Leumas
V.I.P. Member
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- Feb 8, 2009
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I posted this on his forum as well.....
Thank you, Henry J., for letting us know exactly how you feel about the little guy. You are quite adept at taking arguments about the more abrasive business tactics of your company and baselessly turning the blame around on the customers. Your entire argument is that the customer votes with his dollar. I agree, and from here on out my vote with my dollar will go to either the used market, or with your competitors. I cannot in good faith as an American and as a supporter of small business contribute to your arrogant and destructive business model. You're not even wrong in a pure numbers sense, but the fact that you are willing to jump out into the spotlight and so publicly blame the very people who support your company and have very real concerns is truly amazing. I should hope the Gibson board of directors is keeping a close eye on everything that happens on this board.
I understand that your job as CEO is to make as much money as you possibly can for the company that hires you. I'm sure that the "big box" is your cash cow and I do not fault you at all for supporting guitar center, Sam Ash, and all of the major retailers that keep large amounts of cash flowing in for Gibson. The absolute disregard you have for the small businessman you seem to possess however astonishes me. I personally do not shop at Walmart, Dixon's, Guitar Center, or Amazon. In fact I am more than willing to pay a premium not to do so. All of these major retailers have well documented histories of aggressive business tactics aimed at putting small retailers out of business, preying on the masses and their indiscriminate buying habits. Once that's done the number of votes you can place with your dollar diminishes. Once the competition is eliminated your power over the market expands exponentially. The problem is that every time this successfully happens, somebody loses a liveable wage, and countless more are added to the dull and hopeless payroll of the big box which all but guarantees a life of poverty or near-poverty. You're right that the majority of the population may not care or realize, but some of us do, and even though it is a losing battle, we're still willing to fight it.
I hope that every American, and every employee of every nationality that works for you makes a livable wage, and lives comfortably in the knowledge that their hard work provides for their needs. Unfortunately, it is the small minded and out of touch CEOs such as yourself that are so callously doing your part to destroy everything that does not provide you with the largest profit margin possible, and thereby undercutting the cornerstone of the American economy that is the small business. I know it's not your fault alone, and the problems started way before you had anything to do with them, but you happily fall in line and continue the practices that make this country worse for the average Joe day by day.
I would never argue that you should not make money, and lots of it. I feel, and I don't think anyone can argue this, that there is a happy medium to be found in both maintaining the big box income and market domination, while providing an outlet for the smaller retailer to profit from your product as well. I'm sure when you started this forum you expected to receive feedback directly from the public about various aspects of the enterprise you control. I'm sure you also wanted to offer a glimpse of the mindset and rationale you bring to the table in your decision making process. You're accomplishing both, for better or for worse.
I encourage everyone to vote with their dollar, I know I'll be voting with mine.
I have to make a bold statement, which many of you may not agree with.
The reason that small dealers are dying is because consumers will not support them. In a free economy, it is you the fan and the customer who gets to choose by spending your hard earned money. If you spend your money at small dealers, I can guarantee Gibson and everyone else in the industry will be there. The fact is, as a group, you do not spend your money there.
There is not a single consumer who does not look at Thoman's catalog offerings in Europe. His prices are incredibly aggressive, the service is exceptional and he has a 500,000 square foot distribution center that ships product to most consumers within 24 hours. He has millions invested in inventory.
He is an aggressive and competent business man who is able to make a profit even though his prices are very low (very low profit margins). No small shop in Europe can stay in business at his very competitive prices, and so where do consumers buy?
Since I have been in this industry, I have found it to be the most price oriented business in the world. Every guitar player seeks out the lowest priced product, and then goes to the local shop and says, "Sell me your guitar at this price or I will walk". These small shop owners gets dozens of calls every day from people shopping price. If they put their inventory online, the situation gets even worse as guitar players will shop the world and hammer the poor small business person. Come on guys, who is going to tell me they know a player that paid more of a guitar because of a relationship. Yes it happens, but not enough to support a small shop. People do not as a rule pay more regardless. I don't think they should have too. I think the fan is always right, and we are there to service our valuable fan. And the best way to get a lower price on a product is to buy from an aggressive merchant that does high volume and probably has only so-so service.
Look at other industries. Look at consumer electronics. How many small stores are left. Where do you buy a big screen TV: Best Buy, Dixon's, Amazon or Joe's TV Shop? Why is Walmart the largest retailer in the world, because they charge higher prices, and have a more limited selection?
Brands and companies react to what consumers want. That is the only way we can succeed. My sin is that I have studied other industries and have gone to where consumers are going before other brands and companies in this industry. I have used strategies and tactics that allowed brands and companies to thrive, and ruined companies that did not adopt them. The sin is to give to consumers what they really want based on their buying behavior.
People bring up stores like Centre City Music, and Gruhn's as small merchants. They may have smaller stores, but they are some of the largest volume dealers in the country and they are extremely aggressive in pricing as is the great store in Cologne which is building a new distribution warehouse with thousands of square feet.
We do our share to support those retailers that have a good customer base. We have Business Development Managers that help them with annual business plans, District Product Specialists that travel to the store and help with training and merchandising, Relationship managers that provide direct line account support, and an extensive 24 hour computerized systems allowing account management. We give smaller dealers significantly better credit terms than large dealer because the smaller guys have a harder time with financing. The average store turns a guitar 4 times a year (Thomann probably 20 times a year) and we extend 90 day terms meaning we fully finance the independent store site. This cost $$$$ money. We cannot support a single store visit that can easily run $1000 when the store sells 10 of our instruments a year, let alone the rich support each of our retailers get.
While you may complain about the demise of small local retailers, it is not the brands and companies that are killing them. It is the price driven consumer. It has happened in every industry, and it is now happening in ours. I think, the consumer and fan are always right.
Thank you, Henry J., for letting us know exactly how you feel about the little guy. You are quite adept at taking arguments about the more abrasive business tactics of your company and baselessly turning the blame around on the customers. Your entire argument is that the customer votes with his dollar. I agree, and from here on out my vote with my dollar will go to either the used market, or with your competitors. I cannot in good faith as an American and as a supporter of small business contribute to your arrogant and destructive business model. You're not even wrong in a pure numbers sense, but the fact that you are willing to jump out into the spotlight and so publicly blame the very people who support your company and have very real concerns is truly amazing. I should hope the Gibson board of directors is keeping a close eye on everything that happens on this board.
I understand that your job as CEO is to make as much money as you possibly can for the company that hires you. I'm sure that the "big box" is your cash cow and I do not fault you at all for supporting guitar center, Sam Ash, and all of the major retailers that keep large amounts of cash flowing in for Gibson. The absolute disregard you have for the small businessman you seem to possess however astonishes me. I personally do not shop at Walmart, Dixon's, Guitar Center, or Amazon. In fact I am more than willing to pay a premium not to do so. All of these major retailers have well documented histories of aggressive business tactics aimed at putting small retailers out of business, preying on the masses and their indiscriminate buying habits. Once that's done the number of votes you can place with your dollar diminishes. Once the competition is eliminated your power over the market expands exponentially. The problem is that every time this successfully happens, somebody loses a liveable wage, and countless more are added to the dull and hopeless payroll of the big box which all but guarantees a life of poverty or near-poverty. You're right that the majority of the population may not care or realize, but some of us do, and even though it is a losing battle, we're still willing to fight it.
I hope that every American, and every employee of every nationality that works for you makes a livable wage, and lives comfortably in the knowledge that their hard work provides for their needs. Unfortunately, it is the small minded and out of touch CEOs such as yourself that are so callously doing your part to destroy everything that does not provide you with the largest profit margin possible, and thereby undercutting the cornerstone of the American economy that is the small business. I know it's not your fault alone, and the problems started way before you had anything to do with them, but you happily fall in line and continue the practices that make this country worse for the average Joe day by day.
I would never argue that you should not make money, and lots of it. I feel, and I don't think anyone can argue this, that there is a happy medium to be found in both maintaining the big box income and market domination, while providing an outlet for the smaller retailer to profit from your product as well. I'm sure when you started this forum you expected to receive feedback directly from the public about various aspects of the enterprise you control. I'm sure you also wanted to offer a glimpse of the mindset and rationale you bring to the table in your decision making process. You're accomplishing both, for better or for worse.
I encourage everyone to vote with their dollar, I know I'll be voting with mine.
I have to make a bold statement, which many of you may not agree with.
The reason that small dealers are dying is because consumers will not support them. In a free economy, it is you the fan and the customer who gets to choose by spending your hard earned money. If you spend your money at small dealers, I can guarantee Gibson and everyone else in the industry will be there. The fact is, as a group, you do not spend your money there.
There is not a single consumer who does not look at Thoman's catalog offerings in Europe. His prices are incredibly aggressive, the service is exceptional and he has a 500,000 square foot distribution center that ships product to most consumers within 24 hours. He has millions invested in inventory.
He is an aggressive and competent business man who is able to make a profit even though his prices are very low (very low profit margins). No small shop in Europe can stay in business at his very competitive prices, and so where do consumers buy?
Since I have been in this industry, I have found it to be the most price oriented business in the world. Every guitar player seeks out the lowest priced product, and then goes to the local shop and says, "Sell me your guitar at this price or I will walk". These small shop owners gets dozens of calls every day from people shopping price. If they put their inventory online, the situation gets even worse as guitar players will shop the world and hammer the poor small business person. Come on guys, who is going to tell me they know a player that paid more of a guitar because of a relationship. Yes it happens, but not enough to support a small shop. People do not as a rule pay more regardless. I don't think they should have too. I think the fan is always right, and we are there to service our valuable fan. And the best way to get a lower price on a product is to buy from an aggressive merchant that does high volume and probably has only so-so service.
Look at other industries. Look at consumer electronics. How many small stores are left. Where do you buy a big screen TV: Best Buy, Dixon's, Amazon or Joe's TV Shop? Why is Walmart the largest retailer in the world, because they charge higher prices, and have a more limited selection?
Brands and companies react to what consumers want. That is the only way we can succeed. My sin is that I have studied other industries and have gone to where consumers are going before other brands and companies in this industry. I have used strategies and tactics that allowed brands and companies to thrive, and ruined companies that did not adopt them. The sin is to give to consumers what they really want based on their buying behavior.
People bring up stores like Centre City Music, and Gruhn's as small merchants. They may have smaller stores, but they are some of the largest volume dealers in the country and they are extremely aggressive in pricing as is the great store in Cologne which is building a new distribution warehouse with thousands of square feet.
We do our share to support those retailers that have a good customer base. We have Business Development Managers that help them with annual business plans, District Product Specialists that travel to the store and help with training and merchandising, Relationship managers that provide direct line account support, and an extensive 24 hour computerized systems allowing account management. We give smaller dealers significantly better credit terms than large dealer because the smaller guys have a harder time with financing. The average store turns a guitar 4 times a year (Thomann probably 20 times a year) and we extend 90 day terms meaning we fully finance the independent store site. This cost $$$$ money. We cannot support a single store visit that can easily run $1000 when the store sells 10 of our instruments a year, let alone the rich support each of our retailers get.
While you may complain about the demise of small local retailers, it is not the brands and companies that are killing them. It is the price driven consumer. It has happened in every industry, and it is now happening in ours. I think, the consumer and fan are always right.
