About that Lacey Act (part 1)

I have been thinking quite a lot about this post, it’s a big important issue. It’s a topic where the guitar mfg. industry is intersecting  with politics and the bigger world in general and that’s kind of fun.  But also, because it’s something that I really do care about, and though DiPinto Guitars is not nearly big enough to be a real player in this debate, I can certainly blab about it to anyone who is willing to listen.

If you don’t know about the Lacey Act, here’s the nutshell version…it’s a bill from 1900 that banned the importation of animal products from countries where it was illegal to harvest those products.  My best understanding is that it was written to try and stop the ivory trade. In 2008 it was ammended to add plant products too.  And that is what all the fuss is about. There’s your job-killing government overreach, or whatever they are calling it on the Wall St. Journal editorial page.

I would just like to point out right now that for the last I-don’t-know-how-many years we’ve had to get a Fish and Wildlife license because the guitars we import (made in South Korea) have abalone and shell inlays.  So that’s they way these things work.  At some point, we showed up on somebody’s radar as an importer of products that contain abalone and mother of pearl, they keep our info on file and we all make sure that our guitars don’t have any endangered shells used as inlays. I don’t really have a problem with  the extra 10 to 15 minutes  and $100  it takes every year to renew my license.

Gibson Guitars  is a huge company, and it takes them way more than 15 minutes and $100 to comply with the law, but this is basically why they are having such a tizzy-fit.  Ok, so they got raided a few times.  But you know how it is, raid me once, shame on you, raid me twice, shame on me.  Although, that’s not how how their CEO Juszkiewicz sees it, he’s got the whole industry up in arms, he’s got NAMM on his side (it’s not the only issue I disagree with my lobby group about) he’s got Tea Party activists drooling all over themsleves to point out the needless governtment regulation,  he’s got Ted Nugent ready to go arrow hunting to shoot down them pesky varmint government regulators.

But lets take a step back for a moment and see who does agree with this…

Mick Jagger Sting
Dave Matthews Band Jack Johnson
Willie Nelson Maroon 5
Jason Mraz My Morning Jacket
Linkin Park David Crosby
Lenny Kravitz Barenaked Ladies
Sarah McLachlan Simon Le Bon
Bryan Adams Brandi Carlile
Deborah Harry Sara Bareilles
Lily Allen Brad Corrigan (Dispatch)
Bonnie Raitt Ray Benson (Asleep At The Wheel)
Guster Of A Revolution (O.A.R.)
Bob Weir The Cab
Ryan Dobrowski & Israel Nebeker (Blind Pilot) Jack Antonoff (fun.)
Razia Said
Pat Simmons (Doobie Brothers) Jools Holland
Brett Dennen Lana Del Ray

(source reverb.org)

OK people… Mick Jagger and Sting.  I don’t care WTF Ted Nugent has to say, you could not get higher profile artists than Mick Jagger and Sting.  I don’t know why Gibson doesn’t embrace that rather than fight it (I don’t know, but I do have some ideas. That’s a subject for another post)

I’m sure I’ll have more to say about this issue, but that’s all for now.

More info about the Lacey Act:

http://www.reverb.org/project/lacey/index.htm

http://www.eia-global.org/forests_for_the_world/Lacey_Resources.html

So Fender’s not going public after all.

And we were all so excited!
But now, no more headlines like this:

Fender reports higher sales, lower profits
http://www.marketwatch.com/story/fender-reports-higher-sales-lower-profits-2012-05-10

The highlight of this article?

Fender, which has filed to go public on the Nasdaq at some point this year, saw its net sales rise 2.2% to $174 million in the first quarter, and its net income decline 73% to $1.9 million in the first quarter.

Wow.

That can’t possibly be right, can it?  And if it was, why would anyone (at least anyone who cares about money, which is pretty common among the investor class) invest in them?

But then you can also find data like this:

The above numbers are from Fenders own prospectus, so they’d better look good.  But still, look at that bottom line there.  Granted, the economy has been weird, but their net profit/loss is all over the place!  I have to say, if I was someone who cared about money I would not put it in a company that only shows a profit every other year.  And if I was someone who was thinking of selling bits of their company out to investors and then being beholden to those investors (an idea that scares the bejesus out of me) I would not think that those numbers would make me look in any way attractive.

There is a great story here about the whole thing:

http://finance.fortune.cnn.com/2012/07/20/why-fender-pulled-its-ipo/?hpt=hp_c4

The CNN article points out the Guitar Center connection, which is another company not doing so well these days

Guitar Center Opens Two Stores Despite Debt Downgrade 
http://digitaleditions.sheridan.com/display_article.php?id=1010001

Guitar Center Debt Downgraded, Capital Structure “Unsustainable”

Y’know one thing that might make it unsustainable?  Well, I’d guess one reason is because they owe Fender, what was that number eleven million dollars??? And maybe that is why Fender wanted to raise a little money, get some cash coming in from some place else, sell off a little stock, get things rolling again. But now it’s not happening.

I think it’s probably better this way. (Maybe not for Guitar Center, but that’s a whole other story) Sure, on some level we are a competitor of Fender, but honestly, I would not like to see them driven down a path of quarterly-profit fueled suckiness.  They have an awesome brand, they have the best players, a great history, it would be a shame to throw that all away to make the investors happy. It may be a rough few years ahead for them (welcome to the club) but in the end I hope it turns out that Fender stays with us with the intent of making great guitars instead of making great profits.

Help! There’s a giant purple lady stealing my guitar!

It’s a constant  in our industry, I imagine in most industries;  the introduction of weird,extraneous products.

Oh my god! They’re coming in through the walls!

OK, so this product is totally not useless. We all need to hang our guitars from the walls every now and then, but totally weird, right?  I cannot imagine what was going on in that product development group!

I don’t know what is more bizarre, the actual visual look of the product, or the fact that this particular series, finished in pretty metallic colors (what the company calls ‘vintage Fender colors’) is called the “Ladies Series” .  So, is this for the ladies?  Or is for the guys,  who before this could only fantasize about a disembodied, metallic, yet distinctly feminine hand gently cradling their guitar.

http://guitargrip.com/prod_GS%20Ladies.htm

SO WHAT DID WE DO YESTERDAY?

Well, we set up guitars of course.  But yesterday was a little different.   Chris packed up a tote bag full of allen wrenches and screw drivers, a soldiering gun, and a cordless drill, with the kids packed in the car we went over to the Girl’s Rock Philly practice space to help them gear up (literally) for camp. I had to go back to the shop for some spare parts, pickup springs, knobs and screws, we had to take two guitars back to the shop for more work but all in all the day went pretty well, and all the other guitars and basses are ready to rock!

Chris working our makeshift set-up table

I have been teaching bass at the Girls rock camp here in Phila for the last 3 years, and am preparing for my fourth.  I am in the groove of it now.  There’s the big stressful buildup towards camp (where we are right now), there’s the crazy, frantic, but super-fun week of camp, there’s the showcase where the girls play and us counselors get all weepy, and then it’s over.  Till next year.

If you are not familiar with Girl’s rock camps, they are all over the place!  It’s a very cool thing.  A summer camp with all female counselors for all female campers.  The girls come in, form bands, get some instrument instruction, write a song & play a show.  All in one week.  Some people bristle at the all-female aspect of it, and I’ll admit I didn’t get it at first, but I totally get it now.  It’s not like anybody  hates guys, they certainly help out getting ready, but during camp week it’s all women run.  It’s more an equal- opportunity thing.

There are Girls Rock camps all over, even in Sweden!

There’s a few reasons why I volunteer at the camp.  First, it’s good to volunteer doing something.  I sat on my butt for years and years thinking “I should really get involved in some volunteer project” and then one day the camp director reached out to me and asked me to teach.  I could have been a little more pro-active on the getting out there part, and now that I think about it, I’m a little embarrassed that I waited for an invitation to get involved.

Second reason is a lot like the first reason, it’s a good thing to do.  I wish I’d had a camp like this when I was younger.  If I can make some slightly off-center teenager (I was a very off-center teenager) come in to their own, then that’s something worth doing.

And then the third reason might sound a little cynical but it really is not.  Is it so awful to say that teaching kids to play guitar and bass is good for business?  Or that there is business value in educating potential customers who will have a lifetime interest in buying guitars?  Okay, a little cynical, but at least I’m admitting it.

And the whole women-centric aspect of it? Like I said,  I was not sure of that at first, but it’s a great environment, and really safe place for girls to try on a different personality.  Some people might question why it’s needed, like I said, I  questioned it myself. But then this shows up:

Every year this gear guide shows up and I just roll my eyes.  What else can I do?  This is how new gear is marketed, with stripper girls.  And just last week I sent in a check for my ad in this very  guide , so am I complicit?  Am I trying to atone for my sins? (maybe)  I like to think I’m just trying to change the demographic.

More information about Girls Rock Philly here:
http://www.girlsrockphilly.org/

Find a Girls Rock camp in your area:
http://www.girlsrockcampalliance.org/

 

WELCOME

I have been thinking about starting a blog for quite some time now.

I’m not sure if there’s an audience for me blogging, but I guess we’ll find out, won’t we?  So I’m going to talk about job. (how interesting) And what is my job?  Well, to be honest  sometimes I have a hard time explaining what it is, exactly, that I do.  Hopefully the process of typing it all out will help me figure that one out once and for all.

But OK, lets begin at the beginning.  I’d guess that most people reading this will have some idea of who I am/what I do, but if you don’t,  if you met me at a party and asked what I do, I’d say that I run the business and marketing end of DiPinto Guitars. That sounds pretty cut and dry, but it’s not one of those things you can say where’s there’s no follow up.  It’s not like being a 8th grade science teacher, or a physical therapist, or  an interior designer.  There’s no reference point for this job description that I’ve created for myself that people (including myself) can latch on to. There’s always a follow up question, or two or three, and that’s where I get tripped up.

It’s not an obvious choice for me, given that I had absolutely no business and marketing experience when we started, and I’m only a mediocre guitar player at best.  Along the way I have to think that the lack of business experience was more of an asset than a liability, if I’d been looking at our P&L all this time, I think we’d have shut our doors a long time ago. And I also think that at some point I should have become a better guitar  player, but I never did.

And yet, guitars define my professional life. And since I’ve been doing this for about 17 years now, and so I’ve got some ideas about this industry that I work in.  I’ve been ranting to anyone who cares to listen about how stupid Gibson is acting lately.  I’ve mired myself in the minutia of the Lacey act.  I’ve been deconstructing the appearance of Fender’s Pawn shop line, and I’ve been wondering out loud, and in my head for years and years, who is buying all these pointy, thousand dollar guitars that I see in the Musician’s Friend catalog?

I came in to my office today, and I found this photo someone had left on my desk:

 That’s me and Rudy Sarzo at a NAMM show, I’m guessing around 2004. Rudy Sarzo! Bass player for the greatest era that Ozzy ever had, friend and band mate to Randy Rhoads, this guy has been on stage in front of thousands people.  What other industry has rock stars wandering around at their trade shows?  I mean sure, every industry has their rock stars, but we have real rock stars, and yet here I am, stuck at a trade show, standing on my feet for eight hours smiling and talking and selling, like the rest of corporate America.

Cause here’s the thing about the Musical Instrument Industry, it is at the same time, both very, very cool, and incredibly dull.