Canadian Music Trade - August/September 2020 | Page 20

MONEY
IN REPETITION
Offering in-store repairs can boost sales …
but how do you ensure it’s profitable?
By Morgan Ahoff
*Note: this article is written about a
guitar shop, but is applicable to any
product category with a technological
component: drums, keyboards, PA
equipment, etc.
Think of how ridiculous it
would be if you woke up
every morning and said,
“Hmm. How can I make
some money? Hey, I’ll sell
something! What will I sell? Maybe some
guitars. Where can I get some? How much
do I need to buy them for so I can make
some money selling them...?” Yeah, that’s
bonkers.
To run a business, you need systems in
place. You need supply lines and procedures
and the tools for the job. You need price
stickers and glass cleaner and a payroll for
the employees...
A repair shop has a particular problem
when it comes to running it as a business:
when a device breaks, it’s completely
random. Broken guitars are like snowflakes
– no two are alike.
Sure, you can group them into categories
– $80 for a set-up, $120 if it’s a Floyd
Rose, $200 for a fret dress... But each guitar
is different. It’s designed differently, and it’s
made from wood, which comes from trees,
which are all different. And every player is
unique, so the way they’ve been using the
guitar is different.
Bottom line, it’s really hard to shoehorn
things that are inherently different into
nice, neat categories, convenient price
points, and time schedules that fit neatly
into a business model.
What can be done? There are a few
things...
Move the Bulge
Here’s a little secret: expensive guitars are
easier to work on than cheap guitars. Expensive
guitars are well-made and do what
the repairperson intends. Working on cheap
guitars is a bit like a scavenger hunt: find
the one thing this guitar will do well, and
set it up to do that. Do you like low action?
Too bad; can’t do it with this guitar.
More expensive guitars are built to be
repaired. It’s expected that you’ll keep them
long enough to run into the need to repair
them, so they’re designed with that in mind.
Budget guitars have employed all kinds of
cost-cutting measures to keep the purchase
price affordable, and that often means building
them in such a way that repairing them
exceeds the cost of buying a new one.
“We’ve got to get more valuable guitars
in the hands of our customers,” is the conclusion
I came to after working in a repair
shop for a while.
In every guitar shop, the instruments
the customers own span the range from
$250 student models to $10,000 heirloom
models all decked out with mother-of-pearl.
If you analyze the value of the instruments
your customers own, there is likely a
“bulge” at a certain price point, meaning
more customers own an instrument at this
price point than at any other.
In the shop where I work, this price
point is about $400. What’s the problem
with that? Well, customers are generally
willing to spend half the replacement cost
of the instrument to get the one they own
fixed. That gives us a “budget” of $200.
Okay, a guitar is checked in because
it isn’t playing well. The retail staff say, “It
probably just needs a set-up.” The technician
starts working on it and discovers it needs
more than an $80 setup to make it play
properly. Because it wasn’t built well at the
factory and it’s been ravaged by time and use,
a $120 fret dress is required. That’s used up
the entire $200 budget; if it needs anything
more than that, the customer should have
just spent the money on a new guitar.
How Price Points Fit
into Your Business
Model
You’ve got to not only think of price points
in terms of “How much were you planning
to spend?”, but also in terms of how they fit
into your business model.
Imagine you succeeded in shifting the
“bulge” in your customer base from $400
to, say, $550. There are still going to be
customers who own $250 student models
(because maybe they’ve got a kid who’s a
student) and you’re not going to convince
all your customers they should be playing a
$3,500 Duesenberg.
But if that $550 guitar needs an $80
20 CANADIAN MUSIC TRADE