question on music stores

[shakinbacon]

I've always wondered how music stores pay for their inventory.

For example, lets say a Guitar Center has 15 Bongos. Are they all payed for, or on loan, or consignment until the sale is made?

I'm sure it is similar to most retail businesses. Inquiring minds want to know

Thanks

 

[Aussie Mark]

It varies from business to business. Some businesses use a bank overdraft to fund stock purchases, some use finance from a non-bank source (eg. car dealers, who often take out loans from the finance arm of the vehicle manufacturer to fill their showroom/yard), some use capital from retained earnings, some would use cash at hand, some would be on consignment. Some businesses who like to fly by the skin of their teeth use deposits from customers on advance orders to purchase their floor stock.

That said, I can't help you on the GC question.

 

[Big Poppa]

guitar center buys their inventory and so do 99 percent of dealers

 

[shakinbacon]

guitar center buys their inventory and so do 99 percent of dealers

That's interesting.

I assume these business take out large loans or use a bunch of cash to purchase the inventory.

I have a new appreciation for a place like GC having to buy all that stuff on the floor and guys coming in and abusing the instruments. They must have pretty good insurance against theft, natural disasters, etc.

I learned something today. Thanks

 

[maddog]

then there are those that use the front half of customer B to cover the back half of customer A.

They tend not to last long.

yes, I so went there.

 

[Michael777]

Obviously I cannot speak for all Retail Dealers. I can say we purchase all of our inventory.

 

[zombi]

Guitar Center definately buys their inventory. So yeah, those $30,000 guitars you see in the platinum room we paid for...