New Guitar Center Policy?
Twibil
I was just informed by our local GCs new manager that GCs are all
going to feature in-house guitar techs from now on, and that he'd
continue to send me the repair work "that's above our new tech's
level" (meaning everything except routine string changes) if I'd start
kicking back 20% of my profits on those referral repairs.
We will pass gently over what I told him in reply. There's no need to
frighten the children and the horses.
But after a bit of thought it suddenly struck me that the whole thing
sounds more than a bit fishy: I can see GC thinking that they might
make a few bucks from doing their own in-house repairs, but demanding
kickbacks to refer work is just plain illegal the last time I looked,
and I find it difficult to believe that a well-known national
corporation would try to do something so stupid and would memorialize
the kickback demand in an email to boot.
In short, I suspect that the new GC manager is thinking that he may be
able to skim a bit for himself off the top of this "new policy", and
I'm curious to hear if anyone else out there has heard anything about
CG's new in-house tech idea in general and in the 20% kickback fee for
out-of-store referrals in particular.
In any case, I've been working with GC so long that some of the guys
who I used to work with at the retail level are now well up into the
GC heirarchy, and I'm going to be tactfully asking them what's going
on, and, if GC is truly trying to demand kickbacks, how they think
they're going to get away with it.
I'll pass along any further developments as they, er, develop.
~Pete
P.S. Since GC is paying their new tech the same basic-poverty part-
time wage they pay their floor salesmen, the new techs are extremely
unlikely to have any idea of what they're doing.
Tread cautiously.
Rufus
I'd straight-up report the guy - hell-yeah that's illegal as hell, but
it may be just him and not GC as a whole. I'd bet the GC higher-ups
would like to know about this...before they end up in court and possibly
OOB.
--
- Rufus
RichL
Sounds to me like the new manager has got sticky fingers.
If I were in your shoes, I'd place a call to a regional manager and ask
him about GC's "new policy".
Me, I rarely go near the place. I've gotten a few things from them in
the past (NEVER an instrument!) 'cause my son used to get "pro
discounts" but that policy was discontinued too.
Twibil
>
>
> Sounds to me like the new manager has got sticky fingers.
I suspect the same, but can't prove it as yet.
> If I were in your shoes, I'd place a call to a regional manager and ask
> him about GC's "new policy".
I'm going to do exacty that come next week.
> Me, I rarely go near the place. I've gotten a few things from them in
> the past (NEVER an instrument!) 'cause my son used to get "pro
> discounts" but that policy was discontinued too.
For almost 20 years I've been putting on periodic setup and repair
workshops for various southern California Guitar Centers, and doing
special jobs for them when they've needed a quick repair or a free
setup to sweeten a customer's deal on a pending purchase. In return,
GC has sold me whatever I needed/wanted at their landed cost, and has
sent me a regular stream of repair and setup customers as well. This
isn't altruism on their part; just good business with a built in quid-
pro-quo.
When they sent their customers to me they knew that they were going to
have happy customers, and a happy customer is a repeat customer.
Why they suddenly think that hiring a minimum-wage kid who's never
worked on any guitars except his own is going to please their
customers and improve their profit margin is utterly beyond me, but as
corporations get larger and larger they frequently lose touch with
reailty as the bosses get further and further away from the dirt-under-
the-fingernails end of retail business, and then the bosses can't
understand why their decisions aren't increasing the bottom line.
Oh well. Such is life.
~Pete
sa...@dog.com
wrote:
If what you mean is that GC wants to make a 20% profit for taking in
repairs, dealing with the customer and giving you work that they find
for you, then I'm surprised they haven't been working with you under
that arrangement since day one. It is perfectly legal, and the word
"kickback" does not apply. They are entitled to make a profit on your
repairs. In fact, 20% is quite low and reasonable.
RichL
> On Nov 6, 9:22 pm, "RichL" <rpleav...@yahoo.com> wrote:
>>
>>
>> Sounds to me like the new manager has got sticky fingers.
>
> I suspect the same, but can't prove it as yet.
>
>> If I were in your shoes, I'd place a call to a regional manager and
>> ask him about GC's "new policy".
>
> I'm going to do exacty that come next week.
>
>> Me, I rarely go near the place. I've gotten a few things from them in
>> the past (NEVER an instrument!) 'cause my son used to get "pro
>> discounts" but that policy was discontinued too.
>
> For almost 20 years I've been putting on periodic setup and repair
> workshops for various southern California Guitar Centers, and doing
> special jobs for them when they've needed a quick repair or a free
> setup to sweeten a customer's deal on a pending purchase. In return,
> GC has sold me whatever I needed/wanted at their landed cost, and has
> sent me a regular stream of repair and setup customers as well. This
> isn't altruism on their part; just good business with a built in quid-
> pro-quo.
Gotcha. The luthier that made my custom guitar has (or had) the same
arrangement with a couple of GCs in his area.
> When they sent their customers to me they knew that they were going to
> have happy customers, and a happy customer is a repeat customer.
>
> Why they suddenly think that hiring a minimum-wage kid who's never
> worked on any guitars except his own is going to please their
> customers and improve their profit margin is utterly beyond me, but as
> corporations get larger and larger they frequently lose touch with
> reailty as the bosses get further and further away from the
> dirt-under- the-fingernails end of retail business, and then the
> bosses can't understand why their decisions aren't increasing the
> bottom line.
>
> Oh well. Such is life.
Yeah, although I'd guess that the folks running GC these days, like so
many other big corporations, never were involved with the
dirt-under-the-fingernails end of the business.
Curse the MBA.
Sac Dave
Well that sounds like the real world to me, is it legal I don’t know.
Years ago when I was contracting I did work for a property manager
“don’t forget 10% for old Jay” I just added the 10% the envelope I
threw in. Besides a tec. would have a full time job just getting
sticky fingerprints off instruments so won’t cut into your stuff
much. By the way are you the guy that dose the pre un-set up for
GC ?
Desk Rabbit
It's one thing to add 20% to bill to the customer (Quite legal and above
board), it's quite another to ask the tech to hand back 20% which AIUI
is what is being asked.
Lu R
"Twibil" <noway...@gmail.com> wrote in message
news:240ba371-1934-4557...@d9g2000prh.googlegroups.com...
Whilst kickbacks seems wrong all they have to do is simply charge a 20%
overhead to the customer above your price..I dont see the problem unless the
guy is pocketing the loot...
Lost in the Wasteland
> After having a good working relationship with GC for almost 20 years,
> I was just informed by our local GCs new manager that GCs are all
> going to feature in-house guitar techs from now on, and that he'd
> continue to send me the repair work "that's above our new tech's
> level" (meaning everything except routine string changes) if I'd start
> kicking back 20% of my profits on those referral repairs.
umm .. I don't think a referral surcharge, ie kickback,
is all that out of line .. saves him from hiring another tech and
a staffed work bench ... and it brings you business . maybe I'm
missing some finer details.
capitalism ... what a bitch .
>
> P.S. Since GC is paying their new tech the same basic-poverty part-
> time wage they pay their floor salesmen, the new techs are extremely
> unlikely to have any idea of what they're doing.
>
>
bingo.
sa...@dog.com
The correct way to do this is for the repairer to bill the store in
writing for the repair, reflecting only what the repairer is being
paid. If that is 20% less than what the store intends to charge the
end user, then that is how it has to be written. Otherwise, the
repairer will be legally responsible for income tax on the full
amount. Make sure you have the resale tax ID of the store on file if
you are in a state where there is a tax on the parts and/or labor.
Otherwise, you get to pay those, too. When I was doing this for a
bunch of stores, that's how I handled it. I billed them for what I
wanted to be paid, and then they could mark it up any amount they
pleased to the retail customer. Most marked it up about 20-25%.
Master Betty
"RichL" <rple...@yahoo.com> wrote in message
news:se-dnc5kU8l7nmjX...@supernews.com...
I'd rather go to GC than some of the over priced boutique shops here in
Austin.
Merely my opinion
1. You should smile and ask him to put it in writing. Say it's for
your accountant.
2. You know what to do with THAT letter!!!
3. GC HQ will probably ream the guy six new ones before replacing
him- or if you're lucky, and it's actually a policy being endorsed
by
GC on a policy level, there may truly be legal recourse of sorts
with punitive ramifications some amulance chaser with a hard on
for
40% of the proceeds in a class action might dig.
Tread ON GC.
Thunderbird
>After ,,,
To clarify:
It is perfectly legal for Guitar Center, as a business, to demand a
referral fee, commission, etc. from you for steering business to you.
It is illegal for an employee of Guitar Center to ask that the fee be
paid to himself personally (not to the company) if and only if Guitar
Center suffers a loss from this act. For example, if Guitar Center did
not offer any repair services and did not have any agreements with
repair shops to subcontract work with or without referral fees, then
an employee steering business for a fee would not be violating any law
(but would almost definitely be violating company policy/ethics
rules), because they are not in the repair business.
dugjustdug
What he said.
I think the term "kickback" is what's stuck in our collective craws.
Referral fees are a part of life these days in business. If this
Manager is laying it out differently, I'd endorse previous suggestions
of either getting it in writing, or, checking out the new "policy"
with the higher-ups.
Good luck.
djd
RichL
Well, yeah, but I've got other choices. A couple of fairly good-sized
mom&pop-owned places, plus a used instrument store that carries a huge
selection. I like to shop in person for the big stuff. For accessories
& the like, I'll use sweetwater if they have what I want.
Twibil
>
>
> If what you mean is that GC wants to make a 20% profit for taking in
> repairs, dealing with the customer and giving you work that they find
> for you, then I'm surprised they haven't been working with you under
> that arrangement since day one. It is perfectly legal, and the word
> "kickback" does not apply. They are entitled to make a profit on your
> repairs. In fact, 20% is quite low and reasonable.
If GC wants to act as a middle man: I.E. collect the work, bring it
over to me and pay me my fee when it's done, take it back over to GC
and then add 20% on top of my bill to the customer's bill, then
*that's* legal and I'd have no argument with it.
But that's not what they're asking for: they want me to send me the
customer, have the customer pay *me*, and then have me kick back 20%
of my fee to GC after everything's finished.
And that's *not* legal.
Twibil
>
>
> Whilst kickbacks seems wrong all they have to do is simply charge a 20%
> overhead to the customer above your price..I dont see the problem unless the
> guy is pocketing the loot..
The problem is that if I do it that way my customer either blames *me*
for overcharging him, or I have to pay GC 20% of my income to keep him
happy.
Merely my opinion
From GC's perspective, you're getting 80% of $ you
wouldn't have gotten at all, w/out them feeding you
the work-
Still, dug said it - "kick back" is funky and until
you get HQ confirmation (that's why in writing matters--
telephone won't even be acknowledged / voicemail)
it's company policy, it doesn't exist- THE issue and
question-- IS THE SALES MGR. TRYING TO POCKET
THE 20%?
jtees4
wrote:
>After having a good working relationship with GC for almost 20 years,
Simple. Agree to do it. Document it somehow. After the deed is done,
blackmail him. Instant free guitar or great prices for as long as he
works there. Just the way I roll...and he'd deserve it.
****
http://www.soundclick.com/bands/default.cfm?bandID=789610
sa...@dog.com
wrote:
>On Nov 7, 4:56�am, sa...@dog.com wrote:
It's completely legal. For 20%, I wouldn't expect them to do the
transportation to and from your shop, but I would expect them to take
in the repairs at their store for you to pick up. That would part of
your job. Just make sure you are making the check out to GC, and not
the manager. Your only problem will be who pays taxes on the 20%.
Currently, DirecTV has a national advertising campaiggn in which they
are offering subscribers $100 for each of their friends who signs up
for DirecTV and gives your account number when they sign up.
Completely legal.
saddlebag
> I was just informed by our local GCs new manager that GCs are all
> going to feature in-house guitar techs from now on, and that he'd
> continue to send me the repair work "that's above our new tech's
> level" (meaning everything except routine string changes) if I'd start
> kicking back 20% of my profits on those referral repairs.
What law are they breaking? How does this differ from you paying to
place advertisements in their store? IMO, this is a better deal for
you since you only pay for guaranteed sales. Meanwhile, they spend a
fortune on advertising to sell a guitar which they had previously sent
you to set up gratis.
Seems like you had a sweet deal for a long time. Still a pretty good
gig if you ask me since they have no way of proving how many of their
sales actually went to you for set up or service. I agree that
discerning whether it's a local guy trying to con a buck or a genuine
new business model is a good idea though.
Twibil
>
>
> From GC's perspective, you're getting 80% of $ you
> wouldn't have gotten at all, w/out them feeding you
> the work-
Yup. But they're ignoring the fact that for years and years they've
been giving themselves a lot of good PR by sending me customers who'll
be treated right and get the best possible work done on their
instruments.
How happy are their customers going to be -and how often will those
customers return to GC afterwards- when they find out that they've
just paid good money to have someone screw up their guitar?
Razordance
> How happy are their customers going to be -and how often will those
> customers return to GC afterwards- when they find out that they've
> just paid good money to have someone screw up their guitar?
Maybe that's the solution right there... Let the new tech screw the
work up, the customer will go back to the tech who's work they know
will be done right, and GC takes a big PR hit right up the ass...
Everybody gets what they deserve...
Twibil
>
>
> Seems like you had a sweet deal for a long time.
Yes, I'm sure you think that, and that's because you're (A) not
terribly bright, and are (B) looking for something about which to
argue. Try reading the thread again, and look up "quid-pro-quo" while
you're at it.
To repeat myself; for almost twenty years I've given setup and
maintanance workshops at various southern Califonia Guitar Centers.
These have been given free, gratis, at no charge to anyone; and they
have actually cost *me* in terms of time, travel, supplys, etcetera.
These workshops were originally GC's idea, were put on to attract
customers to GC, and they've worked quite well: both to sell guitars
for GC and to rustle up some work for myself. (The very first one I
gave resulted in GC selling a $6,000 Martin D-45 right there on the
spot. A pretty good return for something that required absolutely no
investment on GC's part.)
I've also done regular -and unpaid- work for GC when they asked for
it, and I've always had a standing offer to provide free setups and
minor repairs to GC employees as part of that quid-pro-quo. I've never
bothered adding up all of that lost labor income, but over almost 20
years it's no doubt come to quite a tidy sum.
In exchange, GC has occasionally sold me stuff at a good discount, and
has sent me a steady trickle of repair customers that bolstered my
already ample workload. It wasn't just a "sweet deal" for me, it was a
good deal for GC and it's employees as well, and that's what a "quid-
pro-quo" deal *is*: both sides gaining more-or-less equally from an
association.
Get it now?*
*(Rhetorical question. Of *course* you don't get it: now or ever.)
Twibil
>
>
> Maybe that's the solution right there... Let the new tech screw the
> work up, the customer will go back to the tech who's work they know
> will be done right, and GC takes a big PR hit right up the ass...
> Everybody gets what they deserve...
Give the man a cigar.
(Gosh, I *do* hope you smoke!)
White Spirit
> Why they suddenly think that hiring a minimum-wage kid who's never
> worked on any guitars except his own is going to please their
> customers and improve their profit margin is utterly beyond me, but as
> corporations get larger and larger they frequently lose touch with
> reailty as the bosses get further and further away from the dirt-under-
> the-fingernails end of retail business, and then the bosses can't
> understand why their decisions aren't increasing the bottom line.
People who let their guitars be set up by in-house techs ought to know
better. Even when the offer of a setup has been free, I haven't taken a
shop up on it. I want to know that I can speak to the tech personally
and that the work will be guaranteed.
saddlebag
> On Nov 7, 3:20 pm, saddlebag <saddle...@aol.com> wrote:
>
>
>
> > Seems like you had a sweet deal for a long time.
>
> Yes, I'm sure you think that, and that's because you're (A) not
> terribly bright, and are (B) looking for something about which to
> argue.
No Petey, I honestly would like to know what law is being broken by
them charging a fee for their referrals.
> Try reading the thread again, and look up "quid-pro-quo" while
> you're at it.
Fine, if you don't like the new terms then terminate the relationship
and pay for your own advertising.
Get it smartass? (Rhetorical, of course you don't, you're too busy
whining and sniping)
Dinosaur_Sr
> After having a good working relationship with GC for almost 20 years,
> I was just informed by our local GCs new manager that GCs are all
> going to feature in-house guitar techs from now on, and that he'd
> continue to send me the repair work "that's above our new tech's
> level" (meaning everything except routine string changes) if I'd start
> kicking back 20% of my profits on those referral repairs.
>
I used to work somewhere where they did this with electronics, like
stereos and the like, back when they were big. As I recall, the
biggest rationale for it was to induce customers to buy there. If you
buy from us, you can use our service department. If not, you can't. I
works pretty good, but there is a serious chaos to it though because
service has to be perfect and timely. Some guy brings something in and
it takes weeks to do and is not done right and it can really hurt
goodwill. this compounds the fact that you really can't get anyone any
good to work in the service dept for what they pay. I wound up doing a
lot of stuff myself just to keep my good customers happy....and kept
doing that even when I worked at places that didn't offer service.
Twibil
>
>
> > > Seems like you had a sweet deal for a long time.
>
> > Yes, I'm sure you think that, and that's because you're (A) not
> > terribly bright, and are (B) looking for something about which to
> > argue.
>
> No Petey, I honestly would like to know what law is being broken by
> them charging a fee for their referrals.
Oh, look! He thinks addressing someone by a diminuitive is going to
make him look clever! (And he thinks I'm dumb enough to fall for it
and feel hurt, too.) That stopped working in about 5th grade, Saddle,
but feel free to continue.
> > Try reading the thread again, and look up "quid-pro-quo" while
> > you're at it.
>
> Fine, if you don't like the new terms then terminate the relationship
> and pay for your own advertising.
I did. I've already sent out an email advising every one of my
customers who owns an email account that I'm no longer associated with
GC and telling them precisely why.
And GC wasn't "advertising" for me. After 50 years of doing this,
repeat customers comprise circa 90% of my business, my customer base
runs to a list of slightly over a thousand players, and therefore I
have no need or to advertise.
> Get it smartass? (Rhetorical, of course you don't, you're too busy
> whining and sniping)
Here's how it works, pussylips: when you say something stupid on a
newsgroup -which seems to be your forte'- it's very likely that
someone will point out your stupidity. And if you choose to be
insulting when you post said stupidity the odds are practically 100%
that you'll get a reply in the same tone. If either of these things
really upsets you, you have only to change your own posting habits,
and -Hey Presto!- you'll stop getting nasty replies. Easy-peasy.
For examples of this sort of thing you have only to read the other
posts in this thread.
In an interesting aside, it turns out that I'm still getting referrals
from various individual GC employees who want to keep their customers
happy and who see GC's new policy as being suicidal. Said employees
are ignoring GC's wishes because they're already aware that the GC in-
house guy doesn't know what he's doing, and they don't want to take
the blame when the shit hits the fan.
Twibil
>
>
> I used to work somewhere where they did this with electronics, like
> stereos and the like, back when they were big. As I recall, the
> biggest rationale for it was to induce customers to buy there. If you
> buy from us, you can use our service department. If not, you can't. I
> works pretty good, but there is a serious chaos to it though because
> service has to be perfect and timely. Some guy brings something in and
> it takes weeks to do and is not done right and it can really hurt
> goodwill. this compounds the fact that you really can't get anyone any
> good to work in the service dept for what they pay. I wound up doing a
> lot of stuff myself just to keep my good customers happy....and kept
> doing that even when I worked at places that didn't offer service.
Were I looking for an employee, I'd want to hire *you*.
saddlebag
> Oh, look! He thinks addressing someone by a diminuitive is going to
> make him look clever!
Oh look, by avoiding the question (i.e. what law was broken) and
making it personal, he thinks it is going to make him look clever.
Sorry Petey.
> > Fine, if you don't like the new terms then terminate the relationship
> > and pay for your own advertising.
>
> I did. I've already sent out an email advising every one of my
> customers who owns an email account that I'm no longer associated with
> GC and telling them precisely why.
Problem solved.
> And GC wasn't "advertising" for me. After 50 years of doing this,
> repeat customers comprise circa 90% of my business, my customer base
> runs to a list of slightly over a thousand players, and therefore I
> have no need or to advertise.
So why make a big deal over something less than 10% of your business?
Sounds like an easy call.
> > Get it smartass? (Rhetorical, of course you don't, you're too busy
> > whining and sniping)
>
> Here's how it works, pussylips: when you say something stupid on a
> newsgroup
I asked a question shit fer brains. You didn't have an answer and
thought it would be cute to call me names instead of simply admitting
it might be something short of criminal. That stopped working in
about 5th grade, Petey.
> In an interesting aside, it turns out that I'm still getting referrals
> from various individual GC employees who want to keep their customers
> happy and who see GC's new policy as being suicidal. Said employees
> are ignoring GC's wishes because they're already aware that the GC in-
> house guy doesn't know what he's doing, and they don't want to take
> the blame when the shit hits the fan.
Certainly not due to your affable demeanor. Like I said in the
original post, they could ask you for anything, but they really have
no way of proving someone was referred to you by them anyway.
Interesting story, but please dude take yer friggin meds already.
Dinosaur_Sr
You wouldn't want to pay me; which is why I am no longer involved in
the retail sales business!
lab~rat >:-)
>After having a good working relationship with GC for almost 20 years,
>I was just informed by our local GCs new manager that GCs are all
>going to feature in-house guitar techs from now on, and that he'd
>continue to send me the repair work "that's above our new tech's
>level" (meaning everything except routine string changes) if I'd start
>kicking back 20% of my profits on those referral repairs.
>
>We will pass gently over what I told him in reply. There's no need to
>frighten the children and the horses.
>
>But after a bit of thought it suddenly struck me that the whole thing
>sounds more than a bit fishy: I can see GC thinking that they might
>make a few bucks from doing their own in-house repairs, but demanding
>kickbacks to refer work is just plain illegal the last time I looked,
>and I find it difficult to believe that a well-known national
>corporation would try to do something so stupid and would memorialize
>the kickback demand in an email to boot.
Just curious, why would a finder's fee be illegal? Seems like there
are a lot of industries that do that and it isn't against the law...
--
lab~rat >:-)
Do you want polite or do you want sincere?
rct
> It all depends on how it is done. There is definitely something fishy
> about one company demanding a 20% kickback because there is no reason to
> do that. All they have to do is negotiate a price 20% lower than what they
> will charge their customer.
Or better, send people to Pete, let him deal with them, let him do the
majority of the paperwork AND the guitarwork, and then get 20% of
whatever it is that Pete manages to sell the player.
Pete keeps calling it quid pro quo, but it has become pretty clear
that large scale business isn't at all interested in whether or not
you benefit from the relationship, only that they do.
Simple. Don't do any work directly for GC. Somebody comes to you
from there, tell them I don't do work for them, come back in <24, 72
hours, a week, whatever you think is appropriate> and I'll do the work
for you and you only.
Then Pete, you tell us all that 90% of his business is repeat and that
he doesn't even need advertising. I'm having trouble figuring out how
Pete even noticed the paltry crap GC was sending his way?
Good luck with it, Pete.
rct
Twibil
>
>
> Then Pete, you tell us all that 90% of his business is repeat and that
> he doesn't even need advertising. I'm having trouble figuring out how
> Pete even noticed the paltry crap GC was sending his way?
"Then Pete, you tell us all that 90% of his..." ??? ( Erm, *I'm*
Pete. But I don't know who "his" refers to.)
And you claim you wouldn't notice it if a regular customer of yours
suddenly demanded a 20% discount on everything you did for him?
Free advise: Don't try starting a small business of your own. You're
not equipped for it.
rct
> > Then Pete, you tell us all that 90% of his business is repeat and that
> > he doesn't even need advertising. I'm having trouble figuring out how
> > Pete even noticed the paltry crap GC was sending his way?
>
> "Then Pete, you tell us all that 90% of his..." ??? ( Erm, *I'm*
> Pete. But I don't know who "his" refers to.)
Yeah, how bout that. Can't get nothin by you, ehy?
> And you claim you wouldn't notice it if a regular customer of yours
> suddenly demanded a 20% discount on everything you did for him?
I claim(ed) no such thing.
> Free advise: Don't try starting a small business of your own. You're
> not equipped for it.
Again, good luck with it. You'll need it I'm sure.
rct