Elderly Instruments

In 1969, New York City native Stan Werbin moved to Ann Arbor, Michigan to attend graduate school. He took his banjo and guitar with him and immediately developed his interest in folk music. Werbin participated in a lively local music scene that included collaborations and "open mic nights" at local venues. It was through those experiences that Werbin developed his appreciation for the variety of instruments the musicians were playing, as well as the various types of music that fall under the folk music genre.

When Werbin finished graduate school, he looked for business opportunities and decided to use his knowledge of used guitars. He searched for vintage instruments to buy at low prices, particularly those made before World War II; Werbin then sold the instruments after repairing and restoring them. Although he initially tried to open his business in Ann Arbor, Werbin eventually decided to avoid operating there due to the high number of other musical instrument dealers. In 1972, Werbin and Sharon McInturff, his college friend and business partner, leased retail space in East Lansing, Michigan for $60 a month in a building that also housed the Michigan Youth Politics Institute, a non-profit organization dedicated to encouraging young adults to vote. With $500 of capital, the two began advertising locally. Werbin and McInturff took the "Elderly" name from a 1971 classified ad they saw, in which the seller marketed his Gibson Les Paul as a "nice, elderly instrument".

Elderly Instruments expanded during the following years. Shortly after the 1972 United States Presidential election, the Michigan Youth Politics Institute moved out of the space across the hall, and Elderly took over the entire basement of the building. In 1975, it expanded into the mail order business. By 1982, Elderly Instruments had about 25 employees but little available space, and so in the following year the owners bought an Independent Order of Odd Fellows building in Lansing, Michigan. After it was renovated for retail use, the company moved into it in January 1984, and in 1986 Werbin bought out McInturff to become the sole owner. In 1994, Elderly expanded again by buying adjacent building space that had once been a post office and a National Cash Register Company building. Around the same time, it began taking merchandise orders over its new web site. The company does not, however, sell merchandise through online auction sites such as eBay, unlike many other independent musical instrument retailers. Werbin notes that entering the Internet business was not much of a challenge for Elderly, as the staff was already experienced at taking and shipping orders for customers throughout the world. He also notes that, with its mail order and Internet business accounting for 65–70 percent of its total revenue, Elderly would have experienced limited growth in Lansing had it not expanded into those markets. The company operates in around 35,000 ft2 (3,300 m2) of space, and is one of the largest vintage instruments dealers in the United States.

Elderly Instruments has become known due to its attention to folk music niche markets (Eddie Collins of Bluegrass Now remarked "The roots of what today has become perhaps the world's most well known music store for acoustic instruments can be traced directly to the folk music boom of the 1960s."), its reputation as a repair shop, its selection of vintage instruments, and its position as a major Martin guitar dealer.

In May 2010, an Elderly manager told the publication TWICE that economic recession had affected the business and forced layoffs of part-time employees, and that Elderly's being in Michigan worsened the effects. He noted that as the consumer electronics business began to recover, the musical instrument business followed.

Marketing and business model

In addition to a printed catalog, Elderly sends lists of available vintage instruments to subscribers in the U.S. and several other countries by mail and e-mail. Elderly purchases some of its used instruments from customers and then offers them for sale, while others are offered on consignment. Although larger retailers dominate the Internet market share (Elderly grossed $12 million in 1999, larger retail outlets such as Guitar Center grossed $297 million), Elderly attempts to serve vertical markets by offering specialized or rare items on its web site, such as left-handed guitars and instrument-specific books.

Werbin notes that while discounting products by 40 percent set his business apart from the local competition in the 1970s, outlets such as Guitar Center now also offer discounts. In response to questions about his strategy for competing with larger retailers such as Guitar Center and American Musical Supply, which also operate mail order and Internet businesses, Werbin states that he has learned to operate on small margins to stay competitive: "The mom-and-pop businesses that have survived have learned to operate on narrow margins."

Top Small Business of the Year

Elderly was named America's Top Small Business 2023 by the US Chamber of Commerce from a field of over 15,000 applicants. "Elderly Instruments... played a vital role in the revitalization of Old Town Lansing when they expanded their brick-and-mortar footprint, breathing new life into the district. They sponsor and participate in numerous community music festivals, camps, and concerts that add to the vibrancy of Old Town Lansing and increase tourism to the state’s capital."

Gibson Guitar Corporation lawsuit

In June 2005, Gibson Guitar Corporation filed a cease and desist order and an accompanying lawsuit against Elderly Instruments. The complaint alleged that Elderly was selling a banjo on its web site marketed as a "Gibson copy" and that the phrase constituted a trademark infringement. Despite Elderly's claim of having addressed the issue by changing the phrase first to "Famous Maker Copy" and then to "Classic Bluegrass Banjo Copy", Gibson persisted with the complaint and asked for unspecified damages. Gibson later issued a press release stating that the lawsuit had been settled.

In the same year, Gibson severed its contract with Elderly as a retailer of Gibson products, citing a contract stipulation that retailers should not carry any competing brands of banjos and mandolins. Elderly had been one of nine retailers selling the specialized Gibson Bluegrass line of banjos and mandolins, although it also carried other brands. Werbin attempted to rectify the situation by offering a dedicated area of the store for Gibson products, but Gibson proceeded with the action. As a result, Elderly does not offer new Gibson products for sale. The incident was well-publicized in the media and discussed at length in consumer forums.