Teacher 'commissions'

March 25, 2021, 8:15 AM · Wonder what happens when one of those violin shops gets a tax audit and the IRS finds out they've written off the kickbacks as business expenses.

March 25, 2021, 9:44 AM · I suppose it is no problem if the teacher recorded it as taxable income.

Edited: March 25, 2021, 12:44 PM · Well the key to not getting audited is having high enough revenue, so hopefully the shops can avoid that by making a lot of money in the first place. I believe we call this a "virtuous cycle".

Edited: March 25, 2021, 1:55 PM · Stephen, that's my point: Likely they didn't. One unethical deed leads to another.

March 25, 2021, 4:05 PM · Supposedly the first piece of advice offered to call girls starting out-- whatever you are being paid to do to your clients, make sure you never try it on the IRS!

Edited: March 25, 2021, 4:59 PM · The feds went after college athletic coaches for taking bribes in Operation Varsity Blues. This has a few parallels except the money might not be as much per student.

March 25, 2021, 5:37 PM · Depends, I suppose. If the next Midori finds herself getting a patron to buy a Strad, that's some pretty nice change flowing to whoever refers her to the right dealer.

Edited: March 26, 2021, 3:55 AM · There have been some criminal complaints, and some lawsuits back and forth involving the practice. I recall one instance in which parents of several students sued a well-known teacher, but I can no longer find any reference to this lawsuit on the web. It seems (to me) to have mysteriously disappeared.

I think it was wise of Two-Set not to mention any names, even though they have probably heard who some of the people involved in this are or were. Making specific accusations has gotten some people in trouble in the past.

https://dailynorthwestern.com/2011/01/16/campus/academic/local-violin-maker-accuses-nu-profs-of-kickback-scheme/

Edited: March 26, 2021, 6:24 AM · Maybe Two-Set should stick to making viola jokes.

I really hope not too many young students take this at face value. While I'm sure the guys aren't making these stories up, giving them prominent unqualified publicity in this way smacks of the kind of alarmist rumour-mongering that results in paranoia and QAnon-style conspiracy theories. Call me naive but I don't believe many violin teachers are into mafia-style extortion and exploitation of their students.

Violin dealers, on the other hand...

Edited: March 26, 2021, 9:48 AM · Steve, do you think that all teachers are paragons of virtue? Are you aware of all the teacher-student sex scandals which have occurred, some of which have received broad publicity, and others which have not?

March 26, 2021, 10:06 AM · Fritz Reuter seems to have single-handedly started this rumor train, which refuses to die even though the man himself has passed away (and with that, all of his website rants).

Do some teachers take commissions? Probably. Do some shops offer commissions? Probably. But many shops have an explicit written policy that they do NOT offer teacher commissions. So does it occur commonly? Almost certainly not.

Some pros (many of whom probably teach as well) deal on the side. In that capacity, I would expect them to take a commission, but in that case it should be clear that they are acting in their dealing capacity.

March 26, 2021, 10:12 AM · David, I cling to the forlorn belief that 99% of the human race are essentially decent, even music teachers.

What's lacking in Two-set's presentation is any sense of proportion. Yes, the danger exists but without any actual evidence in support I suspect the risk is too low to worry us unduly, particularly when there's little or nothing we can do about it.

March 26, 2021, 10:15 AM · A particular shop in my "area" has some publicly posted verbiage about how kickbacks and commissions can add up to "six hundred percent" or increase instrument price by "2 to 10 times" and claimed to be the only shop in the area? state? country? at the time this was written, which may have been a number of years ago? to not participate.

I may be showing my ignorance here but had "commissions" really been distributed historically that were more than the instrument's price or value? Or dealers taking a "cut" (more like a pound of flesh, looks like) of the inflated price too? For a "reasonable" 10% type of commission, that is a lot of unaccounted-for excess in the 2-10x number. Does anyone remember when [a federal agency] came down HARD on [a particular professional association] on [things related to pricing] - how did that become such a big deal (think instrument prices and remove one or two or more zeroes from the immediate left of the decimal point) over this?

March 26, 2021, 10:24 AM · I don't find it hard to believe that there would be teachers doing this stuff, even if I've never dealt with it directly. The amount of politics and rivalry in teaching, especially at the level where the students start getting good and competitive, and especially especially at the university level, is kind of astounding sometimes, but also not totally surprising.

Per David's post, I was immediately wondering when I saw the TwoSet video, whether they might tackle the much thornier issue of sexual harassment in its various forms in the teaching profession.

Teachers are neither sinners nor saints by virtue of them becoming teachers, even if teaching is noble.

March 26, 2021, 10:41 AM · Just had a teacher quite rudely ask for a kickback claiming to be poor, I said no way, like he's actually poorer than me, I think not.

Edited: March 26, 2021, 10:58 AM · "Does anyone remember when [a federal agency] came down HARD on [a particular professional association] on [things related to pricing] - how did that become such a big deal (think instrument prices and remove one or two or more zeroes from the immediate left of the decimal point) over this?"

An example in the U.S. are pharmaceutical kickbacks to physicians. That wasn't always regulated until the past decade. Today, the feds require doctors to publicly disclose gifts from drug companies, even if it's just a $10 coffee mug. They can still take gifts, but they have to disclose them. There are obvious reasons for feds coming down on this.

TwoSet raises a point about how it's really about the trust between a teacher and student being violated. Some teachers don't disclose that they are receiving commissions. They also mention teachers retaliating against a student when he/she didn't purchase a violin from a shop that the teacher had a deal with.

Even if some teachers provide a beneficial service, the incentives are still there. For example, in school admissions (which are not blind auditions), it's possible a teacher under financial stress will prefer wealthier students whom they can convince to buy expensive violins, and take them over poorer students of the same talent who cannot afford to buy a new violin during school. It's easy to see based on their financial aid applications or scholarship requests, or googling what their parents do.

March 26, 2021, 11:29 AM · Frieda - the proprietor of that shop was quick to bash other dealers/shops, even by name, but I had dealt with so-and-so and whoevers before and did not find anything amiss (or was blissfully ignorant). I got the impression that they were passionate and proud of taking a stand for integrity and also that they seemed to be trying too hard because I wasn't familiar with if they were blowing things out of proportion or not.

I didn't mean the pharma example (didn't know it, thanks for the education!) but something else slightly closer to interests of people on this forum. I had an exchange on another forum pointing out how an extreme reading of [the case language] could be carried *much* too far, so as to prevent growth and development in the profession that was being discussed, and thus I personally was going to set my own behavior boundaries. (I'm being vague on purpose.)

March 26, 2021, 11:35 AM · I'll tell a quick story or two, and then leave this alone for a bit.

I've been in the fiddle trade for quite a long time. I have been offered "commissions", and have also been solicited. Sometimes, a student would want to try a violin, and I would decline, because I knew who the teacher was, and already knew that nothing could possibly come of it (other than my shipping and insurance expenses, along with the instrument being down-played or trashed by the teacher), because I don't pay teacher commissions.

My first awareness of the practice came when I was a rather serious violin student. My parents bought me a pretty expensive violin. The dealer said, "Oh, you're a student of so-and-so? You get a discount". My immediate reaction was, "Oh, what a swell guy, furnishing a discount to students of this coveted teacher".

Later, I came to be employed in this same violin shop, and learned that teacher commissions (kickbacks?) were built into the pricing, and that the reason I qualified for a discount was that my teacher did not accept these commissions, instructing instead that the commission be taken off the price of the fiddle.

I came to admire that teacher much more after learning that. Not everything needs to be based on money-grubbing, and I continue to hope that there will people who aspire to "higher purposes".

March 26, 2021, 12:00 PM · David - wouldn't that imply that the practice is more dealer-driven than teacher-driven?

Edited: March 26, 2021, 12:23 PM · I can easily see how things like sales kickbacks can become a tolerated aspect of a profession like violin teaching. It's not that violin teachers, as individuals, are especially given to breaches of ethics. But it's a profession where there might be more opportunities to take advantage of people in various ways. Nobody's watching you in your studio. Nobody's regulating business practices. Violin prices are mysterious and quality is subjective. Students (and their parents) may be unwilling to challenge their teachers. Kickbacks can be rationalized as a means of developing a business relationship with a dealer that conveys benefit to the student, and so on. And after a few people do it, or after one person gets away with it once or twice, then objectively intolerable practices somehow become become normalized.

March 26, 2021, 12:38 PM · It makes far more sense to me that it should be the dealer who offers inducement rather than the teacher who demands it. You might argue it amounts to the same in the end, but the way Two-set describe it is as if teachers are operating a kind of protection racket - pay up or we'll put you out of business.

March 26, 2021, 1:21 PM · There is another shop that some of my students rent and eventually buy from and where I get some work done on my own instruments, and I also transport their instruments when it works out for me to do so. On one such trip, I helped some random people try violins (pre-pandemic of course) while the proprietor was dealing with my instruments or other clients or whatever else that was uninterruptable. It was purely out of boredom and innate teacher-ness. They had walked in off the street ready to buy, did so, and I was offered a commission for "making that sale" as well as a job! (I don't see myself as being able to do commission sales; that was simply a case of being in the right place at the right time.)

That told me that the shop participates in commissions, but is that because I'm a teacher or because commissions are common in sales? It would be almost like buying a car at the local dealership, you expect that your salesperson has incentives, but your driving instructor isn't involved in that. Or when my real estate agent recommends an attorney or inspector, or my doctor recommends a specialist, or preferred social media influencer recommends a product, how do I know if a referral fee is involved in that or how it affects the recommendation? I don't, so I pretty much have to do independent research as a consumer and teach students to do the same. (Well, I assume that the blogger or YouTuber is compensated, unless they say otherwise, and perhaps the first two are more regulated but I'm not familiar.)

March 26, 2021, 1:53 PM · Steve, I think it's a chicken-and-egg question. There's a co-evolution of a kickback arrangement. Probably there is a whole spectrum of power dynamics that depends on the specific locality and people involved.

Edited: March 26, 2021, 2:21 PM · Steve wrote:
" David - wouldn't that imply that the practice is more dealer-driven than teacher-driven?"

Steve, doesn't it take two to tango?

The practice started well before my time, so I don't have any personal experience with which side should bear the bulk of the blame.

What I am fairly certain of is that well-positioned teachers can exert a major influence over a student's future opportunities, and pretty much make or break their career, if they wish. Dealers, not so much.

Edited: March 26, 2021, 6:11 PM · I once chatted with a local maker, who (if he is to be believed) had placed a cello with a player very famous for some ensemble affiliation. He had a huge collection, but was allegedly gushing with enthusiasm over this new axe. Until it came time to discuss the invoice. Apparently, he was used to getting free instruments with the notion that he could then recommend that maker to his many students.

Not quite the same sleaze as the hidden commissions on makers living and dead, but lots of potential for conflict of interest. Some makers, of course, use this as a helpful form of marketing.

Another similar second-hand tale (from a luthier about a famous violinist in our town) said that this one person had a long Strad model and LOVED it. Which is kind of unusual, if critics are to be believed. Anyway, there was a local maker who made the player an decent copy of it, which was probably useful for bad-weather gigs. And wouldn't you know, there ended up being quite a number of this person's students urged to get the same thing from him. Apparently, this maker uses good instruments owned by teachers as models (which helps the rest of his business, to be sure), and somehow orders follow from students who are urged to sound just like their teachers.

Now, unless this teacher were being paid directly and not just in the form of a discounted copy for personal use, there is no obvious crime. But it does illustrate how power can shift to one side or another of all these transactions. You've got three parties at work, and the students are the ones with the least information.

Edited: March 27, 2021, 2:05 AM · Yes Stephen, as a student the violin marketplace used to terrify me but now it just baffles and amazes me. There can't be many "commodities" where "consumers" are confronted with dozens of (to them) practically identical examples, some of them worth hundreds of quid and others hundreds of thousands. And you can't even expect how much they're "worth" to be strongly correlated with how well they sound.

btw, my favourite old (1810) violin is loosely based on the "long Strad" design and I gather shares some of its sonic characteristics. I love the sound it makes although it probably wouldn't suit a virtuoso with very different requirements and priorities.

March 27, 2021, 12:44 PM · I'm curious how large commissions normally are. And if there are commissions for bows as well as violins. Given that almost all students are buying workshop violins, even if the commission is 10%, it's probably something like $100 - $300 for a very few number of sales per teacher. (Most teachers will have students on fractionals rent, and only one or two students are likely to be upgrading to a full-size each year within the studio.) That doesn't seem like enough money for a teacher to consider it worth compromising their ethics.

Students purchasing at the high end -- i.e. who are buying five or six-figure antiques -- are in a different category, obviously, but how many teachers routinely deal with such purchases?

When I was a high schooler, my teacher helped me search for both a violin and a bow -- especially the bow, which I eventually bought from his recommended maker, with whom he helped negotiate a discount. (I purchased a Douglas Raguse.)

Edited: March 27, 2021, 2:47 PM · Lydia's argument that the stakes are too small to bother with is an interesting one. Should you drive your personal vehicle instead of a motor pool vehicle, because you can get personal mileage back and it's more than gas money? Take the meals per-diem and then bring along a loaf of bread and a jar of peanut butter on your conference trip? When I hear or read about these kinds of things going on I just wonder how so much effort can be put in for such little return. The flip side of that is that if I do my job fairly well, I might get a 4% raise in a given year. It's not beyond the scope of imagination to come up with 4% of a professional salary by means of various micro-embezzlement schemes. The problem is then you have to do them every year.

March 27, 2021, 3:32 PM · A long time ago when I was a student of Ivan Galamian, I bought a Pajeot violin bow from Moennig. The offering price was $1800 and I asked for a "professional" discount and they agreed and the price went down $1500. Galamian seemed to be very P'oed at my next lesson when he asked about my bow purchase. My conclusion was obvious.

After that when I recommended a dealer to a student I always told the dealer that I did not accept commissions and I would not recommend them to a student unless they gave any "discount" to the student.

I remember one incident in particular. A minor dealer sold a $200 violin bow to a student and wanted to give me $20. I refused but he later sent me a $20 bill in a letter. I gave the $20 to the student and never recommended this particular dealer to any other student.

March 28, 2021, 3:38 AM · The most common explanation I've heard from shops which pay these commissions has been, "It's the only way we can compete with all the other shops that do it".

March 28, 2021, 10:07 AM · Bruce,

How common was this at the places you taught, and do you think a faculty code of conduct to prevent it would have any teeth?

Edited: March 28, 2021, 12:21 PM · At the very least, schools would be wise to implement a code of conduct. How well the school enforces the policy is another issue. There are stories of schools looking the other way where star faculty are concerned (in various other matters), despite the rules.

It's in the institutional setting where the stakes are higher. Recall the thread about advanced students needing a $10,000+ violin. At the conservatory level, there's a higher chance students will be shopping for an instrument in the five- or six figure range. The fact that the earnings can be small doesn't mean that a student's education won't be disrupted if they get on the teacher's bad side. Students choose a school because they are accepted by a particular teacher and they can't easily switch studios. Degrees and careers can be affected.

Even if $1,000 is pocket change to an established professor, it is a lot of money to be earning off of their student who on average will be making less than $25,000 out of college (pre-tax), plus student loans.

March 28, 2021, 12:27 PM · Not just the $1,000-- but being told to narrow one's search to something that might not be best at the price.

March 28, 2021, 12:30 PM · Stephen,
At Baylor University every faculty member is required to fill out a conflict of interest statement which include payments from outside sources. I thought at the time I started teaching here that it is an excellent policy.

March 28, 2021, 12:33 PM · Last year my daughter had to switch to a full size violin. Her teacher recommend a violin store I didn't know about and said that she takes all her students there to pick violins when they need to upgrade. I checked online to find glowing reviews for a store several generations old serving a number of professional musicians as well amatures. I was happy with the store recommendation, and decided to go and check it out. The teacher offered to meet us at the store and help us choose a violin. I was willing to pay for the generous offer, but she didn't want to accept payment from me.

I called the store to schedule appointment. They asked about our budget so I told them. Upon arrival, we were walked into a room with about a dozen violins layed on a table all within our price range. The teacher was already there and after a brief chat started playing the violins for us in order starting from the least expensive. The ones my daughter liked, she put aside and had her play them herself. Then we proceeded with the approved few until my daughter set her mind on one of them. During all that time, the teacher was very helpful and not pushy at all. It seemed to me that she was genuinely interested to help us find the best sounding violin in our price range that my daughter would like and enjoy playing for years to come. They both agreed to like a violin which wasn't the most expensive.
The same procedure repeated with bows.
After we were done, I went to pay and accidentally overhead that the teacher was getting a commission.

Last thing worth mentioning is that I've checked before hand the online prices of the different student outfits, and I ended up paying the same price stated on the store's website which matched the labels attached on the items we purchased at the physical store.

Here's my perspective on this.

First, I as a parent was offered a professional help in choosing a violin for my child. Very valuable service in my opinion worthy of being financially rewarded. Second, the store was able to make a sale helping them stay in business while also being able to employ people. Third, a teacher gets financially rewarded for an excellent service.

It looks to me that in this particular case everyone got something out of the transaction.
However, I understand how things can get out of control when it comes to instruments worth tens of thousands of dollars and more. We're all humans, and greed is in our nature.

Edited: March 28, 2021, 2:32 PM · Ted, I think it's great that you took advantage of professional help. However, I tend to think that this help would be more in the interest of you and your child if YOU paid the teacher for his/her opinions and professional help, rather than the dealer paying the teacher.

One thing I noticed from your post is that the teacher recommended only one shop, and that this shop just happens to pay teacher commissions. But that might just be coincidence.

March 28, 2021, 2:11 PM · At the conservatory level, I can imagine that the skimming might be nontrivial. The instrument prices go up significantly, and more importantly, each studio teacher churns through more students -- most of the students are likely to purchase both a professional violin and a bow before they graduate. The commission on $50k in purchases will be very different than the commission on $3k near-commodity workshop violins.

Edited: March 28, 2021, 10:59 PM · Frieda wrote, "At the very least, schools would be wise to implement a code of conduct." As Bruce explained quite well, we already have very strict conflict-of-interest policies. I need permission from my dean to accept income for anything related to my professional work. I'm a chemist, so if I play a jazz piano gig, I don't have to report that. But if I tutored students for a fee, I'd definitely have to report that, and I can assure you that it would be forbidden. Consulting (which is the broad category for what is going on with these sales commissions) is likewise scrutinized closely. There are certain things they tend to ignore like offers from publishers to review a book chapter for a fee, etc. But technically I'm supposed to report that. (I don't do chapter reviews, however, because that kind of work bores me and I don't have time.)

Ted's story has a heartwarming glow, but as David pointed out, in the end his choices of new violins for his daughter were limited by having been directed to a particular shop. You can argue that the outcome was good and everyone's happy, but the conflict of interest should be as clear as crystal too.

March 29, 2021, 12:03 AM · As David noted, it would have been better for you (Ted) to pay the teacher and for the shop to give you a discount for not paying a commission.

I'm glad you're happy with the result, but you also don't know whether you might have been happier had you checked out all the local stores and taken the best out of everything. I'm also concerned that it sounds like you went into the shop and simply bought something without having taken multiple violins home on trial.

Edited: March 29, 2021, 1:11 PM · TwoSet are advanced players with $X0,000 instruments, and their friends presumably are talking about instruments in that price range and above (they play on Widenhouse instruments, ATM, wonder if Ray Chen got a commission for the referral?).

For instruments below $2000, it's one thing to talk about commissions. After all, whether it's 10% of the sale price of a $1500 outfit, or paying a teacher for the lesson time it takes to pick one, it kind of all washes out anyway.

For bows and instruments in the $X0,000 range, such things, IMO have to be disclosed up front to the student, if they do exist. While I think Brett and Eddy could have used more nuance, having it be something that potential kids of upper-middle-class and wealthy parents are at least aware of is, I think, valuable. This is not to say you should throw the baby out with the bathwater and only buy from instrument makers who aren't in your city to avoid potential commissions (I did, but it's coincidental), but maybe it will give people the confidence to at least ask.

Edited: March 30, 2021, 1:05 PM · James, distance is no barrier to paying/receiving commissions.

As to your claim that "For instruments below $2000, it's one thing to talk about commissions. After all, whether it's 10% of the sale price of a $1500 outfit, or paying a teacher for the lesson time it takes to pick one, it kind of all washes out anyway",
I will assert that it doesn't. Students will usually assume that when they or their parents hire a teacher, it is implicit that the teacher will always be acting in the student's best interest. Teachers can, and do sometimes have other priorities.

A ten percent commission on a student's purchase of even a $1500 outfit is enough to buy a teacher a nice restaurant dinner (at least around where I live), and who doesn't enjoy that once in a while?

Edited: April 3, 2021, 3:38 AM · I'll pitch in with two stories of my own.

When I had just started making cases and was in my early 20s (with still a lot to learn), I still had contact with my former violin teacher who really had a lot of students. So one day I showed her my cases in the hopes that she might help me sell them. I offered her a commission, to which she replied, oh no, give the students a discount instead. I never offered a commission to a teacher again, recognizing the moral value of her stance.

The second time was when I helping an elderly retired string teacher with her finances, since she was a friend of the family. I kept seeing small checks coming in from a violin shop, even though she was no longer teaching. It turns out that the violin shop was (still) sending her (unsolicited) monetary thank-yous when a former student upgraded their instrument or bow.

So there are many facets to this issue.

April 3, 2021, 9:55 AM · I first thought about this issue 25 years ago after I had moved to a new area that had reasonable access to a number of violin dealers and started giving lessons there. I consider the practice of teacher commissions abhorrent but still I wanted to direct my students to what I thought would give them the best chance for decent instruments.

Since most of my students were beginners I directed them for their rentals to the shop I dealt with for my own purchases and I went with them to help select the specific instrument and bow I thought would serve them best. I never charged the students for my time - in fact I usually drove student and parent (even paying the bridge toll). I felt getting their hands on the best possible instrument at the best price would give ME the best chance for successful teaching and them the best chance for a good and lasting experience.

Thinking about this only now, however, I wonder if consecutive and subsequent discounts the dealer gave me on my own purchases over the years (when I requested them) might have been (at least partially) the result of this practice.

April 3, 2021, 8:34 PM · "Relationship" discounts are very different from commissions.

April 3, 2021, 9:12 PM · I think if there's a quid pro quo for recommending students to the shop or to particular instruments therein, then it's problematic. "We'll give you a discount because we like you. We like you because you send your students here to buy stuff." It's still a little sticky.

April 3, 2021, 10:39 PM · As a novice violin student and buyer I might feel a bit coerced and overcharged if I knew that my teacher was making commissions from my purchases. On the other hand, I have gladly compensated my teacher to accompany me to the dealer. He was very helpful and did not ask to be paid. But it was I who insisted as I felt it was well earned.

April 11, 2021, 3:23 PM · In my opinion, the problem here is about honesty and trust, not commissions.

When I lived in London I regularly went with students and parents to a number of very well known and established London violin dealers. I told the parents up-front that I would be receiving a commission of 15% from the dealer for my time and expertise. Generally the parents, the student and I would go in their chauffeur driven car. The chauffeur (and in one case, the bodyguard as well) would wait outside till we were done. Most appointments would last around four hours. I would help them find the best sounding instrument that suited them. This would result in one or more violins being taken on approval.

All parties knew in advance what was happening. All parties (including the IRD) were happy with the arrangement. These familys were very wealthy, time poor, and needed someone they trusted to guide them though the process. I do not think there is a one-size fits all to the idea of commissions.

Cheers Carlo

Edited: April 11, 2021, 4:08 PM · Carlo, I agree that it's better with the arrangement being clear from the outset. But I hope you can appreciate that students and parents are often very reticent about speaking up, and for that matter they might not even appreciate the possibility of a conflict, or they might assume that it's a standard practice in the business of violin-teaching. The relationship between a student/parent and violin teacher is often viewed as precious and not worth risking damage over a matter of a few hundred or even a few thousand dollars. Maybe your chauffeur-driven families were made of stronger stuff, but I know that if my daughter's teacher was similarly engaged in such an arrangement, I would have been disappointed, but I would probably have kept my mouth shut because finding a different (but equally qualified) teacher in our area would have been hard. There are no violin shops in our area (nearest is 3 hours by car) so this situation does not arise around here.

April 11, 2021, 4:42 PM · It is perhaps different in London, where one can get the same commission from more than one shop. In that case, you're not necessarily steering business to a second-rate solution for a hidden fee. Also, with a fairly sophisticated pool of students, the temptation to do a student wrong by flogging overpriced junk will be minimized.

Still, one necessary (if not totally sufficient) element here was full disclosure. Most teachers have never bothered to do that, and extra points to Carlo for making that a part of the deal.