Salesmen who work
on commissions are not your friend
The main reason "Guitar Center" has such a high employee failure rate or turnover is probably because they have a commission system that forces people to work at minimum wage.
The "Guitar Center" salespeople get commission & bonus only after they have earned enough in commissions to surpass their base pay.
This commission style is called fading! Until a salesperson has "Faded" he is useless to the company. I have been told that a salesman who fails to fade after 3 weeks is terminated.
Guitar Center has lots of money because to my knowledge they also put all prospective salespeople through a rigorous 7 to 10 day day training program. Judging by the percentage of turnover the sales training is not effective and only serves to raise "Guitar Center's" cost of doing business. Gee, I wonder who pays for that could it perhaps be the poor hapless consumer (I Think So).
Here at Ed Roman Guitars I have tried very hard to find truly qualified long term experienced employees and pay them a decent wage.
At Ed Roman Guitars, I don't like using commissioned sales people.
I am sure there are exceptions, but for the most part, a commissioned salesman does not have the customers best interests in mind. Granted a commissioned salesperson can and most likely sell all the lousy swill in the store that the owners want to get rid of.
In the long run however, today's customers are much more savvy than those thrilling days of yesteryear. It doesn't take a customer too long to realize he got screwed. Usually they will simply not come back and spend any more money. The store owner always loses in the long run on commissioned salespeople.
Here's how commissions work. And some of the problems associated with commissioned salespeople.
When the newest hottest item hits the market all the "in the know" people want to buy them. Normally a store owner will have no commission on those items and a high commission on the older not so cool models. The storeowner needs to entice the salesman to push the items that are getting ready to have the price reduction. The only motivating factor that a store owner understands is usually money.
Armed with that knowledge, the store owner proceeds to buy the honor & credibility of the salesman by bribing him with a cash payoff to sell the older crappier merchandise.
Many times, one salesman will try to steal a sale from another salesman, pretending he knows about the product. The salesman will sometimes say anything to get you to buy the item. Many times the customer has no clue how to use the merchandise and expects the salesman to be knowledgeable about the product. The customer gets cheated from learning the real scoop because some lowlife idiot is trying to make a commission.
Another common scenario, you walk into a store and buy a product, you place the product in layaway because you don't have all the money. In a commissioned environment another salesperson could conceivably sell the item to someone else so they can get the commission. HE DOESN'T CARE ABOUT YOU. All he knows or cares about is getting his commission.
My operation is certainly not perfect, In fact I am far from perfect. One thing you can rest assured of is the fact that I will NEVER have commissioned sales people.
I will be adding comments to this article as soon as possible. I welcome letters from customers with examples of other possible uncomfortable commission scenarios. I also welcome any positive feedback regarding commissions. I have an open mind but I cannot think of one good reason for having a commissioned salesperson. If any of my readers wish to contribute any more reasons good or bad I will print them.
Recently A Friend & Customer Of Mine Told Me This Story
He works as a security guard at one of the corporate mega stores which shall remain nameless to protect him. His job ranges from watching people on camera, checking for employee theft, & sometimes working the door checking bags against receipts. He owns several of my guitars and he is a relatively knowledgeable guitar geek...
He observed one of the hotshot commissioned salespeople showing a customer a Brand New Factory Fender Relic Guitar, it was a relatively expensive one and it was sunburst with most of the paint missing.
Apparently the customer (3 piece suit, tie & expensive sports car had asked for a Vintage Guitar)
No one in their right mind would walk into a big box department store looking for a vintage guitar... The salesman must have immediately picked up on the guy as being a know nothing with money to spend. The Know-Nothings are easily identifiable because they always ask semi qualified questions. (They are usually afraid to tell anyone they are amateurs because they assume they will get ripped off if they do.)
The salesman knew he had a big fish on his line. These guys are always afraid to look dumb, actually they are by far the dumbest of all customers. We get at least 2 of these types daily in our store, even someone who has been working here for less than 2 weeks can usually spot them instantly.
OK Here's a basic overview of how the sale went as explained to me...
This looks pretty cool, what year is it ?
Cstmr. Well there must be a way to tell the year? serial numbers etc...
Slsmn. I don't know the exact year, but I do know that rosewood fingerboard means made in the sixties, and maple means made in the 50's
Cstmr. How much is it?
Slsmn. How would you be paying for it?
Cstmr. Cash, and I'll do it today !!!
Slsmn. Ok, Hold on let me go back to my manager and see what he will let me do it for.
Slsmn. Be back in a minute....
The salesman left and about 30 seconds later another salesman walked over and commented, Nice guitar !!!
He went on to point out that the frets were in "great condition for such an old guitar" and "the pickups sounded great!!! He told the customer he had "played the guitar himself" and "wished he could afford to buy it himself." He also lied to the customer about seeing the guitar get traded in recently!!!! He said, (The guy who traded it in didn't know what he had & the store management isn't really aware of it either") INCREDIBLE BS
The original sales guy came back on the scene & quoted the customer $4,000.00 Which was actually $59.00 above the list price.
customer hesitated for about 3 or 4 seconds and said OK...
I'll take it!!
This customer just paid at least $1,400.00 too much for a new guitar that probably cost less than $500.00 to manufacture.
The following is unbelievable by anyone's standards!!
The two salesman were totally tag teaming this guy by this point.... They went on to sell him a brand new really expensive case, because the original case was so damaged that it fell apart.. Then they sold him a 2 year extended warranty for $480.00 ouch.
They told him "The warranty would be a really smart thing to buy on such an old guitar."
The customer actually walked out of the store thinking he got over on them, because he had probably heard that an old Fender should sell for about $12,000.00. Oy.
In reality, this not so bright customer paid $1,200.00 too much for the guitar, which comes including a case. He should not have had to pay for the case. $480.00 for the warranty was ridiculous, because it was a new instrument with a full warranty. Of course he also paid $165.00 to much on the sales tax because the sale should have been lower. It was just over $5,000.00
the customer hadn't even got into his car. The two maggot salesmen high fived each other and started laughing at the customer. they were commenting, that they could have got even more for the guitar, but it would have sent a red flag to corporate HQ.
Ed Roman analyzes just what these salesman did.
The salesman pretended
not to know much about vintage guitars...
The salesman never said
the guitar was made in the 50's or 60's...
the salesman qualified
the customer as an immediate impulse buyer so he knew he
could make a score.
The salesman knew he
could have probably gotten $6,000.00 from the customer..
The salesman sent in
his buddy to help positively reinforce the deal while he
was supposedly talking to the manager.
If the reader thinks that this is too complicated or too long and involved.... THINK AGAIN... this type of activity goes on every single day in every single type of business that pays by commission. You should NEVER NEVER NEVER TRUST a commissioned salesperson even if he's in your band or you have known him for years.
There are some exceptions of course.... For example commissioned account executives sometimes are on your side, because they don't want to lose you. This applies to sales reps that you work with repeatedly. This does not apply to a one time Car, Camera, Barbecue. Swimming Pool, or Guitar sale.
These Types Of Things Go On All The Time When Salespeople Are Paid Minimum Wage They Have To Rely On Commissions To Feed Their Families. It Happens Even More Directly After Someone Just Gets Married, They Immediately Realize, They Need More Money!! Much More Money!!!!
I related to my security guard buddy the below story....
Back when I owned East Coast Music Mall, we didn't pay commissions on sales, but we did offer a $25.00 spiff on our $99.00 lifetime warranty. We had one wiseass salesman adding in the cost of the warranty to the price he was quoting. He would actually raise the price of the item by $100.00 and then give the guy the warranty at no charge.. We figured it out when we found he was selling them on Martins & other items that already come with a lifetime warranty.
Whereupon my friend told me that was common practice at his store, he also told me. that if the customer didn't balk at the price, the salesman would proceed to sell them yet another warranty on top of the amplified price.
So instead of telling the customer after the fact that there was a lifetime warranty included. Like the guy who used to work for me would do. These maggots would actually not say anything and not even bother to write the warranty (apparently the commission on the warranty was less than on a sale with a high profit). This left the salesman or counterperson free to try to sell yet another warranty on top of the first one that the customer never knew he had bought. Ouch!!!! Ouch!!! Ouch!!!!!!
Variations on that that theme abound, My friend told me that other companies routinely stamp custom shop on guitars that are not custom shop guitars at all... The big box chain stores have a lot of clout. They can order 350 of one special model that is not available in other stores. Usually this model will have a couple of very minor differences. ( gold hardware or maybe a special color) These are legally custom guitars.... So they can be stamped custom shop. This means the customer will pay more and get the same.
350 guitars isn't many if you have 50 or more watered down white bread stores. Some chains have well over 200 watered down stores. This is why all the guitars you see in those stores are usually low end beginner brands. You'll never see anything cool like Quicksilver, Turner, Abstract or JET.
The story I related above happened to be a Fender, My friend told me that Gibson is by far the one that 3 piece suited sports car driving know nothings ask about. and the salesman's Hijinks are usually pretty much in line with the above story.
I personally don't believe these reissue guitars are good for the industry, For example around 1964 the United States Post Office printed some postage stamps with Dag Hammarskjold's image on them. There was a misprint and some of the stamps got out. Collectors thought they had struck gold, then the post office reissued the original misprinted stamp by the millions and killed the value.
These guitars all have the perceived cache value frontloaded. This is precisely so that the manufacturer and/or the dealer makes an immediate ridiculous profit. The sad thing is that a lot of people have bought into that philosophy. Well I am here to tell them that those guitars will never increase in value, because the collectibility has been tainted by the fact that the companies all profited greatly from the consumers ignorance. There are tons of them out there and even if they did go up a little, Inflation will kill the long term increase in value.
I explain this to many customers and most of them look at me and say something like "Uh Oh well it sounds really good" Or something like "It plays better than my other Les Paul"
I submit to them that the sound is largely psychological... Te same as a washed car runs better than a dirty car and the playability might be slightly better simply because the factory may have allowed an additional 15 minutes in setup time into the build schedule.
First things first, your store in Vegas rules!
Second, a small story, regarding commission sales.
I used to be a commissioned sales person at Rubino's Music in IL & IN. One day the owner ( a real prick I might add! ) took in a 1960's Gibson EB-2 bass. He scammed some poor kid out of it for $75...Well, it was cherry, I mean perfect, and later in the day I sold it for $275 w/the original hardshell. The boss chewed my ass, thought he'd get $1500. What the moron didn't realize was that the buyer was Mike Lutz. He was playing with Nugent across the street that night. Now, I could've raped some poor kid across the coals for it, but I'd rather see it go to someone who'll use it right! I always did my best to match the customer with the instrument, and F#%K the commission! But then, my customers always came back. That's why I'd sell $20,000 a month, and make the same money as the guys who sold $3000! Man, I know what it's like to need a guitar I can't afford, and was willing to cut everyone a break. Anyway, we aren't always pricks!
Thanks for letting me rant.
Keep up the good work! Your store, your selection, and your employees are top-notch!
PRS Guitar with a Floyd Rose Mounted On It
Date: Saturday, June 14, 2008
Time: 11:42 PM
Ed, I just wanted to comment on the commissioned salesmen (Also, sorry I accidentally clicked submit before finished, so please ignore the unfinished version). I worked as a salesman for Willis Music, which is a chain of I think 7 stores in Ohio and Kentucky. I quit after 2 days because of the BS sales tactics they push on you. I had no sales experience going in, I quit long before my training was over and have no intention of doing sales again.
One thing that bothers me is that they pretend to care, when I go to Guitar Center at least I know that they don't care. They have a lame motto/acronym of FORTE, I won't quote the whole thing but it centers on focusing on people and integrity. Like I said, I had no sales experience but I did have consumer experience and I knew how I liked to be treated.
We were highly encouraged to sell no name-brand crap because the store made
more money on those because they were made only for Willis Music. These were
beginner products that parents would probably be buying for their kids. I
couldn't look someone in the eyes and tell them that these are quality
products made by reputable companies, which would surely be asked by a
non-musician parent looking to get their kid started. Also, letting a customer
simply look around wasn't allowed. We were told to stay just around the corner
to see what they were doing. As a consumer, I hate when salesmen are breathing
down my back. A big part of the job was to get someone to buy something they
didn't need or something that they didn't even want. We were supposed to talk
them into sales instead of selling them what they wanted or needed (yes,
people will come in knowing exactly what they want, but most don't and aren't
even planning on making a big purchase that day). And selling one thing at a
time wasn't enough, we had to try to get them to buy at least 2 more items
than they planned on. I
I also have a consumer experience at Guitar Center involving one of their no-nothing employees. My 10 year old nephew was getting his first guitar. Maybe the salesman spotted my sister and her son as people who were uninformed and easy to rip off or maybe he was just stupid. My nephew got the mini-Squire Strat (he wasn't big enough for a full size and the only other option was a pretty crappy Epiphone Les Paul mini).
At the cash register, he asks my sister if she wants to buy the special 1 year Guitar Center warranty, which any Guitar Center employee can assure you that this is a great deal. Not knowing what to do, my sister looked at me, and I said "No". The salesman does his "Are you sure? If something happens within the year, we'll fix it for free" spiel. I said that the guitar (which was new) had a warranty. He said, "But if something happens, you'll have to send it to Fender. With our warranty we could fix it right here in our store." I told him that Fender has certified guitar techs all over the country who would be able to do the warranty work. I would imagine that the Guitar Center repair-men would fall into this category (but didn't mention it). He then told me that you never know because he had a problem with an MXR pedal that had to go back to the factory. I told him that MXR is owned by a different company, not to mention that it is a different product. Why can't all salesmen be informed strait shooters like you Ed?
This is what is known as a