Goodbye to The Tone Station
It is with great regret that I have to announce the closure of the Tone Station/Hartnoll Guitars Ltd. A number of factors have lead to this reluctant decision, some personal and some business.
The industry is struggling to support retail shops up and down the country. I know several other shops have closed this week and countless in recent years.
See our Facebook page if you would like to make comment -
I have seen many retailers close their doors and immediately point the finger at the internet, or manufacturers, or customers, or the favourite of course, blame the government.... this is unfair and rather arrogant as its accepting no blame yourself. Every person in business has a duty to recognise and adapt to changing marketplaces. I've been doing that actively this year, a distinct and explicit move to reduce reliance on retail and increase the workshop services we offer and it's been working well. Unfortunately, our mistake was made a few years back in expanding, the expansion added to costs but did not proportionally add to sales, the knock on effect has been something I have been fighting for some time and unfortunately, the changes I've made this year have been too late. Maintaining a skeleton retail operation is not viable mainly due to stock commitments required by the major brands.
Our workshop side has been valuable to a great many of our customers, and has been a great asset to the business, such that we hope that at least some of us may continue to operate in this field, providing guitar repair servicing in the Plymouth area, I personally am still operating in the distribution of musical instruments, but from now I am stepping out of all retail operations.
Having said I am not interested in passing responsibility of closure, there are some comments I would like to note regarding the retail industry. This applies to many sectors, not just musical instruments, and is quite concerning for the future of retail in general, there's a lot of words to follow, you don't have to read them!
Customers expect instant gratification at low cost. No retailer, however large, can provide the availability that "the internet collective" can... a kid can sit at home on his iPad, do a Google search for whatever product they like. They won't care where it comes from, just that it arrives tomorrow and it's cheap. We all understand that mentality. But what if the item they've decided to buy doesn't best fit their needs? Who do they go to discuss this with and is this purchase really the best value...? With the distance selling regulations currently in place, this kid can order several items, try them all at home and then return what's not needed, paying just a little more for return postage. Would it not be better, more sociable, more informative, and more productive for society as a whole if they were to visit a shop and talk to trained experts about the items, maybe have to wait 36 hours for delivery, but then get the best item for their needs first go?
Sales and Discounts
"20% off selected products".... wooo.... that sounds great to the customer.... and for some reason there's an expectation to negotiate that sort of deal from a small retailer even when it isn't being offered. On everything. In musical instrument retail, a 20% discount cuts the profitability by over 50%. That's more than HALF! Just to stay in the same position expected, a retailer has to more than DOUBLE its turnover when giving 20% off. Sure it improves cash flow and helps turn stock around, but we need profits.
Profits are ESSENTIAL
Profit is a dirty word. Filthy in fact. It's become so frowned upon that retailers are so embarrassed to make a profit that they actively discourage it! Theres a common misconception that when we sell a guitar for £1000 we can somehow dine out on that for a month... Remember 1 in every £5 a retailer takes is set aside immediately for VAT, and prices of guitars have barely risen since the 80s - gone down in real terms!
Some of the biggest outfits in the industry are operating on single figure net margins. Sure, the turnover is large... 1% of a lot is better than 20% of nothing... but, what if something changes? What if sales drop by 5% due to an uncertain political landscape, or profitability falls because of a crash in currency? Is this a sustainable business model? Having torn £millions out of an industry at a cost of profitability to the whole, this unsustainability puts the entire industry at risk, from factory to shop floor. Everyone is affected... but these are the companies that the big manufacturers favour.
Why? Because it's easy. The 80/20 rule... 80% of *insert big guitar company* business is done with 20% of their customers. The other 80%, the small shops, are hard work... they represent a higher cost of sale, a higher cost to market, so they are being slowly squeezed out, not just by "the evil internet" not just by Amazon, eBay, distance selling regulations, not even by the customer "need" for instant gratification, but by the industry itself, by huge stock commitments and terms that massively penalise the small business. I'll name and shame one here, Gibson Guitar Corporation... leading the way in decimating the small guitar dealer network... We've seen it in other industries.... how many small computer shops (actual shops that you can go into and ask stuff) are there? Even medium sized ones? Basically, we've got PC World and we all know what we think of their customer service! But isn't that just great for Dell, or HP etc? They only have to sell to one customer and their sales job is done.... until that customer can't pay its bills. If the banks or venture capitalists pull funding because they start to realise that a 1% net margin is not secure... what happens then?
Why do I care?
All of the above might be of interest to a business person, but the average consumer may be of the belief that they don't care and why should they? They just want stuff, they want it now and they want it cheap because they can't afford all the stuff if they pay full price for it.... well... I get that, I really do, I don't actively seek out to pay more for something that I need to, no one does... BUT....
I was walking along Mutley Plain the other day and tripped on a dislodged paving stone. I'm pretty aware of the number of empty units up and down Mutley Plain as they've gradually been emptying in the 11 years that I have been there. It occured to me, all these empty commerical buildings will be paying zero, or heavily discounted business rates. I won't go into the technicalities of why here, but, I will points out that those rates would be going directly to Plymouth City Council. With extra revenue, the paving stones on Mutley Plain might have been repaired... this is just one small job that the council have to do to maintain our way of life and without the small retailers filling the commerical units in towns and cities all over the country... where will these revenues come from? Sure there are big Amazon warehouses paying more rates than I am in the little unit in Mutley Plain, but they're not paying proprtionally more... so proportionally, tax revenues will go down, so who will pay for it... the people will pay for it, out of increased Council Taxes and other local taxes...
Consider the knock on effect that your small actions, when multiplied by all the people, can make and support your local shops. Plymouth is now left with just one music store, Rich Turner at Soundunlimited. Now go down there and support him. Buy everything you can from him INCLUDING your strings, plectrums, leads etc that you might think are "easier to get online" because he will give you the advice and care that no one online will. He will pay business rates, which will support the local economy, and he will provide you with the best overall service that you can get. Give him first chance on products you want but you don't see in his shop. He might supply anyway, you might have to wait a day or two, but, it'll be worth it... Don't feel a retailer is ripping you off because they're making profit. That mentality, is just ripping yourself off... because of the knock on effects and extra work for you.