Piano World Home Page Forums Our Most Popular Forums Piano Forum Looking at the Piano Business through the Marketing Eyes

Hey, I resemble that remark.

Actually, the irony is complete because there is no history.

Secondly, in this very thread I have noted on multiple occasions that deception is not a Wilson monopoly and long predates the internet model. If memory serves, I have explored in depth the ways in which B&M dealers scratch and claw at each other for every scrap of competitive advantage, even if it skirts their dealership obligations and deceives their customers (about warranty service and prep to name two). I think you just lumped this in to my schizophrenic tendency to defend Wilson against some of the sillier generalizations that are flung out by his detractors (of which I admit I am one).

I have also spent some time on this thread and on others warning unsuspecting posters of the risks involved with college sales, some of which poach into other dealers' territories (yes, Mr. Haught, and real live dealers have told me so) and which are inherently high pressure events where sharp closing skills are often on display.

I cannot name names and point fingers at offenders. Heck, even Mr. Haught wouldn't name names directly when I asked who sells outside of territory in a manner that conflicts with his view of ethical sales practices. But TW's active and visible presence clearly makes him a lightning rod. Dealing with what is in front of you more frequently than with what is not doesn't suggest that I am picking on him in some particularly obsessive way, especially since you note that I do try to be somewhat evenhanded. Yes, yes, my language ran away with me a little in the last two posts and I'm a bit disgusted with myself.

Actually, I think the deceptive use of ebay may merit the word a bit more now that I understand that it is a very recent ebay change to list the actual purchase. Before that, TW was even more clearly leaving the false impression in the minds of potential customers that these positive reports about penny purchases reflected real piano sales. Clearly he was doing nothing that ebay didn't allow. But to most non-lawyers legal and ethical are not yet synonyms.

Turandot said to William Haught :
Don't hold your breath. Most not all, but most feel that territorial distribution, MAP policies, and degrading of other products to sell your own is how to "re-tell" pianos. That's what makes Mr. Haughts post here so refreshing. He's not using side agendas as some have here to distract his position. He say's what he believes, and stands behind it. If more people would do that rather than make this about someone they loathe because they can't compete this would be a 4 page thread rather than a 17 one so far.

I'm sure if some of my detractors wanted to they could spend another 17 pages on railing about some other company they didn't like. As stated before by many, the marketing approach by Ellenburg is not different than most piano companies. You don't hear others railing against other companies, why? Because those other companies stay in their sand box. See if you play by the traditional B&M rules you get a pass. So at the end of the day, on the last page of this thread or others to come, the fact remains. This isn't about anything but what Mr. Haught has had the honesty and integrity to post about. Traditional distribution v/s Modern distribution of pianos.

I to would vote for Mr. Haught to work with. Of course on our sales floor is office cubicles and I-Mac's. We would have to break him of some bad habbits. With us he could quote prices over the phone, sell pianos at what other dealers pay for them, and guarantee the client satisfaction or their money back. I'm sure though once he saw how much easier it was to sell pianos in our office over what he has "experienced" before he would love it!

Terry

Can you explain to us in your words what you were doing with the ebay feedback? You should set the record clear.

Herr Klaviervati,

I'm a little cheesed that Terry Wilson has now chosen to address you as Mr. Piano Dad leaving me no choice but to resort to other ways to address you. Honestly, the man has no shame.

It's definitely true that you are one of the good guys and have tried more than anyone else to keep this thread on some kind of a meaningful course, and it's also obvious that you do agonize over what is fair and what is true.

Maybe Mr. Wilson and Mr. Haught are worthy adversaries. They are opposites to the extreme. I'm not saying that one of them represents the truth and the other its opposite, far from that. I'm not even sure the truth resides anywhere between the two. The one has stated that he is for all intents and purposes retired. The other is building his empire slowly, one penny at a time. The truth may be resting comfortably in a pasture far removed from this 400-plus acre electronic stomping ground. Usually it's much easier to locate the black than it is the white. This thread gives ample opportunities for doing that.

Now you know I have this unfortunate habit of saying I'm exiting and not doing it. But I honestly do want to get out of here and enjoy the weekend. I'm going to look for the truth while camping in the mountains. Maybe I can find it looking under a rock. I remember some silver-fork-tongued guy suggesting that. Maybe I'll find it watching a plant grow. So, I'll leave you with the 'delicious' task of sorting it out and dealing with what is certain to be a barrage of bombshells in the evening thread-news report from Wheeling. So tighten those sheets to the wind and make quickly for the crow's nest. A storm is surely brewing.

William

Turandot,

After re-reading 17 pages of post that include so many from you on every single conversation that has been had between other members, I have come to the conclusion that you go both ways. Whatever side that seems to be ahead in a discussion, you chime in with your total lack of diplomacy and knowledge and spin it another way. Therefore, I will not respond to your "private" post anymore as I have the feeling beyond a reasonable doubt that your post are full of stirrings to just make this thread longer for your personal enjoyment.

Terry,

I appreciate the fact that you see me for who I am. I respect all business ventures. I do not condone selling pianos over the internet but I cannot judge you, personally for the fact that this is what you have chosen to do to feed your family. Sell all of the stencil pianos you wish. I have problem with selling Kawai, Yamaha and other brands that hold their dealers to a territory only to have the same piano appear on a website to be sold.

While turandot is looking under a rock for peace and harmony, I hope that he finds some knowledge to back up what he speaks about.

This thread, if you took out his post and the responses to his ridiculous remarks would go from 17 pages down to about 8.

I will start another thread soon. Actually two, One for dealers and one for buyers. That way I will miss his comments altogether. He is not a dealer and he already has his Nordiska to enjoy.

I will admit that under most circumstances, I am a very hard person to agitate, but he seems to pull the right chains.

Your remarks have been welcomed and I leave you with this. Good luck with your business, however, honestly I hope that the B&M dealers throughout this great country of ours kick your @#$%^&. Ha!

Best Regards,

Quite telling, especially the last paragraph. Such a juvenile remark. And to think you used to be the president of a piano company.

There will be B&M piano stores as long as there
are pianos. Plain and simple. The internet is a wonderful tool for research. For buying a piano?
No.....for those people who don't care about touch, tone, longevity, service before and after the sale, learning anything about pianos at all...this is the kind of customer that will buy
on the internet. Not that there's anything wrong with that, to each his own.

Some take themselves way too seriously.

Mr. B

YAMAHA C3

The remark to Terry Wilson was a joke, pure and simple. Sorry if it offended you. I am sure Terry knew exactly where I was coming from.

Bownlow,

If you are the Kawai and Shigeru dealer in Austin, I welcome your remarks. You have chosen a fine brand of pianos to represent. How is your Shigeru sales going. I have a SK7 in my home and even my technician, who works on primarily Steinways says that it is the finest piano he has worked on. The tone is rich and warm and the action is fantastic.
What other brands do you carry?

This thread, too long already, has been scrambled up and even I have been thrown into some discussions that I wish I would have stayed out of. I am interested in the state of the piano industry from the dealers point of view and how we can, as dealers serve the customer to the fullest and maintain a reasonable profit. You can reply to me privately or on this thread, it makes no difference. Everyone is of utmost interest to what the B&M dealers are going to do in the future.

Best Regards,

Mr Haught.....I do not carry any other brands. I think things are confusing enough for the consumer. Why add to the frustration by carrying
several different brands?

My last shopping adventure took me from all over the great state of Texas, to the UK. I tried
many pianos, made in the USA, Germany, Austria,
and Estonia. I ended up getting a Shigeru, as it
was the best playing, most responsive, best sounding. (to me, of course)

MR. B

It's generally known as being even-handed and avoiding simplistic black/white judgments. I'd rather do that than start with a roar-- that a barrage of inferior Chinese pianos are killing the industry, and ending with a whimper-- that Sojin and Schumann pianos will not appreciate in value. That is where you ended up on the issue of Chinese pianos.

Fair enough, and in everyone's best interests.

I was looking for the truth under a rock, not peace and harmony. But then, there isn't much that you seem to be able to fathom in what I say anyway.

I will most definitely stay out of your grey market thread. According to the Music Trades, in the same article that cited 25,000 Chinese-manufactured pianos sold in the US last year, there were 507 grey market pianos imported into the US during the same twelve months. Either each and every one of these was sold and re-sold repeatedly during the course of those twelve months, or the whole matter is a bit of a tempest in a teapot.

I will enjoy my Nordiska, as you suggest. I may as well enjoy it now since its days are apparently numbered.

Ah, you're back. That Klaviervati designation was a scream!

At some risk of hijacking a thread I thought was good and dead, that 507 number is intriguing from a marketing perspective.

I'm sure that entry level Chinese pianos are to some small extent substitutes for Yamahas. More so for the GB's than for the C's, but even for the C's to some extent. As long as changes in the price of one cause changes in the demand for the other they are substitutable. But I suspect the cross-price elasticities are small. In English, the markets may be rather separable.

This means that sales of new Yamahas and Kawais (especially the solid citizen C's and RX's) may be determined mostly by conditions in that segment of the market. The main competition for them thus could be used versions of the same model. Those used versions come from the natural aging of the N. American stock augmented by the flow of grey's from Japan.

How many C series and RX series pianos are sold new in the US each year? The continued flow of greys from Japan may be a more meaningful problem for sales of new C's and RX's than the entire flood of low-price-point Chinese pianos, especially if the greys are mostly C's and RX's. Basic incentives suggest that most greys will be the higher value pianos (U series in verticals, C's and RX's in grands) because the shipping cost is based primarily on weight instead of value. Thus it makes more sense to export high value greys instead of cheapies.

Vati,

You lost me with the shipping cost info about weight and value? Could you illustrate, maybe with an example of each?

This is a variant of the old "Washington State Apple" paradox taught to generations of econ 101 students. In that case, the paradox was "why do the high quality apples get shipped out of state, while locals get to eat the low quality apples." The answer, of course, is that it costs just as much to ship a low quality (low price) apple east as it does to ship a high quality (high price) apple.

If you're an apple producer, suppose you get $1 per apple for high quality apples and .5 for low quality apples in Washington. If you sell them in Washington there is no transport cost so the relative price of high quality apples is 2 (2 low quality apples are worth one high quality apple).

But In Florida, for instance, the price of high quality apples will be 1.25 with shipping costs added and the price of low quality apples will be .75. Floridians thus will demand a different RATIO of high quality to low quality apples because the relative price they face will be different. In Florida the relative price of high quality apples is LOWER than in Washington (1.67 low quality apples per high quality apple instead of 2), so Floridians will demand relatively MORE high quality apples.

Same idea in pianos. US demand for greys will be skewed toward the higher quality ones because the shipping cost (which is a decent percent of value in used pianos) is essentially the same for high and low quality pianos. All of this is, of course, an "other things equal" kind of argument. It can be reinforced or contradicted by differences (cultural or otherwise) between the two marketplaces.

While in the past I have not questioned NAMM's figures, I find the estimate of only 507 grey market pianos being imported in a year to be unbelievably low.

In fact, given what I know, it is impossible to believe.

As much as I hate to agree with Steve, he is right. The 507 figure is bogus.

Dad,

Thanks for the illustration. I get it now. I had interpreted your statement to mean that some pianos' shipping charges were based on weight, while other's were based on value. I guess I can add remedial reading to my 'agenda'.

Steve,

I would have to assume that the markup on used grey market Kawais and Yamahas is solid enough for dealers to keep them in their inventory. How does the markup on a Japanese grey compare to a same-cost new Indonesian or Chinese piano? Also, I notice that you are selling Kawai digitals, but apparently not selling Kawai or Yamaha acoustics. From your experience in the business, do Yamaha and/or Kawai do anything to discourage their authorized dealers from participating in grey market import sales of their brand?

Terry,

You use the word 'bogus' to describe the low NAMM estimate of grey market imports last year. 'Bogus' might imply some intentional understatement rather than simply a failure to include all appropriate data. Any specific reason to think that?

To anyone,

Since shipping charges are based on weight and size rather than value, and the cost of dedicated floor space in a retail establishment is again size-related and not a question of sales price, can we assume the following?

A 40% markup on a piano that costs a dealer $3000 will only net one-third of the profit that a 40% markup will net on a piano that costs the dealer $9000.

The dealer who provides the necessary floor space for a $3000 (cost) vertical will need to turn that inventory over three times as fast as the dealer who provides the same floor space for a $9000 (cost) vertical if both retailers are to realize the same approximate profit.

I tend to discourage discussions on pricing and mark-up except in terms of national averages. I think they do more harm than good. That said, most dealerships make a SLIGHTLY higher margin on used pianos. And they need to, due to higher prep and post-sales expenses. Also used pianos sell for less than new ones, and as you point out in your post, they earn less per sq. ft. of floor sapce than higher priced instruments.

And YES!!!! Kawai and Yamaha strongly discourages their dealers from carrying grey market instruments.

One other note: You take in terms of a 40% mark-up. Our industry doesn't use "mark-up" as a basis for pricing. For example, a piano that has a wholesale cost of $10,000 would sell for $14,000 with a 40% mark-up.

The industry averages about a 42% "gross profit margin". This means that 58% of the selling price is the wholesale cost and 42% is gross profit (before all expenses). So a piano that has a wholesale cost of $10,000 and a gross profit margin at the 42% average, would sell for $17,240.

Yes.

Where is that "eating a bucket of popcorn" graemlin when I need it????

Be nice Steve I just referred someone to you. I even told them your pricing was competitive with ours. :rolleyes: