Dealer buying consortium - GuitarGuitar/Andertons/PMT

guitars4you

http://www.thefretboard.co.uk/discussion/138925/classic-richards-guitars-video#latest - Saw this link posted on FB and it reminded me of a chat at the Leeds Guitar Show this weekend regarding a new buying consortium - Called GAP - GuitarGuitar + Andertons + PMT

They have acquired the UK distribution for G&L as their first line - It appears to be a direct to market option for the manufacture - No middle man, straight into 3 large UK accounts with appropriate web sites and a good spread of outlets across the UK in major cities

Nothing new in such buying consortium's, but the first I recall for many years that is run by such large accounts

It certainly gives G&L a large and prominent 'shop window' in the UK, based on many years as a line carried amongst 'lesser known' accounts

My gut feeling at this stage is that they will add other similar lines as an 'exclusive retail outlet' - Such power could easily give them access to lines such as Tokai, maybe Tom Anderson, maybe Mesa Boogie, maybe Duesenberg - then add pedals, pick-ups, amp lines and acoustic as required - Such lines have either had very little major strength in the UK market place, or handled via a middle man which could now be eradicated - Such lines would sit amongst the major brands they already stock, like like PRS, Gibson, Fender, Yamaha etc whereby the UK/EU divisions are just part of the manufacture/distribution channel, so no middle man and again effectively a direct to market option - Prices will be controlled by all 3 stores and the same across all outlets - I don't see such a consortium handling small 'boutique' lines like say Matchless/Carr etc, as the sales potential and supply is not larger enough for such an account as GAP - They and others will stick more with specialist outlets like Coda Peach, WG etc

The negative of this may well come in months time - GAP will have to place orders in advance for delivery schedules months later - What happens if one outlet is finding the line slow and needs no additional stock ?

I can well imagine that come NAMM, GAP will be looking to add to G&L and I can see certain manufactures looking towards GAP as a direct to market option - Will it be short term gains for the manufactures with potential large opening orders - We'll have to wait and see  - But I can certainly see GAP having enough purchasing power, with relative marketing, promotion and retail access, that can create a monopoly in the UK for brands like Rickenbacker and maybe even Taylor - They could easily take a UK exclusive on the likes of Hamer and/or Guild if required

In short they can create a monopoly on well known brands with a direct to market option - As required - In the short term this will certainly be bad news for many smaller stores

Let's see how it pans out

richardhomer

An understandable delevopment - Fender, Gibson & PRS own/run their distribution and take the margin previously taken by Arbiter, Rossetti & Headline - now a group of dealers are doing the same....

Musicman20

G&L Guitars are lovely!!!

Jackobean

I'm somewhat sceptical about this. Exclusive distribution for a brand no one gives a damn about, unceremoniously dumped by every other dealer that's attempted to carry them. Does appear to have allowed GG to cut starting prices to around £1200, arguably a pretty compelling option vs the competition. 

TA22GT

Very scary in a lot of ways. Controlling the supply of certain popular brands could kill off the little guys.
I would hate to see specialist shops that rely on niche brands go under after their supply dries up and the years of great customer service they have put in.

Whitecat

I noticed that World Guitars dumped G&L overnight a few weeks ago after taking them on as a new brand less than a year ago. All the guitars they had disappeared... I guess they were shut out...

digitalscream

Here's the thing...this is extremely commonplace in the IT world - with folk like Scan, Ebuyer, CCL etc - and smaller shops haven't gone out of business. Why? Because selling and services are two entirely different propositions. Local shops focus more on customer service and everything that buying online doesn't get you (at least, they should be by this stage in the game), and there's a massive part of the population who value that. There have to be, otherwise you'd never see small one-off computer shops around, or all the millions of "We'll repair your phone!" shops that seem to be stabbing me in the eyes with neon signs everywhere I go.

I spoke to Lee Anderton about it in anticipation of these threads popping up; the focus is on brands which don't have particularly good representation in the UK, for whatever reason (but mostly the distributor markup pricing them out of the market). These are not popular brands - that's the whole point of the exercise: to bring them to the UK under better terms which benefit the consumer as much as the retailers involved.

There's explicitly no agreement in place regarding pricing, so Richard's veiled insinuations about collusion are baseless (note the clumsy attempt at covering himself, with the whole "This might be a load of rubbish, but..." which has never convinced a judge in this history of defamation hearings...). Lee's always been genuine and up-front with me in the past, so I have no reason to doubt him now.

My personal take on it is that Andertons are by far the biggest fish in the UK pond, and they could easily take care of "controlling the supply of certain popular brands" by themselves if they wanted to, but this could be about spreading the risk for them. Besides which...which "popular brands" could be problematic here? Gibson and Fender already have such overbearing terms attached to any purchase agreement that smaller shops are effectively priced out of the market anyway.

Here's a completely hypothetical question of my own making: would you guys think it was as scary/damaging/unfair etc if they started buying Mesa amps, and because of the shortened supply chain brought the prices down to the exchange-rate-equivalent of the US prices?

Sparky

Musicman20 said:

G&L Guitars are lovely!!!

Not according to Richard...

digitalscream

Sparky said:

Musicman20 said:

G&L Guitars are lovely!!!

Not according to Richard...

Indeed, which makes me wonder exactly why he seems to be so upset about it. Especially since - by his own proclamation - he provides a service that Andertons, GAK and PMT can't possibly match, so their business practices have (apparently) no effect on him.

Musicman20

To be fair the basses seem to be more popular. I've noticed the prices have reduced compared to World Guitars 

Bridgehouse

Musicman20 said:

To be fair the basses seem to be more popular. I've noticed the prices have reduced compared to World Guitars 

The basses are superb as well. Really good. Can be heavy but they do something quite unique

Tenebrous

digitalscream said:

Here's a completely hypothetical question of my own making: would you guys think it was as scary/damaging/unfair etc if they started buying Mesa amps, and because of the shortened supply chain brought the prices down to the exchange-rate-equivalent of the US prices?

A really good post, but I'm only going to focus on this one thing.

Music is a hobby for me, and in this hobby, I want to get the as much as I like for as little as I can. If a deal like this could save me tens if not potentially hundreds over buying the exact same model from a smaller store, then I'm sorry, I'm going to continue to shop online & buy from wherever is the cheapest.

But I'm with you on the service part. If I need some help, I wouldn't go to PMT or Guitarguitar - I'd either learn to do it myself, or I'd go to a local store/luthier.

Strat54

Hard to see them adding Anderson when they only produce 750 guitars a year, although I'd like to see them for sale at other outlets other than WG.

thebreeze

digitalscream said:

Here's the thing...this is extremely commonplace in the IT world - with folk like Scan, Ebuyer, CCL etc - and smaller shops haven't gone out of business. Why? Because selling and services are two entirely different propositions. Local shops focus more on customer service and everything that buying online doesn't get you (at least, they should be by this stage in the game), and there's a massive part of the population who value that. There have to be, otherwise you'd never see small one-off computer shops around, or all the millions of "We'll repair your phone!" shops that seem to be stabbing me in the eyes with neon signs everywhere I go.

I spoke to Lee Anderton about it in anticipation of these threads popping up; the focus is on brands which don't have particularly good representation in the UK, for whatever reason (but mostly the distributor markup pricing them out of the market). These are not popular brands - that's the whole point of the exercise: to bring them to the UK under better terms which benefit the consumer as much as the retailers involved.

There's explicitly no agreement in place regarding pricing, so Richard's veiled insinuations about collusion are baseless (note the clumsy attempt at covering himself, with the whole "This might be a load of rubbish, but..." which has never convinced a judge in this history of defamation hearings...). Lee's always been genuine and up-front with me in the past, so I have no reason to doubt him now.

My personal take on it is that Andertons are by far the biggest fish in the UK pond, and they could easily take care of "controlling the supply of certain popular brands" by themselves if they wanted to, but this could be about spreading the risk for them. Besides which...which "popular brands" could be problematic here? Gibson and Fender already have such overbearing terms attached to any purchase agreement that smaller shops are effectively priced out of the market anyway.

Here's a completely hypothetical question of my own making: would you guys think it was as scary/damaging/unfair etc if they started buying Mesa amps, and because of the shortened supply chain brought the prices down to the exchange-rate-equivalent of the US prices?

That's okay, in theory.  But it's usually not good - or certainly requires attention, when the biggest players in a market start getting together and making agreements and arrangements together.  This is why there's an on-going investigation into potential price-fixing at the moment (and rightly so).  If I was a small/boutique/specialist outlet I'd always have my antenna up about this kind of development and as a consumer I do too.

Sporky

Sparky said:

Musicman20 said:

G&L Guitars are lovely!!!

Not according to Richard...

Reminds me of Gordon Smith, which he said were great until he stopped carrying them. 

SteveF

I think he now says they're great again. 

I think he stocks them again.

Jack_

I guess there is a GAP in the market.

I'll get my coat and go hang myself.

guitars4you

Jackobean said:

I'm somewhat sceptical about this. Exclusive distribution for a brand no one gives a damn about, unceremoniously dumped by every other dealer that's attempted to carry them. Does appear to have allowed GG to cut starting prices to around £1200, arguably a pretty compelling option vs the competition. 

I would not say G&L are the most desirable guitar in the world - Yet for many years in the UK they have had very little promotional activity to appeal to a larger market place - Look at what Anderton's have done with Chapman Guitars - Created a market for a guitar that no one knew what it was only a few years ago - With such strong links via new media channels, be it Facebook or there own video channels, plus major dealers in large cities, they can make this line far more prominent than it was - Will be interesting to see how a direct to market policy improves UK pricing

guitars4you

digitalscream said:

Here's the thing...this is extremely commonplace in the IT world - with folk like Scan, Ebuyer, CCL etc - and smaller shops haven't gone out of business. Why? Because selling and services are two entirely different propositions. Local shops focus more on customer service and everything that buying online doesn't get you (at least, they should be by this stage in the game), and there's a massive part of the population who value that. There have to be, otherwise you'd never see small one-off computer shops around, or all the millions of "We'll repair your phone!" shops that seem to be stabbing me in the eyes with neon signs everywhere I go.

I spoke to Lee Anderton about it in anticipation of these threads popping up; the focus is on brands which don't have particularly good representation in the UK, for whatever reason (but mostly the distributor markup pricing them out of the market). These are not popular brands - that's the whole point of the exercise: to bring them to the UK under better terms which benefit the consumer as much as the retailers involved.

There's explicitly no agreement in place regarding pricing, so Richard's veiled insinuations about collusion are baseless (note the clumsy attempt at covering himself, with the whole "This might be a load of rubbish, but..." which has never convinced a judge in this history of defamation hearings...). Lee's always been genuine and up-front with me in the past, so I have no reason to doubt him now.

My personal take on it is that Andertons are by far the biggest fish in the UK pond, and they could easily take care of "controlling the supply of certain popular brands" by themselves if they wanted to, but this could be about spreading the risk for them. Besides which...which "popular brands" could be problematic here? Gibson and Fender already have such overbearing terms attached to any purchase agreement that smaller shops are effectively priced out of the market anyway.

My local PC store barely sells any PC's at all - All repairs + accessories - They are content for you to go elsewhere and buy the PC from major outlets etc, and when you get it home and it does not interface correctly with existing printers etc tha is were they come into play

I spoke to Lee Anderton about it in anticipation of these threads popping up; the focus is on brands which don't have particularly good representation in the UK, for whatever reason (but mostly the distributor markup pricing them out of the market). These are not popular brands - that's the whole point of the exercise: to bring them to the UK under better terms which benefit the consumer as much as the retailers involved.

100% agree with this - It is almost like owning your own opposition to the major brands like Fender etc

It is certainly not a complaint from my end, just an observation and a report of what is happening in the market place - It will be tough for many smaller independents who can no longer support major brands, thanks to stocking requirements and now start to loose secondary lines

digitalscream

thebreeze said:

digitalscream said:

Here's the thing...this is extremely commonplace in the IT world - with folk like Scan, Ebuyer, CCL etc - and smaller shops haven't gone out of business. Why? Because selling and services are two entirely different propositions. Local shops focus more on customer service and everything that buying online doesn't get you (at least, they should be by this stage in the game), and there's a massive part of the population who value that. There have to be, otherwise you'd never see small one-off computer shops around, or all the millions of "We'll repair your phone!" shops that seem to be stabbing me in the eyes with neon signs everywhere I go.

I spoke to Lee Anderton about it in anticipation of these threads popping up; the focus is on brands which don't have particularly good representation in the UK, for whatever reason (but mostly the distributor markup pricing them out of the market). These are not popular brands - that's the whole point of the exercise: to bring them to the UK under better terms which benefit the consumer as much as the retailers involved.

There's explicitly no agreement in place regarding pricing, so Richard's veiled insinuations about collusion are baseless (note the clumsy attempt at covering himself, with the whole "This might be a load of rubbish, but..." which has never convinced a judge in this history of defamation hearings...). Lee's always been genuine and up-front with me in the past, so I have no reason to doubt him now.

My personal take on it is that Andertons are by far the biggest fish in the UK pond, and they could easily take care of "controlling the supply of certain popular brands" by themselves if they wanted to, but this could be about spreading the risk for them. Besides which...which "popular brands" could be problematic here? Gibson and Fender already have such overbearing terms attached to any purchase agreement that smaller shops are effectively priced out of the market anyway.

Here's a completely hypothetical question of my own making: would you guys think it was as scary/damaging/unfair etc if they started buying Mesa amps, and because of the shortened supply chain brought the prices down to the exchange-rate-equivalent of the US prices?

That's okay, in theory.  But it's usually not good - or certainly requires attention, when the biggest players in a market start getting together and making agreements and arrangements together.  This is why there's an on-going investigation into potential price-fixing at the moment (and rightly so).  If I was a small/boutique/specialist outlet I'd always have my antenna up about this kind of development and as a consumer I do too.

Did you miss the part about there definitely not being any price-fixing or collusion involved here?

It's interesting how, when this sort of thing, everybody's suddenly bothered about the plight of the small shop...because most of the time, folk are pissed-off with the lack of service, poor attitude of sales staff, lack of stock and ludicrous pricing with those one-off shops.

I'd say, generally-speaking, that they have bigger problems than three box-shifters with fancy store-fronts getting hold of cheap deals with a couple of brands that (currently) nobody wants to buy.

Gassage

It’s Richard’s Guitars I feel sorry for...