jackr wrote:Not a very large selection. Pretty cool idea, but I have my skepticism about it actually being a profitable business. I dont like the fact that they want your SSN. You can rent a car without giving up that info.
Jack, thanks for your comments, both of which are very legitimate and, I feel, deserve a response. First, please bear with me on the selection issue. I have about 140 guitars in inventory and we are rushing to get them all photographed and put up on the site. It's a terribly time consuming process that has to be done between servicing our customers.
Now the more difficult issue, the SSN. I struggled for many, many months with this one when I was designing the business. One of my previous startup efforts was PromiseMark (sold to Experian), which invented the identity theft recovery service and insurance that is now common and offered by all kinds of insurance companies and banks. Having helped many people through the identity theft recovery process, I am very sensitive to the fact that people are very wary about giving out this level of information.
Quite simply, I just couldn't figure out a way around it that wouldn't kill the business. The problem is that this is essentially a credit transaction, in that I'm sending out a multi-thousand dollar instrument, to people I've never met before, and only collecting a hundred bucks or so. It came down to two choices - 1) I needed to take a deposit for the value of the guitar, or 2) I needed to treat it like a credit application and run credit checks and background checks on people. I just didn't think solution #1 was valid, particularly to your point about whether or not the business can be profitable. Many of our customers are business executives who use their Amex cards to transact. On a $2000 deposit charge, the credit card processing fees would be well over $100, just for taking the deposit. I'd have to build that into my prices which would inflate the price too far, in my opinion. So, I had to opt for running the credit and background checks which therefore required the SSN and DL#. I'm very sensitive to your opinion on this matter and it's a very fair criticism of the process. I hope that someday I can find a way to get around that. The reason that you don't have to provide an SSN to rent a car is a) you show up in person and provide a valid DL, b) you return the car in person where damage is identified, and c) the loss rates in that industry are well established so the insurance rates are set and reasonable for that business. Unfortunately, I don't enjoy any of those aspects with Guitar Affair.
I appreciate your comments and the opportunity to respond, and I am delighted that you think it's a cool idea. I realize that privacy issues are strong ones, so while I can't expect that I can convert people from that reasonable view, I hope that you at least understand why I feel the need to do it and that I just didn't decide to collect personal information on a whim.
Regarding the profitability question, that remains to be seen, since we've just launched. As of now, things look pretty good. I'm a fairly seasoned entreprenuer, so I think I have a good shot at making this work. Also, to be clear, the business is NOT a Netflix for guitars. The author of that article embellished a bit. It is a straight forward rental and leasing program where the rental fees are rebated for customers who purchase a guitar. I had some calls from that article from people who thought that they could get a new guitar every month for a flat $50 fee. That business model certainly would NOT be profitable.
Best regards,
Jim Basara
Owner
Guitar Affair
