Klarinet Archive - Posting 001185.txt from 1998/04

From: Bill Hausmann <bhausman@-----.com>
Subj: Re: Mouthpiece Information--Retail v. Warehouse
Date: Tue, 21 Apr 1998 18:14:53 -0400

At 03:58 PM 4/18/98 PDT, Kevin Fay wrote:
>I understand that local music stores think they need to charge more than
>the "warehouses." It is not true, however, that the WW & BW get a
>better price--what they may be selling at less than your purchase price
>is last year's inventory. The Robinson-Patman Act disallows volume
>discounts among sellers at the same level of distribution.

You can't sell last year's merchandise forever. You gotta get new
eventually, at this year's prices.

>The real reason that their prices are lower is that their margins
>(profits) are lower--they gouge less.
>
I resent the "gouge" remark. If we were gouging I'm sure my salary (based
on commission) would be MUCH higher! They can afford lower margins because
they sell more. Let's take an example: Say it costs $1000 to keep a store
open one day, whether it is a local store or a big warehouse place. This
includes salaries, heat and light, rent, etc. You have to make at least
that much per day to stay in business. We will assume for the sake of
argument that the cost of merchandise is the same for either store. If the
only item you sell costs you $100 and you only sell 10 a day, you HAVE to
charge $200 each for them or go under. If you sell 100 per day, you only
have to charge $110 to break even. While it is nice to think that lowering
price will increase sales, within the limited market area a local store
operates in it is unlikely to make much difference, although on the
national level it may make some. Nobody is gouging anybody, but you have
to cover the cost of doing business, which is higher for the local store
PER ITEM SOLD. But since it is local, there are things they can do for you
that the mail-order place can't -- personal service and product knowledge,
ideally. (Yes, yes, I know, things are frequently not ideal.)

Sorry to get preachy, but I felt that my integrity as a retail salesman was
being impugned.
>

Bill Hausmann bhausman@-----.com
451 Old Orchard Drive http://www.concentric.net/~bhausman
Essexville, MI 48732 http://members.wbs.net/homepages/z/o/o/zoot14.html
ICQ UIN 4862265

If you have to mic a saxophone, the rest of the band is too loud.