on effect? No local music industry means no Bothner's, Marshall's, Music Mate, etc. Who is going to sponsor the more successful local artists and bands, who's going to put up prizes for competitions, lend the PA for big events, who is going to host free workshops with players like Mattias Eklundh, Guthrie Govan, etc.? Who is going to advertise on this site or in Muse mag so you can have access to them for free?

Even if it means for example. buying Fender from the States, from a dealer there who is willing, and getting it here, shipped, at a fraction of the price.
After all, a saving is a saving.

Tell that to my friend who just broke his brand new HD500. Not a warrantee repair, so if there was no local distributor, who would repair it? Or any specialised musical item for that matter? Even if you find someone who can service the device in question, just having to order spares for every little thing from the US What if it's still under warrantee - are you going to pay to ship it back to the US, then back here again (and customs will hit you for duties on the value when it re-enters the country).

And, when people are complaining how we dont support the local dealers, but are buying direct from the manufacturers because they have contacts there...

Who is? Everyone who has spoken of getting better prices has said they have done so by developing a relationship with a store. In very rare cases, from the local distributor - but usually that is an endorsement deal. The only items some of us are getting directly from the manufacturers are from those boutique brands that only sell directly - and they do not discount unless you are a big international name. The only items I get for free from a manufacturer are when I'm helping to beta test something before release - and that is all too rare (and BTW - I still have to foot the VAT and duties on the retail value of the item, so it costs me money anyway). Even if I review something - it comes from the local distributor and they want it back again when I'm finished.

Norman86

Alan Ratcliffe wrote Have you actually priced shipping an amp from the US? Or heaven forbid a speaker cab? Your PA? A set of drums?

At least when im pricing an item in the states, im getting the US street price, and its the same, or close to the same from all the places you look...
Here, all you get is a RRP, and the discount is never the same, from one salesman to the next, in the same shop. never mind from different shops!

And THAT is why we'd like the correct price to begin with ?

I must be honest, if im going to buy a set of strings, i buy a few sets at a time... and i dont mind buying online...
even from SA vendors... Havent had a problem!
Plectra is available too... capo's too. This, from online SA music shops!

importing the other stuff... im sure it can be done at a more reasonable cost... there are ways, and people go out of their way to find these ways!

The problem starts though with walking onto a shop, and seeing the RRP, not the street price!

People like consistency, not inconsistency!

And again, maybe it will be a good thing t get rid of this discount attitude.
IMO, it doesnt devalue a product, or the value of a product. Bad service and support devalues a product!

And salesmen should get sales by being knowledgeable, friendly, and courteous to customers!
Not by offering the biggest discount!

You wont by a guitar with a tag of R10000 and discount of 50% from one store, when the same guitar is R8000 tag but discount of 37.5%.
it comes own to R5000 from either shop... so unless you want to say "hey, i got 50% discount", thats just stupid!
You would by from the store with the best service! even if it cost a little more!

« Previous Page Next Page »