Edit: Another thing- part of the problem for US based retailers in general is MAP. Its price fixing, and in many cases I can go to, say Thomanmusic.com and order something from Germany for ~85% of the best price I can get at major retailers here, including shipping, tarriffs and foreign transaction fees. Personally I think MAP is ridiculous and leads to TREMENDOUS waste of resources. Im buying something that was shipped from China to Europe, then shipping it back to Texas all for less money than US retailers will allow. WHY IS THAT?

I owned a bike shop and sporting goods store in a past life (I've written about it here: http://www.sciencerocketry.com/blog/great-work-and-new-begin...) and the effects of Shimano's inability (or really, refusal) to control pricing from its European distribution was catastrophic to my business and my peers. And not only that, I found that many of those sellers would defraud customs on expensive items by declaring the value just under thresholds that would result in them paying import taxes and tariffs. It was a profit destroyer for us but Shimano moved units, and that's all that mattered to them.

When some of those parts customers purchased from Chain Reaction or Wiggle or whatever didn't work, the customers who bought those parts overseas would come into our shop asking us to handle the warranty process. We were a Shimano dealer, after all! If we politely refused or tried to collect a handling charge, we were the ones that would face the customer's outrage.

The end result is that there is less sales tax in your community because of the absence of that brick and mortar retailer. There are fewer jobs. There are fewer local communities built around hobbies, crafts, trades, or whatever. But you can get products cheaper and your dollars have greater purchasing power. Maybe that's a worthwhile trade-off - YMMV.

Multiply your experience by a million and stretch it out over decades, and this is middle America getting sucked dry.

Most of my consumer products are sold directly, online, but I also sell titanium weed pipes to a local chain. COVID definitely slowed retail sales. I looked into getting my motorcycle parts onto big corporate retail shelves, but the margins are tight. I’m working on that. Business has been good, so I can afford to try new things. Cutting blanks with plasma rather than waterjet and milling steel with air blast rather than coolant, together, might make big box retail rational, for me.

The economics of manufacturing: extremely multi-faceted. There is a tendency for successful manufacturers to allow costs to escalate until flexibility is gone. Their employees unionize. Management borrows against the future. Then, the market changes.

It’s a rough game. I chuckle when people talk about the right to a job. Sure; that can work if I have a right to sales.

This is a beautiful, heart-warming story that is not really supported by the data.

Actually, steel employment in the US declined after the tarrifs were introduced [1].

Net steel production in the US went sideways over the past decade. It rose around the time of the tariffs, but it also fell and rose at other times [2].

The tariffs did, however, cause the cost of US steel to skyrocket [3]. Which is not fantastic for the ~330,910,000 Americans who aren't steel workers (who didn't actually win anything, since employment declined), or owners of steel plants (who I assume did win something, since they reaped the lion's share of the benefit of higher margins).

[1] https://www.ibisworld.com/industry-statistics/employment/iro...

[2] https://tradingeconomics.com/united-states/steel-production

[3] https://tradingeconomics.com/commodity/steel

Frankly, we won't know the true effects on the tariffs until at least 2026 in my opinion -- these trends happen on the order of decades rather than years.

[1] If that weren't the case, they'd be more expensive than just employing people.

Really, retail has largely been gamed past the point of no return. "Win the Holidays", as Best Buy put it a few years ago. Consumers evangelize their hookup, not their service experience.

Maybe bike consumers don't need the support and service the bike business traditionally offered. Camera stores are gone, but camera sales have never been better. Cameras are better and more accessible than ever before, too. Maybe the bike business will follow the same path. Time will tell.

EDIT: Funny enough, cameras are still subject to MAP and it is generally enforced fiercely.

In regards to dirt cheap OEM parts from Europe, that's largely stopped. Most of those online retailers won't ship Shimano groupsets to NA anymore and while you can find good deals online, I tend to see them being sold from US-based companies. In any case, with the way manufacturers have shifted away from standards, being your own home mechanic has gotten prohibitively expensive, with the need for various presses and extraction tools, etc... I tend to see many more high-end factory bikes on the road than bespokes and forget doing your own suspension work on modern MTBs...

If a local shop orders parts from lets say shimano it must be bought from the official shimano importer. All while the online shops import it themselves and undercut the prices by a lot.

I once wanted to buy a new bearing for the crankset and my bike was already disassembled. So i went to the local shop to avoid waiting for shipment (was before next/same day delivery was a thing in germany). The price there was about 50 or 60€ while the online price was something in the 20th. I talked to the owner what the reason for that big of a difference and he showed me his official B2B catalogue. It was basically the price he asked for. So he wouldn't even make money out of it if I would have bought it there. He recommended to just buy it online which I then did.

That is excellent news for bike shops. I just hope it's not too little, too late. It kinda defeats the narrative from Shimano and others it was legally impossible to do so, though.

I wonder if for major purchases, there'd be a market equivalent to the "independent fee-based investment advisor." Basically unbundle the service experience brick-and-mortar traditionally provided and let people buy it seperately. You'd pay a modest service charge up front and discuss with them what your needs are, and then they find you the right product and the cheapest/most reliable place to buy it. It comes with a service guarantee-- if you buy through their recommendation, they are responsible for negotiating warranty/service hassles.

I could see spending a $20 fee to know I completely slam-dunked a $500 purchase, especially if they can regularly yield outcomes like "Our huge network of merchant data found you the bike/appliance/etc. you wanted at some tiny brick-and-mortar in Baltimore and it comes out $50 cheaper delivered than any retailer you'd consider locally." Brick-and-mortar retailers don't have to try to maintain an expensive sales and customer-service experience and convert to rack-em-high-sell-em-cheap warehouses, and no-service-required customers can skip the consultancy and go directly to them and still get a decent price.

They "advisor" service would have to be explicitly independent and no-kickbacks for this to work... so I suspect what would happen is that it would build trust for a few years, then start undermining it by taking incentives to steer business.

Here is the crux: the 'supply chain' for gathering the data from all the tiny stores in small towns, who may not even have a retail system or may not be even connected, would be intractable.

What I just said may not be true for Red or Arri, but you don’t walk into Joe’s Camera to buy an Arri, and for their high-end models they’re literally only available to rent for production anyway.

Long lead times on new cameras is not indicative of high sales in a vacuum, just high sales relative to projected demand, which again is absurdly low.

It'd be great to see sales numbers for all the major manufacturers, but Canon have in the last year launched five new cinema focused cameras (R5, R6, C70, C300 iii and C500 ii), Sony have launched three (A7sii, FX9, FX6). All of these (the ones that are currently available at least) appear - both from availability, and the frequency I see them on location - to be selling extremely well.

As to your 'high end models' comment. That isn't remotely true. Arri make one camera, the Alexa 65, that isn't available for retail. Red make one line of cameras, the Red Ranger, that wasn't available but now is. They also make custom cameras for specific DOPs occasionally. But broadly speaking both manufacturers only make 'high end models' (only exception being the new Red Komodo pro-sumer crash cam), and they're all for sale (and doing extremely well).

You go in, get to handle the actual product. Then, if you decide to buy, do it there via the stores affiliate link. If not, you pay the store $N on your way out.

That way the customer gets the price they want, and the store makes some money for letting them handle things.

It's interesting. The online marketplace (Amazon) controls the return policy, but the sellers control the pricing. That's not necessarily a bad thing. Unfortunately, it's distorted (particularly in the case of Amazon) by the proliferation of fake brands. And by fake brands, I do not mean fakes of well-known brands...I mean meaningless brands that do not exist, that attempt to create product differentiation that does not exist.

It's turned Amazon into the crap-pile of last resort, for me.

I was thinking the same as I scanned down this thread, but I can't get past two things: 1) It's tough to for me (the customer) to have enough confidence that the showroom has all the options I should consider, and that the showroom employees are knowledgeable about them all. Without that, it's tough to commit to a flat price for browsing before I enter. 2) I can't see how this happens one store at a time. As long as there are traditional retail locations nearby, ones that let customers browse for free, customers will gravitate there. Can this business model succeed only once traditional brick and mortar retail has disappeared?

Also helps that Apple is vertically integrated and has tight control over it's supply chain and applies MAP very uniformly.

Medical supply is probably a different category, where expertise is more important than others. But in more common examples, when I would go to a store and already knew more about their product lines than the salespeople, the local price difference was a turnoff. I'm happy to pay a reasonable uplift if a vendor can educate, guide or support me as a customer. But when few of them can, I literally have no reason to patronize them.

As fast shipping became an option, there was less and less reason to go to a showroom other than to independently look at a product person. In 2020, I don't even care about that, because return policies are liberal.

My favorite case example is CircuitCity [1]: "In 2003, Circuit City converted to a single hourly pay structure in all stores, eliminating commissioned sales. Many previously commissioned sales associates were offered new positions as hourly "product specialists", while 3,900 salespeople were laid off, saving the company about $130 million per year. Many company insiders later revealed that they thought this was the most influential company decision that would ultimately lead to its demise."

Lowering costs by eliminating qualified and experiences salespeople, attempting to become an expertise-less local storefront competing on price with businesses that have lower costs was a suicide move, and endemic of executives attempting to run companies based _purely_ on a bottom line, without actually understanding the market they are in. "Excel Excutives" in my words.

On the other hand, I have begun doing more business with BestBuy this year. Not because they have changed their level of in store expertise, but because when I need something, they can compete with Amazon in some cases on a combination of price and convenience. I can find if their store has something, the quantity, and have it in hand with no more than drive time. In the work-from-mode many of us are in, this can be a big deal. Plus, I can get appliances from them with installation, and office furniture from their delivery services that is a bit of a gamble from Amazon, who so far is not as convenient for "big box" shipping.

I hope BB continues what they are doing, because they seem to have figured out some of the variables to _adapt._ IMO innovation is not the problem, adaptation is. No business can survive if they don't adapt to fickle consumers where a significant portion of them will always use the resources available to them while simultaneously seeking to save money.

[1] https://en.wikipedia.org/wiki/Circuit_City#2000s

Total opposite of Frys, or the late CompUSA or Circuit City.

Best Buy isn't packed, but they always have some activity in the locations I frequent, and they also have decent prices and good selection when you need things local.

Goes in hand with not receiving goods that are obviously used and resold with zero apparent QC.

Are Shimano and others just gouging in the US market because they can (and damn the impact on local retailers)?

And somehow the bike retailers get furious at their own customers for seeking out the lower-priced options, instead of being furious with shimano for ripping them off.

This is false (unfortunately); while CR/Wiggle does sell their own bikes with Shimano builds this is no different than any other bike manufacturer, yet the trek or specialized at your LBS is still significantly more. You cannot purchase any Shimano parts at Chain Reaction.

this is a relatively recent development, you could last year. i'm not sure if they've clamped down globally or just stopped shipping to north america.

>this is no different than any other bike manufacturer

it's different in that CR is a retailer as well as a manufacturer. I assure you that even if the situation has changed recently, they definitely were selling off their OEM parts. it wasn't some sneaky thing, they were literally advertising what they were doing.

- It's common for global manufacturers to sell products at different prices depending on regional market conditions. So EU distributers may get better pricing than US distributers.

- Some retailers may be able to purchase products cheaper because of volume or preferential relationship.

- Most commonly, the products beings old are actually OEM products originally sold at a significant discount to a bike brand (who have massive minimums, arbitrary product mix requirements - think a mountain bike brand buying road parts because that's the "package" Shimano sells to get favorable pricing, and big incentives to prevent them from purchasing from SRAM or some other parts manufacturer). The bike brand takes its excess parts and sells them "under the table" to a retail outlet (that they may have actually discretely partnered with at the outset).

My opinion is that yes, Shimano, specifically, doesn't care about brick and mortar retailers. Shimano considers it a relic of the past and are partially unaware (or apathetic) of the reality that their actions and distribution model is accelerating the death of the brick and mortar shops. That said, Shimano USA might care about US brick-and-mortar retailers, but they don't have enough influence to prevent Shimano Global (Japan) to affect any real change.

Shimano has seen steady growth, so they have no incentive to change. But that growth has been at the expense of the very partners that played a significant role in helping them gain market dominance.

I'm generally of the opinion that, at least in the bike industry, the shops and online outlets selling massive volume at discount aren't really in any better financial shape than their mom and pop competitors. When I first got into the industry I was regaled with stories of success of competitors like The Clymb and how they were 'killing it'. Turns out, the only thing they were killing was themselves. The Clymb, despite assurances of their brilliance, sold back in 2015 for $100,000 despite millions and millions in sales (the buyer assumed 18.5MM in debt) - https://www.oregonlive.com/silicon-forest/2016/01/the_clymb_...

Manufacturers don’t sell direct for a variety of reasons that steadily become less compelling as the costs and complexity of shipping, advertising, and retail management fall.

How long before non tech firms follow the path of tech firms and sell direct?

And that's the view of more than a few consumers in terms of how they view their bike shop. Anything that can be sold direct, will be.

It sounds like they're being overly aggressive with their price segmentation. When setting up your first lemonade stand, you learn that you should set prices at the sum of costs for goods, labor, and overhead, plus a profit margin, hoping that the output of your manufacture delivers more value to your customers than that sum. Shimano doesn't want to be paid a flat rate for the value they add, they would prefer that everyone to pay exactly as much as they could possibly be willing to pay.

If I'm a shop and I want to deal Fender guitars, I have to sign a dealer agreement which says that I agree to buy $x worth of apparel, parts, guitars I don't want because I don't think I can sell them etc on top of the sometimes unreasonable numbers of guitars/amps they also make you buy.

The companies have all the control and they know it. A lot of brands are also making you pay a separate fee to be able to sell online and most absolutely prohibit you as a US dealer from shipping overseas.

All of these things + operating costs make the margins at your average local music shop very very slim. I ran one of the best shops in the world and we still struggled with this kinda stuff.

The traditional evolution for a guitar maker is like this: A guitar technician tours with famous guitarists and starts customizing instruments for them. They start their own brand for making new guitars. They have a small team in a small shop and they hand make good but expensive guitars. Then they move manufacturing to Japan. Still pretty good stuff, moderate price, available for the people who really want to get it. Third phase is to move manufacturing somewhere else and sell barely adequate quality guitars with just your brand. Make flashy paint jobs, sell to the masses as "first guitar" etc. Original owners might be out at this point.

Some decades later introduce some old models revived at high quality again.

Locally, the bike shops that are doing well all have a side-business - several have brewpubs or cafes, other have training facilities.

That's kinda opposite of a lot of (good) HN advice about pricing.

Here, we (mostly) agree that you set your prices to capture as much of the value you're providing to the customer as you can, not some simple markup on your costs. If the customer gets 10k/month value from your startup, of course you don't price it at $1k - even if it only costs you $500 to provide it.

If I had been running a lemonade stand on the island where Fyre Festival was failing to eventual, you can be sure my pricing would have been regarded as predatory and obscene to all the "cost plus a profit margin" folks.

I reckon the big error here - is tradition wholesale and retail chain ignoring the fact that geographic market segmentation is rapidly disappearing for many things. Shimano think they can gatekeep their markets, and sort-of can at retailer level using distributor contracts. But they totally can't stop consumers buying online from wherever it's cheapest, and that includes dark shift and/or knockoffs from AliExpress et al. Shimano will slowly kill their distributor network, who'll go broke or give up stocking Shimano as more and more consumers use them as a showroom and then go buy parts/bikes online. That'll happen more or less slowly depending on Shimano's brand strength, but the smaller and less discounted distributors will go (or skirt the wholesalers) first, and sooner or later the only place to see a Shimano bike will be a few major specialist bicycle retailers or on late night TV watching the Tour De France.

In the UK (and perhaps other parts of Europe) manufacturers aren't allowed to force retailers to sell at a particular price. The manufacturer can 'recommend' a price (or indeed print a price on the package) but the retailer can sell for whatever price they want [1]

Any binding 'minimum advertised price' or 'resale price maintenance' agreement would be price fixing, violating competition law.

[1] https://www.gov.uk/government/publications/resale-price-main...

If I buy an expensive custom modular synthesizer from the US, I'm going to get hit with import duties as well as VAT. As a business owner I can claim back the VAT, but the import duties are a non-trivial and non-recoverable extra.

If buy a synthesizer from Thomann in the EU, I can also claim back the VAT. And there are no import duties - at least until January 2021 in the UK.

So the final cost for a UK business buyer is 20% less than the nominal price.

Does the US charge import tariffs on these items? I have no idea. But if it does, that would explain some of the differences.

And it usually works the other way. The standard price in pounds for US tech sold in the UK is 1:1 with the US dollar price.

The base iPhone 12 Pro Max is $1099 in the US. In the UK it's £1099, which is more than $1400. Even without VAT it's more than $1200.

In Spain it's €1259, which is closer to $1500.

Duties are another funny thing. At least in Canada, bike stuff from China has variable duties:

> Importing a complete, assembled bicycle will cost you 13 per cent in duty. If you're just bringing the frame in, that's a five per cent tariff, and if you're importing complete wheels, there's a 6.5 per cent tariff.

So, if you import tires and rims separately (even in the same package), there's no tariff! Frame + other parts, and you only pay on the frame.

https://www.cbc.ca/news/canada/british-columbia/what-you-nee...

They should simply sell parts at competitive costs, but price labor for repairs, adjustments, etc. at a fair rate.

Alternatively, charge a transparent markup in exchange for “free” service on the item should something go wrong.

Where MAP fails is if brands want to different prices globally. This is because items will just get re-imported if they are priced lower in other countries. They want the benefits of globalization which is cheaper labor and materials but don't want to negative aspects which is the same price globally for the product.

Still, feel you on the retail apocalypse, and how every other new internet darling can somehow skirt taxes or... and the problem is unfixable until right after it doesn't matter anymore. It took something like twenty years for Amazon to start paying US sales taxes most of the time, in many cities Uber's business model was price dumping etc.

Shimano could, were they willing, use Parallel Import laws to prevent European retailers from selling those products in the American market. They've chosen not to. So whether one likes hearing it called a "refusal" or not, I think that's what it is.

Seems like addressing this problem is important. Why is wholesale cheaper in Europe than the US?

MAP is outright illegal in the EU.

I think Wiggle and Chain Reaction have now merged, but both are struggling.

I was wondering if you could explain why bike components are so expensive in the first place? For example, why can a bicycle, which is mechanically quite simple, cost as much as a motorbike or small car? Is this a patent situation?

My general understanding of the economics on the product side of the bike business (which isn't as deep as my understanding of the retail side) is that the manufacturers aren't making much money either. They've got lots of hands in their pockets, a lot of pricing pressure thinning margins, and a low barrier of entry for new competition in the marketplace.

In regards to Chain Wiggle, I'm not surprised they are struggling. The graveyard is full of businesses that won on price and their is no business strategy easier to emulate than being the price leader.

Some crazy bikes there (I like the offcenter wheels for hop riding.). Also very high end road bikes. (though italian carbon fiber seats).

Carbon Bike design process: https://www.youtube.com/watch?v=1WinYdscJi0

Bike show part1 https://www.youtube.com/watch?v=a9BAc0kL55o

part2 https://www.youtube.com/watch?v=ZQVoKKwydwQ

part3 https://www.youtube.com/watch?v=SKa3iQ3akHk

A bike manufacturer cannot produce a better man, but they can keep optimizing the bike itself and they will keep doing it until even the wealthiest customers balk at the cost. Which is why the best gear is out of reach for most people.

You can easily purchase a bike that is not that heavily optimized - they are $100 a pop in Walmart.

The details of these optimizations are numerous and elaborate, but they are only a consequence of the weight/power balance.

I can say this with confidence - the bike industry isn't built on a scam. There are scammers within it (like any other industry) but the established brands are not scamming you with their higher priced offerings. They may be wrong about some of the benefits they believe they are offering, but it's not a scam.

It sounds mostly like your cost-value threshold has changed. And that's fine. But that €80 pair of shorts - if it comes from a reputable brand - actually does offer some benefits and advancements that a few consumers find valuable. When I read a comment like yours it sounds like someone lamenting that people purchase high-end GPUs. Sure, nobody needs 4k graphics at 120 fps, but there's a market for it anyway.

https://www.thebalancesmb.com/what-is-minimum-advertised-pri...

it's still unclear which of the 2 acronyms I cited was the intended one.

Why should they control pricing, or why any producer should control pricing in stores?

"The end result is that there is less sales tax in your community because of the absence of that brick and mortar retailer. There are fewer jobs. There are fewer local communities built around hobbies, crafts, trades, or whatever. But you can get products cheaper and your dollars have greater purchasing power. Maybe that's a worthwhile trade-off - YMMV."

I'm not here to claim that the answer is convincing (or not), but I think it does qualify as an answer to your question.

There is always a retailer willing to undercut the rest in pursuit of a sale. Some retailers are even willing to do so in a predatory way, willing to absorb losses until the competition is eliminated or in pursuit of add-on sales that might help recoup lost margin. But those brands strictly enforce the prices their products can be advertised and sold at because it helps maintain the customer's perception that their products are valuable and in demand.

Products in bike shops are almost always considered "premium". They don't sell the big box $100 bikes and cheap parts. They typically sell higher quality products targeted at aspiring enthusiasts or enthusiasts. So a price control is exactly how you can differentiate your product from the cheap schlock on the shelves at Wal-Mart or even Academy and Dick's Sporting Goods.

The second major reason is because (although this benefit has diminished over time) having products on store shelves provides enormous marketing benefit. Most customers that walked into my store didn't come in knowing explicitly what they wanted. Many of them had done some research to be generally aware of their options, but our recommendations were often a massive influence in their purchasing decision.

Bike, component, and apparel brands were often pretty myopic when it came to their marketing efforts (and that's why they are always exactly the same from brand-to-brand). They genuinely thought the average consumer in the market for an entry-level carbon bike (say 1500-2000 USD) was influenced by having a Tour de France team or having some great rider win races on their bike. While that sometimes made a different at the prosumer level, the meat-and-potatoes bike shop customer isn't influenced one bit by that type of marketing. But seeing an attractive bike at a compelling price on the floor of a reputable bike shop is how most sales begin. So brands making sure retailers can be profitable selling those options is essential or retailers won't bother stocking their stuff.

If the bike shops can't be profitable, there will be fewer bike shops. And that means there will be fewer opportunities for customers to see you brand and your products. And it also means there will eventually be fewer riders - at least among bike enthusiasts. Because in my experience, bike shops are the hub of bike culture in most communities.

Price fixing is banned by (I think) any reasonable country in the world and there is a reason for it.

There will always be brick-and-mortar stores because some people want to touch and look at the product before buying. Others prefer to buy online for lower price.

There's still a lot of brick and mortar retail, and it does not seem to be disappearing, but it is not really about re-distributing the goods anymore, but mostly about paid support. For instance, a lot of bike shops in my area are turning into repair and assembly workshops, where you are welcome to bring the bike that you bought cheaply from an online retailer and they help you assemble and adjust it. I guess the earnings for that usage are much larger than for re-distribution, since 100% of what the client pays is directly for the shop.

EDIT: also, I have issue on the fact that you call buying cheapest goods a "loophole". There's nothing wrong about it in an efficient market.

The service-only shops will never be anything more than cozy lifestyle businesses. And a few of those that own service-only shops actually live in the business to make ends meet.

I recently bought a new bike in one of those shops and it essentially amounted to the seller buying the bike online from his laptop in front of me.

Not sure what you mean about "cozy lifestile business", but is seems great, especially if it allows to make ends meet.

[1] www.cyclable.com

They however were excellent at expanding into online sales (in roughly the same timeline as Amazon) and became Europe's largest online retailer. So one could argue that Guitar Center not improving their online offerings and maybe cutting back on physical locations had also something to do with it.

Edit: Also Ive tried getting a lower price on gear in the US by showing the all in Thomann price, and the response I get:We do not honor non US pricing.

I don't really understand how leveraged buyouts are legal, and I suppose I should learn a bit.

Source: I helped build a product to track MAP violations, and there's also a bunch of articles and books written on this stuff.

I dont disagree, but it leads to scenarios like the above where arbitrage exists. I can buy something from Europe and then sell it on Reverb under MAP and still make a tidy profit. This sort of thing doesnt scale and introduces risk to me if I do that(how do you handle warranty claims, most gear is shipped with EU power cords so you have to buy US power cords to ship to customers, etc)

For retailers, most do not have the resources to differentiate so 1 store selling for MAP is interchangeable with another. There are boutique stores that have passionate/knowledgeable staff that can guide less informed or newer customers. Sweetwater does this at scale, and I do buy from them for this reason when its something Im not completely up to speed on when I purchase.

This is not an easy problem, but I do think an unofficial price floor is not good for the consumer. I also acknowledge that there are stores that will discount privately via chat or in person, but ironically Guitar Center was very inflexible on several items I wanted to purchase there in the last 5 or so years. I ended up going to smaller retailers.

Reverb.com completely kneecapped this side of their business, and probably lots of their new product sales also. Between competition from Reverb (who have minimal warehousing overhead and no physical retail overhead), online-only sellers (who have no retail overhead), an expanded boutique market (pedals / eurorack), and much of the overall market turning to software and direct sales (much easier to download Ableton and start making music on day 1 rather than spend years learning guitar), the writing has been on the wall for large-scale brick and mortar operations in the music creation trade.

On the other hand, I prefer getting the package myself in the car, so as to avoid surprises when the thing arrives --I didn't have any issues with Thomann's courier, though.

I had always assumed that a salesperson immediately offering me a discount, or that weird "price shown when you add to cart" pattern were just people being shady to increase conversion... while that may be true some of the time, I had no idea there was a legitimate reason why they might not tell you the "real" price upfront.

How does it work with musical instruments?

Some examples of brands I can find cheaper in Europe vs US: - Jomox - MFB - Roland - Behringer(In some cases by 50%(!) For instance the Behringer X32 mixer is a pretty popular 32 channel mixer used throughout the world at Thomannmusic.com its currently $1,495/€1,262.93 vs $2498.99 at GuitarCenter.com)

https://www.thomannmusic.com/behringer_x_32.htm

https://www.guitarcenter.com/Behringer/Digital-Mixer-X32-133...

YMMV but I can assure you there is arbitrage/huge discounts to be had out there.

Having everything flow into a Amazon Monopoly of retail isn't great. Even just going in the stores to talk and get a literal feel for instruments is great.

The biggest issue with online retail is it erodes one of the last community functions. Particularly for older Americans retail shopping might be their only social interaction all day.

If 2050 is this dystopia where everything is ordered online, all food is dropped off by drones, it's going to be very bleak.

That said retail, particularly non essential retail ( my various instruments are all effectively toys, I'd guess the working musician to hobbyist ratio to easily be 1:100) is getting hit hard. No one NEEDS a news 1500$ Gibson.

Edit : Worth while to add a with concerts being shut down the professional market is effectively dead as well. I wouldn't count on this returning until late 2021 at best

Been a happy Sweetwater customer ever since. I've had 3 different reps and I know them all quite well at this point.

I am glad some local stores have survived, either battling GC valiantly or being far enough away from them. Having a hub for lessons, repairs, expertise, etc. is very nice to have around still.

However, Guitar Center would be just fine if it didn't have all the debt Bain Capital loaded it with.

Guitar Center needs Chapter 7 bankruptcy, not Chapter 11. Discharge the debt, dump underperforming stores, let the major players bid on the remains, and restart.

Chapter 11 is just playing a shell game with the Bain debt instead of nuking it.

It's amazing how little things like that make the sale.

Now, as someone who lives online and has a solid misanthropic streak, I find this human interaction slightly annoying. However, for a lot of musicians this really seals the deal.

That said, I'd love to go to a GC in person and try before I buy. Just...not during a pandemic.

If GC ends up closing, hope more local shops can benefit.

But I feel for my buddies that make electronic music. They loved GC since they could try out the synthizers and drum machines before they bought.

It doesn't help that with Gibson's quality control, you're maybe getting a $300 instrument for your $1500.

I know a lot of guitarists. Professionals. They all are buying new guitars frequently. There's too many niches to fill and variation between instruments. I know quite a few who cycle through a couple of dozen guitars bought and sold every year just to find instruments with the right sound.

anecdotal case in point: did once try out a new guitar, sounded good there - get it back to my house and line feedback like no other. i have many other guitars that work fine on this setup, but this one wanted to be a complainer...no way that any hands-on demo would have stopped that, unless i haul all my gear in there as well.

I agree that if sales go to Amazon instead, that's a loss for customers and the community. On the other hand, online retailers can't really compete when it comes to being able to actually try out the exact instrument you're buying. Guitars aren't completely homogeneous; one might sound better than another, or have different wood grain, or whatever.

Also, physical stores can provide guitar setup and repair services. Local setup can help a lot: manufacturers will often set the action very conservatively at the factory because they don't know what kind of humidity conditions the guitar will endure in transit or at its final destination, and they don't want the frets to buzz when someone takes it out of the box. Consequently, the strings are higher than they need to be which makes it unnecessarily hard to play. Fixing that is pretty simple and makes a big difference.

I hope that if Guitar Center closes a lot of their business goes to smaller local music shops for those reasons. However, I expect that if GC is having a hard time, a lot of other music stores are in just as bad of a situation and a lot of them are going to close.

> That said retail, particularly non essential retail ( my various instruments are all effectively toys, I'd guess the working musician to hobbyist ratio to easily be 1:100) is getting hit hard. No one NEEDS a news 1500$ Gibson.

Back around 2007-ish, there was a surge in sales of ukuleles, as a large number of recently-unemployed people with a lot of time on their hands were looking for a cheap hobby. My own anecdote from this last summer was that I made a pond and in early fall went looking for koi to put in it, but a local supplier was sold out and couldn't get more. Apparently there was more demand than has been seen in a long time, which makes sense. If you're stuck at home and need a project, why not make a koi pond?

If you’re in a city though, I can’t recommend local music shops enough. So much about what makes a guitar (or any instrument) great is how it plays for you. How it feels.

I’ve bought dozens of guitars online. I’ve returned maybe 95%. I’ve returned 0% of the guitars I’ve bought locally. It’s all about how they play.

The abundance of cheap gear / equipment to fill the shelves makes it feel more like a big lots of music with premium prices.

Once it looked like GC was in trouble in 2007-2009ish, those large brands worked on other sales channels and stopped extending GC so much credit once they were established.

Guitar Center had to sell Harmony Central off to Gibson to cover its debts years ago and basically has nothing else going for it. None of their instrument brands are any good.

I do. Donations accepted. ;-)

(Sadly a Gibson [not Epiphone] Les Paul Standard is more like $2500, though a Special or sub-$1K Tribute looks like it might be a pretty good deal for a US-made Gibson...)

That’s my line in the sand

if online has enough real value it will stay

if just enough, long term sufferings will happen then it will be removed

otherwise people will reopen things they need (just like vynil and newspapers)

Well my sister used to work as a cashier at a local hardware store when she was a teenager before they got obliterated by Lowes and Home Depot and pretty much everybody would go there to buy their sundry needs for various projects. Turns out that you strike up a conversation with someone who lives in your neighborhood, you find out about their projects, then their family, then their lives. It's you know, community, not mumbling words at some faceless person that is a poor cog for megacorp whose only plan is to literally extract more money from the community than they inject.

Local hardware stores are actually doing well. They are a little more expensive, but have made up for it by having someone who knows where to find what you need quickly.

Small shops always gave better service to the little guy because that was their business.

Normally I am totally ad-blocked, but my Mac refuses to reconnect to my OSS Airplay Raspi contraption, and I just don't feel like rebooting ( already killed coreaudiod ).

I wired up my tuner with a dipole and am listening to radio through the ether mind you. No adblocking though.

Amazon is almost absent in NL at the moment, but they will crush the competition in a couple of years.

Amazon should be broken up.

For offering more products and better service at a lower price? They don't have a monopoly on anything.

The governments role should not be to subsidize uncompetitive businesses. That hurts consumers.

The US defense sector requires domestic manufacturing for good reason. The US recently got bitten hard with an inability to manufacture 5G equipment.

The loss of skills accompanying loss of industry is a huge problem that can take decades to fix.

There is a reason pilots prefer flying two engine aircraft, even though you really only need one engine. Redundancy is important.

In the absence of outside influence, scale produces monopolies that haven't the slightest interest in serving consumers, much less competing to win their favor. Have you ever BOUGHT anything from Amazon and gotten screwed by them? Have you been given random stuff by third parties working (successfully!) to game the Amazon system so their garbage is full of fake testimonials and is #1 recommended Amazon product in their category?

Competitive businesses gotta start from somewhere or there will NEVER be any others. It will just be 'what was competitive, once, and forever' because infrastructure and scale lock in and then you're monopolized and it no longer matters.

Show me the alternative to Amazon. Show me the alternative to YouTube. There is by definition no competitive option to any of these things because they locked in controlling positions, and now it doesn't matter what they do: they are NOT subject to any sort of competitive forces because it's too late. It doesn't matter what they do to consumers: there's nowhere else to go.

In the US retail market? Walmart (2x the size of Amazon), eBay, Kroger, Home Depot, Lowes, HEB, Costco, Target, Walgreens, Staples, CVS, Publix, Albertsons, Aldi, Macy's, Best Buy, OfficeMax, Nordstrom, Kohl's... I can continue if you want. Those are just off the top of my head.

>Show me the alternative to YouTube.

Netflix, cable, Hulu, Amazon, HBO, Disney, Sling, there's a few more. It's a very competitive market and it's why YouTube hardly makes any money, if they actually make any at all.

I think you are making the common error of conflating "big company" with "monopoly". Amazon doesn't control supply in a market like say the USPS with first class mail or your utility with electrical supply.

Tons of competition to Amazon. Tons. For anything you want to buy, there are other places that sell it.

there aren't any other companies that offer the full range of what you can get from amazon (cloud services, audio/video streaming, physical goods, etc.), but there is viable competition in each of those markets.

for cloud: google and microsoft

for streaming: spotify, google, apple, netflix, hulu

for physical goods, walmart also has a huge inventory of many different SKUs and they offer free two-day shipping on a lot of them (without needing a subscription). there are also tons of specialty retailers like newegg and microcenter.

LOL, Amazon makes up maybe 30% of my online shopping. Less if I can get away with it. The rest is _all_ other places to go.

One thing I would do if I were running a brick-and-mortar retailer is to figure out how to manage same-day deliveries, using the retail locations as distributors.

Buy a used UPS/FedEx truck for every retail location, and send a guy out in the morning to make onsite deliveries.

People can come back to the store for returns, and they can order large items that would otherwise be undeliverable or heavily delayed from the likes of Amazon.

The idea of blended warehouse/retail locations could make the logistics simpler and speed up delivery, even if you use a shipping carrier to do the delivery and/or serve areas that are not within ~100mi of a retail store.

Yes, but it is worth pointing out that COVID is killing already-sick businesses. Guitar Center was doomed from the moment that Bain Capital bought it in the early-2000s and started raiding it.

COVID will be listed as the immediate cause-of-death for many, many businesses, but what made them susceptible to a shock is the private equity vampire.

100% agreed. I should have written that COVID-19 has been a killing blow for many already-sick companies.

Still, if you're running a distressed company, your attitude must be, "we are not dead until we're dead." Channel your inner Dylan Thomas and rage against the dying of the light.

I have a mid-60s relative who teaches music privately, via Zoom. Her business is more active now than it was when she was teaching in person, due to fewer costs for transportation and less downtime between lessons. I'm not sure how sustainable that surge in activity will prove to be, but she has at times asked me to help her buy musical instruments online for new students. It's anecdotal evidence that suggests music education isn't going away just because brick-and-mortar retail is under pressure.

School closures aside: if someone is going to sell guitars and drum kits, why can't it be Guitar Center?

Amazon has put retailers in the position where they have to compete on price, information, ease of returns, and shipping speed. A dedicated retailer (music store vs general store) should be better at competing on price and information. A local store should be better at competing on ease of returns and shipping speed.

why would it be guitar center? I don't see anything that would give them a competitive advantage. I only ever go there to try guitars. if I really like one, I'm probably just going to go home and order a pristine example online. there's no way I'm gonna drop $800+ on a guitar that's been sitting in the open air and manhandled by customers for an unknown length of time. it's not a local business, so I don't even feel bad about it.

as I see it, a brick-and-mortar retailer has three possible functions: an inventory, a showroom, and a service center. it's hard even for a large physical store to beat an online retailer on inventory. guitar center in particular does not seem to be trusted as a service center. musicians I know would only take their guitars there for repairs/setups if there was literally no other option. this basically makes it just a showroom. it's hard to make money showing other people's products that can be bought cheaper elsewhere.

it seems to me that the only way forward for third party brick-and-mortars is to somehow monetize the showroom role. maybe they could get paid directly by the manufacturer to show their products or have some sort of referral system. integrate it with a service center and let the customers play with the display guitars while you fix theirs.

It's been really good business for guitar stores. I talked to someone at one and this has been the best year in a decade, and this was a small, independent store that also has a web presence. Guitar Center must have been pretty mismanaged leading up to this. It's also been a rough decade for rock music--there just isn't as much guitar music as there used to be.

FedEx just uses standard Sprinters or box trucks so you could find a used one of those anywhere.

How does this work exactly? Why would the company lend an acquirer money?

So from the point of view of a bank or bond-holder, it's not such a bad deal if the company survives. It's not a bad deal either for the past owner who does cash out. Then, after the acquisition, they put the debt on that company's books because they were technically costs incurred from that company, and there is nobody to stop them anyway.

In practice it’s a little different as you arrange the debt financing before buying the company, but conceptually it works the same way. As the new owner of the company you can saddle it with debt (as long as lenders are willing to lend you the money).

They find a public company that's not doing great. Maybe they're just stagnant or they had a down year. Either way, you find someone who wants to sell a publicly traded company.

Then they put up a small amount and have the company itself take out a loan to buy back its stock.

So now the company is paying interest on the debt it took on to buy itself and also paying "management consulting fees" to places like Bain Capital.

In short: Toys R Us should have never had to close its doors. https://theweek.com/articles/761124/how-vulture-capitalists-...

"""In connection with the execution and delivery of the merger agreement, Parent and Merger Sub entered into a debt financing commitment letter with J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. to provide up to $1.815 billion in debt financing, consisting of (1) a senior secured asset-based revolving facility with a maximum availability of $375 million, (2) a senior secured loan term facility in an aggregate principal amount of $800 million, (3) a senior unsecured bridge loan facility in an aggregate principal amount of up to $300 million and (4) a senior subordinated unsecured bridge loan facility in an aggregate principal amount of up to $340 million. """

As to the question of why company management would agree to do this, it's because they personal get paid a huge amount of money to execute the merger. Guitar Center's old CEO got paid $25 million by immediately paying out all his future stock grants on the date of the merger.

"""Each stock option to purchase our common stock outstanding immediately prior to the merger, whether or not then exercisable or vested, will become fully vested and will be deemed to be exercised and canceled at the effective time of the merger, and each holder of such stock option will be entitled to receive a cash payment..."""

Guitar Center voted to give Bain Capital money by one person wearing two hats.

The structure of the Sears deal was really interesting and suspicious. Sears bought a small number of Kmart stores for an enormous cash price, which sent Kmart stock into orbit, then Lampert used the inflated Kmart stock to acquire Sears. Pretty shady.

Another difference is Lampert is a black sheep, but Mitt Romney is for some reason still socially accepted despite having wrecked dozens of American companies.

Our democratic governor Deval Patrick went to work for Bain after he left office.

* Are their success stories quiet and their failures heavily publicised?

* Are they not as creative/clever at strategy as they could be, resulting in them exhausting options and going for "run into the ground" too early or too frequently?

* Do they pick an unusually large number of unhealthy firms that are prone to this endgame? In which case, why aren't they getting better at due diligence?

COVID really increased the rate of change for everything. Companies playing online first saw the boost, while companies doing it as if 30 years ago failed fast.

[1] Lee from Andertons was telling lockdowns are nothing to complain about, bussiness wise.

[2] https://www.guitarcenter.com/Fender-American-Pro-II-Guitars-...

For online, ship to store/pickup in store is super important to me (and probably many others). I'm not sure why more places don't offer it.

This also being said, I don't believe I've ever found GC/MF in person to be useful or any better than Amazon. No one working there was actually knowledgeable about their lines of products or about instruments in general, they just kept harassing me over buying worthless GC-offered third party warranties that they refuse to pay out and covers nothing

I ordered an XLR cable from their website and went to pick it up at the store in person. When I arrived, it took about 10 minutes before someone could help me, then they spent several minutes finding someone who could get the cable. That person then walked past a wall of XLR cables for sale, into a back room. I asked "cant we just grab one off that wall?" Nope. Another 20 minutes go by, and the person returns from the back of the store with a cable, and several sheets of paper. This next part is going to sound like a joke from the hitchhiker's guide from the galaxy but it's very real: they then had to run my card to ensure I was the buyer; I had to sign two forms; and finally I had to have a third form stamped twice. All for a $20 cable.

Guitar Center was cool for browsing in person. Beyond that? Trash. Bankruptcy makes perfect sense.

Second, I got it home, and it was all sorts of wrong. Every single fret had buzz, the neck was warped, and while the guitar “felt” great, it just wasn’t playable especially for a $1300 guitar. I had no choice but to return it.

Then I went to Sweetwater. Completely opposite experience. I ended up buying a 7-string Ibanez RG752M (again, the yellow one), sight unseen. The customer service was absolutely stellar, I got phone calls from two people asking me how and when I’d like to receive it, etc. The guitar came completely and properly set up, ready to play. Sweetwater has a 50-something point setup for all guitars over like $300.

No wonder GC is going under.

For instance Crutchfield now has “SpeakerCompare”

“To try out SpeakerCompare, select two or more pairs of home or car speakers to audition, then select your model of headphones from our menu. (We currently have more than 100 to choose from, with more on the way.) Pick a genre of music to cue up a song sample, and hit play. You can then toggle between each speaker in real-time using two listening modes: equal power mode lets you hear differences in loudness as they naturally occur, while equal volume mode gives you a more direct comparison of tonal differences between your selected speakers.”

https://www.crutchfield.com/S-MgU7GRLTDvu/speakercompare/def...

Whatever headphones or speakers you use to listen to the samples will add their own dynamics to the sounds. It still won't really give an accurate representation.

Its not going to be perfectly accurate, but should get you into the same (or possibly better due to lack of noise/business) ballpark as auditioning in a store.

I can see the comparison system working alright for some things. It's just not a replacement for listening to something on hardware and if I were out to spend some money on a good set of speakers, i'm going to want to listen to them in person first.

All hearing is 'feeling the sound' - that's what sound is a, a feeling of vibration of air.

> I can see the comparison system working alright for some things.

So it's got value?

> It's just not a replacement for listening to something on hardware and if I were out to spend some money on a good set of speakers, i'm going to want to listen to them in person first.

So it's not perfect? Why does everything have to be perfect?

If you know what you want, you know why you want it, and you know what brands/models will give you the sound you want. If you don't know what you want, a fairly standard pair of monitor speakers will sound terrific.

Like I have a hard time believing someone who picks up set of HS series Yamaha monitor is going to be like "Oh wow, these sound too forward for me".

That being said, I do think speakers can make a big different. I have a buddy who has a set of Ohms speakers from 72, and listening to music from that era (like Led Zepplin) does sound better than listening to it on something more modern, because it was mixed with similar speakers.

It's cork sniffing at a certain point to me, but people who are really into it can really hear it.

Citation needed. Sometimes they can, but a large part of the time they are claiming things that they cannot hear if tested. They of course refuse scientific tests.

It's one of those things where the people who talk about it the most have the least idea of what's going on, but that doesn't mean there isn't anything going on.

headphones in the $100-200 range are already pretty good in terms of total harmonic distortion. frequency response is a large part of why you might prefer one set of headphones/speakers over another. this is basically equivalent to a final EQ stage, which can be compensated for earlier in the signal chain. I highly doubt they can make my hd555s sound as good as hd800s, but I wouldn't be surprised if the software could give at least a general sense of what hd800s sound like.

If it could then you would just use the software on all your music and have high end audio for free.

You can say "this model of headphones produces peaks at 4kHz, 11kHz and 26kHz compared to a flat reference model" and add that effect with a DSP or pre-rendered sound clips.

That will give you some of the "voice" but it won't add the performance aspects-- power handling capacity, responsiveness of the drivers, sharpness of the crossovers, etc.

TBH, it's a fascinating idea and I wish it had existed last time I bought speakers-- I recall going all over town to Best Buys and Fry's back when they still had stock to listen to floor samples in rooms completely unlike the ones I would be listening in, using sample media and amplification unlike what I was going to use.

I don't understand? Don't you audition an artist, not a piece of equipment?

  2: the act of hearing
  especially : a critical hearing
  // an audition of new recordings

I doubt comparing the sound quality of multiple pairs of headphones is going to be something VR can simulate.

For a more obviously untenable example:

Imagine using an old VR headset to test out newer, more capable VR headsets.