Why I Will Never Shop at Guitar Center Ever Again

As if you needed another reason to never step into another Guitar Center, right?  Well, if you do need one, here it is.  (I'm sure the VPs over at Guitar Center (GC) are shivering in their boots right now, thinking uh-oh, another Abe Lincoln look-a-like is writing an article about how much we suck)

For a little background about what this under-the-radar story is about, here is some info you might not know:

Musical instrument manufacturer's (aka vendors) have certain requirements for their retailers that sell their products online, from shipping restrictions (limiting sales to the US to protect foreign retailers, for example) to price restrictions (MAP = Minimum Advertising Price*).  These restrictions are enforced by the manufacturer's, or in some cases by third-party companies, and if the rules are broken, then retailers are put on probation or suspended from purchasing for a certain period of time.  Each manufacturer is different--some allow international sales, some don't.  Some are very strict in enforcing their MAP policy, some are lax.

So here's a typical scenario:  Company A advertises Product X for MAP on their website.  Company B has the same product, but cuts their price to be competitive.  Company A sees Product X for $50 less on Company B's website, so they lower their price to $50 below that.  This process repeats until Company A has Product X for sale at a price that is barely more than what they had to pay for it.  Company A sells the product and ends up breaking even (or possibly even losing money) on the sale.  Once Company B sees that the product is out of stock elsewhere, they can jack their price back up towards MAP and make more money.  This is the way the industry has worked for the last few years.  Often times, manufacturer's do not have the time or manpower to keep an eye on every single independent music dealer on the World Wide Web and this sort of competition, while technically shunned, is allowed to take place.

A good reason for enforcing MAP is so that this does not happen.  Theoretically, NO company should have the product advertised online for less that MAP (to the penny).  That means people would be forced to choose where to buy the product based on things like feedback ratings, customer service, and other promotions (bundling deals, free goodies, etc).  A misconception of this policy might be this: "But what about sales?  Companies put things on sale all the time--manufacturer's must allow that."  This is 100% untrue, and a good place to start digging in to the main point of this article.

If Company A runs a sale on Product X and puts the price below MAP in an advertisement or online listing, the manufacturer has every right to call out Company A and give them the ultimatum that they either end the sale or be suspended for a certain time.  That means that the manufacturer will not ship new products to Company A.

"But what about Guitar Center?  They run sales all the time!"

Exactly.  This is where the debate is.  If GC can put things on sale, then Indie retailers should be able to match or beat their prices.  Right?  Wrong.  Read this article from MMR Magazine and download the letter (PDF) that a GC VP sent out to all their vendors:

On Dec. 16, Guitar Center sent a letter to vendors indicating that it may begin advertising products below minimum advertised price (MAP) policies.


The letter, signed by John Bagan, the company’s executive vice president and general manager, merchandising and supply chain, outlined that when MAP is “inconsistent with actual market pricing,” GC becomes uncompetitive and wastes resources. The letter declared that Guitar Center will take, “whatever actions it deems appropriate to maintain its competitiveness in the marketplace and to achieve a fair return on its substantial investments in its vendors and products. These actions may include competing with and matching the lowest prevailing advertised price in the market, seeking vendor chargebacks or other concessions to restore [GC's] expected return on investment, canceling purchase orders, terminating some or all product lines of a vendor, or taking any other action it deems appropriate.”


GC will enforce the policy at its sole discretion.

Link to letter

As someone who has purchased musical instruments from mom-and-pop shops, online retailers, and big box stores like Guitar Center, I find the news of GC's letter very disturbing.  This means that GC is using their clout to, as they would have it told, even out the competition and make things "fair."  Which is commendable.  I'm sure it would make life easier for smaller independent retailers if everyone actually did have the same price on all their products.  Then they could promote their excellent customer service or some other facet of their business that puts them a cut above everyone else.

The reality is, GC is doing this because they can.  They control a huge chunk of the market and therefore think they have vendors by the balls.  Once the vendors crack down on Indie retailers (which, don't kid yourself, they are definitely doing because of this letter), GC will be able to keep their pricing and profit margins right where they are.  And oh yeah, they can put on sales whenever they want to and undercut Indie retailers because they actually do have the vendors by the balls.

The real problem here is the manufacturers.  If they really enforced MAP policy and didn't allow any distributors (GC or your Grandpa's Guitar Shanty) to advertise below MAP, then there wouldn't have been a huge decline in prices all over the internet.  Then we wouldn't be where we are today, stuck in the middle of a battle between Goliath and thousands of little Davids.

We've had a taste of the low, low prices that companies have been offering on gear for the last few years, and we don't want prices to go back up.  Some people (like me) also don't want to walk into Guitar Center and talk to some know-it-all 18 year old douche from a shitty metal band no matter what the price is.  I also don't want to buy a guitar online from GC when I know that they aren't going to inspect it or do any QC beyond what the manufacturer has done.  I would rather give my business to someone local, or smaller, that I know will provide better service and take care of me consistently.  I'm not saying everyone that works at GC is a piece of shit, in fact I have friends that work there who I am very close with, but because of the turnover in employees there, you can never be sure who you're going to talk to the next time you call/walk in.

So I'll end by saying this: wherever you want to shop is your choice.  Many of you reading this may have had great experiences at Guitar Center, or Mars, or Musician's Friend.  I've bought things from big box stores online when they weren't available and had a good experience overall.  I just think that trying to blatantly horde business and control manufacturer's policies is a pretty huge conflict of interest.  Wouldn't it be interesting to see what would happen if the manufacturer's told GC to fuck off?  You wouldn't see many products on their shelves then.  It would allow some Indie retailer with great business practices and customer service to rise to the top.. only to become the entity they despise.

*Let's not confuse MAP with MSRP (Manufacturer's Suggested Retail Price), which is basically an exorbitantly high number that the manufacturer's come up with so that their MAP prices look more attractive to consumers.