What Do The Big Box Retailers Pay -VS- You?

[Dispatch]

Was just wondering, from actual experience, maybe someone here who was a former employee or someone might know for a fact, what (% less), do the big name retailers actually pay for the products they sell you like amps, cabinets etc., this in comparison to what you pay when you buy it from them?

 

[LP Freak]

There’s no set percentage. It would vary between manufacturers.

 

[Dispatch]

There’s no set percentage. It would vary between manufacturers.

Is there an average?

 

[splatter]

well I've seen stores discount guitars up to 40% and you can bet they aren't losing money. I would guess that ther is probably at least 50% markup if not more. Of coarse I'm sure it varies with the brand but thats probably fairly acurate

 

[Snowblind56]

The general rule I go buy is cost is 50% of MSRP. MAP or street price is 75% of MSRP. Of course there are a lot of other factors, but that's a good baseline to go by.

 

[muudrock]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

 

[chunktone]

It depends on the item. There are A, B and C marks. and there may be more. From my music retail experience, and A mark item the dealer will pay 50% of list price, B mark is 60% and I think C mark was around 75%.

 

[napalmdeath]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

Interesting..

So, a new LP Standard lists for $4149. 50% would be $2074.50, then another 25% would be $1555.88 dealer cost.

$1555.88 cost ÷ $2499.00 sell price would be about 38% GM for the dealer if this were still the case.

What I'd be interested to know, is the formula used to generate MSRP. What's Gibson really have in a guitar they sell to the dealer for $1555.88?

 

[LP Freak]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

Interesting..

So, a new LP Standard lists for $4149. 50% would be $2074.50, then another 25% would be $1555.88 dealer cost.

$1555.88 cost ÷ $2499.00 sell price would be about 38% GM for the dealer if this were still the case.

What I'd be interested to know, is the formula used to generate MSRP. What's Gibson really have in a guitar they sell to the dealer for $1555.88?

I have a hard time believing those #’s.

 

[napalmdeath]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

Interesting..

So, a new LP Standard lists for $4149. 50% would be $2074.50, then another 25% would be $1555.88 dealer cost.

$1555.88 cost ÷ $2499.00 sell price would be about 38% GM for the dealer if this were still the case.

What I'd be interested to know, is the formula used to generate MSRP. What's Gibson really have in a guitar they sell to the dealer for $1555.88?

I have a hard time believing those #’s.

That's what I come up with, if the 50/25 were the in play, as mentioned above. Certainly not saying it's the gospel. But, the math is accurate.

 

[scottosan]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

Interesting..

So, a new LP Standard lists for $4149. 50% would be $2074.50, then another 25% would be $1555.88 dealer cost.

$1555.88 cost ÷ $2499.00 sell price would be about 38% GM for the dealer if this were still the case.

What I'd be interested to know, is the formula used to generate MSRP. What's Gibson really have in a guitar they sell to the dealer for $1555.88?

I have a hard time believing those #’s.

yes, and people.cant grasp the concept. They expect a dealer.ro give them near street for a.used piece , when the dealer can get new item for less than the street price of a used item

 

[lockingtuner]

When I worked for Gibson, it was 50/25 discount. Meaning 50% of list price and then 25% off of that. I'm sure it's changed since then and like mentioned above, depends on the manufacturer and varies widely. Most import guitars will be 50/25 currently.

Interesting..

So, a new LP Standard lists for $4149. 50% would be $2074.50, then another 25% would be $1555.88 dealer cost.

$1555.88 cost ÷ $2499.00 sell price would be about 38% GM for the dealer if this were still the case.

What I'd be interested to know, is the formula used to generate MSRP. What's Gibson really have in a guitar they sell to the dealer for $1555.88?

I would guess the MSRP is more likely determined by the marketing department than operations or procurement in the case of a widely known and reputable brand. but every industry is different.

 

[the rossness]

This was 7 or so years ago...

My cousin is in a pretty popular band and has an artist endorsement deal with fender. A while ago, he hooked me up with a geddy lee J bass. Street price was $999 and he got it for $560 (which I repaid him). I’m not sure if stores and artists buy their guitars for the same price, but it would mean there is a 45% difference between street price and cost. At least for production fender guitars.

 

[Dispatch]

Another thing I can't understand is why is it that the customer who is the one purchasing the product for personal use is the one responsible for providing sales tax, yet no one down the line (the maker, the wholesaler or the store), pays any tax.

 

[napalmdeath]

Another thing I can't understand is why is it that the customer who is the one purchasing the product for personal use is the one responsible for providing sales tax, yet no one down the line (the maker, the wholesaler or the store), pays any tax.

This is how business works, regardless if it's a guitar, or a pair of shoes. Resellers pay no sales tax, end-users do.

 

[Dispatch]

Another thing I can't understand is why is it that the customer who is the one purchasing the product for personal use is the one responsible for providing sales tax, yet no one down the line (the maker, the wholesaler or the store), pays any tax.

This is how business works, regardless if it's a guitar, or a pair of shoes. Resellers pay no sales tax, end-users do.

Once again, the burden is put on the customer.

How about when you win a lottery?

You pay sales tax to buy the ticket, then you pay tax again when you win, it's not right...

 

[thisguy]

Don't listen to this song! Hate to see your blood pressure get any higher.

 

[Dispatch]

Don't listen to this song! Hate to see your blood pressure get any higher.

lol...

 

[skullfxr]

Another thing I can't understand is why is it that the customer who is the one purchasing the product for personal use is the one responsible for providing sales tax, yet no one down the line (the maker, the wholesaler or the store), pays any tax.

This is how business works, regardless if it's a guitar, or a pair of shoes. Resellers pay no sales tax, end-users do.

Once again, the burden is put on the customer.

How about when you win a lottery?

You pay sales tax to buy the ticket, then you pay tax again when you win, it's not right...

I rarely play the lottery but you don't pay tax on the ticket. At least not in FL. I may be spend a dollar on a scratch off a month and maybe a powerball.

Again tax is end user.

 

[Norton666]

I owned a music store for many years, and I can tell you that very few lines are still selling to their dealers for 50% of MSRP. I had a few , but they were import accessory lines. Gibson for example , for the last that I was a dealer , sold at about 62-65 % of MSRP , depending on the product. If I sold a LP Standard at MAP , I made about $150.Gibson Custom Shop guitars had an even smaller margin.