The Boutique Amp Gamble

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GEAR TREND | BY DAN DALEY
The Boutique Amp Gamble
n the 1990s, a renaissance of
sorts took place in the guitar
amplifier business. Several
dozen entrepreneurial, technical types began a cottage
industry by building guitar
amps in basements, garages and
storefronts. Driven, self-admittedly, more by a passion for
sound than sound economic
principles, they came at a time
when music instrument manufacturing and retail underwent
a huge round of consolidation.
Some suggest that the corporatization of the MI landscape
helped instigate this grassroots
capitalist tornado. To others, it
reflected a music industry that
itself was on the verge of becoming an independent-driven
economy. For whatever reasons, companies with names
like Matchless, Top Hat, Naylor,
Bogner, Tone King, Guytron
and Dr. Z began to vie for the
attention of a fast-growing
musician base.
These entities presented an
opportunity to the community
of independent music product
dealers to carry unique, highmargin guitar products that set
them apart from the retail
behemoths filled with massproduced products selling at
steep discounts. But it was an
opportunity that also carried a
level of risk.
“We would buy these ‘bou-
I
tique’ amplifiers based on the
same sort of passion that the
people building them have,” said
Dan Tracey, a salesman at World
Music in Nashville. “It’s not a
product for the weekend-warrior musicians who are looking
for lower-priced products.
Established ‘name’ musicians
will often get endorsement deals
and products through them. So,
it’s a pretty narrow niche of the
customer base that this appeals
to: experienced players who are
willing to take a chance and can
spend the $2,000-plus that boutique amplifiers cost.”
Greg Bayles of Make’n Music
with a Bogner amp stack
A LABOR OF AMP LOVE
n the other side of the
fence, the economics are
equally stark. Joe
Naylor started his
eponymously named
brand of guitar amplifiers in 1994 using
capital scoured from
friends, family, credit
cards, personal loans
and the sale of a business whose site had
been the manufacturing home for the 15 or
so amplifiers he could
build per month in Warren,
Mich. (The boutique amp phenomenon is centered in the
Midwest for reasons no one can
explain, as opposed to the indie
amp movement of the 1970s
O
Boutique amps
can mean profit
and prestige for
dealers, but
require an
investment. Is it
worth the risk?
which was heavily concentrated in California.) By 1997,
he had sold his interest in the
business and even his name to
another entrepreneur whose
fortunes were as dismal as his
had been.
“You start out strong—there
are people who like to jump on
something new,” Naylor said.
“The hard part is keeping the
buzz going when you’re up
against big brand names.”
Joe Naylor now owns
Reverend Musical Instruments,
JULY 2005 | MUSIC INC. | 55
“It’s a pretty
narrow niche of
the customer base
that this appeals to:
experienced players
who are willing
to take a chance
and can spend the
$2,000-plus boutique
amplifiers cost.”
Dan Tracey,
World Music
“You have to get the
amps in the hands
of the sales force on
the floor. You need
them to explain to
the customer why
they should be
interested in a $2,000
amplifier.”
Brian Gerhard,
Top Hat Amplification
“[Carrying boutique
amps] sets us apart
from the big
retailers. On the
independent level,
we have more
latitude.”
Greg Bayles,
Make’n Music
56 | MUSIC INC. | JULY 2005
which started out in the boutique electric guitar market and
branched out into amplifiers,
turning out nearly 50 per
month. He said the lessons
learned from his first go-round
are helping make this business
successful.
Most start-up amplifier
companies fail, and of those
that do persevere, the rewards
are often minimal. Boutique
amps are rarely sold on a consignment basis; the sale of one
amp often directly funds the
manufacture of the next one.
“‘It’s a living’ is the best I
can say,” said Brian Gerhard,
who recently moved his Top
Hat Amplification company
from the high-overhead environs of Anaheim to the more
cost-effective Raleigh, N.C.,
area. “Any significant money
came from the real estate I had
the business on.”
The exception many point
t o i s M e s a B o o g i e, w h o s e
amplifiers became highly successful in the 1980s when
many California rock artists
began using them. The company’s dual-rectifier preamp
design was also cited as being
an element that helped the
company stand out and gain
acceptance among musicians
and retailers.
Boutique amps tend to be
aimed at older vintage-sound
aficionados rather than young
“shredders.” Still, amp makers
have developed a set of strategies to break out of the pack.
“You have to get the amps in
the hands of the sales force on
the floor,” Gerhard said. “Often,
the experienced store owners
or managers will buy them to
play themselves in clubs and on
gigs. But the younger sales people tend to stick to the name
brands. You need them to
explain to the customer why
they should be interested in a
$2,000 amplifier.”
Gerhard sends banners and
other promotional materials to
retailers to generate in-store
buzz, adding that he rarely uses
co-op advertising.
Naylor said that making
the rounds at trade and guitar
shows, such as NAMM and
the Dallas Guitar Show, is
important. “NAMM’s expensive, but that’s where you get
everyone in one place,” he
said. “So it can be worth it.”
Guy Headrick, co-owner of
Guytron Amplifiers, has been
building between 15 and 25
units a month, costing $2,900
each, in his Troy, Mich., factory since 1997. He’s found
some fairly reliable indicators
to determine if a retail dealer
i s a g o o d p ro s p e c t . T h o s e
boasting a significant level of
pro audio sales is one.
“I like to see a dealer whose
customers know the difference
between a Shure and Neumann
microphone,” he said. “Also, I
look at the guitar lines they
already carry. Is it Fender or is it
Squier? They’re good clues as to
whether the customer base is
open to our kinds of amplifiers.”
RETAILERS TORN
he start-up amplifier genius
remains a sort of artist in
solder-laden manufacturing,
though retail often takes a less
romantic view of them. Tracey,
who once assembled guitar amp
rigs for George Lynch and Ace
Frehley, said he looks forward
to trolling the shows for “cool
new tones.” Still, when it comes
to committing to a boutique
amp, he said, “I sit down with a
Peavey 30 and ask the guy,
‘Why is your boutique amp so
much better?’ It’s about being
able to move the product.”
The margins on boutique
amps can make it worth the
effort. Dean Moody, store manager at Rudy’s Music Stop on
Manhattan’s famed MI retail
T
strip along West 48th Street,
pegs the profits on exotic handwired amps at between 25 and
40 percent. Moody monitors the
grapevine for names of boutique
marquees, using buzz as the
barometer to determine if he’ll
commit to buying and setting it
up in the rear room, the store’s
exclusive space for guitar amps.
“If we love it, we’ll buy it,”
he said. “If we don’t love it,
but if we think some musicians will like it, we’ll offer
the manufacturer some floor
space, which is a sort-of consignment, I guess.”
Greg Bayles, founder of
Make’n Music, has made boutique products a major part of
his inventory for nearly 30
ye a r s a n d c o n s i d e r s t h e i r
inventors to be artists. He
mentored Rheinhold Bogner
when the Eastern European
immigrant was a newly arrived
teenager in Los Angeles, selling the first Bogner amp to
Eddie Van Halen and buying
all of Bogner’s production for
more than a year, providing
the company with a foundation that helped give it a strong
hold in the boutique market.
However, Bayles said, there
are parallels with the larger
music business. “I’ve had dealings with boutique guys who
also sell direct to the customer
on the side, using your store as
a showroom,” he said. “Some
o f t h e m d o n ’ t re a l i z e t h a t
that’s wrong—they’re not as
sophisticated about the business of selling as they are of
electronics. But some of them
d o k n ow. N o t eve r yo n e i s
totally scrupulous.”
WEB & ENDORSEMENT DYNAMICS
he Internet has also become
a double-edged sword, with
positive “reviews” often posted
by the amp’s own manufacturers. (A tactic much of American
business has been accused of in
T
recent years.) “There’s a lot of
ulterior motives in what you see
on the Web,” Bayles said. “And
the chat rooms devoted to guitar
amps are populated with guys
who type more than they play.”
Endorsements are another
issue. Bayles asserts that
Matchless had a policy in its
early days that impacted his Los
Angeles store, which closed in
1995. “If you were in a big band,
you got a free amp. That positioned them to compete with me
for the very customers that you
sell these kinds of products to.”
But the pluses are there.
Aside from good margins when
a new amp starts to sell as a
result of positive word of mouth,
the boutique guitar amp gives
the independent store a unique
product often not found at large
chain retailers. Boutique amps
are rarely discounted, they’re
not subject to simulations by
amp modeling software, and
rival stores often can’t use them
as the basis for price wars.
“It sets us apart from the
big retailers,” Bayles said.
“They’re like McDonald’s in
that they need to know that a
certain product is going to do
a certain amount of volume
before they can make the decision to commit to it. On the
independent level, we have
more latitude.”
“The level of added value
they can bring to a store is
often significant,” Moody said.
“At a time when we see a lot
of conglomerations in this business, it’s accompanied by a lack
of innovation,” Tracey said.
“That’s what the boutique guys
bring to the table.” MI
The Empires Strike Back
he boutique amp phenomenon has not escaped the notice
of larger amp makers. Both Fender and Marshall now offer
hand-assembled, limited-edition products. Fender’s ’57 Twin
Reverb and ’65 Vibroverb reissues list at nearly $3,000.
And in a move that underscores the current influence of
boutique amp makers, Fender recently inked a deal with
Victoria Amplifier, whose eight employees in a small Chicago
suburb will soon begin hand-making and -wiring a line of
Gretsch-branded boutique amps.
“Fender had been trying to pull off a credible boutique
amp of its own for years through its Custom Shop, but I truly
think that they were getting tired of seeing their efforts—
which were often quite good—trashed on the Internet bulletin
boards by people who assume that a large company can’t
make a boutique amp,” said Mark Baier, president of Victoria.
According to Baier, the deal gives Fender the authenticity
of a genuine boutique crafting the amplifiers. He said they’ll
use carbon-composition resistors instead of the cheaper
Asian ones he alleges Fender often uses as part of its mass
manufacturing process.
“It validates the Gretsch amps and the whole concept of
boutique amps, which will help everyone at retail,” he said.
“And it’s a perfect opportunity to grow my company on
Fender’s dime.” —D.D.
T
JULY 2005 | MUSIC INC. | 57
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