• Out of Stock - A Pandemic Supply and Demand Story

    Out of Stock - A Pandemic Supply and Demand Story

    15 months into the COVID-19 pandemic the retail stringed instrument market is in uncharted waters.

    Inventory is markedly down. A sizeable increase in first-time buyers flooded the market last year and continues, as almost every retailer notes. Many manufacturers have been unable to keep pace with the demand while experiencing their own operational challenges.

    Some manufacturing employees moved on and some companies downsized or restructured. In addition to new buyers, many musicians not impacted by the pandemic saw their stimulus checks as the opportunity to upgrade or expand what they owned.

    In the simplest of terms, most stores have a lot more visible wall space and most music websites are rife with listings advertising "Sold Out," "Coming Soon" and "Out of Stock."

    To gain a more accurate sense of what has happened we gathered feedback from a few key businesses to help paint a clear picture. And while this is largely a story about retail, similar stories exist for every part of the music community and the infrastructure that drives the entire music industry.

    How this plays out, when it ends, how it ends, few are confident they know, but this much they are assured of: it won't be soon.

    The Music Emporium

    The Music Emporium

    This has been the year everyone decided they'd learn a new instrument, get better at the one they knew, or if they had the money, decided to buy more or make upgrades to what they owned.

    Anyone that looks at our web site can tell we primarily deal in higher end stringed instruments and fine vintage products, so while we have been impacted, maybe not in the same way as other music stores. From a numbers standpoint we had a terrific year. We had a healthy inventory going into the pandemic and worked closely with our suppliers to do the best we could to maintain. As we do with our customers, we always pay a great deal of attention to developing the very best relationship with our suppliers. As far as lower priced instruments, while we did sell several dozen $500 Taylor guitars the past year, had the pandemic not occurred we would have sold many times more than that. It seems everyone wanted one in that price point.

    Used prices are up. We're not deep discounting near as much, and I don't think many other retailers are. The vintage guitar market has done exceptionally well for us. Part of the economy is flush with cash, so people that like high end instruments are taking advantage. Vintage instruments in general are up, unless you're talking late 20s Gibson F5s and Loar signed instruments.

    It will be another year or two before manufacturers catch up. Will all those people that bought instruments for the first time continue to play? Will they flood the market with used instruments they purchased if they give up? There are many questions we don't yet know the answers to. 2022 and beyond is going to be a real eye opener.

    Denver Folklore Center

    Denver Folklore Center

    We had to close the store at the end of business March 24, 2020. I'll always remember that date as it was the day I turned 70. Seven weeks later, on May 11, we reopened. For a week or two we did curbside and phone service only. When we decided we were ready to reopen in-store what happened next could only be described as "the perfect retail storm."

    Lock-downs, work from home, closed schools, businesses closing permanently, travel canceled — all meant new found time on people's hands. Combine that with no place to spend disposable income and buying an acoustic instrument jumped into the top ten of many lists.

    Though our instrument inventory was at normal levels when the shutdown came, we had no way of anticipating the level of demand we were about to see. Our vendors had shut down, and some still were closed when we reopened. First, instruments in the more affordable range, $500-$1500 started flying out the door. Then the first stimulus checks arrived in people's bank accounts and the buying levels increased. Pretty soon we were concerned we could run out of some brands.

    Once our vendors reopened we placed larger than usual orders and re-ordered more frequently. Since they were often operating at less than full capacity the increased demand meant that deliveries were taking longer and the amount we could get was smaller than we needed.

    As Asian-based manufacturers recovered (ahead of the US) we decided to add their products to fill the gaps in inventory left by those still gearing up. Meanwhile, the demand seemed to continue to grow.

    After the affordable phase and the stimulus check-fueled phase we saw a new phase pop up — what I am calling the "if not now, when" phase. Higher end buyers started showing up. These were typically older players who wanted to step up to a higher end instrument. It was as if the pandemic had triggered a fatalistic response along the lines of "at my age, and with a pandemic taking lives of people like me, why am I waiting to get that (fill in the blank) I always have wanted?" Soon our high end wall was as lean as the rest of the store.

    Fast forward a few months and things are starting to look better. Sales are still strong and our vendors are starting to catch up. Just today one of our prime vendors let me know we would be getting 18 instruments from them this month. That's 5-6 times what we had been seeing over the last year. Now we just have to hope the buyers continue to show up as the world reopens.

    Morgan Music

    Morgan Music

    There's a new normal coming, and no one knows what it looks like.

    This last year has been kind of a whirlwind, but at times feels like it has been five years long. We haven't seen anything like it. The demand for stringed instruments has been overwhelming.

    When we started hearing things were shutting down last year we started thinking how this would impact us a year or more out as the supply chain ran dry and employment in all of the instrument manufacturing and retail sectors was disrupted. We started obtaining as much inventory as we could and so far it has been a good thing.

    This year has been great for us as a business, but the future right now is a real unknown.

    A major reset is going to occur at some point, and what that looks we can't be certain. Will the orders manufacturers have accepted actually hold? They have the same issues in obtaining materials they need. How will that impact their ability to produce goods?

    We feel like we're seeing less shopping. Whereas people used to call to dicker on prices, we're seeing more "if you have it, I'll buy it." Quality used guitars, banjos and mandolins are bringing good money and anyone that has instruments sitting that could be sold shouldn't have a problem finding a buyer as long as they're reasonably priced.

    There's just so much that can't be calculated right now that it makes the future very uncertain.

    The Mandolin Store

    Dennis Vance - The Mandolin Store

    Since mid-2020 the amount of instruments in the supply chain has been dramatically reduced due to the pandemic. At the same time customer demand has been on the increase due to people being stuck at home.

    Many manufacturers made cutbacks in order to maintain profitability in the changing marketplace so that has impacted the supply as well. Even if companies wanted to expand production, finding qualified workers is an issue.

    2020 was our best year considering only selling mandolins. Much of that was due to us buying everything available in route to Eastman when the pandemic first hit China and already having deep backorders. As we came into 2021 demand was still high but there was less product in the pipeline. This has put The Mandolin Store inventory level at about 50% of normal.

    We have lots of instruments on order and continue to do our best to improve our inventory levels. While I don't see builders increasing production, I do think demand may lessen as the country opens back up. One other thing of note is that this instrument shortage has also impacted the used market creating more demand and higher prices.

    Elderly Instruments

    Elderly Instruments

    There's something eerie about a music store, full of instruments with no one there to pick them up. That's what we had for about two weeks at the beginning of the COVID crisis. We quickly realized we wouldn't survive waiting for things to get better so we created various staffing models for our staff of 43 allowing for fewer bodies in the building, with no loss of work hours.

    We've been doing mail orders since 1975 and web orders since the '90s, but added curbside service to give our local customers a more flexible experience. Our long distance customers didn't have the same experience they were used to, but the barrage of used and vintage instruments to buy and consign never slowed down; although they have been leaving the building faster than usual.

    We reopened our showroom in March, 2021 and that's when we noticed filling the hooks was harder to do. We're now ordering double, and in some cases triple what we'd usually have on order in some new instrument categories to keep up with demand. The "supply chain" is definitely problematic these days. The increase in inventory spend doesn't ensure we will get to hold the instruments anytime soon, but that's show business. Although our overall on-hand inventory is down, as one of our staff said the other day: "The in-store customers still have plenty to choose from."

    So far, our customers are getting what they want and we're still standing. Our 50th year is next year, so no matter what happens next, we'll be ready to celebrate how far we've come.

    Carter Vintage Guitars

    Carter Vintage Guitars

    It looks like my gloom-and-doom prediction that COVID would kill off the musical instrument industry did not come to pass. In fact, demand for mandolins has remained strong. Stronger than the supply.

    In the case of new mandolins, the near shutdown in production resulted in some empty hooks on the wall at Carter Vintage that won't be filled for months to come. But throughout, plenty of people were wanting to sell mandolins, so we were able to maintain a near-normal inventory of used and vintage pieces. Business began picking back up toward the end of 2020. I believe it was tied into a feeling of confidence in the new President and a vaccine that was finally on the horizon.

    Sales in March and April have been better than ever. Things won't feel normal until musicians are back to work again, but whether the surge in business is a new normal or just a temporary boom, I think we've made it through the worst.

    Fiddler's Green Music Shop

    Fiddler's Green Music Shop

    As has been the case throughout the pandemic, Fiddler's Green continues to struggle to keep up our inventory levels against the pace of sales. We have always strived, really more than anything else, to offer an interesting and varied selection of acoustic stringed instruments to our customers. We want everyone that visits our shop to leave with the feeling that they had a respectable choice of options within their interest and price range, and maybe even received a bit of an education in the process. This is the first time that we feel like we may be failing on that front.

    Being a smaller shop, our inventory levels have always fluctuated somewhat, but whenever things seemed to run a bit lean we were always back up to speed within a week or so. Now it seems like we just aren't able to keep up with anything close to what our ideal selection would be.

    Not only are many of our vendors of new instruments way behind in getting us inventory, we have also noticed a sharp drop off in all of the ways that we obtain used and vintage pieces as well. We are running a very large list of people to call when we get in particular types of instruments and it just grows larger every week.

    Many of the instruments that we obtain are now sold without ever hitting the sales floor or website. On one hand you could say, "that sounds like a pretty nice problem to have," and it's true that we feel extremely grateful that our business is thriving. On the other hand, we are very aware that a big part of the success of this business has been the experience that we offer and that experience, of course, starts with the selection of inventory that we have.

    Comments 11 Comments
    1. Verne Andru's Avatar
      Verne Andru -
      Thanks - very nice read.
    1. JEStanek's Avatar
      JEStanek -
      This is hitting so many sectors of the economy. Instruments, bikes, rollerskates (really, not making that up), furniture (Ikea has backorders on cabinetry for months), and even real estate. I think the big thing with that last one (at least in my area of Philaburbia) you need to buy a place to live before you start to sell your current place. I'm sure much of this will level out once things get more normal. I do hope some of our changes, like remote work stay. I certainly have more time in my day without losing 2 hours driving.

    1. MikeEdgerton's Avatar
      MikeEdgerton -
      It's good to see folks in the musical instrument business surviving this and as Jamie says, it has hit a lot of industries. A month ago I ordered parts for my table saw knowing that they wouldn't ship until mid-June. That may be more of the new normal.
    1. DaveGinNJ's Avatar
      DaveGinNJ -
      Interesting article. Glad these shops survived
    1. trodgers's Avatar
      trodgers -
      Thanks for pulling all this together and sharing.
    1. ks4egray's Avatar
      ks4egray -
      Interesting! I have experienced this first hand over the last couple of weeks. Once visiting a music store in Tennessee. They had inventory, but were having long lead times getting more. The other trying to buy an inexpensive CF fiddle online. The price was up, and some stores were out of stock. I'm just glad that gigs are starting back, and I have something to play!
    1. Verne Andru's Avatar
      Verne Andru -
      Considering many sectors had moved to a just-in-time inventory system it's curious it took a year for this to manifest. Guess it speaks to the amount of inventory in the channel when the pandemic started if it was able to last a year. I might add this seems to be more an American issue as I've not seen it in Canada but I have been waiting on a couple of parts for a while now so it is global to a lesser extent.

      If we view societies along the lines of Maslow's Needs Hierarchy we see (top to bottom)

      - self-actualization
      - esteem
      - love and belonging needs (friendship)
      - safety (job security)
      - physiological (food and clothing)

      The pandemic which is causing this "problem" is a global health crisis that has taken the lives of hundreds of thousands of people, reshaped global supply lines and economies, put millions out of work, out of their homes and is generally the worst crisis in generations. In short, the pandemic appears to be ravaging many people's safety and psychological needs.

      Yet I would argue that perusing musical attachments would fit more in the upper end of this needs spectrum - i.e. esteem/self-actualization - so this seems an odd disconnect to me.

      Faced with overwhelming challenges to peoples health and security they're running out in droves to buy things they can't wear, eat or live in at a time when those things are under threat.

      This is almost like the emperor fiddling while Rome burned. Odd times indeed.
    1. Mandolin Cafe's Avatar
      Mandolin Cafe -
      This didn't just happen. It's been this way for some time but inventory has been hammered long enough that the record sales some have mentioned have turned sharply. Real concern from retailers has been aired at least since early last Fall that inventory was dwindling with little end in sight. To give an idea of scope, this time one year ago The Music Emporium had 24 brand new Collings Mandolins in stock. I'd seen them have as many as 30 Collings Mandolins or more at times. Today, 7 new, couple used. Collings is a fraction of their size pre-pandemic so don't look for that to turn around. That TME information can be verified on the Wayback Machine. I've been wanting to do this article since early February and thought things would improve. They haven't. Some retailers like Denver Folklore mentioned they took a deeper dive into a few Asian manufacturers because they had the inventory, and Elderly went to the Ortega brand for mandolins and banjos which was kind of an eye opener (my opinion) because they needed inventory. There are others engaging in this as well. As one told me, "we can't make any money if we don't have products to sell." In spite of a decline in deaths and infections and increased vaccination rates, inventory rates won't reverse soon. And, without mentioning anyone, I had a couple of stores off the record say they didn't want to contribute to this article because they didn't want anyone to know they were struggling. Ouch.
    1. Cheryl Watson's Avatar
      Cheryl Watson -
      Inflation, shortages, panic buying, and the list goes on and on because of this cursed pandemic. But keeping to the subject of the music stores and their struggles, I do hope they survive and eventually thrive again. This is an interesting article.
    1. Mandolin Cafe's Avatar
      Mandolin Cafe -
      Noting the anniversary of this feature.
    1. Mandolin Cafe's Avatar
      Mandolin Cafe -
      Noting the anniversary of this feature.