Piano World Home Page Forums Our Most Popular Forums Piano Forum A word or two on the industry

I doubt that customers really have such a long and quite so plainly silly list of demands in terms of what they expect from piano shops.

Buyers just find it unfathomable that the prices are so often absent from websites, unclear, or at best to be considered the starting point for some lengthy negotiation in which the customer feels (rightly or wrongly) they are at a disadvantage. This adds stress to the transaction, which will typically be for a significant amount of money already. Sort out the prices, not the distance from the freeway.

Here is my issue with the MSRP/SMP/given/actual price scheme.

Without starting any real negotiations yet, I was given:

Dealer 1, Piano A: 43% off MSRP, 27% off SMP (best deal by MSRP)
Dealer 1, Piano B: 13% off MSRP, 13% off SMP (msrp=smp)
Dealer 2, Piano A: 25% off MSRP, 5% off SMP (same as piano A above)
Dealer 2, Piano C: 37% off MSRP, 35% off SMP (best deal by SMP)

What this tells me is: MSRP is meaningless, SMP is a vague starting point, "discounted SMP" is widely variable, prices between dealers are widely variable.

I think this matters most on the low end, where every $100 in the budget really counts, but it makes it incredibly hard just to find out which pianos are (would be?/could be?) in a similar price range without shopping every piano within (at least) 43% MSRP/35% SMP at every dealer (which is pretty much what I've been doing ).

The list was clearly a composite based on the demands of many customers.



I can understand that some customers feel uncomfortable in negotiations. I do. But if apparently many/most customers expect negotiations to be part of the process, how can that part be removed? I have never owned a car since I live in Manhattan, but don't buyers negotiate for cars?

With the Piano Buyer, a reasonable starting place for negotiations is no longer absent as long as someone knows about this free resource.

Although distance from the freeway is not one of my concern(I live a few miles from Piano Row), that very problem was mentioned by one of the early posters in this thread who complained that it was a two hour trip to tne dealer.

That is a rather large paraphrasing of:



That this is nonsense does not entail that something else must have been meant.

A factor many of you are not taking into account is that, according to the most accurate source (NAMM), the break-even point for piano dealers is about 38%. Falling below that average means we are losing money.

True some deals are above and some below, but the average stands. This is due to the costs of maintaining a operation that satisfies the needs of enough buyer to sustain the business.
Many of the prices discussed on the Forum are far below that average.

Most shoppers will not buy without getting some kind of "deal". With that in mind, what price should we mark on our instuments?

Actually, car negotiation is slowly going away, too. With the internet, you can often get lowest-price quotes from dealers before you ever leave your house, if you already have a general idea what you want. Then you go test drive the ones you were interested in and see how you like them.
There is still a lot of car negotiation going on right now, but this alternative method is becoming more and more common, and dealerships are adapting their own practices to meet the new consumer way of shopping.

Plover,

I don't want to nitpick because it's clear you're trying to be helpful and your comments are completely reasonable, but a two-hour drive could be any number of combinations of freeway driving, local streets, and traffic delays. We really can't conclude much from that factoid. OTOH, the preponderance of factoids from shoppers who find the whole pricing process bewildering indicates a real problem.

One thing we have to remember is that two hours in a piano showroom will bring no pleasure to one category of shoppers even if prices are firm, fixed, and fair. This is the category of non-players who are shopping for someone else's instrument, mainly parents who want to do the best they can for their kids, but don't want to become self-made experts on piano touch, tone, or price. A dad in this situation might spend a couple of pleasurable hours looking over the power tools at Sears, but have very limited patience with the sophistication of pianos and their prices.

There's no question that Pianobuyer is a great resource for piano shoppers, but there is a weakness IMO in the area of MSRP / SMP. There are many brands with identical prices listed for SMP and MSRP. As I understand it, that could be a confirmation of the validity of the MSRP, or simply indicate a lack of data available to plot the SMP.

An example of this is Hailun / Wendl & Lung. These are relatively low-priced pianos, instances of where every $100 may very well count, as one poster put it. Fine has given Hailun prices a big haircut to arrive at SMP. Wendl prices on parallel models have significantly higher MSRPs which are then matched by identical SMPs. Thus a Hailun 178 has an SMP of $21,700 and the corresponding Hailun has an SMP of $13590.

If there is any meaningful difference between the two pianos, no dealer or other source has been able to state it here even though the question has been asked several times in threads. A few retailers have suggested that the differences are minimal and may be different depending on the production run. That's a lot to digest and sort out for the non-player/shopper.

I hope that in future editions of pianobuyer matching SMPs are not listed in cases where there is a lack of data to support them. Such listings can create confusion.

I think it's clear that no individual piano buyer would be concerned about all of the items on the first list or even 80% of them. So, a reasonable interpretation of Marty's list is what I said. In fact he said "I am sure you are willing to throw out three or four on the list, but there are others who demand those, and would throw out a different three or four."

I don't think he included something on the list that only a small percentage of customers is interested in. Many/most of the NYC delaerships offer a high percentage of items on the list. Do you think they would offer them if customers didn't expect them?

To all:

First I want to thank all of you who regularly contribute (and argue) here, and freely answer questions of consumers such as my family who are searching for the best piano value for our needs. Having asked some questions, reading and rereading several strings here, reading the Piano Guide, and visiting several stores (within and outside of our immediate area over the last year), we finally purchased a new grand just a couple of days ago to replace our Samick upright that the kids have practiced on over the past 6 years.

I really appreciate all of you and thank you for the sharing here.

However, in relation to this particular thread, I would say that my experiences with about half the dealers were less than satisfactory. I don't care if the store is out of the way, in the best retail location, in a broken down warehouse or fancy carpeted and lit store as long as they have quality pianos, do not treat me like an ignorant fool, listen and answer all questions honestly and completely (including the big one - PRICE), and are patient and understanding of my timeline and process as this is a huge commitment financially.

Notice I didn't point out just PRICE, as there were other factors important in choosing the right piano for us, but price was a huge factor when looking at plunking down multiple thousands. However, I was completely turned off by those who wouldn't talk about anything other than list pricing or tagged discounts in the store, and I refuse to buy from someone who won't have an honest discussion over the phone/internet to provide reference points for me to compare dealers (again considering all other factors as well). It is extremely frustrating trying figure out what dealers are really selling pianos for, and I agree that going to an internet site that says "Call for price" is useless.

Also, while the piano guide was useful to a small degree in this area, the high prices stated are not realistic at all given the different "deals" I was offered. Note that this can be a negative, because the inflated pricing nearly prevented us from even looking further.

The bad experiences my family had can only be compared to the "used car salesman" tactics that you see in movies. If any dealers persist in following those tactics (as some do per my experience) then I can only hope they are driven out of business.

I'm rambling here, but I'll close by saying LISTEN TO YOUR CUSTOMERS AND WHAT THEY WANT/EXPECT rather than fighting the changes/expectations that are inevitable. Just an opinion from one of those people with unrealistic expectations (who also happen to have the money to keep the piano sellers in business).

"we finally purchased a new grand just a couple of days ago to replace our Samick upright that the kids have practiced on over the past 6 years."

So, what did you get, Kymont? Can we see some photos?[i][/i]

I can officially clarify this issue:

Most manufacturers supply us with an MSRP that each manufacturer calculates in their own way. If they do supply it, it is listed as is. For those manufacturers that do not supply us with an MSRP we calculate an "MSRP Equivalent", usually the same as the SMP.

Let me reiterate a point made many times. Using MSRP as a means of price comparison is usually fruitless, as manufacturers use widely vaying methodologies to calculate it. Examples of the problem in using MSRPs is detailed in Piano Buyer on the page immediately preceding the price charts. The SMP is base on wholesale costs, with some adjustments, and provides a more accurate means of comparison. There is no "lack of data" in pricing information used to calculate the SMP.

BEFORE USING ANY OF THE PIANO BUYER PRICING INFORMATION, we strongly suggest reading the 2-page introduction the the Model and Pricing Guide in Piano Buyer.

Does this mean you tried bargaining and they wouldn't go lower or something else?

Did you take into account the average discounts from SMP that Fine mentions or assume the SMP was supposed to indicate the selling price?

Congratulations, Marty, on your thoughtful and concise analysis of the current state of the piano industry. Perhaps with the additional economic factors that have kept many average middle-class buyers away from piano stores, we are witnessing a paradigm shift in the culture, where buyers like cBeam01 do their research online, then expect the local dealer to cave to their demand for a lowball price. As Steve pointed out, no traditional dealer can survive in the piano business if they lose money on the fewer unit sales being made in this climate. As you well know, a new Yamaha U1 in polished ebony has a MSRP of $11,000 and a MAP price of $8200. If cBeam01 walked into your store with the intention of negotiating his best deal under $5500, including delivery and two free tunings, how would you handle it? Switch him to a grey market used U1 or a different brand (Pearl River)?

I seriously doubt that we will see Yamaha or Kawai sell directly through warehouse club catalogs, like Suzuki is doing with Costco. Keep in mind that Costco "road shows" are conducted by local dealers and the pricing, while ostensibly less than store prices, are established by the dealer, not by Costco. If dealers cannot cover the additional expenses of paying Costco's share of the proceeds, plus pay the travel expenses and commission of outside sales people necessary to conduct the road show, by selling enough units to make this type of promotion viable, they will soon become extinct. A quick survey of dealers that have previously done Costco road shows will reveal that this is already happening, plus the participation by Yamaha and other manufacturers has been significantly curtailed.

As for cBeam01 getting "ripped off", maybe he should continue shopping all over the net for his best price on the U1 or K3, then when he needs service issues resolved, see how responsive the local dealers are, let alone the selling dealer in another state (if they are still in business).

Here is the problem. cBeam said he wanted a fair price. We guided him to a site where it is quite easy (as long as you read the WHOLE introduction!!!!) to calculate.

5k for a new U1 is not fair, not even close. The margin for the retailer is well below what you spend everyday for clothing, furniture, even cereal. Yes, the purchase is big, so the numbers for the consumer are daunting. But if you look at strict margin percentages, the piano industry is one place these days where you don't get ripped off. Especially if you are willing to do a couple hours of research.

The fact that many consumers here are confused, upset, and dissatisfied with the price schemes of the industry is very real, though. I try my best to explain new piano prices. Sometimes people believe me, sometimes they don't.

Dealers have the LEAST amount of control over price. Manufacturers/distributors have the most (they set wholesale prices) and consumers second. Pianos are negotiated items because the customers demand them to be. Spend some time in a store and you will understand.

Fixed prices don't work because a majority of customers shopping for pianos want to negotiate, or at least expect to. Hard for forumites to understand, but this forum represents a minority of opinion out there. At least that is my 'real world' experience.

For Steve Cohen and pianoloverus: I'm not trying to argue with anyone here - I bought my piano and am done shopping. I just wanted to thank everyone - including the two of you - and give my opinion on my experience. I did read (in detail more than once) the two pages preceding the price lists and I fully understand the methodology and difference bewteen MSRP and SMP as well as the "street price" methodology. My earlier comment still stands. The reason I point this out is that even taking the typical discounts off the SMP (as instructed), the high prices nearly scared me off.

As far as negotiating, when I let a store know I'm serious about buying with both of us knowing there are altenative places to spend the same money, then I expect them to give me their best price (or at least close). When I get the run around, a grossly inflated price over what I consider to be "street value" based on my shopping, or the used car salesman pitches (if you'll buy today ..., this sale is only good through the end of the day, these pianos typically don't get discounted any further but here is a different line you might be able to afford, "X" brand is inferior, etc. etc.), then I just listen to my girls enjoy playing the pianos and leave. No further negotiation is needed. I want honesty and I expect them to give me an honest answer on pricing that is realistic to the market - I only had two dealers do this. Maybe I'm the only person who has had this experience - if so take it for what it is. Maybe the other dealers had higher cost structures that wouldn't allow a competitive deal, or they felt they were the only or the best choice in the area. I don't know and it is not for me to debate and figure out as the market will ultimately do that for them.

All of you helped me get to this point, our new piano is being delivered later this week, and now we need to get our Samick in the hands of someone who would enjoy a piano that has served us well for the last few years. I will try to get some pictures posted after we get it setup (and the room cleaned up!). I know I'll be back on the forum reading because all of these forums are good reading, good entertainment and kind of addicting!

By the way, even though I've already purchased the piano I am going to buy the Piano Guide hard copy now rather reading online - not for the pricing anymore but for the other valuable information it contains.

@ Marty - thanks for bring this into light, albeit it's been done before, despite what is written I think that those not in the industry do appreciate the insight.

@ Turandot - I have experienced every single thing on Marty's list (yes, even the distance from freeway thing), and in the worst case scenarios 90% of them with one customer. That being said, Marty's insights paint a very negative picture, and it isn't always like that. In fact, the beauty of this industry is that many times we get a pleasant surprise with a fresh experience.

@ Customers - The real gem of ths thread, I think, is the customer responses and their insight. Solutions aren't always clear and easy, and sometimes a little creativity goes a long way. To understand, at the root of the problem, what the consesus is amongst buyers as to what sums up a great shopping experience, makes for the possibility of a great retail solution. In theory at least

One way or the other, I think the economic climate is forcing piano retailers to rethink the business model, whether they want to or not.

If the prices even after discounting the SMP were "high" compared to what you paid, then I assume this reflects the extremely poor economic situation when you purchased the piano. I don't think the Piano Buyer attempts to take the economy into account nor could it even if it wanted to. If the PB could do this, we should also use it for managing any stock funds we own.

Though I have just registered, I have been following and learning from forum discussions for some time. I have found input from and interaction between pianophiles, dealers, and casual consumers generally very helpful. That said, I have been puzzled by dealer and dealer-sympathizer response to issues raised in a previous thread by Journey and echoed in this thread by turandot and some recent consumers.

At the middle to low end of the piano market, can there really be any doubt that price is among the main concerns for consumers, especially in an economic downturn? The issue is not simply price but also price and service transparency.

Reasonable consumers understand that dealers need to make a living. So it's understandable why dealers might be frustrated when, for instance, a consumer who expresses fears about being ripped off really seems most concerned about getting the lowest possible price around. Still, the lack of price and service transparency has the effect of fueling consumer suspicions that are not necessarily unreasonable. A consistent price range, say, of +/- 5% (excluding services) would do a lot to quell these suspicions.

Dealers have complained that consumers often call in an attempt to get a price that would leave the dealer with the lowest price losing or not making enough money. Why would the dealer bother selling if that were true, unless he was already well on the road to going under? And if a dealer can sell for less than her competitors, why shouldn't consumers want to find those dealers? Reasonable, price-as-bottom-line consumers are ready to take the risk that local dealers will refuse to service. Dealers who believe that their service is worth a relative premium could specify upfront the services that factor into their total price. Consumers can do their own cost-benefit analysis.

I humbly suggest that the list Marty Flinn has offered more plausibly represents what consumers who are already committed to buying new and local want or expect. Presumably, most of these consumers are not determined to get the best deal in the country and instead have made known their service and convenience expectations.

But a significant number of other consumers care mainly about price and have no extravagant service and convenience expectations. Still other consumers are on the fence about whether to buy new. The lack of price and service transparency can lead such consumers to give up in frustration and buy used (for much less), delay buying, or not buy at all.

In my case, I thought I would be buying used through a private party on Craigslist. Turns out, I answered an ad from a dealer/reseller/restorer: nice guy, reasonable asking price, very fair selling price ("I'm really interested. What is your best price?"), service "extras," could not be more pleased so far. Critics of piano retail practices aren't talking about such dealers. Apparently, there are more than a few dealers who don't operate this way.

Jeff,

I don't wish to put you on the spot, but in my recollection you have not been one to spout the credo that "the existing model is the only one that can possibly work. It may have flaws, but all the other alternatives have fatal flaws."

I would like your take on the issue from the perspective of floor financing. If you add the withdrawal of credit for dealers to floor their inventory into the traditional model, do you think that the traditional model can survive?

I know one should not read too much into the factors that led providers to exit the arena. It could just as easily be their own sour finances or a general dismal outlook for the luxury goods sector as it is the detection of a fatal flaw in the industry model. But whatever the reason for the exit, does it not require fundamental revision of the model? It would seem that those dealers who have capitalized their own inventory are in a vastly superior position over those who have relied on credit. It also seems that there are very substantial barriers to market entry for any sales pros who would like to go it on their own and renew the model by becoming the smaller fish. I mention that because in explanations of the traditional model, it is usually stressed that the model protects smaller dealers from being cannibalized by larger well-financed operations with lots of cash liquidity. I just can't see that benefit now unless manufacturers or distributors are willing and able (which I kind of doubt) to either lighten up on flooring requirements or underwrite floor credit themselves.

What are your thoughts on this perspective?

There have been many PW threads detailing the numeorus factors that go into pricing differences. A few are dealer wholesale cost, dealer overhead, prep, how long the piano has been unsold, dealer cash flow, dealer location...plus many others.

I think +/- 5% is a small price range to expect for anything. My guess is that for many or most items the price range is more than that. It certainly is for yoghurt in the two supermarkets near my apartment.