Musical Instrument Stores

The musical instrument store industry includes about 4,500 stores, or dealers, with combined annual revenue of $5 billion. Major companies include Guitar Center, Sam Ash Music, and online dealers American Musical Supply and Sweetwater Sound. The industry is fragmented: the 50 largest companies account for about 45 percent of revenue.

COMPETITIVE LANDSCAPE

Consumer income and changes in musical tastes drive demand for musical instruments. The profitability of individual companies depends on effective merchandising. Small companies can compete effectively by specializing in personalized service or high-end instruments. Average annual revenue per employee is $150,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include guitars, pianos, sound equipment, parts and accessories, and school music products. Guitar sales account for about 25 percent of sales, traditional pianos for 20 percent, audio equipment for 15 percent, and electronic keyboards 10 percent. Other products include repairs, equipment leasing, and sheet music.

Musical instrument stores include full-line stores and specialty stores such as keyboard, school band music, and pro audio stores. Full-line stores offer a complete range of musical instruments and accessories. Keyboard stores specialize in traditional upright, grand, self-playing, and electronic pianos. School music stores sell band instruments to universities, high schools, and amateur players. Pro audio stores specialize in selling sound system equipment.

Full-line musical stores include national chains and independent dealers, as well as big-box retailers with a musical instrument department. National full-line chains operate in stand-alone buildings and strip malls, ...