I used to do it myself. Ask “what’s my price?” when I bought music gear. For asking, I always got a special discounted price, but it took me a long time to figure out that the kindly music store owner was simply whittling a few dollars off the MSRP, or manufacturer’s suggested retail price. The suggested price that nobody in their right mind would ever pay.
Then along came the Big Boy catalog operations, followed a few years later by Internet stores both large and small. That’s when I realized how often and for how much I had been ripped off in the past.
Today almost every competitive music gear business charges MAP, or minimum advertised price, for its goodies. MAP is established by manufacturers, and is designed to create a level playing field for large and small retailers, as well as protect the integrity of each manufacturer’s brand. In other words, no price dumping allowed in catalogs or on Internet music stores – both considered advertising venues.
A lot of retailers play the game of ignoring MAP until a competitor squeals on them. Then the manufacturer calls the offender to slap his wrist. Then, as if by magic, the price is corrected upwards to MAP. Once the coast seems clear, the game starts all over.
The nice thing about MAP pricing is that it is supposed to be the best price you can offer. At least that’s how it used to be. Nowadays, I get tons of phone calls asking (and more often telling) me to drop the price below MAP. There is a general conception that since the economy is going through a tough stretch, retailers should be willing to sell at deep, deep discounts. I usually try to work out pricing with a customer (unless he or she is a jerk; then I ask if they are looking to buy or rent).
Some customers very much appreciate getting a break on an already-low price. But offer an impressive deal to others and they smell blood. That’s when they want to haggle. One metal head told me he would buy two Aguilar amp heads and two large 8×10 cabs if I sold each item for $100 more than I paid for it. His reasoning was that I would make $400. I told him I would buy his existing rig for $100 more than he paid for it. Shut him right up (and he hasn’t called since).
Here are a few factors that determine how low I may go with gear prices. Of course, we are talking in-store pricing or prices discussed over the phone. The Internet store only shows MAP. Push “add to cart” and that is what you will pay.
1) If you are a jerk, no soup for you. I’ve learned that a troublesome customer never changes, from that initial great deal to that final damaged return. Jerks are jerks are jerks. Get over yourself, ya big jerk!
2) How long will it take me to replace an item I might sell for below MAP? There is no way I am going to further decrease an item’s price – especially an item that is in demand – if it takes weeks to restock. In between, there are a lot of customers happy to pay MAP and as a bonus get real one-on-one customer service.
3) What are my out-of-pocket expenses, beyond already making less profit? Most customers do not realize that incoming shipping costs take a sizable bite out of the profit margin. That means there is less “wiggle room” with which to negotiate. In my opinion, it makes no sense to win a sale only to make next to nothing.
3) What is my competition doing? Often, that’s what precipitates customers demanding lower prices. Many stores selling on eBay charge MAP during the week, then lower prices from Friday evening through early Monday morning. They know that nobody is going to police prices over the weekend. A lot of online stores trumpet that they will match any advertised price lower than theirs. I don’t have to play that game because I am already selling at the best price each manufacturer will allow.
4) What kind of profit will I make? 1st Gear Music is a business with lots of bills to pay. Why should I match someone else’s dirt cheap, illegal discount if I am only going to make $10?
I love to see and hear from happy customers. Sometimes they can get a price break, and always they will get great customer service. It is actually very easy to give customer service that is superior to competitors’. Just give a damn. Many operations don’t.
