I've been hearing more and more that local businesses (including music stores) are losing substantial business because people are increasingly turning to the internet for their purchases. The attraction of volume internet retailers, is that they typically offer steep discounts. Another reason people are turning to internet & mail order sales, especially for big ticket items like arranger keyboards, is that internet retailers typically don't collect state/local sales tax, if you live out of their state. This can really amount to a hefty sum of money (hundreds of dollars) especially if your local state sales tax is over 8%, and the item costs $2,000 and up.

It appears now that no matter how much personalized service & attention a local dealer might provide, the substantial cost savings offered by a large internet dealer is becoming increasingly more appealing as the economy has us all watching our pocketbooks more closely. In the meantime, many of the large online dealers have quickly gained our respect as dealers we can trust, many offering generous refund/exchange polices that local dealers can't match. Some internet dealers even provide free after-market telephone/email support and warranty service referal.In addition, with the internet onslaught of message board forums and online chat rooms, just about any question or problem you encounter with your product now has a dedicated forum devoted just to it. Because of this, you might even get a response & solution quicker than the local dealer can.

Ok, so exactly what do you gain if you purchase from a local dealer? The only thing I can think of at the moment, is the sense of 'moral responsibility' of contributing to help keep local business' afloat. Even if this were the only reason, this is still a very IMPORTANT reason to consider.

My intent of this thread is NOT to insult or de-value small local dealers in any way, but merely an observation of what appears to be a revolutionary consumer purchasing shift which has taken place in just a few short years both in the USA and around the world. For better or worse, it is changing the way we do business.

I'm really interested to hear other people's thoughts & views on this subject.

- Scott

Just the opposit Scott. Since the intervention of the "INTERNET" most smart businesses have Increased Sales through Store Website Shopping, Email Catalogs, News Letters, and many other avenues online, and many sell on Ebay and online auctions which increase sales tremendously.

hi Donny: Good point. Never thought of it that way. I guess it has a lot to do with a local business' ability to CHANGE with the times.

Still, it seems that local business (storefront) sales have dropped, while their 'out of state' internet sales increased. This still affects the 'local' economy: tax base, local jobs, etc.

Alan Jackson's song: 'Little Man' highlights the plight of local businesses to corporate chains.
http://www.lyricscafe.com/j/jackson_alan/aj65.html

Ok guys, please keep the thoughts flowing.

[This message has been edited by Scottyee (edited 11-13-2002).]

Scott,

the sales tax issue is temporary. By law one is supposed to pay state sales tax even if he is purchasing the item out of state (though few actually do). Nevertheless, some states have wisened up to this issue - I believe that New Jersey has an electronic database to track out of state purchases, so that they can collect the state sales tax. It is only a matter of time until the power of computers will be harnessed by other states to collect the sales tax.

I believe that what really hurts small local retailers is their predatory pricing practices. A local store was quoting me a list price of $6000 for Technics KN7000, and offered me a deal of a lifetime of 30% off if I bought that day.

In a way, these are the days of an educated consumer. Most of us know more than most salesmen about the new instruments, and the main benefit to the consumers of having a small retailer locally is the ability to try the instrument before paying for it.

Of course, I am not talking about really knowlegeable people like George Kaye or Dan O., but the majority of the store owners who only know the prices of the instrument, rather than any technical features.

A retailer who can offer a 30 day return and competitive pricing can do very well in the marketplace - they would be able to reach users who are too far from the local store, and at the same time outbid the price gougers.

Regards

Hi Scott,
You make some valid points however there are many more to be made. I will touch on a couple of points that effect us as local consumers.
I have owned businesses all my life, having built from scratch 5 corporations, the largest having 165 employees. Our problem was always offshore competition. Realistically I think it still is. We don’t know who owns these major on line companies that we deal with because it is not important to us.
Musicians Friend used to be a local company up in a small town in southern Oregon. I knew the owner and many of his employees as I often went through there and always stopped to visit and buy something. Now it is a major privately held corporation warehousing in the Midwest and who knows who the principals are?
You and I suffer the same problem of dealing with the same dealer in different locations. I can’t believe that you get treated much different 50 miles up the street then we do down in San Jose.
A case in point. The Technics 6000 was list priced and advertised at $5950.00. Parts and service are non existent unless it is through a third party contractor that you contact. The sales people that I was familiar with were great pianists and organists, as it is a piano/organ store, however they barely knew how to turn a keyboard on and play the demo. Answers to questions? Forget that!. Do I buy locally? Only if they match my best cash no trade offer and I am a cash and carry customer that knows I will not see the inside of that store again until I am ready to make another offer on a new model.
We could use a store in this area like I perceive the store that our member George owns. I can see that he is a businessman, and intends to sell his customer time after time. I understand that he has survived these many years because he gives his customers what they need and think they want. That builds loyalty that overcomes price. The customer is willingly sharing the overhead cost of the service, advice, parts and follow up that so many need and want. That is worth a lot more then the last dollar of discount on the new shiny keyboard on the demo floor.
I have considered starting such a store in this area, but I feel I am too far past my prime to start another business. Someone will though. The opportunity is there and it will happen. You can only take advantage of your customers for so long and the void created will be filled, almost always.
I leave you with these thought as I am sure there are many here that will add to our posts.
Best to all.
Bebop

Well Scotty, this is what is happening to me. I manage a small specialty furniture store. We carry sleep products such as flotation, air, memory-foam, futons, etc.
We do not carry any well known standard mattresses such as Sealy etc,
So, people will only buy these products if they can see them in person, touch them, try them out, ask questions. To do business we rent retail space, warehouse space, advertise, hire staff, pay fees and taxes and lawyers and on and on. And so some people will come in and touch and try and ask and learn----and then buy from an online store that is just a warehouse and a web page. Which means that someone is selling off MY floor, using MY sales help and MY advertising!
And these customers act like I am the "ripoff" because I cannot match the price of a predator who has done NOTHING to educate, inform, or give any service whatsoever. I tell you, if you do not have to pay retail rents and sales help, if you just work out of your home with a warehouse, you can sell for very little profit and still make money. BUT---these sales would have never been made without a "real" retailer doing the real job of selling.This is predatory, it is unfair, and it may very well put a lot of stores out of business. And then where will you go to see and touch and try and learn? And will people still buy online when they cannot see it in person? Yes, if you really know what you want and need. But if you need a local source of information and service, if you value the hands-on experience, then you should buy from those that provide it. NOT just for any "moral" reason, but for the very practical reason that it is in your own self-interest to have that local presence survive.It is not just at the ballot-box that we vote, but with every purchase decision we are voting for what type of world that we will live in. I will NOT reward stores with rude or useless staff with my business, even if they have the best price.
But it appears that I am in the minority on this matter. For many shoppers price is the only thing that matters.
And yeah, I'm mad about it!
Bill E

The more things change the more they stay the same. Local merchants face the same upside potential and downside effect from the internet that they faced by the mail-order businesses.

Simply stated there are a certain percentage of customers who buy strictly based upon price.

The irony is today’s consumer is better educated than ever before and expects the highest level of service in all aspects of their lives. We have all grown accustom to liberal exchange policies, frequent buyers bonuses and many other perks that are associated with being a consumer today.

Local music merchants should represent the consumers best source for information and technical assistance. If the local shop isn’t doing the job, then people like Bebop should throw their hat in the ring and fill the void.

Many people choose the local music shop over the big-box chain stores because they know they will receive a higher level of service. In the purchasing equation the only components that count are: 1. Price 2. Quality 3. Service in most transactions you can only have the best of two of the three components. Choose your two carefully.

Further irony: there are more posts on this forum discussing quality than service and price together. Obviously as musicians we want the ‘best’ sound we can find. That being said the trade off is either price or service.

It seems as though many forum participants forgo the service for the price and then use the forum for their service. Over the years I have read a good number of complaints written in hopes the manufacturers would listen and respond to you in this venue to resolve some issue you have.

Well here’s your epiphany: your local dealer is your liaison to the manufacturer.

Your local dealer has built a relationship with the manufacturer over a number of years that involves the sale of countless unit sales of the latest, greatest instrument and also the obligatory sales of less desirable models. Just like in song for every hit there are countless flops. So goes the relationship between the dealer and the manufacturer.

Local merchants take service issues to heart and spend a fair amount of time resolving these issues. When you as their customer have a problem, they have a problem. Local dealers are built one unit sale at a time. Manufacturers market based on trends they have a goal for unit sales. They expect a certain percentage of product failure. They bring products to market ahead of schedule and sometimes behind schedule. Surely they innovate, spend lots of money on R & D, but when push comes to shove the success of a manufacturer is measured in containers full of product. Please ponder that thought for a moment…

The music industry faced an awakening this month with the bankruptcy of MARS. Since it’s inception MARS was touted as the future of the music business. A lot of local dealers were dealt a rough ride when MARS, Sam Ash and Guitar Center all decided their local market would be the latest marketing war zone. Many musicians frequented the big-box stores only to find the level of service was unacceptable. When they returned to the local dealer they wanted the high service they had grown accustom to and the price they got from the big-box retailer.

Thanks to MARS a lot of manufacturers are taking a direct hit in their profit and loss statements. Ironically many of these manufacturers will be forced to revisit the local dealer they abandoned not so long ago in hopes of maintaining some market share in some specific market.

Even more ironically the big-box store that saves the consumer a few bucks on purchase will now cost the consumer money because of their demise. Surely the manufacturers will pass their losses to their supply chain. Now cables go up a few cents here and cases go up a buck or two. We all pay in the end.

1. Price
2. Quality
3. Service

Choose your two carefully.

Scott...
Great subject.
Price matters. But no less than service and product knowledge.

Once all the homework has been done, it is just human nature to buy at the most economical source. Regretfully, a lot of so-called brick and mortars are in for quick, high volume sales with transparant markups and markdowns. (George and Dano are notable exceptions.) My experience locally has revealed a distinct lack of knowledgable help...and mininal, if any, help after the sale.

I really do WANT to deal with local stores first, even if it costs a few bucks more. But if they don't offer the desired product... or have the desired product but lack product knowledge and can't back up the sale with service... no deal.

A personal for-instance (yes, I will mention the name. Don't sue me): Mars.

I did the homework on a $3000 kb that I could have bought on line for less.

The Martians didn't know a whole lot about the keyboard, but they hyped the warranty and offered a floor model a few hundred bucks below list. They convinced me the warranty was my fail safe guanrantee of satisfaction.

Within 30 days the keyboard failed to operate properly. Not only could they not fix it, they were aggitated by my phone calls and said they had no idea where I could go for service, outside of sending the KB back to the manufacturer myself. And, because it was a floor model, they would not refund or exchange it.

It took weeks, several hundred miles of travel and tons of time for me to find a qualified, authorized service rep that could honor the warranty. I just could not believe the retailer could not supply the information I found on my own.

That was my last purchase from Mars (by the way, how are they doing?)

I have since purchased 2 other keyboards, two speakers, a monitor and an amp...most of them online...all with a minimum of 30-day satisfaction guarantee. I tried to find what I wanted at a local retailer. The only mom & pop retailer in my area are nice folks and personal friends... but are so Technics and Peavey oriented they will hardly aknowledge there is anything else out there. So, I ended up going online.

One of the online stores has even called several times to make sure I am satisfied offering any other assistance they could.

We all want the most bang for the buck...however it is foolhardy not to factor in the value of having a knowledgable, willing retailer that really cares about making sure the product, service and customer are well suited to each other.

As Charles Barcley says: "I may be wrong, but I don't think so."

Eddie

One other thought: I don't know about the rest of you but my experiences in the past few years with brick-and-mortar music stores has been bad. Those stores really make their money by selling to parents and walk-in customers at list price, not to pros looking for the best deals. The stock merchandise is often dated and poorly maintained and the "local service and support" angle is bogus too - much of what stores do for electronic gear is act as a shipping company to send stuff off for repairs and add their costs onto it. If you have a reputable dealer that you've known and worked with for years, especially if you play guitar it seems, then you may get real service - but for the most part I get better and more knowledgable service and support by the internet. I'd hate to think where I'd be today if I was still relying completely on my local music stores for anything.

Having a business myself, yes internet can increase the number of sales made, but because companies are not pushing the authorized selling clauses, the mark-ups are so low, that service as a seller to consumer is at an all time low for most places.

When in the past a company would buy an item for $100, and sell it for $150. There was room for bargains for multiple purchases and extra's.

Now we purchase this item for $100 and to sell it with all the competition we sell it for $110 or $115, why bother!!!

Unles I can sell 30 times more than I did, so there goes your one on one type sale