The More Things Change, The More They Stay The Same

There’s a superb video from violinists Brett Yang and Eddy Chen of TwoSet Violin where the duo takes the bold step of calling out a pair of dubious practices inside the world of string instrument dealers.

Yang and Chen deserve a great deal of credit for speaking out on this topic and while issues run far deeper than their video examines, the topics they focus on are certainly of paramount importance.

Secret Commissions

• It goes both ways. Dealers entice teachers to send students their way but TwoSet points out that sword cuts both ways where teachers of certain reputations and studio size can leverage that “market share” to force commissions from dealers.
• Unfair profit. Dealers raise prices by extreme amounts to increase profit margins and therefore teacher commissions. A teacher will tell the buyer that a price is fair even when they know it isn’t because the result puts more money in their pocket. In an ironic instance, the duo relates an account of a dealer that got hit by two teachers with the same student asking for full commission. As a result, the dealer increased the violin price to pay both what they thought they deserved without cutting into the shop’s profit margin.

There’s only one additional item I would add to their list that buyers should be aware of:

• Second opinion negging. Yang and Chen recommend getting a second and/or third opinion when purchasing an instrument and that is certainly good advice. Having said that, it’s far too common for a dealer to engage in some heavy-duty negging, which is a form of emotional manipulation. The goal is simple: steal the customer at all costs, even if it means fabricating or inflating concerns.

Selling Fake Instruments (Manufactured Provenance)

The duo offers one account where they encountered the practice of manufactured providence. They told a story of a violin one of them owned from a popular living maker. It was discovered that part of their label was cut off, removed, and presumably placed into another instrument to misrepresent its provenance. Real label, wrong instrument.

This is a minefield of rabbit hole conversations but if you want to jump into just how much damage this can cause, you can go all the way back to 2004 in Adaptistration’s archives and begin reading about how the New Jersey Symphony Orchestra got duped by Herbert Axelrod and Dietmar Machold to the tune of $18mm, which is ~$25mm in 2021 when adjusted for inflation.

I’ve written more than a dozen articles on that subject over the years but here are some of the highlights:

• Playing the New Jersey Symphony Like A Fiddle
• A Bombshell In New Jersey
• Violin Turf Wars
• Axelrod Collection Value Determined By Attitude
• Keeping Up With The Jones’ In New Jersey Part 1
• Keeping Up With The Jones’ In New Jersey Part 2
• Keeping Up With The Jones’ In New Jersey Part 3
• Keeping Up With The Jones’ In New Jersey Part 4
• Does The Name Dietmar Machold Ring A Bell?

In 2005, I was a guest on WNYC’s Soundcheck hosted by John Schaefer to have a frank conversation on this topic. But the real kick in the pants in all of this is fast-forward more than 15 years later and TwoSet Violin’s video makes it clear all the issues that came to light in the NJSO fiasco haven’t changed much.

Solutions

Yang and Chen recommend one of the most straightforward solutions in the form of improved transparency: commissions should be disclosed. It’s an excellent start but in the end, a system is only as good as the people involved and I’ve seen too many instances where manufactured transparency is designed to cover even deeper levels of duplicity.

This is exactly the sort of thing that begs for Federal regulation and licensing. Sadly, it doesn’t impact enough people to warrant attention at the scale of fraud that led to the formation of the Consumer Financial Protection Bureau.

I could go on and on about this topic but instead, you should set aside some time to watch Yang and Chen’s video.

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