Business Advice - Teaming with Music Store

[Robbie Collins]

I got a call from the owner of a local music store. He wants to partner and offers to take in repairs and send them to me. He wants 25%. I said my prices were market but on the low side without padding for middlemen.  He suggested I mark up my prices so that I would get the same net.

I feel that 25% is steep since the cost to him is minimal and that (1) I can't discount my rates 25% and make up for it in volume and (2) he can't mark up my prices 25% without pricing himself out of the market.

There are some other considerations. The store has the clinical vibe of a piano store and is quiet and orderly.  There isn't anyone on staff that knows guitars....all of which says to me that they aren't really in the guitar business and, hence, won't generate many repairs.

Can someone tell me if there is a industry standard for structuring this deal and things I should look out for?

[Robbie Collins]

Yes. The owner is a guy past retirement age. He and his wife run the store. Neither they nor their 3 employees play guitar. They have a guitar teacher but he doesn't help out front.

Thomas...I'm using that approach with a large pawn shop that specialized in guitars. They've sent me a few referrals.

[Kerry Krishna]

 What Thomas suggested is the agreement I have with the local store that I do repairs for. If something comes in that they can't handle (electric setups and such) they just give them my business card, and maybe phone me and let me know it is coming my way. There is no money exchanged at all, and it suits both of us.