A word or two on the industry

Posted by: Marty Flinn

A word or two on the industry - 12/13/09 06:59 PM

A frequent theme on the Forum is bashing of the traditional piano retail sales “business model.” There have been several rounds just this week. There are usually one or two "armchair" marketing "experts" who believe they have all the answers to the piano world. A lot like Monday morning quarterbacking through a fantasy football season. This is always frustrating for us in the industry who live the realities of retailing in today’s world every day.

The traditional piano retailing model has been around for generations, and that is the criticism often laid at its feet. Retailers have tried “one price” houses and failed. Retailers have tried limited boutique offerings and failed. “Retailers have tried doing business from drafty warehouses to keep overhead down and failed.” Retailers have replaced commissioned salespeople with “hourly” clerks and have failed. Manufacturers/distributors have fielded “factory” stores to sell direct and have failed. Several internet-direct models have crashed and burned dozens of buyers. Single location superstores vs multiple small local satellite stores. Experimentation is costly and often fatal.

Throw off the chains of the traditional model. Think outside the box. Reinvent yourself. Innovate. You must adapt to survive. The “model” is dying. And yet, the customers still come with the same needs and wants and demands. Pianos get sold one at a time and usually face to face with the consumer. Each transaction is unique.

Frequently the criticism is directed to the retailer. Often his hands are tied by restrictions put on him by the manufacturer, distributor, and a variety of regulatory agencies. Changing the “paradigm” or the “business model” requires a lot more than just the will of the retailer. I will require consideration and collaboration of the entities I have identified. Such collaboration is actually illegal in some situations.

There are pressures from a variety of directions that have shaped the traditional model. While there has always been pressure to change the model, there has never been a consistent consensus as to where and how. Lots focus on the simplistic topic of “outrageous overhead expenses” of the traditional model. Yet, more often than not, the expense load is driven by customer demand or entitlement that piano stores have this and that or are set up just so. Retailers don’t just conceive of this out of whole cloth. They are responding to specific articulated consumer demands. Every retailer daily examines his product offering, his promotional activity, his fixed expenses and controllable expenses. No successful retailer rests on his laurels and rides the “model” without constant examination and correction. We have some very creative minds in the industry and all are focused on solutions. Recent posts have painted piano retailers as morons who can't get out of their own way. As in any industry, a few are, most are not.

Here is a list of what many/most real piano shoppers demand:
1. Freeway close, and easily located locations with good parking and lengthy store hours.
2. Well lit carpeted showrooms with good acoustics and good HVAC. Too hot in here! Too cold in here! Pianos out of tune (raining outside)!
3. Depth of product selection from portable keyboards to concert grands. Why aren’t there four new Yamaha C3PEs for me to select from? Why don’t you stock a new Kawai RX-3 in walnut satin?
4. Well prepared and tuned instruments, each one all the time.
5. All credit cards accepted and competitive (dealer bought down) consumer financing, and “same as cash” options.
6. Wholesale or free delivery charges.
7. Free lessons? How long and for how many family members?
8. At least one post-delivery tuning, often two.
9. Product staged, prepared and ready to deliver in less than a week. For some ethnic buyers, “fresh” back up product for “in the box” delivery.
10. Rental fleets with depth of selection and full value back on a future purchase.
11. The newest hottest digital products immediately after release and below wholesale discounting on discontinued digital products even prior to release of replacements.
12. Free “button pushing” instruction on complicated ensemble digital models.
13. Guaranteed trade-up allowance programs down the road.
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. Each item comes with a measurable cost.

Here is a list of what many community teachers demand from a local piano retailer to earn their support, in addition to the list above:
1. Below market pricing from themselves and their student referrals.
2. Free recital space with 7’+ instrument, tuned regularly, with seating for 50-150.
3. Outside sales commissions, frequently in excess of what the salesman earned, or commensurate donations to their local association chapter or other charity.
4. Dealer support of association chapter bulletins or other publications.
Teachers are a valuable source of “bonus” business for piano retailers, but it comes with a cost. Education centers have nearly always been cost centers rather than profit centers. Recital halls in the final and complete analysis are always cost centers with little tangible return.

Piano retailers are often taken to task for not “growing” market demand for their products. Many do a lot to grow piano education opportunities by sponsoring scholarships, supporting local teacher associations, establishing health and wellness music making programs, sponsoring local concerts, outside exposures, school loan instrument programs. Piano ownership and display, and piano lessons are a cultural imperative for some ethnic groups, thank God. It is also attached to a broader cultural pendulum that over the decades has swung back and forth. With each generation more divergent pressures against piano come “on line”.

All successful retailing has many similarities:
Treat your customers with respect.
Give them more use value than you extract in purchase price.
Deliver excellent service before, during, and after the sale.
Know your products and prepare to professionally present them.
Tell the truth.
Let the competition present their own products.
Create a comfortable and conducive environment.
When any retailer violates these tenants they deserve to be scourged. Just don’t use the same whip on the rest of us.

From time to time I get the image of folks dancing around the campfire in joy that the business is so bad and dealers are falling by the wayside, thus paving the way for "fire-sale pricing". In the long run, fewer dealers and fewer brands and models are not good for the consumer.

To all the armchair critics of the piano business out there: put your considerable money on the table and at risk, sign a multi-year lease, secure a franchise or two, and have at it. Bring your new concept to the market and make a killing. Until you have done that or until you have walked a couple of miles in our shoes, don’t be so quick and sure you have all the answers. Constructive criticism is helpful. Keep the ideas flowing. Complete indictments of the entire industry, and every salesperson in it, are not helpful to anyone.
Posted by: pianoloverus

Re: A word or two on the industry - 12/13/09 07:29 PM

I agree strongly with your first and last paragraphs. Some of the biggest armchair experts seem to think they know all the answers but, at least according to their signatures, have never worked a single day selling pianos no less owned a piano dealership. And I strongly doubt they have ever tuned a piano or can play beyond a mediocre level.
Posted by: Steve Cohen

Re: A word or two on the industry - 12/13/09 07:44 PM

Marty,

That was simply one of the best posts I have read in a long time.
Posted by: Peter Sumner- Piano Technician

Re: A word or two on the industry - 12/13/09 07:54 PM

Thank you Marty...very well said from the heart....

Having been a piano retailer during a deep recession back in the UK (Margaret Thatcher's handbag being waved with abandon), I can relate to both sides of this very wobbly fence...
Posted by: LS35A

Re: A word or two on the industry - 12/13/09 08:03 PM

Wonderful post.

It's a tough life these days for piano retailers. They have my sympathies. The old days of 'Mommy and Daddy make payments on a piano so Suzy and Johny can take piano lessons' is OVER.

The local piano store where I bought my Kawai ES4 closed down this year. There was just no way they could make a go of it.
Posted by: LS35A

Re: A word or two on the industry - 12/13/09 08:04 PM

Wonderful post.

It's a tough life these days for piano retailers. They have my sympathies. The old days of 'Mommy and Daddy make payments on a piano so Suzy and Johny can take piano lessons' is OVER.

The local piano store where I bought my Kawai ES4 closed down this year. There was just no way they could make a go of it.
Posted by: PreparedPipa

Re: A word or two on the industry - 12/13/09 08:10 PM

i whole-heartedly agree with many points in your post and i appreciate knowing so many of the ins and outs of the industry. indeed - selling pianos is very different from selling other things. i for one won't even dare to try. to do so must take courage, knowledge, persistence, patience, and a certain amount of insanity! i have so, so much respect for everyone in the industry who are just very, very classy people. out of the 10 store owners i have dealt with, 9 of them are just wonderful, which means something.

i urge you to not take those "down with retailers" calls too much to heart, however. more often than not, people take the time to criticize when there is a problem, but when they're happy, they just don't talk about it.

i had been shopping for a piano for 3.5 months and tried almost all the new business models you had mentioned. in the end, i reaffirmed my believe that buying a piano is not like buying anything else - you have to go touch it and play it. you need to shop around different retail stores. i enjoyed the whole process and just for background - i shop online heavily, from clothes to computers.

i never shared this experience but now that i'm reminded of how demanding, ungrateful and unsympathetic consumers can be, i thought i just might as well... one of the places i shopped for a piano, which is a large chain store, had a sales person who didn't even get up from the armed chair to greet me (I made an appointment). he basically just gestured me to go try on the pianos. after he heard me play and saw that i was serious, he got a bit more involved but in the end, he told me "give the manager a call and tell him what you think as a courtesy" - by then i really felt that he was unnecessarily rude. he also didn't know many of the things i asked about the pianos, like where they were made etc. the manager of the store tried to make up for it (he wasn't there) by calling me multiple times afterwards but by then i was shopping elsewhere. there was also another big store that had people who didn't even acknowledge that i was in the store until almost 15 minutes later i went up to them to ask them questions.

my point is that just as there are consumers who are jerks, there are many of us who just want to have some basic politeness from sales people and ones who can answer your basic questions. most of the time if the owner is in the store, you get a much, much better experience. i'm just saying, watch your staff - you never know what happens when you're not there... ;p so no - my post is NOT about "down with retailers" but more about ineffective, unaffected sales people.

thanks again for the informative post.
Posted by: cBeam01

Re: A word or two on the industry - 12/13/09 08:33 PM

Well, bashing or not bashing, the piano retail industry in the U.S. is failing me. I am a simple consumer and plan to purchase my first acoustic piano soon, and have no intention to buy another one in a long time.

I am looking to buy a new piano for my sons, age 12 and 8. I am looking for decent quality, but we do not need anything fancy at all. We started to get information by doing some research online, and it looks like a Yamaha U1 or Kawai K3 would fit the bill. I am envisioning a purchase process where I pack my kids into the car, drive to the dealer (one hour across the bridge), try 2 or three instruments, decide, write a check, and get the piano delivered within the next couple of weeks.

Price question. Looking at the dealer's web site I do not get a price at all. "Please Call". Calling them, I do not get a price quoted either. What???
Fine, there is the "Piano Buyer's Guide". I find for the K3: MRSP $8,500, SMP $7,800. According to the website SMP is "Suggested Maxiumum Price" (spelling error from website). Now I begin to wonder what a suggested maximum price means. I should not pay more? All right, but what is a fair market price?

So I do a search on piano forums, and up comes a post where someone says he got a quote for a brand new K3 for $5,300. I am starting to scratch my head, is a price of $5,300 fair or do I still overpay? Or even underpay?

Here is my dilemma: I do not want to make a 2 hour round trip with my kids to the retailer just to find out that our ideas about a fair price are so far apart that there will be no agreement. Additionally I am a person who does not like horsetrading at all.

My bottom line: Price is an important factor in a transaction like buying a piano. Money is tight. I am not looking for an exotic instrument, but for an instrument that is manufactured in sizable numbers (call it a commodity), has a decent quality and a good value. I want a prospective retailer to answer my price question without wasting his or my time. And if they cannot provide an accurate number then they should give me a ballpark number. If the ballpark number is $8,000 for the K3 in my example, then I know it is not worth his and my time to pay a visit.

So, how can I make a purchase?
Posted by: pianoloverus

Re: A word or two on the industry - 12/13/09 08:46 PM

Originally Posted By: cBeam01
Price question. Looking at the dealer's web site I do not get a price at all. "Please Call". Calling them, I do not get a price quoted either. What???
Fine, there is the "Piano Buyer's Guide". I find for the K3: MRSP $8,500, SMP $7,800. According to the website SMP is "Suggested Maxiumum Price" (spelling error from website). Now I begin to wonder what a suggested maximum price means. I should not pay more? All right, but what is a fair market price?


The meaning of SMP is clearly explained in Fine's book. It's also explained how to use the SMP to get a reasonable idea of a fair price. There have been threads here at PW explaining why dealers cannot quote prices on new pianos over the phone in most cases.

It's unfortunate you don't live closer to a dealer.
Posted by: turandot

Re: A word or two on the industry - 12/13/09 08:58 PM

Marty,

Why did you bail from the other thread?

You make some good points here, but opening another thread to make them is suspect IMO. The point/counterpoint on the other thread was interesting. This is not.

Your laundry list of what shoppers demand is not new. Here's a version from 2008 posted by you.

"You seem to have a handle on what our customers want, from your perch in Surrey. Hear is what they are telling us daily:
1. Want acres of instruments to play and compare
2. Want multiple C7’s to select from, for example
3. Want air conditioning, carpeting, good lighting and acoustics
4. Want convenient neighborhood, freeway close, locations with good parking
5. Want regular expensive advertising and Yellow Page presences
6. Want detailed piano tuning and preparation pre and post-delivery
7. Want free or wholesale delivery charges
8. Want multiple post-delivery tunings
9. Want displays of entry level, mid-line, and high end instruments to choose from
10. Want a variety of furniture styles, finishes, and colors
This is what the bulk of the American piano buying public wants."


In all my time here, I have never read a consumer shopping report complaining that a piano store (s)he visited was too far from the freeway, that parking was a bitch, that not all models were available in all finishes, or that the concrete floors were disconcerting. I've read plenty of complaining about price practices though.

You're bound to pick up some sympathy votes here. There is plenty to choose from in sympathizing with piano retailers. But exiting a spirited exchange to resurface with yet another rant does not distinguish you.
Posted by: Monica K.

Re: A word or two on the industry - 12/13/09 09:37 PM

Originally Posted By: turandot

You make some good points here, but opening another thread to make them is suspect IMO. The point/counterpoint on the other thread was interesting. This is not.


Maybe it wasn't interesting to you. I thought it was very interesting, and I'm glad to see it in a new thread. I had stopped reading the other one, as I had grown quite weary of the long and unproductive posts that were being thrown back and forth with people accusing each other of not acknowledging the other's points.

Thanks, Marty. I think your post is a terrific summary statement of the retail perspective of the piano business. smile
Posted by: terminaldegree

Re: A word or two on the industry - 12/13/09 11:09 PM

cBeam01,

As pianoloverus mentioned, you need to read the descriptions in the Piano Buyer more carefully. Very recently there was a long-winded thread here (try the search function) detailing exactly why prices for pianos are not quoted over the phone. "Rogue" prices are posted here from time to time. It's hard to tell what's real, what's imaginary, etc. not to mention what market someone obtained that price (the membership here is from all over the world). Did the price include dealer prep, tax, delivery, tuning, bench? US dollars? Canadian dollars? Something else? There is a competitive element to trying to be the one who posts the most outrageous deal they can here. I wasn't one of those people. I paid about 25% less than the price in Fine's guide including a 250 mile delivery and a tuning. I thought it was a fair price, and I really liked the piano I bought.

I would submit the "traditional" dealer model did not fail you yet because you haven't visited a store in person to play anything. In the past few years, I've probably visited at least a dozen piano stores. Only one or two of these were an unsatisfactory experience. The rest ranged from good to great...
Posted by: turandot

Re: A word or two on the industry - 12/13/09 11:16 PM

Originally Posted By: Monica K.
Originally Posted By: turandot

You make some good points here, but opening another thread to make them is suspect IMO. The point/counterpoint on the other thread was interesting. This is not.


Maybe it wasn't interesting to you. I thought it was very interesting, and I'm glad to see it in a new thread. I had stopped reading the other one, as I had grown quite weary of the long and unproductive posts that were being thrown back and forth with people accusing each other of not acknowledging the other's points.


There is some truth to that. It didn't seem like there was going to be any agreement on anything and the posts did get lengthy and complex. Of course, we're not navigating uncharted waters here. These marketing threads never produce sound-bites. Posts tend to be long and tedious. Threads repeat other threads in covering the same old ground with the same old hostility.

Still, I prefer dueling perspectives to a Sunday sermon, which is what I think we have here. I respect both gents for the depth of thought they put into that thread. I think Journey knows it's a losing cause. I also think he knows why. I'm guessing he's probably seen businesses die the hard way in his career and seen other businesses turn things around. I have a feeling he knows well the conditions necessary to produce each outcome.

Originally Posted By: Monica K
Thanks, Marty. I think your post is a terrific summary statement of the retail perspective of the piano business. smile


Yeah, but Marty's new thread is titled "A word or two on the industry". It is not entitled "A word about piano retail". As far as I know, Marty speaks from the perspective of a commissioned salesman, not from that of a retailer, a distributor, a marketing guru, or a maker. A lot of the sympathy that can be extended to the retail end of the industry is based on the demands placed on retail from makers and distributors. Marty often touches on those demands in his posts.

You can't have it both ways. If you defend the industry model against all comers saying that it is unique, you should not bellyache about how the industry treats retailers. If you wish to elicit sympathy for retail, you should not vigorously defend the industry model.

Posted by: apple*

Re: A word or two on the industry - 12/13/09 11:46 PM

i found it interesting
Posted by: cBeam01

Re: A word or two on the industry - 12/14/09 12:59 AM

Originally Posted By: terminaldegree

... you need to read the descriptions in the Piano Buyer more carefully...


I guess this is exactly my point what I do not want to do. I am really not that interested in making a big endeavor out of this purchase. For my taste I have spent enough time to prepare for this purchase. I already circled in on 2 models, want to try them, decide, pay, and leave. I am not looking for a lengthy back and forth re price and conditions. Again, I see the piano I want to buy as a commodity, I am not in the high end hand craft market.

Originally Posted By: terminaldegree


I would submit the "traditional" dealer model did not fail you yet because you haven't visited a store in person to play anything. In the past few years, I've probably visited at least a dozen piano stores. Only one or two of these were an unsatisfactory experience. The rest ranged from good to great...


I submit that the traditional US dealer model already failed me. I am just not interested in visiting a dozen different piano stores playing many different pianos. I am not qualified enough to understand or appreciate the subtle differences between manufactures and models. I am not an expert and I do not want to become an expert. I wanted to get price information before I go there to ensure that the visit will be worthwhile. And none of the retailers I contacted gave me any meaningful information. And to be honest, I could not care less about internal rules of the piano retail industry why they are not "allowed" to provide this kind of information.

It is pretty simple for me. I am the one who will spend the money. If there is no one that wants to deal with me in a reasonable way, I will spend my money elsewhere. The other thread mentioned Costco roadshow, so maybe I wait for one of these. Or the kids will have to practice longer on their keyboard and play real pianos only at lesson and at school.

Gee, I am not in the market for a really high end unique instrument. I am in the market for a reasonable quality upright that is manufactured and sold in the thousands each year. And I want a price where l am not ripped off.

I am looking for an easy transaction.

I can understand that others are looking for a different experience; I just want it simple, fast and fair.
Posted by: turandot

Re: A word or two on the industry - 12/14/09 02:45 AM

CBeam,

You mean that you're not demanding acres of pianos as far as your eye can see, models upon models in all wood finishes, tastefully carpeted floors, and the opportunity to pay for a guide book to help you figure out what the hell the price should be? You mean that you're not a piano snob?

In the granddaddy of these marketing threads almost three years ago, a retailer made this post to fellow retailers:

*Always be looking for what's happening around us. The world changes so fast now. I read fashion magazines, travel & wine magazines, even women's magazines, (look at the ads and what is "hot" now, it will keep you sharp) and I take my family out to happening, hip, artsy parts of town constantly to feed my mind with ideas, and I do get many. Please, go out to a hip, eclectic furniture store, it will blow your mind. We began to burn a candle at our reception desk and closing ratio improved.

*Modernize your showroom: Look at what's inspiring now, it's not expensive: pergo wood floors and clean concrete flooring, earth tones and sage colors, dark wood cabinets and silver fixtures. Clean walls, track lights, windows. Day by day, work at it. Customers want casual elegance, so for us chandelier guys, we gotta change. And for the warehouse guys, or smaller operations, I would get a young female furniture salesperson from a hip store in town and get her opinion on cheap upgrades to help inspire your customers to buy. They do incredible work for cheap.

*Customer service is a way of life. I think about my customers and not my competition, I don't give a rat's butt about what he's doing, and that's why "he" has gone out of business two times and counting. I deal sheet music and I have a recital hall, I believe these two factors are HUGE.

*Internet: YOU MUST GET ON THE NET. Even just get on Google.com/adwords and get your company's website (you have one right?) listed in your metro area constantly. This will not cost you much and is Vital. Email me for details if you'd like.

Other than these "dreamy" concepts, we have trimmed down our lines extensively. We believe that customers are just looking for EASY now. Most of the time it's more about the people element now than it is about the product (unfortunately). We're trimming our inventory and upgrading our merchandising. Hassle-free is a word people love to hear now.

If I could make it clear and concise (if only) I'd say it like this... You could say that the piano industry is in decline. Yes, it is. But we've finally stopped complaining and have taken action. I hope that you will join me in a high-performance, energized, creative and customer-driven approach to the piano marketplace.

PS - I know I failed to talk much about, well... pianos! This was done on purpose. We must refine ourselves as retailers and stop operating like country clubs or dinosaur watering holes that call themselves piano stores


Now rapidly approaching 2010 we have Marty's dinosaur list of what consumers demand.

[b]1. Freeway close, and easily located locations with good parking and lengthy store hours.
2. Well lit carpeted showrooms with good acoustics and good HVAC. Too hot in here! Too cold in here! Pianos out of tune (raining outside)!
3. Depth of product selection from portable keyboards to concert grands. Why aren’t there four new Yamaha C3PEs for me to select from? Why don’t you stock a new Kawai RX-3 in walnut satin?
4. Well prepared and tuned instruments, each one all the time.
5. All credit cards accepted and competitive (dealer bought down) consumer financing, and “same as cash” options.
6. Wholesale or free delivery charges.
7. Free lessons? How long and for how many family members?
8. At least one post-delivery tuning, often two.
9. Product staged, prepared and ready to deliver in less than a week. For some ethnic buyers, “fresh” back up product for “in the box” delivery.
10. Rental fleets with depth of selection and full value back on a future purchase.
11. The newest hottest digital products immediately after release and below wholesale discounting on discontinued digital products even prior to release of replacements.
12. Free “button pushing” instruction on complicated ensemble digital models.
13. Guaranteed trade-up allowance programs down the road.
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. Each item comes with a measurable cost.
[/b]


It would be hard for two visions to be further apart, one providing a gentle nudge forward toward a streamlined "light and easy" model with fewer choices, the other a contentious, complaining, ridiculously overstated and overcooked potpourri of the unreasonable from someone who would like you to buy his book so that you know how to deal with him wihout offending him.
Posted by: Jerry Groot RPT

Re: A word or two on the industry - 12/14/09 08:18 AM

Great thread Marty. From a technicians stand point, I appreciated the thoughtful insight.

Many customers can be very demanding and many also think they have some sort of special rights as a buyer to do so. I see that on my end as a technician as well. As you mentioned in so many words, they fail to realize profits are necessary to stay in business. Expecting wholesale prices because the market is slow is nuts unless they want more businesses to fail.
Posted by: pianoloverus

Re: A word or two on the industry - 12/14/09 08:27 AM

There is no need to pay for the guide book about pricing, the online Piano Buyer is free.
Posted by: pianoloverus

Re: A word or two on the industry - 12/14/09 08:36 AM

Originally Posted By: cBeam01
Originally Posted By: terminaldegree

... you need to read the descriptions in the Piano Buyer more carefully...


I guess this is exactly my point what I do not want to do. I am really not that interested in making a big endeavor out of this purchase.[quote=terminaldegree]


Explanations of the SMP and how to use it to detemine a fair purchase price are a couple of pages of reading at most. Probably less than 10- 15 minutes to understand completely.

Perhaps you can call a dealer and explain your time problem because of the distance to the dealer. Ask them if they can at least say something like "you can expect a price within the suggested range of discounts from SMP in the Fine book". And make sure you're speaking to the owner. Don't know if they're allowed to even say something like that over the phone, but you could try.
Posted by: Hummingbird

Re: A word or two on the industry - 12/14/09 10:03 AM

One thing that's curious to me is why the piano industry evolved so differently from the violin industry.

The needs are pretty much the same: have to try every individual instrument, need a place with good accoustics, good customer service, good selection, good location, comfortable atmosphere, etc, etc...
Prices are negotiable, as are the services that coming along with it - ability to upgrade later, lessons, tunings....

Yet I can log onto my local violin shops' websites, find out everything they have in stock AND a starting point price for each. I can call them up and even engage in price negotiation before I ever set foot in the store.
With pianos I have to make a trip to the store to get that same information, which is potentially a huge waste of my time which a simple phone call could have resolved.

The difference doesn't make sense to me...

No, I've never been involved in selling pianos. I'm simply a person who spends money on them. Apparently "the customer is always right" doesn't apply to this industry, though.

For my experience, so far I've only bought a digital. My piano store had one I liked in stock while I was there, and I was playing around with it. I asked for a price. $6K. Plus tax. Plus delivery. Ouch. I didn't even start negotiations. That's well out of my range.
Got home and searched online. Found it for $4300, including tax and delivery. I bought it.
Perhaps if I'd gone back to my piano dealer I could have gotten that lower, but I hate playing games. It was easier to just order the cheaper one.
I'm really, really dreading my first acoustic purchase, because I'll have to play it first and will have no real option other than buying from a piano store. It's not an experience I want, but it's something I'll have to suffer through. Do you really think a shopping experience that customers dread is good for the industry?
Posted by: Rickster

Re: A word or two on the industry - 12/14/09 11:18 AM

I agree that the issue of not discussing pricing on the phone is antiquated and outdated in this day and age of the internet, mass information media and wireless communication.

As for my particular circumstance, my wife of 34 years is totally and severely disabled due to a brain tumor and is confined to a wheel chair. I am her primary care provider when I’m not at work, and I pay a sitter to stay with her during the day. It is difficult for me to travel long distances to visit piano stores and negotiate prices in person. The last time I visited a piano store and took my wife with me, in her wheel chair, there was no handicap access to get in the building and there was not hardly enough room between the pianos for the wheel chair and the salesperson asked me to be careful not to scratch the pianos with the wheel chair. I really didn’t like that comment, even though I understood why he would say it.

So, Marty, you said you were looking for honest, constructive criticism, and positive suggestions on how to improve the current marketing model for the piano business, so here goes… make your stores more handicap accessible and don’t be afraid to give firm prices over the phone.

Best regards,

Rick
Posted by: Marty Flinn

Re: A word or two on the industry - 12/14/09 01:20 PM

Turandot,

I started a new thread as I thought this discussion was not completely germaine to the original poster's needs. I felt his thread about pricing over the phone had devolved into a dialogue between another and myself.

With all due respect, all your time on the Forum is not the same as listening to consumers on the scene every day. I have heard multiple complaints on each of the listed issues. Not looking for sympathy. I was simply looking to state a perspective. I don't write on the Forum to please people. I write to clarify, inform, identify misinformation, just as you do.

Yes, what consumers want in a piano store has not changed much since 2008, redundant or not.
Posted by: terminaldegree

Re: A word or two on the industry - 12/14/09 01:38 PM

Originally Posted By: cBeam01
Originally Posted By: terminaldegree

... you need to read the descriptions in the Piano Buyer more carefully...


I guess this is exactly my point what I do not want to do. I am really not that interested in making a big endeavor out of this purchase. For my taste I have spent enough time to prepare for this purchase. I already circled in on 2 models, want to try them, decide, pay, and leave. I am not looking for a lengthy back and forth re price and conditions. Again, I see the piano I want to buy as a commodity, I am not in the high end hand craft market.

Originally Posted By: terminaldegree


I would submit the "traditional" dealer model did not fail you yet because you haven't visited a store in person to play anything. In the past few years, I've probably visited at least a dozen piano stores. Only one or two of these were an unsatisfactory experience. The rest ranged from good to great...


I submit that the traditional US dealer model already failed me. I am just not interested in visiting a dozen different piano stores playing many different pianos. I am not qualified enough to understand or appreciate the subtle differences between manufactures and models. I am not an expert and I do not want to become an expert. I wanted to get price information before I go there to ensure that the visit will be worthwhile.


Then again, you weren't really listening. The book helps you find what a reasonable price is (online for free, as mentioned again) quickly and easily, and if you narrowed your selections down to 2 pianos, you visit 2 stores that have the models in stock.

What exactly is the big problem with this? Are you prepared to wait for 2 separate Costco roadshows for Kawai and Yamaha? How exactly is that less trouble than visiting 2 dealers?

For me, there was no back and forth. I had a picture in my mind of what an acceptable price was, and the dealer met that expectation. Transaction was done the same day. Whoopty-do!

Welcome to the forum, by the way.
Posted by: Achillle

Re: A word or two on the industry - 12/14/09 02:22 PM

I've just skimmed this thread. I find it interesting, but... I really don't know how this kind of back and forth about the state of the industry helps anyone. Understandably, Marty feels he needs to stick up for us dealers/salespeople in a forum that is quite honestly anti-dealer much of the time.

The problem seems to always come down to something very simple: price.

cBeam's quest addresses this fundamental problem. Why can't a consumer just call and get a fair price over the phone?

There are many reasons you can't, some of them have to do with territoriality protection, some of them have to do with a sales strategy to get people in store. Most of time, people who call but are unwilling to come in are price shopping, using dealers against each other to get an unfair price (one that is way, way too low and unsustainable for any dealer to remain in business). Dealers and manufacturers see this (rightly so) as a slippery slope to unreasonable price expectations.. prices that would not allow anyone to stay in business for the long haul.

HOWEVER:

With so much info out there, especially pianobuyer and the pricing guide, it is very easy to find a fair price. It is right there before your eyes. Someone tell cBeam what a fair discount from Fine's SMP list is. I would but it is almost 11:20. I am busy from 11:20-11:30 today.

Is it possible to find a piano for a greater discount? Yes. I recently bought a $600 suit from Macy's for $40. I don't expect every purchase I make there to be discounted this much, though.
Posted by: turandot

Re: A word or two on the industry - 12/14/09 04:02 PM

Originally Posted By: Marty Flinn


With all due respect, all your time on the Forum is not the same as listening to consumers on the scene every day. I have heard multiple complaints on each of the listed issues. Not looking for sympathy. I was simply looking to state a perspective. I don't write on the Forum to please people. I write to clarify, inform, identify misinformation, just as you do.
Yes, what consumers want in a piano store has not changed much since 2008, redundant or not.


No, I don't have your perspective. That is true. But my business also involves customer service. I have war stories like everyone else involved in customer service. Such stories are shared in faculty meetings and through private channels, not in Internet chat rooms hopefully.

One thing to consider is just how contentious you want to be in presenting your perspective.

If you have a significant population of Asians who want to buy pianos in the box, I think Journey would tell you to deal with it, to make it work for you, not to moan and groan about it as you often do here. If the customer values something highly, perhaps you then go with the flow and charge more for it (if you catch my drift). Also, you don't want to inspire your local competition with marketing ideas to work against you.

If certain music teachers are gouging you for kickbacks larger than your commission slice of the pie, in your words: "outside sales commissions, freqently in excess of what the salesman earned", I'm not sure this is the place to be discussing it. Lots of music teachers here...they might think that you are being unfair in your comments. Do you want to alienate them? Again, competitors may also take notice. Do you want them poking into your private business issues? SoCal is a super-competitive market. You know that better than me. Lots of people read here who don't post here.

Finally, do you want to present Keyboard Concepts as a shop that welcomes and respects all sorts of customers (as it does) or as a place where customers may encounter some friction and possibly even hostility? You may think that's a ridiculous question but you get ornery with some frequency here, and I'm not sure that helps the company's image or yours. The last thing you should want is that customers call ahead to find out your day off so that they can avoid a fire-breathing dragon. smile

PS On your laundry list of what consumers demand, some of them may come up occasionaly, but you know what the big one is, and even though you didn't put it on your list, it's not going to go away.



Posted by: Plowboy

Re: A word or two on the industry - 12/14/09 04:31 PM

turandot, if you drop by where Marty works, you'll find he's not a fire breathing dragon but a good guy to deal with as a customer.

As for pricing, I'm in the camp that finds it distasteful to have to haggle to buy something. Not that I'm unwilling to play the game, I've had car salesmen chase me down as I've driven off the lot!

But the last new car I purchased was through the Auto Club. No haggle, just find the car you like and purchase. A very nice experience.

It's too bad pianos can't be purchased the same way. Just my 2 cents.
Posted by: Steve Cohen

Re: A word or two on the industry - 12/14/09 04:40 PM

This topic seems to rear up every few months.

There simply is no scenario for transparency in pricing beyond the kind of framework provided in Piano Buyer. As Marty [points out, many other scenarios have been tried. (I've even been a consultant on one or two.)

All have at least one of many fatal flaws.
Posted by: Marty Flinn

Re: A word or two on the industry - 12/14/09 05:18 PM

Turandot,

My list does not reflect "customer service horror stories" as you indicated. I was sharing a common list of things that consumer demand dictates to piano retailers. Not my company, or my store exclusively, but the industry in general. I felt they directly pertain to the discussion of the "aptness" of the "traditional model" as so often discussed here. To ignor them in any discussion of discarding or altering the "model" would be to ignor the consumer. The items on the list come up more than just "occasionally". They are real and common. If there was any contention it stems from the notion that those outside the business "know the business".

The bulk of the customers in my area are in fact Asian and we do just fine serving their needs. We don't have any problem with delivering in the box when asked. I personally don't recommend it, and caution against it, but always gratiously defer to the customer's wishes. But thanks for pointing that out.

Contrary to your depiction, I have great rapport with my customers and shoppers. I suppose my name and industry affiliation (actually I don't list KC in my signiture, and thanks for mentioning it) should put me at a disadvantage in jousting with those behind an annonymous avatar (by-the-way, let me know any time I can help you with your work in academe). I do not represent Keyboard Concepts on this Forum. To that end, and to avoid the appearance of promotion, I deliberately removed that line from my signature several months ago. I felt it was enough to identify my region and brand affiliations. My observations and comments are my own and come from my experience in the business. I am quite aware of who I am, and what I write.

Regarding your post script, one might assume you were referring to price. In nearly every store I have ever worked in and/or supervised we clearly posted the MSRP (with the exception of S&S) and a discounted price on nearly every instrument. The discounted pricing fell within the commonly discussed suggestions in the Larry Fine publications. Many of the dealers I talk to on a regular basis follow this same practice. Quoting discount prices over the phone or email or the internet is prohibited by most manufacturer/distributor agreements, and in practical application are not productive for retailers.

If your only goal in this post was to attempt to nullify my perspective, and make this a personal exchange, why post in this thread at all?
Posted by: Monica K.

Re: A word or two on the industry - 12/14/09 05:24 PM

Originally Posted By: turandot
you get ornery with some frequency here,



so do you. wink
Posted by: turandot

Re: A word or two on the industry - 12/14/09 05:46 PM

Quote:
If your only goal in this post was to attempt to nullify my perspective, and make this a personal exchange, why post in this thread at all?


I had two goals in posting here. One was to dispute the importance of your laundry list of what consumers demand. I do not agree with that list. My own feeling is that pricing should be at the top of the list (not absent), and that the items you listed are of lesser importance. As I said before, I read a lot of posts from consumers who are bewildered by piano pricing. I have not read any posts from consumers complaining about stores that do not have acres and acres of pianos in all models and all wood finishes, or about stores that require a drive further than the bottom of the freeway exit ramp. If you have links to such posted complaints, perhaps you could share them here.

The other reason I posted is that I don't think it serves your purposes to pop off in a way that can alienate consumers, music teachers, and other elements of the music community. If you have a problem with teachers demanding kickbacks (as your opening post clearly indicates that you do), I feel you should deal with it in house and not blaze it across this forum. Many people despise these teacher 'arrangements' and will question the integrity of a shop accommodating them almost as much as that of the teachers seeking them. The same is true of ethnic stereotyping. If you have no problem getting on with your Asian customer base, you shouldn't bellyache about "members of certain ethnicities" as you coyly do on this forum.

If you don't get any of this, ignore it.

As to your disassociation from your employer and your house brands, that's for the management here to decide. If you recommend the Yamaha T118, the Yamaha C and GC series, and the William Knabe lines as you routinely do, I think those recommendations should be understood in the context of your representation. However, that's just my opinion.
Posted by: Marty Flinn

Re: A word or two on the industry - 12/14/09 06:06 PM

The lines I represent are clearly shown in my signature. You might want to turn on that function and/or read my sig.

You are absolutely entitled to dispute anything you read on the Forum and frequently do. Your "feeling" about my list and your observations on the posts on this forum are not exactly the real world of the majority of piano retailers. Do you actually believe that I just make this stuff up?
Posted by: turandot

Re: A word or two on the industry - 12/14/09 06:29 PM

Marty,

My apologies for misunderstanding your tag. I was reading what you wrote about it and didn't even bother to check what was under your post.

Thank you for giving me your permission to disagree with you and present a perspective different from "the real world of the majority of piano retailers" grin . I will step aside though so that others can respond to your opening post and comment on your list of consumer demands.

Monica K,

You are right. I can be very ornery. It's a good thing I'm not trying to sell anything.
Posted by: pianoloverus

Re: A word or two on the industry - 12/14/09 06:34 PM

Originally Posted By: Achillle
Is it possible to find a piano for a greater discount? Yes. I recently bought a $600 suit from Macy's for $40. I don't expect every purchase I make there to be discounted this much, though.


Wow! Did the pants have two legs or one?

I never seriously considered those 100K+ pianos(except looking at pictures), but at less than 7K for a 100K piano...I won't worry about the free in home tuning.
Posted by: pianoloverus

Re: A word or two on the industry - 12/14/09 06:46 PM

Based on any of his posts in this thread or anywhere, I would have no second thoughts about dealing with Marty Flinn as a consumer.

I find it hard to fathom how anyone with virtually no experience in the piano industry can think they have the answers.
Posted by: Steve Chandler

Re: A word or two on the industry - 12/14/09 10:11 PM

I wrote this reply this afternoon and then had internet connection issues. But I still think it's relevant.
Originally Posted By: cBeam01

I submit that the traditional US dealer model already failed me. I am just not interested in visiting a dozen different piano stores playing many different pianos. I am not qualified enough to understand or appreciate the subtle differences between manufactures and models. I am not an expert and I do not want to become an expert. I wanted to get price information before I go there to ensure that the visit will be worthwhile. And none of the retailers I contacted gave me any meaningful information. And to be honest, I could not care less about internal rules of the piano retail industry why they are not "allowed" to provide this kind of information.

Well you may not be interested in that, but you can bet every authorized dealer is. Given that they can lose their dealer authorization, then whether you're interested doesn't really matter.
Originally Posted By: cBeam01

It is pretty simple for me. I am the one who will spend the money. If there is no one that wants to deal with me in a reasonable way, I will spend my money elsewhere. The other thread mentioned Costco roadshow, so maybe I wait for one of these. Or the kids will have to practice longer on their keyboard and play real pianos only at lesson and at school.

Gee, I am not in the market for a really high end unique instrument. I am in the market for a reasonable quality upright that is manufactured and sold in the thousands each year. And I want a price where l am not ripped off.

I am looking for an easy transaction.

I can understand that others are looking for a different experience; I just want it simple, fast and fair.

As has already been noted in another thread a Costco deal will probably not be as beneficial as you think. As one who has experienced the difference between a serviceable upright and a quality grand I can assure you it's your children who will pay the price of your quest. You say you're interested in a quick easy transaction, but refuse to drive 2 hours to a dealer who may or may not be able to give you the price you want. The actual problem is you don't know what price you want.

So let me give you some answers. The $5300 that's been batted around of late for a K3 strikes me as an unrealistically low price. I asked a friend who was in the business a few years ago and $6K for a K3 was a good price back then. As I recall the $5300 did not include any dealer prep and was in fact for a new "in the box" instrument (though it did include 2 tunings).

The reality is 70% of the time what you don't get in discount you do get in dealer prep. I wish I could say 100% of the time, but I can't, the reality is there are some dealers whose mission in life is to maximize their margin. There are people in your local market who know who the good dealers are, but you apparently don't know them.

What I don't hear from you is making any effort to call upon your local musician community. Who teaches your children lessons? Where do they buy their music? Who else do you know who's a player (church organist or choir director). But wait you said you don't have time to shop and want to make this quick and easy and so probably won't bother with any of that. Meanwhile you carp to an online forum that doesn't even know where you live and thus cannot comment on your local market (believe me someone here knows what's going on there), all while you kids practice on an electronic keyboard.

The bottom line is this, your quest for simple, fast and fair is at odds with your quest to not get ripped off. Pick one.
Posted by: Ken Knapp

Re: A word or two on the industry - 12/14/09 10:19 PM

Originally Posted By: Steve Chandler

The bottom line is this, your quest for simple, fast and fair is at odds with your quest to not get ripped off. Pick one.


Amen.

Ken
Posted by: Mark_C

Re: A word or two on the industry - 12/14/09 10:28 PM

Even though I've been in the piano market frequently over the years, and have bought several pianos including a couple in the last few years, and have been in and out of showrooms dozens if not hundreds of times, I had no idea there was any amount of "bashing of the traditional piano retail sales business model."
Posted by: meowmix52

Re: A word or two on the industry - 12/14/09 10:43 PM

In the future, ideally everything will be maximized for margin. Although it pains me to say this -- virtual all the old "mom and pops" piano stores will give rise to larger, more efficient piano titans -- with names like "Pianos R Us" or "Piano's Club".

It has already happened in many other industries, I believe it is only time for the piano business model to undergo a radical change...

I guess what you're getting with this evolution is
1. a lower price (something everyone wants -- why not use that extra $700 from the Kawai K3 to buy yourself a nice, new jacket, perhaps a new laptop, or maybe a cruise ticket for yourself?)

2. a more consistent quality and service (mammoth department chains will carry pianos of the similar quality, with the same, depersonalized service).

Why all this negativity with this change? It is definitely beneficial for consumers for one -- the extra money saved can be wisely used elsewhere.

I guess the only downside is the depersonalized service you would receive -- much like walking into a Home Depot instead of the hardware store down the street.
Posted by: turandot

Re: A word or two on the industry - 12/15/09 01:20 AM

Originally Posted By: pianoloverus
Based on any of his posts in this thread or anywhere, I would have no second thoughts about dealing with Marty Flinn as a consumer.


Neither would I, and the company he works for, Keyboard Concepts, is first class. I wouldn't have any hesitation buying a piano from his comrade-in-arms Steve Cohen either, despite the fact that Steve doesn't play the piano at all and comes up short in your expertise qualifications. grin

"Some of the biggest armchair experts seem to think they know all the answers but, at least according to their signatures, have never worked a single day selling pianos no less owned a piano dealership. And I strongly doubt they have ever tuned a piano or can play beyond a mediocre level."

However, you miss my point. Marty's integrity is not in question here, not in any way. The question is whether the personal perspective of one industry member is the only perspective to be considered. I know many piano retail shops that do not follow the KC store model, that do not worry about carpeted floor, a myriad of choices in every finish, and a freeway-close location. Another thing I know is that there are no topics in any field where different perspectives do not add value.

This is a discussion forum. If you personally want to accept the commonly-offered opinion that the present industry model is the only one that can work and has no need to adapt to the times, that is your prerogative. Others may not accept that conclusion. I don't.
Posted by: cBeam01

Re: A word or two on the industry - 12/15/09 01:32 AM

Originally Posted By: Steve Chandler

The bottom line is this, your quest for simple, fast and fair is at odds with your quest to not get ripped off. Pick one.


I guess you are right, the piano retail business is not set up to deliver a simple, fast and fair purchasing experience for me.

So, to not get ripped off I need to do more research.

Here is what I got (internet search): Yamaha U1 PE: MRSP $11,000. Offered at Costco roadshow in Northern California for $5,525 plus $125 shipping. A search on this forum delivered a couple of more (low end) price points: $5,900 from a dealer in Michigan, $5,200 on a sale event in San Jose, CA, and another price of $5,150 in Ohio. Most prices are 2008, all are for new instruments (incl. delivery and 1 or 2 tune ups), and do not include tax.

Not sure yet how I have to value dealer prep, but I'll figure out tomorrow.

Based on numbers above I will drive to the piano shop (recommended by the piano teacher), play a few instruments. If the U1 is the one we want I will offer $5,000 (complete instrument, delivery, 2 tune ups). If after negotiating the retailer is not able to come through at slightly below $5,500 I will drive home and do more research.

After all I am aware that prices posted on the internet might not be accurate, and I am definitely going into the negotiation with what I believe is a low ball offer.

Originally Posted By: Steve Chandler

So let me give you some answers. The $5300 that's been batted around of late for a K3 strikes me as an unrealistically low price. I asked a friend who was in the business a few years ago and $6K for a K3 was a good price back then. As I recall the $5300 did not include any dealer prep and was in fact for a new "in the box" instrument (though it did include 2 tunings).


I really appreciate your effort providing a price point for the K3. Thank you for that. Again, we need to play the instruments first. But in case I could get a U1 for $5,500 I most likely would look for a lower price than $5,300 for the K3.

I think I am now at a pretty sad state of the purchasing experience. I am only talking about price trying hard not to get ripped off. Not sure if I will be happy with any deal, not sure that the retailer will be happy.
Posted by: TempoPrimo

Re: A word or two on the industry - 12/15/09 08:11 AM

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.
Posted by: peejay

Re: A word or two on the industry - 12/15/09 08:20 AM

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 whistle).
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 08:39 AM

Originally Posted By: TempoPrimo
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.

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

Originally Posted By: TempoPrimo
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.


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.
Posted by: TempoPrimo

Re: A word or two on the industry - 12/15/09 09:18 AM

Originally Posted By: pianoloverus

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


That is a rather large paraphrasing of:

Originally Posted By: Marty Flinn

Here is a list of what many/most real piano shoppers demand:


That this is nonsense does not entail that something else must have been meant.
Posted by: Steve Cohen

Re: A word or two on the industry - 12/15/09 09:35 AM

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?
Posted by: Hummingbird

Re: A word or two on the industry - 12/15/09 09:37 AM

Originally Posted By: pianoloverus

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?


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.
Posted by: turandot

Re: A word or two on the industry - 12/15/09 10:26 AM

Originally Posted By: pianoloverus


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.


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.
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 10:33 AM

Originally Posted By: TempoPrimo
Originally Posted By: pianoloverus

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


That is a rather large paraphrasing of:

Originally Posted By: Marty Flinn

Here is a list of what many/most real piano shoppers demand:



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?
Posted by: kymont

Re: A word or two on the industry - 12/15/09 11:39 AM

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).
Posted by: Jeff Clef

Re: A word or two on the industry - 12/15/09 11:45 AM

"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]
Posted by: Steve Cohen

Re: A word or two on the industry - 12/15/09 11:49 AM

Originally Posted By: turandot
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.


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.
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 11:50 AM

Originally Posted By: kymont
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...
Does this mean you tried bargaining and they wouldn't go lower or something else?

Originally Posted By: kymont
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.
Did you take into account the average discounts from SMP that Fine mentions or assume the SMP was supposed to indicate the selling price?
Posted by: Piano Peddler

Re: A word or two on the industry - 12/15/09 12:09 PM

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).
Posted by: Achillle

Re: A word or two on the industry - 12/15/09 02:08 PM

Originally Posted By: cBeam01

Based on numbers above I will drive to the piano shop (recommended by the piano teacher), play a few instruments. If the U1 is the one we want I will offer $5,000 (complete instrument, delivery, 2 tune ups). If after negotiating the retailer is not able to come through at slightly below $5,500 I will drive home and do more research.


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.
Posted by: kymont

Re: A word or two on the industry - 12/15/09 02:12 PM

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.
Posted by: Jeff Bauer

Re: A word or two on the industry - 12/15/09 02:15 PM

@ 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 smile

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.
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 02:22 PM

Originally Posted By: kymont
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.


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.
Posted by: pdad

Re: A word or two on the industry - 12/15/09 03:14 PM

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.
Posted by: turandot

Re: A word or two on the industry - 12/15/09 05:18 PM

Originally Posted By: Jeff Bauer

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.


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?
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 05:40 PM

Originally Posted By: pdad
A consistent price range, say, of +/- 5% (excluding services) would do a lot to quell these suspicions.


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.
Posted by: pdad

Re: A word or two on the industry - 12/15/09 06:34 PM

Originally Posted By: pianoloverus
Originally Posted By: pdad
A consistent price range, say, of +/- 5% (excluding services) would do a lot to quell these suspicions.


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.


Fair enough. Let's say +/-10%.

But the difference between pianos and most items, including cars (re invoice), is the lack of transparent pricing for pianos. Otherwise, a consistent +/- range wouldn't matter much: consumers could simply compare prices, take service and convenience into personal account, and make their decisions accordingly.

As others have suggested, cost-conscious consumers have no direct reason to be especially concerned about any particular dealer's pricing factors. Nor is it clear how these numerous factors are so different for pianos in a way that rationalizes non-transparent piano pricing as an exception.

I understand why the pricing status quo for pianos is supposed to benefit dealers/manufacturers. I don't understand why ordinary consumers are supposed to feel at ease with this status quo.
Posted by: pianoloverus

Re: A word or two on the industry - 12/15/09 07:00 PM

Originally Posted By: pdad
Originally Posted By: pianoloverus
Originally Posted By: pdad
A consistent price range, say, of +/- 5% (excluding services) would do a lot to quell these suspicions.


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.


Fair enough. Let's say +/-10%.
I think a pretty high percentage of dealers fall within a 20% range of eachother. It would be interesting to know exatly what % that is, but I doubt anyone will be interested enough to find out. A 20% range also relates to the 10-30% off SMP Fine suggests.


Originally Posted By: pdad
As others have suggested, cost-conscious consumers have no direct reason to be especially concerned about any particular dealer's pricing factors.
I'm sure they're not concerned and most are completely unaware, but I don't think that's the same as denying that the factors exist and expecting consistency.


Originally Posted By: pdad
Nor is it clear how these numerous factors are so different for pianos in a way that rationalizes non-transparent piano pricing as an exception.
But, at least according to one poster on this thread, bargaining is still the norm for cars. I've never bought a big ticket item other than a piano, but I suspect bargaining is not so unusual for other big ticket items. I've read articles about bargaining for furniture even before the economic crisis.

Posted by: Steve Cohen

Re: A word or two on the industry - 12/15/09 07:27 PM

Originally Posted By: pdad

I understand why the pricing status quo for pianos is supposed to benefit dealers/manufacturers. I don't understand why ordinary consumers are supposed to feel at ease with this status quo.


Perhaps I can shed light on the problem. There are so many variables in piano retailing that a narrow price range simply does't work. Here are some of the factors that vary from dealership to dealership:

Rent (varies considerably - from high-end mall operations to bare-bones warehouse dealerships)
Interest expense (flooring (adds 4%-6% to average sale or owned)
Payroll (varies widely)
Return on owners investment (we could bank the monay and have no risk)
Prep (or lack thereof)

Add to that the fact that some dealerships are able to buy in quantity and get a substantial discount on their purchase. Also, manufacturers often discount overstocked models, so one dealer may pay 5%-20% more than another if they buy at different times and in different quantities.

The current system, with all is downside, has evolved over the years out of necessity. I have been a very active poster here for 8 years and have over 7000 posts. This topic has been debated literally dozens of times. Always to no avail.

You are right that shoppers are often ill at ease with the status quo, but there is no better alternative.
Posted by: Marty Flinn

Re: A word or two on the industry - 12/15/09 08:05 PM

If I remember correctly there are two regular members on this Forum who have taken the plunge in the past 18 months or so and opened new B&M store fronts. I cannot remember their names or business names. Maybe others can help. I would be great to hear from them on their outlook on this bold move in this climate.

The cost of inventory and attendant flooring closts is one of the biggest controllable expenses a piano retailer faces. The cost of traditional flooring is tyically a point or three higher than the cost of money. That is what the retailer might earn on medium risk investments instead of paying cash for his merchandise, assuming he has the cash. It is a material consideration.

Several of the stores I have been associated with carried in the neighborhood of $350-$450k worth of inventory at wholesale cost, not including any tier 1 instruments. Now picture a multi-store chain and a warehouse. Many will argue this is outragiously excessive. Why not just stock the models and colors that realy realy sell? Not as easy as it appears with demand shifts, seasonal sales, manufacturer/distributor demands to "represent the line", digitals comming into and out of currency etc. A constant chess game shooting for just in time inventory. Some large chains employ a full time salaried specialist to perform only this function. I know. I was one.

Its a wierd little spread sheet, the projection analysis is. Monkey with sales, margins, and expenses, they are magically interrelated. We know demand is at best static, probably shrinking. We know that margins are shrinking from the reported selling prices we read and see on our own sales logs. Perhaps private label stencils? Used Piano World? Ah ha, well then get to those expenses. Hence my original post. How much can you throw out without the baby?

All good retailers are contantly analysing (rethinking) their business model. Outside sales events were a bonanza in the 1980s and 90s now show marked diminishing returns. Warehouse roadshow events are in their nadir, IMO. At one time the parking lot sale was king. Regional shopping mall satellite locations rocked in the 70s and early 80s. Bare bones warehouse style stores were thought to be the answer. Roll player pianos: 1930s, 1980s. Digital keyboards (yes, gag, yes)! At one time, life-time free lessons was though to be the answer. Lifetime warranties anyone? Ebay sales? These ideas go though life cycles somewhat independant of current economics. Of course in these current economics even great ideas that might ordinarily win, might fail. Piano retailers haven't stopped thinking, analysing, and trying new ideas. The notion they they are mostly dullards is naive.

Most of the complaints I read on the Forum relate to bad service, rudeness, deception, and misrepresentation. These are not as a result of the "model" but as a result of bad people and ultimately bad store/company leadership. No excuses for this. Angst about not being able to get prices over the phone or over the internet are "model" driven, but beyond the scope of the retailer. They are proscribed by most dealer agreements. Please don't blaim the retailer for this. When are retailer baits shoppers into the store with vague committments on pricing, that is not good business, and IMO, a violation of ethical retailing not matter what the product.

Getting manufacturers/distributors and retailers together to agree on consistent and transparent uniform pricing is a violation of antitrust (federal). It is a scary thing, lately, for distributors to hold dealer meetings to discuss anything.
Posted by: Kurtmen

Re: A word or two on the industry - 12/15/09 08:39 PM

Welcome to our world!


If selling pianos was so easy, Sears,Roebuck and Co. would still be selling pianos without sales people.
Mcdonalds..... would be taking your order, One piano please... and a side order of Fries.









Posted by: Marty Flinn

Re: A word or two on the industry - 12/15/09 09:29 PM

Kurtman,
You seem to be sincere and speaking from the heart. Clearly I have not communicated with you in my posts. I am not looking for sympathy. I have presented a perspect about dealerships in general.

You represent ten lines of product. "One or two models of a given product are enought to sell it." The Kawai line has dozens of skus in it acoustic line alone. Are you telling me you only stock two Kawai pianos? And, Kawai lets you get away with that? Have you never had a customer who wants to buy a new Kawai RX-3 complain to you that he would like to have another or three to play to make a selection from?

Are you saying that you spend little or no money/time preparing your RX grands, Bluthner grands, Steinberg grands, Shigerus. You just show them right out of the box with just a tuning? Boy, your high end buyers much have a lot lower expectations than ours do.

"We don't sell pianos for retail prices". You mean MSRP list? Who does? Nobody does.

I don't believe there are any pianos that require lying to sell.

I am glad your company's policies and procedures seem to be working for you. You missed my original point entirely. We don't let the industry set up anything for us. My point was that the need for these things come from consumer demand. What happens in our neck of the woods is clearly not the same as yours. This does illuminate regional differences in demands on piano retailers.

The company I work for has five locations and has been doing this for 27 years or so. We are the largest Yamaha dealer in the U.S. We are doing ok.
Posted by: Marty Flinn

Re: A word or two on the industry - 12/15/09 09:33 PM

Please excuse my confusing post. While I was responding to a rather lengthy post by Kurtman he edited his down to five line completely irrelevant to his original. Sorry.
Posted by: Jeff Bauer

Re: A word or two on the industry - 12/15/09 10:26 PM

Originally Posted By: Marty Flinn
Please excuse my confusing post. While I was responding to a rather lengthy post by Kurtman he edited his down to five line completely irrelevant to his original. Sorry.


That's why you quote the people you reply to . . smile

Originally Posted By: Turandot
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?

...But whatever the reason for the exit, does it not require fundamental revision of the model?
...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?


Turandot:

My perspective on floor financing is irrelevant because I don't supply $$ to finance pianos, nor am I a banker with any working knowledge of what the correct interest rates and risk assessments would be for such a venture.

That being said, maybe you should direct this question at Ori, or Kieran Wells, both of whom just opened up new locations and may have an interesting take on this.

Perhaps the disappearance of flooring and financing in the piano industry was a small indicator of the larger economic problem; Over extending individual credit and lenders not being able to reap any further benefits from the over tilled soil. Is it gone for good? Not yet, I don't think. It will be some time before any real meaty financial companies get in this game again.

If the buying power of retail stores continues to be as dismal as it has been, manufacturers are going to have no choice but to get creative with the ways they sell their inventory.
Posted by: Jerry Groot RPT

Re: A word or two on the industry - 12/16/09 09:28 AM

Seems to me what many customers and others fail to take into consideration is this. While it may seem daunting to pay $15,000 as an example for a piano, that same instrument if well taken care of will be around for 30-50 years or more in some cases. Basically a life time for many. Divide the amount paid for the piano up in the years that you'll have it and the price is not really all that bad with that taken into consideration.

Paying $15,000 for a car, or, $450 a month to lease it for some reason, is not as daunting but seems to be more expected in many ways yet, 3-5 years later, you will pay another $15,000 or will lease yet another car for maybe more. Plus, you still have the routine maintenance that cars require. Buy a computer or any other electronic gadget and within a few years that also needs replacement and/or repairs and/or both.

Yet, people do not want to pay the price for a good quality instrument, something that will almost last them a lifetime let alone pay for the routine maintenance that goes along with owning a piano. The logic here seems somewhat skewed.
Posted by: turandot

Re: A word or two on the industry - 12/16/09 10:13 AM

Hi Jerry,

Long time no see (which is not a bad thing in terms of your avatar grin)

One problem is that car prices begin at around 15k. If you need wheels, that's the starting point for new ones. A new piano can be had for $2.5k. It takes a lot of time and self-education to get to the point where you are self-assured that sufficient value is present in a piano of 15k.

I know unemployment is severe in Michigan. We just nudged over 12% in California. Purchasing power is way down. The immediate outlook is not reassuring. It takes guts to lay out 15 - 30k, especially if you're betting on a child's progress and dedication over several years to justify the payments over several years.
Posted by: Hummingbird

Re: A word or two on the industry - 12/16/09 11:07 AM

For most people, at least in the US, a car is a necessity. Yes, they are expensive, but we need them to get to work, get to the store, etc. There's no real way around that, unless you're fortunate to live in one of the few places with good public transportation or where everything is walkable. Most people in the US have to rely on a car.

A piano is not a necessity unless someone is making a career out of it. That is a lot of money for pure enjoyment. In addition, for many people buying a first piano, they aren't even certain yet if it's something they want.
Posted by: Jerry Groot RPT

Re: A word or two on the industry - 12/16/09 11:16 PM

Yeah, he's a cute lil guy isn't he? (avatar)

My point wasn't that either were required. It was the comparison of longevity between the two along with maintenance requirements and expenses.
Posted by: turandot

Re: A word or two on the industry - 12/17/09 12:25 AM

Well, 'cute' wasn't exactly the word I was thinking, but no matter.

Yes, Jerry. If you can see your way past a 15 to 30k outlay in this economy and be relatively sure that the piano will be in regular use, I won't argue with you at all. Pianos in that price range still offer good value for money spent IMO, especially if one shops carefully.

I'm laughing here because I still remember Mike (Durango) writing that if your avatar came to the door to tune his piano, he would pay it (you) to leave! I don't know if you remember that exchange, but it still cracks me up.

Have a great holiday season Jerry!
Posted by: Jerry Groot RPT

Re: A word or two on the industry - 12/17/09 08:43 AM

Yeah, I do remember that one! It was funny. I chose that avatar just to make people smile when they looked it and and hopefully, enjoy a sense of humor or three! It doesn't appear to be showing up now for some reason is it?

I gotta run to work, see you in the funny papers. OH, that's right, I live there!

Jer
Posted by: turandot

Re: A word or two on the industry - 12/17/09 10:04 AM

Originally Posted By: Jeff Bauer


Originally Posted By: Turandot
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?

.......What are your thoughts on this perspective?



My perspective on floor financing is irrelevant because I don't supply $$ to finance pianos, nor am I a banker with any working knowledge of what the correct interest rates and risk assessments would be for such a venture.

That being said, maybe you should direct this question at Ori, or Kieran Wells, both of whom just opened up new locations and may have an interesting take on this.

Perhaps the disappearance of flooring and financing in the piano industry was a small indicator of the larger economic problem; Over extending individual credit and lenders not being able to reap any further benefits from the over tilled soil. Is it gone for good? Not yet, I don't think. It will be some time before any real meaty financial companies get in this game again.

If the buying power of retail stores continues to be as dismal as it has been, manufacturers are going to have no choice but to get creative with the ways they sell their inventory.


Jeff,

I wasn't assuming that you personally bankrolled the financing of floor inventory, and I'm not sure I want to ask Ori and Kieran where they get their money. grin

I was just curious if the withdrawal of financing from the big providers who traditionally served piano retail adds a fatal flaw to the existing model. As I posted before, the way the traditional model has been explained to me on many occasions is that the piano biz is sustained by smaller fish getting into the swim with a chance to grow and prosper without becoming a meal for the larger fish. The territorial restrictions of price disclosure and advertising are defended as a way of protecting these smaller (and often younger) fish.

Withdrawal of financing seems to put a significant barrier to entry on the existing model. I know there are a few members here like Furt and Kieran who have gotten into the swim recently, but in each case they have been congratulated for their courage more than their business acumen. I believe that Kieran was asked if he was crazy by the traditional model's most steadfast defender here. grin

Maybe I should just throw open the question to the industry veterans who have posted on this thread: Marty, Steve C, and Craig Smith, or any other. It just seems to me that something has to give between the flooring requirements of manufacturers, high cost of inventory, slow turn on product due to low demand, and problems in obtaining credit. But I'm not in the biz, so I would be happy to be enlightened.
Posted by: Jeff Bauer

Re: A word or two on the industry - 12/17/09 12:06 PM

Turandot, I think the answer to this is pretty clear: if the money isn't available, either via bank loan, investor, or personal funds, the only option a store owner has is to limit floor stock & inventory to what is affordable.

I don't think this spells doom for the new smaller independent store - it just means that store can't open with the latest/greatest & most highly rated products available. This is nothing new, and in fact is how many piano stores start out: by carrying less popular lines where the floor terms are more generous to start, and finding a supply of inexpensive used pianos to fill in the spaces.

As the piano store grows roots, and a bank account, things can grow - lines can improve, space can get larger, etc. . .
Posted by: Ori

Re: A word or two on the industry - 12/17/09 01:20 PM



Posted by Jeff Bauer:

Quote:
My perspective on floor financing is irrelevant because I don't supply $$ to finance pianos, nor am I a banker with any working knowledge of what the correct interest rates and risk assessments would be for such a venture.

That being said, maybe you should direct this question at Ori, or Kieran Wells, both of whom just opened up new locations and may have an interesting take on this.



Jeff,

It’s nice to see you posting again.
Unfortunately, I have little experience with floor planning companies, since I never used any of them for my business.
I started with a very modest inventory investment, and my piano inventory grew slowly over the years.

Usually, after selling an instrument, I replaced it with another and forwarded additional money from the gross profit to increase inventory.

Since our new showroom is not a ‘new store’, but rather a new location and an expansion, located only a few miles down the road from our other showroom, new inventory did not represent an issue.

We were bursting at the seams prior to the new location, and although the new one is considerably larger, I was preparing to stock it for a couple of years prior in various ways, including by setting aside the necessary funds for inventory.

I do believe that floor planning is expansive, and will leave those who are heavily relying on it at a disadvantage, so I never went this route.

However, for less established dealerships, or when dealerships aim to substantially grow in a short period of time, it may be an option worth considering, within reason.

I guess the problems with floor planning start when dealers take on more inventory than they can handle, and at a certain point must ‘dump’ the piano in order to pay for it…sometime at little or no profit, only to replace it with another which the can floor again for awhile.

Perhaps an angle that wasn’t explored before regarding the affect that the disappearing financing have on the piano market.

Hopefully, it may contribute to pricing stability, and lessen the erratic price differences/changes that seem to confuse and frustrate many consumers.
Posted by: Piano Peddler

Re: A word or two on the industry - 12/17/09 05:24 PM


Originally Posted By: Turandot
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?

Maybe I should just throw open the question to the industry veterans who have posted on this thread: Marty, Steve C, and Craig Smith, or any other. It just seems to me that something has to give between the flooring requirements of manufacturers, high cost of inventory, slow turn on product due to low demand, and problems in obtaining credit. But I'm not in the biz, so I would be happy to be enlightened.


William,

This thread has certainly taken some interesting turns. Perhaps you have heard the old cliche "Do you know how to make a million dollars in the piano business? Start with four (million)!" At no time in my forty years' in this industry has that been such an accurate statement. You have identified a key factor in the serious challenge facing nearly every piano dealer in the country right now- the lack of any reasonable inventory financing. Last year at this time, Textron bailed out of the market of providing floor planning to piano dealers (along with RV's, spas and other big-ticket discretionary products). Now GE is the last remaining provider of inventory financing and there has been rumors of them also exiting the music industry. Local banks have seriously cutback available credit for floor planning and even consumer financing, which is another serious issue that piano dealers face. Allegro Acceptance (the consumer financing arm of Sherman Clay) is the last remaining source of consumer credit for the piano industry, but with so fewer pianos being sold during the last couple years, they have also become more selective on who they approve and many of the dealer incentives (six month's same-as-cash, zero down payment or zero percent interest for the first year, etc.) have disappeared. The reality is that many would-be piano buyers are sitting on the sidelines, due to the economy and putting their purchase on hold for better times down the road. The few pianos that are being sold are often high-end grands that are not financed; in other words, to wealthy clients that are able to pay cash.

We have seen a few large piano dealers close this year, as well as some smaller independent dealers in markets across the country. I personally know of three good-size cities in the midwest, where the local Yamaha piano dealersip has closed or is going out of business at the present time. Time will tell, but there doesn't seem to be any new dealers coming out of the woodwork to buy those dealerships or open their own new venture. Kieran Wells and Ric Overton are to be commended for their courage (or hopefully financed by a wealthy relative), in order to survive in this climate.

I have worked in the piano business since my college days (back in the late 60's) and for the past twenty-three years as a wholesale district/regional sales manager for major manufacturers. Several times over the years I have considered opening my own retail business, as I believe I have the sales ability and experience not to repeat the mistakes that I have seen others make. However, in the current economy and state of the piano industry (for the other reasons mentioned in this thread), it would be financial suicide to open a piano store (even with the best lines), unless I had the three or four million in working capital available to lose, before possibly turning a profit. Even now, that I am currently unemployed and have few prospects of finding another job as a wholesale rep (along with several friends and colleagues in this industry, that have been laid off due to cutbacks and not their ability or track record), we need to seek employment outside the music industry. In my case, since I have maintained my status as a professional musician over the years, I can go out and play piano gigs in restaurants or as a church organist; maybe I will even try working as a musician on cruise ships.

Borrow against the equity in my house to open a piano store in 2010? I don't think so!