LOS ANGELES -- Fender's curvy Stratocasters, Telecasters and Jazz Basses have been must-have features on guitar shop walls for decades.
Music retailers, including mom-and-pop shops and big national chains such as Guitar Center, have been among the last bastion of businesses to survive online competition. Consumers like to try before they buy.
But just before Christmas, Fender Musical Instruments began selling directly to buyers on its website.
Retailers, already hurt by e-commerce sites such as Amazon and eBay, worry that Fender's online sales could increase competition and even offer lower prices. They also are concerned that other manufacturers such as Gibson Guitar, C.F. Martin & Co. and Ibanez Guitars may pursue similar tactics.
"It's hard to not call it a bit of a betrayal," said Gabriel O'Brien, sales manager at Larry's Music Center in Wooster, Ohio, which dropped Fender as a supplier a year ago, partly because it anticipated Fender would start selling its guitar lines through its site. "I feel it undercuts dealers whose backs these brands were built on."
Some shop owners plan to buy less merchandise from the manufacturer, said retailers, many of whom did not want to be named for fear that speaking publicly could damage relations with Fender.
Some are considering not re-signing as Fender dealers.
For its part, Fender said the introduction of sales through its website would benefit retailers, still their most important partners for getting Strats and Telecasters in the hands of musicians.
The site gives shoppers an option to add Fender guitars to their "carts," but also tells musicians the local dealer where they can try out and buy them. The company also does not undercut prices that can be found at retailers.
Richard McDonald, an executive vice president at Fender, said selling directly to customers will help make musicians more loyal to the brand and help increase sales at shops.
"If this works, their businesses will grow," he said of retailers. "This strategy is about elevating the brand and getting closer to customers."
Not all retailers believe that.
They say if direct sales catch on, players may try out new instruments in physical stores and then order them online from manufacturers, the way many people purchase items such as personal electronics on Amazon after visiting a Best Buy. Consumers' behavior has changed so much that they now order eyeglasses online, through such firms as Warby Parker in New York, or even electric cars directly from Tesla.
Store owners have seen Fender's direct sales efforts coming for months.
The company unveiled the plans in August at a meeting with dozens of top dealers at its factory. Many were caught off guard, said dealers who attended the meeting. Some left the meeting in anger.
By selling directly to shoppers, Fender is catching up to other industries including personal technology and sporting goods that have been selling online through manufacturer websites for years.
Consumers expect to be able to buy products from brands themselves, often at cheaper rates, retail experts said. Direct-to-consumer sales work best for shoppers in areas with limited access to retailers or who know what they want but can't find it at a nearby store.
"We've seen a much greater need for the brands to communicate with the consumer," said Marshal Cohen, a retail analyst at NPD Group. "I can do a much better job of telling you what I want you to know about my product than I can if I rely on someone else."
But the musical instruments industry is different, experts, executives and retailers said. People tend to want to play the instrument they're interested in before spending more than $1,000 on it.
Dealers do more than just sell equipment, too. They provide lessons and repairs that manufacturers don't offer.
Buying from a guitar shop can be a personal experience that the Internet can't replicate, said Keith Brawley, vice president of sales for popular acoustic instrument maker Taylor Guitars.
"Musicians often have a relationship with their dealer like some people have with their doctor," said Brawley, who added that he understands why many retailers are unhappy. "I think it goes to the question of, 'Do dealers add value?' And I think the answer is yes, they do. Dealers will help a consumer end up with a better choice."
Even the big store chains are apparently concerned.
Guitar Center, the largest seller of musical instruments, declined to comment. But a person familiar with Guitar Center's strategy, who requested anonymity because of the sensitivity of the topic, said executives fear direct sales by manufacturers could hurt revenue at its 260 stores and its online retailer Musician's Friend.
Industrywide, guitar sales have been mixed, thanks to a robust supply of used instruments and shifting music tastes.
According to data from Music Trades magazine, U.S. retail sales of acoustic and electric guitars accounted for $1.07 billion in 2013, the latest year for which figures are available. That was up 7 percent from the previous year. However, total shipments declined slightly.
Business on 01/29/2015