The High Cost of Low Prices in Guitar Retail 🎸

By Lee Alexander

Walk into almost any guitar shop today or scroll through their online listings and you’ll see it everywhere. Red sale stickers, epic deals, clearance banners that never seem to clear.

But here’s the hard truth: discounting isn’t a strategy.

It’s a slow leak that eventually bursts the tyre.

And I don’t just say this as an industry observer. Over the past 20 years I’ve felt the pain of discounting first-hand from the brand side many times and I’ll come back to that below.

If you want proof of where this road leads, just look at what happened to GAK and PMT. These weren’t small independents they were two of the biggest names in UK guitar retail. Both are gone. And while there were many factors in their downfall, playing the discount game was almost certainly part of it.

The Discount Trap

On the surface, discounting feels safe. Knock a bit off, move a guitar/amp/pedal out the door, keep the cash flowing. But the hidden costs are brutal:

• Margin erosion – That 10–20% “deal” wipes out the very profit you need to keep the lights on.

• Customer conditioning – This is a biggy…Shoppers learn to never pay full price. They’ll wait, because they know you’ll cave.

• Race to the bottom – If one store cuts prices, everyone else follows. The only winner is the guy with the deepest pockets. Spoiler: that’s Amazon or Thomann, not your local retailer.

Of course, discounting does have its place. Clearing out genuinely old or slow-moving stock is part of the retail cycle, and no one expects a shop to sit forever on gear that isn’t shifting. The real problem and the focus here is the way our industry has normalised discounting on brand-new, in-demand products that don’t need it. Too many retailers reach for the discount button by reflex, convinced it equals more sales, when in reality it just eats into margin and conditions customers to expect lower prices from day one.

It’s short-term thinking dressed up as “competitive.”

Why It Happens

• Fear – Better to sell at a loss than lose the sale altogether.

• Laziness – Easier to cut £50 than to build a real offer.

• Copycat behaviour – “They’ve discounted, so we have to.”

• Overhang stock – Especially post-COVID, when warehouses were overflowing.

The problem is, once you’ve trained players to expect a deal, you can’t un-train them.

The Psychology of Discounts

Discounting doesn’t just affect the numbers. It affects behaviour.

Players start to see guitars not as aspirational instruments but as commodities. The magic is stripped away when the focus shifts from tonewoods and playability to voucher codes and clearance mega deals.

Worse still, discounts encourage procrastination. Players hold off buying because they know or at least believe a better deal is always around the corner. That stalls cashflow and clogs inventory.

And when players do buy, the brag is often about how cheap they got it, not about the quality of the instrument itself. That’s a dangerous cultural shift for an industry that thrives on passion and inspiration.

The Fallout

GAK and PMT didn’t collapse just because of discounts. But living in permanent sale mode was a symptom of deeper trouble: competing on price instead of value.

When you’re fighting Amazon and Thomann on their own turf, you’re playing an unwinnable game. And in the end, the customers got used to bargain prices… until the shops couldn’t keep up.

Discounting doesn’t just kill margins it kills businesses.

Even Amazon Has Moved On

And here’s the irony: whilst Amazon used to be the most aggressive discounter of all, today they’re often not the cheapest place to buy. Yet millions of people are happy to pay a little more for the trusted experience, fast delivery, reliable returns, and customer service that simply works.

That’s the lesson for our industry: value beats price when you package it properly.

Brand Damage

Let’s not forget the knock-on effect for manufacturers.

When dealers perpetually slash prices, it drags the brand’s value down everywhere. A guitar that’s £799 one day and £649 the next doesn’t just look cheaper it feels cheaper. Players then expect the same discount worldwide, which frustrates international distributors/dealers and forces brands into a corner.

And here’s where I speak from personal experience: there is nothing more frustrating from a brand point of view than launching a new, exciting product something you’ve spent months or years developing only to see instant discounts. Often, these discounts can come from dealers who don’t even have stock, but still feel compelled to list lower to appear competitive. That forces the dealers who do have stock to price match, and from that moment on, the discounted number becomes the “unofficial RRP.” It never goes back up. The margin carefully planned by the brand is gone — permanently.

It also creates bad blood between brands/suppliers and other retailers. The shop that holds the line on pricing looks overpriced next to the one running constant sales. The result? Erosion of trust across the whole dealer network.

A Familiar Pattern

If this all feels eerily familiar, that’s because it is. Look at the book trade when Amazon came along. Or fashion retail, where entire high street chains collapsed after years of endless sales. The playbook is the same: lean on discounts to prop up turnover, train customers to expect them, and watch the long-term viability disappear.

Guitar/MI retail is not immune. In fact, with thinner margins and slower-moving stock than most industries, it’s even more exposed.

What To Do Instead

The good news? There’s another way.

• Add value, don’t cut it – Free setup, first restring, or even a quick lesson with purchase.

• Bundle smart – Strings, tuners, gig bags, straps, and warranties add perceived value without gutting profit.

• Create experiences – Launch events, try-before-you-buy sessions, in-store content collabs. Give players a reason to come in.

• Protect price integrity – Position guitars as instruments of passion, not commodities. If you don’t believe they’re worth the price tag, why should your customer?

Quick Action Checklist for Retailers

If you’re reading this and thinking “we’re already discounting,” here’s how to start shifting course:

1. Run one value-add promotion this month instead of a discount. Measure the difference in uptake.

2. Audit your website for endless discount banners or codes. Do they build trust, or look like desperation?

3. Test bundling vs. price cuts on one product line. Which drives more margin and satisfaction?

4. Talk to your staff — how are they selling value over price on the shop floor?

5. Set a line in the sand for how low you’re prepared to go and stick to it.

Small shifts add up. The point isn’t to abandon promotions it’s to use them intelligently, without devaluing the very thing you’re trying to sell.

The Bottom Line

The brands and retailers who survive the next five years won’t be the ones offering the biggest discounts.

They’ll be the ones who give players a reason to pay full price — and feel good about it.

So here’s the question and I’m keen to hear what you think:

👉 Do you think discounting is a necessary evil in our industry… or is it slowly killing us?