Pricing structure for music storesm.

[copacetic]

I am just wondering what the pricing structure is for American music stores. There is the msrp and it seems all stores and web sites have a price listed 25-30% below that price across the board. It seems that is to give the impression that you are getting a deal. Not sure if I am correct on that, but it seems so. Also it seems based on that, the actual cost of the instrument to the store is from 25-35% of that 'artificial' msrp. So when they really have to wheel and deal they can come down another 5-20% +. Also wonder if the big stores like GC in fact really buy their instuments as opposed toi have them consigned. (Maybe the limited editions, special orders, boutique makers have to be paid..?). I used to work for and with music stores in Japan and their buying, pricing structure was very uniform esp. With imported instruments.

[Psycho Bass Guy]

I am just wondering what the pricing structure is for American music stores. There is the msrp and it seems all stores and web sites have a price listed 25-30% below that price across the board.

This is standard and was implemented decades ago to give the impression of a "sale" price. Until the advent of the internet and the spread of big box music chains, it was NOT uncommon for local music stores to charge full retail or even "retail-plus" prices.

Also it seems based on that, the actual cost of the instrument to the store is from 25-35% of that 'artificial' msrp. So when they really have to wheel and deal they can come down another 5-20% +.

Wholesale costs for MI are typically 50% of retail on most items, but that varies. Typically, accessories like strings and cables have a much higher profit margin and as items become more expensive, margins decrease. It varies by product as well. Most electronics have lower margins than instruments.

Also wonder if the big stores like GC in fact really buy their instuments as opposed toi have them consigned.

No, they own everything sold as new merchandise.

[Dave W]

There used to be more variation, before online selling became widespread. Then the big companies stepped in and started enforcing minimum advertised prices. Stores can go lower, they just can't advertise it. But the effect has been to level out prices.