Korg Forums

Kevin Nolan · Posted: Mon Apr 18, 2011 4:39 pm Post subject:

Look at the number of synthesizer manufacturers who have come and gone, and the number of music distributors who have come and gone. It's a tough business they are in. They all definitely need to make a profit.

It amazes me that a company like Korg can even exist. The amount of innovation they have to put through, continuously, to survive is incredible. So I see companies like this as among the most positive organisations that exist. They are definitely driven as much on passion as of profit. The amount of innovation in, say the OASYS, is far greater than an iPad for example, yet Korg probably sell to one thousandth or one ten-thousandth the market.

Likewise, IMO, the emergence of huge distributors like Thomman, DV and Sweetwater are a reaction to many smaller ones going under - they look to be about the only way that a music distributer can survive.

So overall I'd say the margins are incredibly tight. There are easier ways to make money and I would suspect many of these companies are on the border between sinking and swimming.

I'd say the likes of Korg and Roland as makers and DV and Thomann as dristributor have it figured out fairly OK, but I'm sure they are never very far from tough times.

Kevin.

Randelph · Posted: Mon Apr 18, 2011 4:44 pm Post subject:

Another difference for the end user in the US: in addition to the initial price being lower, most of us don't pay sales tax or shipping.
We negotiate our best price from an out of state retailer, and they don't charge sales tax (if their corporate headquarters are not in my state).
However, many of us, myself included, often buy locally to ensure our kick-the-tires music retailers stay in business.

As far as distributors go: I know that with Clavia for example, they sell their Nord keyboards to AMS, who in turn provides warranty service and sets the final price for the keyboard.

I've always wondered how much markup the retailer is adding to expensive keyboards, and this makes me wonder how much markup the distributor adds.

Greg C wrote:

RKfan · Posted: Mon Apr 18, 2011 4:44 pm Post subject:

I hoped the healthcare thing might die a death on this thread... but since I actually work in medicines market access (drug pricing, negotiating with health authorities etc.) ..... Its interesting to note that for those people in the US that can afford it (i.e the rich - since the US system is not universal) things are pretty good. There is a two tier healthcare system (if you are poor, life's a bitch). But if you have paid your medical insurance (assuming you dont overclaim) you can get access to some really expensive drugs. I am currently working with one which costs >$100,000 in the US for a course of treatment. In the UK (and rest of the EU) this drug will get no where near this price (closer to $30K) above that price and two things might happen (i) the drug is rationed and (ii) the manufacturer cant sell the medicine to the NHS (private patients only).

Nothing is free, especially healthcare.... and it is possible to price yourself out of the market.

billbaker · Posted: Mon Apr 18, 2011 4:57 pm Post subject:

Greg C raised the issue of low pre-orders.

I think that to expect high pre-order number is wishful even with a great product, for a couple of reasons.

First, it would be a rare customer who will shell out money for a product that could be vapor-ware... that's not likely to happen, but consider this: GC is not even advertising the Kronos yet, much less making a big push for pre-orders. Call me Monkey-boy, but I want to get my grubby paws and ears on this keyboard before reaching for my wallet (that may happen on the first day, but seeing / hearing / touching the actual beast is the closer for me).

Second, at this price point we're talking rarified air - even for a great product at a great price for that product. If everyone was buying $3-4K boards all the time you might expect a bigger number. "Entry level" has a different meaning to me - by an order of magnitude. At a price where I could buy somewhere between 2 and 6 of yesteryear's flagship synths and call myself happy, putting all my cash on one product takes Vegas level 'nads... and a blindfold please.

Lastly - calling ANY Kronos model anything but a PRO level board is just silly. Most of us start as hobbyists. We're in a week-end band. We're "rehearsing twice a week and hoping to play once a month"..."recording an album in the basement"..."jamming at Bob's party this Saturday." Kronos is a hobbyists board only if your other hobby is, oh, being a doctor or trading securities. Without a "real" job I couldn't afford Kronos.

If we stick with it long enough and work often enough, we start making a bit more. Then Kronos becomes a viable purchase - if we actually need a new board at that point... I want a Kronos, but I have to convince my wife I need one by selling all my old gear first. Being "honest, honey, a real professional musician" isn't enough to establish my need - it's the only job I know of that hasn't seen a realistic raise in price-for-services in the last 25 years. I'm still seeing jobs where $100 a man per gig is the going rate, just like 30-some years ago when I started. By my math that's gigging twice a week every week for half a year to afford Kronos - longer if the gig's not in my back yard. (FYI - I just put $100 in my band truck and got only 3/4 of a tank).

Agents got a raise. They're making 20% for manning the phones. Makes me hope there's truth to that cellphone-brain cancer link.

BB
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billbaker

Triton Extreme 88, Triton Classic Pro, Trinity V3 Pro
+E-mu, Alesis, Korg, Kawai, Yamaha, Line-6, TC Elecronics, Behringer, Lexicon...

ScoobyDoo555 · Posted: Mon Apr 18, 2011 5:24 pm Post subject:

billbaker · Posted: Mon Apr 18, 2011 5:36 pm Post subject:

Scoob...

"I'm here for an Argument!"

"No you're not!"

-------------

Chicken and egg time.

Hobbyists gotta have ready cash to get new keyboards to start playing.

Pros gotta have old keyboards to play to get cash to have hobbies.

So I'm only a "professional" in those years I don't buy a new keyboard.

----------

Appologies if my "silly" rubbed you wrong. We just need to open an Econ 101 and Rant page here.

BB
_________________
billbaker

Triton Extreme 88, Triton Classic Pro, Trinity V3 Pro
+E-mu, Alesis, Korg, Kawai, Yamaha, Line-6, TC Elecronics, Behringer, Lexicon...

JPWC · Posted: Mon Apr 18, 2011 6:27 pm Post subject:

This whole issues has a few more variables than list and street prices.

Cost of living. Shipping cost, import taxes and quantity of product ordered.

From what I can tell the majority of of the keyboard buying public is in the US, so the bulk dealers like sweetwater or guitar center tend to buy more korg product and get a better pricing.

If your dealer can't order but 2 or 3, they are just not going to get the same price, much like the "Mom & Pop" shops in the US.

And of course the fewer that are ordered the higher the shipping cost per unit. Not counting the higher shipping cost for the various countries world wide.

Of course this does not necessarily mean Europe should pay 60% more, and maybe the won't, once the pre-ordering begins in Europe.
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