Klarinet Archive - Posting 001202.txt from 1998/04

From: Lee Hickling <hickling@-----.Net>
Subj: Re: Mouthpiece Information--Retail v. Warehouse
Date: Tue, 21 Apr 1998 21:19:28 -0400

Bill Hausman wrote that "warehouse" music stores can afford lower margins
because they sell more. He said:

> ...... 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.

Bill is absolutely right, but I have to question the assumption that the
cost of merchandise is the same for either store. The owner of the store
where I teach says he knows for certain, from salesmen, that the big
stores, and the operators of chains of stores, get not only volume
discounts when they buy new instruments hundreds at a time, but
under-the-table price breaks and other goodies -- like special instruments
that are not in the catalogs and can be touted as above-the-top-of-the-line
and sold at a premium. He's an honest man, he's been in the business for
nearly 30 years, and I believe him.