It came to my attention today as I bought a set of pickups from a guy at guitar center who usually gives me good deals, that he wasn’t giving me a discount like he always did. I felt it odd, but for what I was buying I figured maybe they couldn’t do it with accessories, despite getting pretty big discounts on a single pack of strings. In my venture, I needed something from Radio Shack, and oddly enough, a former Guitar Center employee was there at Radio Shack. I asked him why he does work at Guitar Center any more, and he says:
“Mitt Romney’s Equity firm bought Guitar Center, and we’re not allowed to discount or haggle any more. All the prices that are on the tags are what you have to pay.”
I was taken aback, considering that’s my main reason for going to Guitar Center, is the thought of getting a better deal. I talked to the guy awhile, and I basically interpreted it as the commission guys can’t really make good money any more from giving people deals on gear, so what’s the incentive of staying at one of the most competitive companies with the highest turnover rate? Also, I hear that they might be doing away with commission altogether. At which point the guitarists, bassists, techies and everyone else with a specialty in music will have no reason to work at guitar center any more. If you don’t have to try to sell things to make more money,what’s to say Joe Everyman who’s doesn’t know jack about guitars doesn’t just come in for a part time job?
Commission was incentive to for musicians to work at Guitar Center. The more you know, the more convincing you sound, the more you sell.
As a background, Bain Capital, an equity fund that was founded by 3 people, including Mitt Romney (take that in whatever way you want), recently bought Guitar Center for 2.1 Billion dollars. Why people who own Burger King, Domino’s Pizza, Toys R Us, and Sealy mattresses (among a few other HUGE names in their specific markets) have anything to do with guitars is beyond me. I’m sure all of the companies felt the same way. Why are we all being managed by the same people? Bunch of marketing/financial geniuses who wouldn’t know a Squier from a Martin if you magnified the logos.
All of these companies started as small places, only to now be owned by some 50 Billion dollar equity firm. I’m sure they all originally had little secrets which customers knew. I knew that the prices at guitar center were flexible, while most others don’t.
What i’m thinking (dreaming?) is that this might bring back competition. I did find out that they are allowed to do price matching ,where they match/slightly beat a competitive price. It’s how I got my now retail 2089.99 SG Reissue for 1400 flat.
Will this be the return of the mom and pop stores? Will guitar competition return and prices drop naturally?
My guess is no. Guitar Center’s super management people will probably realize that this is a major screwup, and return to normalcy.
But if they keep it this way, it’ll turn Guitar Center into Circuit City or Compusa. Stores with even more lackluster sales people with no enthusiasm for what they’re selling, and they’ll start to close down.
As for me, I really have no reason to go there any more. If there’s no chance that I can get a really good discount, I might as well just go to a mom and pop store and pay normal price and give it to people who actually need the money.
Excuse me if my Guitar Center post-apocalyptic thought process was a little difficult, but I found this revelation to be a big mind changer. Understood it’s a slippery slope, but damn if it aint greasey on that guitar hill.