Mountain Music Exchange owners hope new model of trade-ins, online sales will usher in new era of doing business in EKY

L-R: Kevin Harmon, Tony Mullins, two of three owners of Mountain Music Exchange.

Walking into Mountain Music Exchange in Pikeville, Ky., is a bit jarring. From the outside, the shop on Highway 23 looks nondescript enough. There’s an old radio-record player combo on one side of the lobby, next to a plush leather couch where parents wait on their children receiving music lessons in rooms down the window-lined hallway on the opposite side of the hall.

Keep walking down the hall toward the shop, though, and you’ll step into somewhat of a fantasy music world of the three business-owners’ own design and making. Guitars of all shapes, sizes, colors and acoustics line the walls; drum sets and keyboards are set up in the middle of the large floor space; a wooden stage is positioned on the left side of the room, and atop it sits banjos and mandolins. There’s also a repair shop in the back of the store, along with the online Mountain Music Exchange headquarters, where items for sale are photographed for the online marketplace.

The whole shop is the realization of a vision shared by three men, who also happen to be friends and family: Tony Mullins, Kevin Harmon and Jared Arnett (who is also the director of the Shaping Our Appalachian Region initiative).

Mullins used to operate a recording studio in Pike County, and had partnered with Harmon to convert the back of the studio into retail space in which to buy, sell and trade guitars. Eventually, it became apparent that more space was needed as the trio’s loyal customer base continued to grow along with their vision for an eastern Kentucky music instrument emporium – both in the physical and online sense.

They also had a vision for a music school. They wanted classroom space in which dedicated music teachers could teach children, and a stage where they could perform. They wanted to provide a hangout space for local musicians to come play music together. They wanted to build upon one of the region’s most beloved assets – it’s musical heritage – to fill a void that previously existed: a lack of competitive music stores in eastern Kentucky.

Mullins remembers well how he used to have to fill that void. In high school, he and his friends drove every weekend to Jimmy Brown’s Guitar Emporium in Louisville, Ky., to play with other musicians, or otherwise be surrounded by music.

“We were there when the door opened, we hung out all day, bought Jimmy lunch, just so we’d have a place to hang out,” Mullins said. “That’s what we want to do here. People can come hang out. It’s real friendly, and just a good place. They come and play guitar for hours.”

More than anything, the trio wants their business to become a third space for their community – a place that is providing hang-out space for local musicians and enthusiasts to be outside of work and home and build connections with each other, while it simultaneously turns a profit for them.

Trading instruments has become a cornerstone of their business. This provides customers who don’t always have money to spend with access to high quality instruments. It’s also allowed the owners to set up a formidable online sales presence with the used gear that gets traded in their store.

When a customer trades their old equipment for something new, the owners sell that used gear online, creating a win-win situation for them and the customer, and also pulling new money into the local economy that would otherwise be spent elsewhere. They also offer a bit more for the trade in than other places might offer.

“We give a little more money than an average store would give for the trade in because we know that that’s not [the customer’s] only trade,” Harmon said. “Our town is too small to not have [trades] over and over and over, so we’re trying to build a model that makes them come once a week, not once and buy a guitar and never show up again.”

Harmon said they work a bit harder than the average music store because they are making a little less on each item because of this trading model, but Mullins says it will help build a very loyal customer base, and since the customer experience is at the heart of what the trio wants to create, that is a big piece of the business.

“Once you have that friend instead of just a customer, they’re there forever,” Mullins said.

“Instead of just trying to get customers, we’re gonna try and make them.”

Harmon, Mullins and Arnett hope another big key to their success will be the music lessons they provide. Before moving to the new space on Highway 23, they only had one small room for lessons. Now, they have three one-on-one rooms, and a larger music classroom for group practice.

“Lessons are huge because you teach somebody to play, and they’re in it for life,” Harmon said. “If we can make new customers, we’ll have customers you’ve never had.”

The owners are currently working with one dedicated teacher who’s been partnering with them for at least 10 years while they worked at another music store. This teacher has loyal students who drive from the surrounding counties to be in his lessons. The owners would love to find at least two more teachers who are just as dedicated, Harmon said.

“This is all new [for us], so this is exciting,” Harmon said. “We’ve got the space, we’ve got the room, and we’ve got some good teachers. . . . [We’ve just got to] get the kids away from a Xbox long enough to experience something else.”

In addition to the one-on-one lessons, Harmon said he and the other owners hope to help students form bands so they can play with other musicians who are their age, which will increase the likelihood of them remaining musicians.

“You take a lesson, and you’re with somebody, and kids get bored. They just want something more than just sitting there,” Harmon said. “When a musician gets that feeling, and they’re like, ‘I’m playing in a band,’ they’re a musicians for life.”

The lessons learned by the students won’t just stay in the rehearsal rooms, Harmon said. The stage in the retail section of the store, currently covered in banjos and mandolins, can easily be cleared to make room for performance space for the students. They want to give kids that space to build their confidence as musicians, but, like any good business person, they also hope it will build their customer base.

“Once a kid plays ‘Crazy Train’ in front of his parents, and his parents are like, ‘My kid’s a rock star,’ [they’ll] want the best guitar in the store,” Harmon said.

Embracing a new Business Model

Music stores are not high-margin businesses, especially in a place like eastern Kentucky where most people don’t have much extra money to spend on instruments. Small music stores often struggle because they either won’t embrace the trade-in model, or if they do, they botch the trades, angering customers and preventing them from becoming repeat buyers or traders.

Small stores also suffer when they only sell instruments at full price when customers can buy online for a lot cheaper.

“It’s a different time now,” Harmon says. “You have to beat their price, and you have to give [customers] something better.”

That’s exactly what Harmon, Mullins and Arnett are trying to do at Mountain Music Exchange – beat online prices, accept fair trades and give their customers something better: an open-door environment where they can hang out all day if they want, higher-than-normal prices for trade-ins, and cheaper-than-normal online re-sales. Not to mention the student lessons with a built-in recital space.

It’s a new model they are trying to perfect in Pikeville before they try to expand to other places, Harmon said. There is currently only one music store from Pikeville to Kingsport, Tenn., and Mountain Music Exchange already has a large customer base in Ashland, Ky., and Huntington, W.Va., that drive consistently to Pikeville to hang out, or buy, sell or trade at the Exchange.

The trio is already courting other music stores in those places, as well as in Norton, Va., that are smaller, and that perhaps aren’t making as much profit, so they can potentially take over those stores someday, spreading their music store model to Norton or Ashland within five years.

With a solid goal towards which to reach, the trio is banking all their hopes and dreams for their business on their newly developed and implemented model. It’s a risk, but it’s one in which Harmon, Mullins and Arnett believe.

“When I first started, stores were making a fortune. Well, it’s not like that now. The Internet changed everything, and if you don’t change with that, there’s nothing you can do but fade away,” Harmon said. “But, if you do it right, I think that there’s potential to succeed.