Different tune in guitar sales

Three years ago, Music Exchange owner Ed Johnson took the bold step of adjusting his business model to include more online sales.

Big mistake, according to many guitar-playing purists. After all, the prevailing philosophy in the music-retail business was that musicians were a "try before you buy" group: You don't purchase instruments online because you need to give them a test drive before laying down the cash.

Turns out, Johnson struck just the right note with his decision. These days, 20 percent of the store's revenue comes from purchases off its Web site, www.comusicx.com, and its postings on eBay.

"I can put something on eBay and have the money within a week," Johnson said. "EBay opens us up to the world."

This wasn't the business model Johnson envisioned when he bought the store in 2005.

The Music Exchange was known locally for the quality of its used inventory of electric guitars and amplifiers. But as more localmusicians sold their instruments on eBay, the store saw a decline in its used inventory.

So if you can't beat 'em, join 'em.

"We've sold guitars to people in Australia, England, Russia and Belgium," said Music Exchange webmaster Chuck Snow. "It's been pretty successful."

That's not to say Music Exchange isn't expanding in other areas. A Fender dealer, the store is carrying more high-end guitars from the Fender Custom Shop, as well as PRS guitars and the boutique amp line by Buddha.

"I have a percentage of loyal customers interested in the high-end stuff," Johnson said, though he noted that most in-store sales consist of low-priced guitars to beginners.

The store also generates revenue through consignments, guitar repairs and brokering to dealers.

Several months ago, Johnson paid a Colorado Springs resident $19,400 for his 1964 Fender Stratocaster, then resold it for $23,500 to a dealer with an A-list clientele of professional musicians and collectors.

Though business has dropped off slightly because of the struggling economy, Johnson said he's hopeful that Music Exchange's reputation will see it through.

In a show of confidence, on June 16 Music Exchange moved one door down from its old location at 305 E. Pikes Peak Ave. into renovated space that has multicolored walls, soft lighting and an industrial vibe.

And though Johnson and his staff realize that online sales have helped the business, they still aren't sold on the Web as being the best way to buy a guitar.

"EBay has turned art into a commodity," said salesman and guitar repairman Kevin Rodela, who owns 30 guitars. "A lot of people are missing out on actually holding the guitar in their hands and getting to know it before buying it."

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CONTACT THE WRITER: 636-0367 or mark.barna@gazette.com.