Drum and gear pricing

slhanks04

Member
Something I've been curious about for awhile, why is it that drums, cymbals, and many accessories are the same price no matter which retailer you buy them from? Guitar Center, Sam Ash, Musician's Friend, Sweetwater, American Musical Supply, etc - all offer the same stuff at the same price. GC and MF I can understand, since it's the same company, but why is there no variation in pricing? I'm sure someone knows the answer...
 
Something I've been curious about for awhile, why is it that drums, cymbals, and many accessories are the same price no matter which retailer you buy them from? Guitar Center, Sam Ash, Musician's Friend, Sweetwater, American Musical Supply, etc - all offer the same stuff at the same price. GC and MF I can understand, since it's the same company, but why is there no variation in pricing? I'm sure someone knows the answer...

The manufacturers of that gear go to great lengths to make sure none of their gear is sold (or more accurately advertised) below a certain threshold.

If you look closely at the bottom of say a guitar center "coupon" they send out, you'll see there's a list of equipment manufacturers who are not included in the promotion, usually because it violates their minimum retail cost/advertisement rules.

It's absolutely not limited to the music equipment industry, either. Lots of companies impose those rules so that they have a little more control over the "value" of their stuff.
 
I think it's basic economics. Manufacturer pays so much to make the product, then ship it and stock it in stores, so there has to be a profit in the sale, or else, why be in business? With music instruments, whatever the MSRP is, it automatically gets discounted about 40%, which is what you pay at the store.

If you look at the computer market, that must be worse because your profits are razor-thin to begin with. And if you don't sell the product while it's the hot new thing, you're soon stuck with an obsolete machine nobody wants. At least with drums obsolescence isn't that big of a factor.
 
To add the answers:

Most stores are selling music gear at huge discounts, really only a small percentage over the wholesale costs the stores pay to the manufacturers.

So when prices are already low, there is nowhere else to go. If it got any cheaper, stores would be selling below their cost, and be out of business ( and hence why there are only a fraction of music stores compared to 30 years ago).

Also, due to the heavy discounting of gear, many manufacturers implemented "MAP" pricing, which is Minimal Advertised Price, essentially telling stores if they want to remain, dealers, they can't advertise prices lower than the MAP price.

And in order to be the "lowest price available" every store just goes right to MAP price.
 
Generally speaking, mark-up on gear is about 100%. Most music stores sell at 60% of retail.

So in other words.

Retail of on an item is $100.
Store buys item for $50, but sells it for $60.

I know that there are exceptions, but this has been my experience.

There's a little bit of wiggle room, but not much if they want to make a profit.
 
I think if y'all knew how low the cost is to manufacture something is you will shoot yourself in the face. I can't disclose numbers, but the cost we sell each cabinet back to Yamaha at is less than my hourly wage.
 
Generally speaking, mark-up on gear is about 100%. Most music stores sell at 60% of retail.

So in other words.

Retail of on an item is $100.
Store buys item for $50, but sells it for $60.

I know that there are exceptions, but this has been my experience.

There's a little bit of wiggle room, but not much if they want to make a profit.

I'm not sure about that. I'm in wholesale, different industry though, but same principles apply. MSRP whould be closer to 120/130 %. Street price would be around 100%. Goods sold on sale at 25-40% during promotions would be the lions share of sales.

Wholesale $10
Msrp $23
Street $20
Averge "Out The Door" $14 (assuming 30% off)

That leaves the store $4 gross profit. Minus overhead, net profit is closer to $3.
 
I think if y'all knew how low the cost is to manufacture something is you will shoot yourself in the face. I can't disclose numbers, but the cost we sell each cabinet back to Yamaha at is less than my hourly wage.

Thats only a piece of the puzzle. Advertising costs, insurance, r and d, warranty expenses, overhead to manufacture, shipping cost and other expenses all add to the cost.
 
I'm not sure about that. I'm in wholesale, different industry though, but same principles apply. MSRP whould be closer to 120/130 %. Street price would be around 100%. Goods sold on sale at 25-40% during promotions would be the lions share of sales.

Wholesale $10
Msrp $23
Street $20
Averge "Out The Door" $14 (assuming 30% off)

That leaves the store $4 gross profit. Minus overhead, net profit is closer to $3.

You may be correct.

I'm going off what my brother told me when he worked at a pawn shop that actually dealt with new instruments as well as used (they were a music store and a pawn shop) in addition to dealing with a drum store that simply handed me a retail price sheet and said, "Build whatever drum set you want and pay 60% of this retail sheet."

But then again, I'm not business man, and I'm easily confused.
 
Thats only a piece of the puzzle. Advertising costs, insurance, r and d, warranty expenses, overhead to manufacture, shipping cost and other expenses all add to the cost.

Oh I completely understand. It just needs to be known that your $500 toy costs a drop in the bucket to actually make. Tons of cost lost in shipping too. From here it goes to distro by truck. From distro it goes to stores or port, again by truck. From port it goes overseas by ship. Then there are taxes, import and export, blah blah blah, yadda yadda yadda. The price YOU pay helps cover all of these expenditures.

Overhead to manufacture is not necessarily included. The company I work for is under contract, we are our own independent facility. We actually sell product back to the owner. Our facility pays us whether or not we make a profit on the goods we produce. That is a risk the facility takes. And if we are late, with Yamaha for example, we have to pay them a fine for each day late.
 
Some stores, mainly Ma and Pa stores will work with regular customers and work on deals, hoping you come back for heads sticks, cymbals, etc. but under contract can't advertise lower prices.
 
Generally speaking, mark-up on gear is about 100%. Most music stores sell at 60% of retail.

So in other words.

Retail of on an item is $100.
Store buys item for $50, but sells it for $60.

I know that there are exceptions, but this has been my experience.

There's a little bit of wiggle room, but not much if they want to make a profit.

Having worked in MI retail for many years, I can tell you that this is exactly the pricing scheme on "A" markup items. Dealers pay 50% of the retail price. Sometimes there are "A+" items with additional discounts, mostly for bulk buys, closeouts, and accessories. Many items such as keyboards and other items are "B" markup - dealer pays 60% of retail. MAP prices are determined by the manufacturer. The dealer can sell for less, but they take a beating.

Bottom line: consumers are NOT being ripped off at the music stores. Even the Guitar Center sized retailers operate on razor-thin margins that barely keep them in business. Mom and pop stores can rarely compete. That's why most of them are gone. We are not being well-served by paying such low prices in the long run.

GeeDeeEmm
 
I get it, it's like when I wanted to buy a Playstation 4...every store that sells them it was priced the same. I'm not claiming they are ripping us musicians off, it just seemed funny that all the major music retailers advertise the lowest prices but they are all selling the same thing at the same price. To be honest, I don't mind paying a little more in markup to keep music stores alive.
 
Having worked in MI retail for many years, I can tell you that this is exactly the pricing scheme on "A" markup items. Dealers pay 50% of the retail price. Sometimes there are "A+" items with additional discounts, mostly for bulk buys, closeouts, and accessories. Many items such as keyboards and other items are "B" markup - dealer pays 60% of retail. MAP prices are determined by the manufacturer. The dealer can sell for less, but they take a beating.

Bottom line: consumers are NOT being ripped off at the music stores. Even the Guitar Center sized retailers operate on razor-thin margins that barely keep them in business. Mom and pop stores can rarely compete. That's why most of them are gone. We are not being well-served by paying such low prices in the long run.

GeeDeeEmm

Wow, that's too bad.
 
This is not unique to drum gear. In the last five to ten years, I've noticed that prices of everything from electronics to groceries have flattened across retailers. I suspect this correlates with the rise of smart phones. A merchant cannot charge a higher price when they know that you can not only compare to the competitor's price instantly, but order it with just a few taps of your finger.

Although sale prices are harder to find, retailers do still offer deals. I've noticed deals of the form "Spend $100 and get a $20 gift card" are quite popular. If you play these correctly, everybody wins. They can't directly discount that big ticket item. Instead, they can give you a discount on a future purchase.

I did exactly this when I bought my DTX Multi-12 a few years ago. I noticed that those never go on sale and are not eligible for any of the straight percent-off discounts. I waited for a generous gift card offer like this. I also wanted to get the bass drum pad, hi-hat pedal, and stand mount. I bought the M12, the pad, and the pedal on the first pass to get the biggest gift card possible and then used the gift card to buy the stand mount. I paid as little as possible for the items I wanted. In exchange, they got all of my business.
 
We are not being well-served by paying such low prices in the long run.

GeeDeeEmm

Wise words, my friend.

This is part of the reason that I'm looking to have my next drum set made from a local builder as opposed to going with one of the big boys. It may be a little over-priced, but I like the idea of supporting an individual and not a conglomerate. I'm glad that my first set of Pork Pies were made back when Bill was just a small shop before all of the overseas stuff started. There's a certain magic to them that's hard to describe.
 
Originally Posted by PorkPieGuy View Post
Generally speaking, mark-up on gear is about 100%. Most music stores sell at 60% of retail.

So in other words.

Retail of on an item is $100.
Store buys item for $50, but sells it for $60.

I know that there are exceptions, but this has been my experience.

There's a little bit of wiggle room, but not much if they want to make a profit.



Having worked in MI retail for many years, I can tell you that this is exactly the pricing scheme on "A" markup items. Dealers pay 50% of the retail price. Sometimes there are "A+" items with additional discounts, mostly for bulk buys, closeouts, and accessories. Many items such as keyboards and other items are "B" markup - dealer pays 60% of retail. MAP prices are determined by the manufacturer. The dealer can sell for less, but they take a beating.

Bottom line: consumers are NOT being ripped off at the music stores. Even the Guitar Center sized retailers operate on razor-thin margins that barely keep them in business. Mom and pop stores can rarely compete. That's why most of them are gone. We are not being well-served by paying such low prices in the long run.

GeeDeeEmm
Having worked in 4 different music stores, I can 100% verify the above is true.

Some stuff is what we call 50-20, which is wholesale is 50% off retail, then 20% off that, so a $100 item works out to $40 wholesale. But such items are then sold for around $55. So, still not much profit. And as mentioned, this doesn't even take into account overhead.

It's why I don't work in music stores anymore. It is near impossible to make a living doing so anymore.

And hence why so many music stores have gone out of business.
 
And then there’s Sweetwater. A huge facility with a salon and gym for employees. A golfing room & arcade for spouses and kids. A complete barista coffee shack and huge lunch facility. A state of the art recording studio. A warehouse that’s so efficient even Amazon took notes during a visit.

I got an email one day about drum plugins. I called my rep and told him it’s spam unless it pertains to a real drum. He then offered me a Tama Starphonic aluminum snare plus a Tama custom bag for $300, shipped.

A few years earlier, I accidentally bricked a brand new Presonus mixer and they had a new one on my door the next day.

If I want something pricey, I call them first. They give me great deals,
amazing support, and they’re making money there somehow.

Always call and ask for the best pricing. No matter where you shop.
 
And then there’s Sweetwater. A huge facility with a salon and gym for employees. A golfing room & arcade for spouses and kids. A complete barista coffee shack and huge lunch facility. A state of the art recording studio. A warehouse that’s so efficient even Amazon took notes during a visit.

I got an email one day about drum plugins. I called my rep and told him it’s spam unless it pertains to a real drum. He then offered me a Tama Starphonic aluminum snare plus a Tama custom bag for $300, shipped.

A few years earlier, I accidentally bricked a brand new Presonus mixer and they had a new one on my door the next day.

If I want something pricey, I call them first. They give me great deals,
amazing support, and they’re making money there somehow.

Always call and ask for the best pricing. No matter where you shop.

Yep, Sweetwater is a rare bird in this industry. Competitive prices and likely the best service in the world. Nonetheless, I hesitate because that's how GC looked a decade ago. But losing money hand over foot.

It's hard to know what kind of shape a company is in from looks alone.

Bottom line, MI is a volatile business with survival rates only a little better than family agriculture and the restaurant business. My hat is off to anybody who manages to keep their head above water in MI sales/service.

GeeDeeEmm
 
And then there’s Sweetwater. A huge facility with a salon and gym for employees. A golfing room & arcade for spouses and kids. A complete barista coffee shack and huge lunch facility. A state of the art recording studio. A warehouse that’s so efficient even Amazon took notes during a visit.

I got an email one day about drum plugins. I called my rep and told him it’s spam unless it pertains to a real drum. He then offered me a Tama Starphonic aluminum snare plus a Tama custom bag for $300, shipped.

A few years earlier, I accidentally bricked a brand new Presonus mixer and they had a new one on my door the next day.

If I want something pricey, I call them first. They give me great deals,
amazing support, and they’re making money there somehow.

Always call and ask for the best pricing. No matter where you shop.

Sweetwater is the best. I visited the store a couple weeks ago...great staff. Don't forget they have the Sweetwater Urgent Care as well.
 
Back
Top