  Internet stores and retail giants are pummelling the mom-and-pop store on price. In a world of virtual purchases with no sales tax, can local shops keep musicians loyal?
"Support Your Local Broke Musician" is one of my favorite bumper stickers. For those of us who gravitate toward a life built around our creativity, there is always that question we must confront: Is it the art that brings on the poverty, or the poverty that brings on the art?
As a kid my dad had hopes that I would grow into a groundbreaking female scientist like Marie Curie. Heck, I even made it to the California State Science Fair a few times in my youth. By the time I went to college, I was intent on becoming a world-changing lawyer who wears suits and heels. (And the folks were fine with that.) Those plans were quickly upset. While most people’s memories of freshman year involve bongs and throngs of boozed up crowds, mine are of sitting alone in my dorm room fumbling with my first guitar, teaching myself day and night as a swirling scene of sordid parties raged outside my door.
I couldn’t put the damn thing down and my newfound love put a halt on my route to riches. (And the folks weren’t so fine with that.) Needless to say, I’ve never worn a suit in my life and I sure as hell don’t wear heels. Being a person of the arts has meant that though my heart is usually full, my wallet is usually not.
Which leads me to the topic at hand, that came to me when I recently went into my neighborhood instrument store in search of my next musical apparatus and accessory: looping station and guitar cable. In the end, I allocated my dollars to the Internet because, as we all do, I wanted the “best deal” I could find to stretch the limited cash I had. I did it; OK, I admit it. I bought something online for cheap and strayed from my local boutique. It wasn’t my initial intention, but I’d ultimately tapped the shop of expertise and hands-on experience only to shell out the bucks in cyberspace. Does that make me an asshole? Aren’t I trying to save and isn’t that sufficient justification?
The debate (and guilt) began to fester in my mind. This type of shopping has become an epidemic that’s plaguing nearly every market, as I realized when a friend of mine who shapes surfboards told me (fatefully in the same week of my purchase) how people were checking out surf merchandise in the stores but then getting them online. The music merchants’ struggle to compete with the tax-free Internet and the Guitar Center, Musician’s Friend, Craigslist, Amazon and eBay websites it houses, is a microcosm of a universal economic dilemma. But isn’t it simple business-Darwinism we have to accept—a survival of the fittest in which those who can evolve with the changing times will outlast those who are stuck in the past? Isn’t pragmatism meant to win over romanticism? Shopping local, organic and green is a great idea, but a lot easier to do if you’re affluent. And let’s face it—if you had to count on one hand the number of affluent performing musicians you know, you’d probably end up with a closed fist.
 Ben Hartselle of More Music
While heading out into the field to collect data, I couldn’t help but recall one of my all-time, top-five favorite films (and books), High Fidelity. Each time I was about to step into an instrument shop I remembered the looming judgments of the scathing Jack Black character and his salesman cohorts who sized up each customer in their record store. Afterall, I was an outsider encroaching upon their territory and endless musical expertise. I would nervously enter each spot to face a new army of staff pledging allegiance to their store and its own version of John Cusack—which always turned out to be a gray-haired, weathered store owner, often with a lot of soulful nonchalance and head-dizzying music experience spanning decades; whether as luthier, merchant or performing musician.
In the end, I’m happy to report that I found welcoming workers eager to annihilate the opposition, the Internet. Some store owners were cold and apprehensive to talk at first, seemingly skeptical of my intentions with such a touchy subject, but all warmly opened up to divulge their past experiences, current worries, and advice for the future.
When The Levee Breaks Dror Sinai of Rhythm Fusion
The Internet is a really great tool because you can see so many things, but it also stinks. Anybody can put a picture online and call themselves a specialist on an instrument just because they decide to. They’re selling things for cheap, without any knowledge, responsibility or care; they just know the world of buttons. The truth is, on our end, unless we find an investor in the next month, we’re going to close down. There is like a war going on without respect and there’s no sustainability in this way of doing things. It’s totally a part of why the economy is the way it is.
—Dror Sinai, owner of Rhythm Fusion in Santa Cruz
I have a cousin who learned how to turn on a computer and play video games before he could even talk. Such is the new generation that lives and grows online, oblivious to any need for human contact in business transactions. Add to that how the Internet cuts out the taxes, and with sellers able to reduce prices so low because they don’t have to worry about the overhead that faces stores that have to pay rent, the consumer can snag one sweet deal with a click of the mouse and not even have to get out of bed. Whizzing along the Internet highway is fast, easy and cheap, and it’s steamrolling the small guy.
Since Guitar Center purchased the mail order and online giant Musician’s Friend in 2000, it has become the Wal-Mart of the music industry. (Last year, Guitar Center was bought out by Bain Capital, the multi-billion dollar firm whose assets also include Burger King and Toys R Us, and was founded by Mitt Romney. Not exactly very rock ‘n’ roll.) Despite the retail industry’s attempt to equalize all competition by instituting Minimum Advertised Pricing (MAP), and the U.S. Supreme Court’s decision in June 2007 in the case known as Leegin Creative Leather Products Inc. vs. PSKS that legally supported the manufacturer-issued pricing limit that asks distributors (online and off) to adhere to the same minimum pricing, some people find it, well, a joke. The loophole is smack in the middle of the policy name. Online retailers can’t advertise lower prices, but they can still sell at lower prices. One website I found even replaced product prices with the label “Too Low To Show” and directed you to a sales associate helpline to find out the real price. So much for leveling the playing field.
Richard Gellis, owner of downtown Santa Cruz’s Union Grove Music, who was forced to phase out his stock of high-end synthesizers four years ago because he couldn’t compete with online sales, says he receives notices from a trade newsletter each week telling of another shop closing its doors; some of which had thrived for more than 30 years. He blames this alarming trend primarily on the tax-avoidance people seek online, where cyber shops don’t have to impose the California 7.25 percent state tax and local taxes.
“Our manufacturers are setting the price to sell at, but our customers want us to match the Internet and take off the tax, so my overhead is more than my profit margin,” he explains. “How can that make anybody feel secure? I really feel strongly that if there were a sales tax on the Internet, people would shop locally again. Instead, if our governor increases the sales tax without including the Internet, it’s going to make things worse and people will go online even more. Then you wind up with a situation where California is broke. In the end, you’re going to pay whether you buy online or not, but you’re certainly not supporting your state or your local business by turning to the Internet.” This April, New York legislature, after immense lobbying by the state’s independent retailers, passed a provision that requires dot-com retailers to collect state and local taxes, and it’s anticipated to increase New York revenue by $47 million.
Gellis says instrument manufacturers’ reports currently show 50 percent of musical instrument purchases by locals are being done outside of Santa Cruz County. The situation for the instrument merchant doesn’t seem to be improving, he says, and it has him looking to the future with woeful frankness. “I don’t think the community has any loyalty to independent shops. Fortunately, I’m pretty old and I’m going to retire anyway one of these days soon. Not that I don’t enjoy being here … but it’s sad to lose your customers that have been loyal for years who just don’t come in anymore because of price.”
The Battle Of Evermore Jody Fonseca of Jansen Music
I think there’s always going to be a pendulum swing in business and society. Although online is a big factor for everybody in retail, we just have to deal with it. We need to be conscious of how online is selling, but you can’t fight fire with fire. You’ve got to figure out how to be different and get your message out and stay on that message. Not unlike running a political campaign. Figure out how you’re different. You can’t just try to be a little bit cheaper.
—Jody Fonseca, owner of Jansen Music in Watsonville
“We are not quite as affected by the Internet as most people because we’ve found our niche,” says Albert Markasky, whose Sylvan Music boasts high-end and vintage instruments, including Santa Cruz Guitar Company axes. “We carry a lot of things and we try to avoid the competition by carrying lines that no one else has.” Stocking up on rarer products means there are less outlets doing the same because those instrument builders don’t want their quality goods just anywhere or online, and therefore there’s less competition. Standing out means that you’re left standing.
Whereas price matching when possible is becoming a mandatory step in combating the Internet, stores have to make up for when they can’t, and give the public a reason beyond our bleeding hearts to buy. On top of the products themselves, every store I encountered promised continued upkeep with each sale (priority treatment for returning customers), as well as a diversification of service that might include instrument rental programs, free clinics, repairs, lessons, and, in the case of Rhythm Fusion, “customer therapy.”
“When someone goes to a website, they care in the back of their mind whether they’re gonna get ripped off or not, but they’re not thinking about the warranty, any support of sales—they just want to get it as cheap as possible,” says Jody Fonseca, who helms Jansen Music, the oldest operation I talked with. Though the current protocol for pricing seems to give the Web an edge, people are buying gear online and then turning to stores for set-ups and repairs. And that can ultimately cost more than what the consumer bargained for when they sealed the cyberspace deal. Whereas products in the shops are well maintained and kept in top condition, what you buy online is delivered to you as-is, straight out of the box and without having been nurtured by a loving hand before yours.
“After Christmas there will be 50 people in this town who are gonna buy their kids a Yamaha guitar from online or Costco for cheap, and then they’re going to bring it to us and we’re going to charge them to set it up,” says Markasky. “We have good quality instruments that you can buy here and save yourself the cost of having to have it set up.” While that argument can’t be made so easily for electronics like recording equipment and accessories, which tend to have the same quality regardless of where they’re being bought as long as they’re still in the package, Markasky’s experience of having to make instruments “playable” for people who buy online is a common occurrence all around. Store owners are left doing the I-told-you-so shake of the head, and shoppers are left holding the bill.
Even when I purchased my digital looping station and cable, which I bought online, my gain in savings created a greater loss to be considered. Civic Economics, an industry respected independent economics consulting firm, conducted an October 2004 study in Andersonville, Ill., which showed that for every $100 spent at a local shop, $68 circulated back in the community as opposed to only $43 from non-local operations. Therefore, money spent on purchases made at a local music shop will return to the community nearly twice as much as purchases made at a large chain, not to mention that all profits from each online sale can virtually go out and never return, depending on the seller’s residency. “Everything is so interconnected,” states Peter Beckmann, co-chair of the volunteer organization Think Local First—County of Santa Cruz. “There’s a good chance that one purchase you make here will directly benefit a friend or neighbor. Also, buying local isn’t just about economics. It’s about who controls the culture we live in.”
In the end, businesses have to be astute and work with the modernity of the Internet so that they can establish a lineage of customers in the younger generation. Despite being the only store I investigated that didn’t offer a website, Offshore Music’s owner was the most positive about the matter: “The Internet helps me in some ways because it makes it so that I don’t have to advertise the products to get people to know what’s coming out and available,” says Rick Leachman, who, like all the mom-and-pop stores, is relying on the atmosphere, customer service and post-purchase support he gives to solidify a relationship with a customer once they find their way off the computer screen and into the brick-and-mortar operation. “I’m here in the shop every day,” Leachman says. “The dependable expertise I have to help out a customer can never be found online or at a Guitar Center.”
I Can’t Quit You Baby
People come here from other countries and they can’t believe how many great music shops Santa Cruz has. I think the local community takes it for granted and that’s the real shame of it.
—Richard Gellis, owner of Union Grove Music in Santa Cruz
So I landed on the brick-and-mortar side of things. Sure, I’m a romantic at heart and that influences my opinion, but what surprised me after buzzing around to investigate so many musical lairs around town, is how pragmatic and economically savvy it can be when buying from a mom-and-pop music shop. Wanting to ensure the preservation of quality in the music industry by not succumbing to the quantity online has me challenging my urge to add to my digital shopping cart for my next quick fix. Will it be easy? Not all the time. But, all it takes is a moment to imagine Santa Cruz without the walk-in, hands-on music shops that welcome my moments of boredom and musical inquiry, and I can adhere to the plea of the “Support Your Local Merchant” bumper sticker, which quietly hints at the lingering addendum: before there are none left.
Locals Only: A Roundup of Your County Instrument Shops
JANSEN MUSIC
Est. 1926
Owner Jody Fonseca: “Every kid has a music store in his computer. Music stores are a little bit different in that we’re a very tactile kind of experience. We have customers who want to come in and try out, touch and feel, and create a relationship with the product. Unfortunately, a lot of times customers try something out in my store, buy it online, but don’t really save any money. People have the perception that they’re saving online but it’s not always true.”
Specialty: Guitars (Seagull, Samick), Ukuleles, School Band Instruments
Services: Lessons, Repairs, Lesson Referrals
Contact: 724-4798, Jansenmusicstore.com
MORE MUSIC
 Brent Cooper and Dave Handloff of More Music
Owner Dave Handloff: “The three things you need to compete against online business is service to your community, service to your customers, and servicing the instruments. That personal touch is what sets local business apart. I make enough money selling at online prices. But where I really make out like a bandito is by having the same people bring their friends, families and neighbors back in.”
Specialty: Guitars (Gibson, Morgan Monroe, Eastwood), Vintage String Instruments
Services: Repairs, Lesson Referrals, Appraisals
Contact: 458-2438, Moremusic.com
OFFSHORE MUSIC
 Offshore Music's Rick Leachman
Owner Rick Leachman: “The industry uses Guitar Center for blowouts, I think. We need Guitar Center because the small stores can’t take the inventory. But I also think there’s a misnomer that people think they’re always going to get something for less online. That’s not true.”
Specialty: Guitars (Ovation, Takamine, ESP), Pro Audio
Services: Repairs, Lesson Referrals
Contact: 462-2567
RHYTHM FUSION
Est. 1989
Owner Dror Sinai: “I started out by importing exotic instruments from 20 countries. It was like a cultural center, a museum, a music store, a healing place with tools for healing from all over the world. We had an edge. With the Internet the world has gotten much smaller and everything’s changed a lot. Now it’s about quantity and not quality.”
Specialty: International Percussion Instruments: Drums, Shakers, Gongs
Services: Hand-Drum Repair, Lessons, Workshops, Clinics
Contact: 423-2048, Rhythmfusion.com
SYLVAN MUSIC
 Sylvan Music's Albert Markasky
Owner Albert Markasky: “The competition’s impossible and everybody’s undercutting so much, the more you have to deal with that the lower profit you have. There’s always going to be competition, but you really need to find areas in which you don’t have to compete as much.”
Specialty: High-End Acoustic Stringed Instruments (Santa Cruz Guitar Co., Goodall, Lowden, G&L)
Services: Repairs, Rental Program, Lessons, Teacher Rental Space
Contact: 427-1917, Sylvanmusic.com
THOMAS MUSICAL INSTRUMENTS
 Linda Bates and John Thomas of Thomas Musical Instruments
Owner John Thomas: “Information is power in this business. If you maintain your integrity and provide a lot of honest, helpful information, you get a reputation for that and people will come to you to see if you can help them. And it’s your job to make sure you’re stocking enough of what people want so that you can help everyone and also still make money.”
Specialty: Band & Orchestral instruments, Sheet Music
Services: Band/Orchestral Instrument In-House Repairs, Rentals, Lessons
Contact: 425-0110, Thomasmusical.com
UNION GROVE MUSIC
 Union Grove's guitar wall
Owner Richard Gellis: “If all the mom-and-pop stores go out of business, manufacturers have lost their showroom. The problem that the local stores have is that our customers come in and try out instruments, get educated on instruments, feel and play them, then they go home and buy them online. For us, it’s a lot of work for very little return.”
Specialty: Guitars (Martin, Taylor, Fender), Percussion, Electronics
Services: Repairs, Lessons, Free Clinics, Band Instrument Rentals, Teacher Rental Space
Contact: 427-0670 Uniongrovemusic.com
10 Business Tips From Local Instrument Shops
- Educate customers on what your specialty/niche is
- Diversify services beyond the sale of a product itself (offer repairs, educational classes/clinics, a rental program, host in-store events, etc.)
- Support the customer after the sale: Offer warranties for repairs and fine tuning of products purchased through your business, offer trade-ins or consignment, an approval period for purchases off your website
- Educate customers on product evolution and what fits their needs, even if it may be something outside your store: Be willing to give referrals elsewhere to obtain trust and an honest reputation
- Establish a network with other businesses and programs that creates reciprocal referrals
- Partner with other businesses to form a co-op to have better leverage and buying power with manufacturers
- Be willing to match online prices when possible
- Create a website for your store and have an online presence with selling capabilities and maintain it in a timely manner
- Be involved in the community: support schools and nonprofits, sponsor community events, provide items such as gift certificates for fundraisers and integrate your business into cultural events
- Hire knowledgeable, enthusiastic staff that believe in the store and uphold your initial mission statement for the business, but who can also take it further with progressive skills and mindsets (i.e. web savvy, hip to your customers’ changing needs/attitudes, aware of current trends)
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