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Big difference between IT and Guitars is the technology itself , with a far bigger price differential as old technology/stock needs to be moved on to finance the next development - The unit cost of manufacture for an ASAT is pretty much set in stone - Plus remember G&L can't undermine a ex-factory pricing that will make the UK cheaper say than Japan or indeed the USA on a like for like basis
I really have no axe to grind against Andertons as I like the way Lee presents himself both business wise and socially. I can't speak for the other two involved. It just makes the bigger stores more profitable and the smaller stores less profitable.
I only have experience with a buying group from a smaller retailer point of view. A store that my best friends owned for over 30 years got together to form a buying group to enable them to club together for say, 30 Strats, to enable to buy at a better discount and keep their profit margin against a national store that bought in huge quantities and sold at much lower prices. It kept them alive and allowed them to stock brands that otherwise would have disappeared to them whilst competing against a large chain. That large chain went bust and reappeared as another large chain.
GAP is the other way around in that it makes them much stronger players which in this day and age is their safety net. I'm still very wary that it will control prices to suit themselves. Of course there is no such thing as price controlling is there.
I'm old school so this isn't just about buying power for me, it's about the way things are going in retail. We all, myself included, buy on line because of price and usually larger choice.
The little stores can't survive on you buying your guitar cheaper online then coming in to your local store to fix it when it needs it or buy strings for it. This isn't like small computer shops or phone shops where everyone has a computer or phone....the music industry is far, far smaller for that model to survive.
Anyway, I am digressing as this topic isn't about the loss of small businesses which is a whole new can of worms.
The real price cuts come when a manufacturer wants to invest in a particular market - they may well sell under production cost to get penetration and presence in a weak market - G&L may say “let’s go for £20 under cost per unit to get some market presence in the U.K. if this group can commit to x number of sales”
In a more restricted market where there are a limited number of big players (In IT actives for instance) this is commonplace - I see no reason why this couldn’t happen in the guitar market - especially as its becoming increasingly tech focused. In fact, I’m surprised this isn’t Yamaha’s Strategy. Or maybe it is.
I think you are probably coming from it from the traditional model for guitars in the U.K. Interestingly, IT itself isn’t as quick paced as you think - the chipsets and so forth are, but for most manufacturers they use chassis and basic materials technology that’s a good 10-15 years old.
But deals like the R8 the other day, are few and far between these days within the guitar world - Guitar manufactures carry so little excess stock, so far less of a need to 'dump' - I certainly believe that G&L can increase some market share within the UK, after all it is so poor as it stands, but I don't see a new/future pricing policy that will see a 30 or 40% reduction on the shop floor price, based on prices we've seen in the last 12/24 months
However with G&L I can see more of a reduction on far eastern imports whereby your theory might well come into place - Ref USA models, then they operate more as a Custom Shop with low build runs, with many orders taken from an 'ala carte' style menu with various optional upgrades - Very few are built exactly the same - Such a 'one off' policy adds to manufacturing cost - I can see GAP acquiring models with less 'optional' upgrades and/or ensuring G&L reduce some of the cost relating to optional upgrades, so more features for less bucks - ie free colour coded bumpers
I reckon you are probably right - it will be the US stuff where the money is made, if that indeed is included in the deal...
I was surprised a few weeks back to discover GuitarGuitar selling new Chapman guitars, couldn't understand why Andertons would allow that, but it all makes perfect sense now.
Like wise GG have run with Suhr, Tyler before, amongst others, so options again