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the pros don't have any money, somebody does. A club or a restaurant comes across with a $20,000 p.a. bid, or a record deal comes down for someone, or a church calls for a keyboard. You really can't just be a guitar rock shop and make it. You've got to be everything from a church p.a. installer to a custom guitar builder and you piece together a business out of all this. It's almost like investing, you don't put all your money in just stocks; it gives you stability because everything can't crash at one time." |
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H ER U M |
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| Expansion, diversification,
what it boils down to is getting yourself into as many areas as possible
without overextending. Strings & Things' most important growth has
been into wholesaling their own line of guitars-a step by step process
which they are still developing. Being in close contact with their clients, the sales force at Strings & Things felt that the reason guitar sales were down wasn't because people weren't playing guitar but because new guitars just weren't up to competing with a '60s Strat or a '50s Les Paul. "We began building our own custom guitars mainly with components from Schecter, DiMarzio, and Seymour Duncan, basically building up hot rod guitars. Our guitar sales went way up doing our own guitars," explained Lovell. "I thought to myself, 'this has got to work for other stores, they've got to be experiencing the same thing'." So into wholesale steps Strings & Things, exhibiting their guitars for the first time at the '82 NAMM Expo in Atlanta. But, Strings & Things guitars looked a little too much like an already trademarked design and they were sued for $30,000. "What they actually wanted," opined Lovell, "was for us to settle out of court for any amount of money, just so they could say they won. They mentioned our name in press releases saying they had won the suit. Do you know what they settled for out of court? $2000. It was worth it to me because when we went to the trade show in Chicago this past year, we were famous. People came up and said, 'I |
didn't think you'd be here, I figured you
guys were out of business'." Lovell continued the story of Strings & Things guitars: "The guitars we were building up from Schecter and DiMarzio and whatever were costing us maybe $500-$600 in raw materials and we ended up retailing them between $1000-$1200. When the idea of wholesaling came into the picture we decided that if we couldn't offer the guitar to the public in a price range of $595-$695, then we were not going to try this guitar line. This meant we were going to have to deal with the Japanese to have components built for us. We ended up with the Shibuya Workshop and these are absolutely the hottest builders in the world. These are the peopIe that build Kramer's necks, Steinberger's pickups, Dean's new Be Aire neck. Everybody is after these people because they're small, they don't turn out a sterile neck or a sterile body. "We actually build the guitars and apply our own finishes here in our workshop (located behind the main store) and what we've ended up with is a guitar that sells for $595 that's got all the useful, practical features on it, and looks great to boot. You don't change pickups, you don't change necks, you don't change pickguards, you don't add push/pull pots, or Seymour Duncan pickups, because our guitars come happening just like they are. In fact, most people would be making a big mistake to change our pickups. "We've got Eric Clapton endorsing for us, Joe Walsh endorsing, Billy Squier, we've got two or three videos on MTV that show our guitars. We're sitting here with a very hot product but we |
really have to be careful about taking too
much money out of our retail operation to launch a guitar line. It's like
claustrophobia because I know that if I could run a color ad of Joe Walsh
and Eric Clapton playing our guitar it would be all over. I can't just
go out there and stir all of this up. I've got to go step by step. This
is the way we built our store, this is the way that we're building our
guitar line because we don't have to become an overnight success in the
guitar business." Then there are the problems of being both a retailer
and wholesaler. "One thing, right off the bat, is time. How much time do I allot to wholesale verses retail. Money, $5000 on a retail level is a lot of money, on a wholesale level it's peanuts, that's one magazine ad. Another problem I run into is some people in my dealer network want me to sell them other brands. They find out I'm a Peavey dealer and they call me about Peavey. I say, 'Hey, I don't transship. I don't even do mail order.' I'm just worried about making money in my own area. We never sell a guy direct unless we just can't get him hooked up with one of our dealers. "As wholesalers we don't deal with 1-800 numbers, we don't deal with catalogues, we have one dealer per city, we offer complete protection and we encourage dealers to sell our guitars at a profit. That's one advantage of being both a retailer and wholesaler, I never lose sight of what the retailer really wants product and protection." Armed with knowledge of both worlds, Strings & Things In Memphis' momentum continues to build. -Al DeGenova |
