• The move to the new server is done. There are some software and database maintenance updates in process. This has us passing the hat around to help out. We appreciate any donations. Seriously, even a dollar helps. The payment page may be found here - https://www.audiokarma.org/support.html

Record store business model?

Opening a record store would also be a dream for me. Will likely never happen but in my idealized view of the world it seems like a great way to make a living. I think there would be a couple of key factors to making it a viable option. The first would be to own the space rather than rent. It will be hard to survive if you are spending thousands of dollars on rent every month. I believe something like a storefront in your home or some sort of work/live loft arrangement might reduce the monthly costs enough to make it viable.

Also, modest salary expectations and perhaps a second part time income may be required. This would probably result in reduced business hours for the record store. The best record store I know of in Toronto is only open Wednesday through Saturday from 11:00 am to 6:00 pm. The two owners are also the only employees I ever see there. The store has been in business since the 1970s I believe, and both owners seem to know and love music. They seem fairly busy whenever I go in but I have no idea how profitable the business is. I can only hope they stay around for many more years.
 
Location location location

Here in The Portland to Eugene area I see the little Record shops doing very well. Ranch records in Salem, Mcminville, and Bend has just moved the Salem Store to a better location with much more room for LP's so he must be doing OK. The other stores in the area I hit like Corvallis and Portland all seam to have plenty of people buying while I'm in there.

Like wise and maybe even more so the times I have been up in Seattle WA. LOTS of customers
 
Come to Boston and check out "Newbury Comix." The very best (and thriving) record/media chain in the USA.
 
Thanks everybody for all the great info and offers! I sincerely appreciate it. Some wild things happening with my current business right now may allow me the opportunity to create another project.
 
I Think Thats Really Great, If You Need Any Assistance For Whatever You Run Into Give Me A Shout And I`ll Try To Help A Local Ak`er Out.
 
Record stores are closing all over - the record industry, as it has previously existed, is in free fall. This is NOT the time to open a new record store.

NONETHELESS, there is room for indie stores that wish to occupy this dwindling niche. Mark hit upon the second most important ingrediant - location. The first most important ingredient is the same as any other independant retail venture. You have to have enough capital to hit the ground running with a full store, pay your employees, pay yourself some meager wage, pay for advertising, and be prepared to maintain inventory even if you don't see your first dollar of profit until two years in.
Going into such a venture with less than $75,000 to start would be foolhardy. With less than $200,000, risky.

Other than that, I could chew your ear off answering more specific questions, having worked in record stores for the last nine or so years. My standard consulting rates will apply. :smoke:
 
Our only local music store has near to died along with the cd industry. He sold his home to keep it alive and has told me that it is records that have kept him in business. CD's ain't sellin'.
 
Maybe this will help.

I have no idea what segment of the music-buying populace is turning to the Internet to both listen to and buy music, but I would imagine it's a huge chunk considering the horror stories you read here and elsewhere about CD sales.

By the time I joined the record-buying public (around 1975 or so), the norm was record store owners would only open a small fraction of shrink-wrapped product for in store listening. A lot of my purchases back then were spurred by reviews in Rolling Stone or Creem, or word of mouth, and lastly, clues deduced from the sleeve (who's the producer? what country are they from? What label is it on? what instruments are being played? are there naked ladies on the cover?). I bought a ton of vinyl back then without hearing not one chord of music from it beforehand.

Today, I feel like a kid in a candy store. between independent labels with their own e-stores offering free previews, if not full track downloads, megastores like Amazon that let you preview just about every song from every album in their vast inventory, to the grey market of bloggers posting full album and cd rips for "preview purposes" to the full-blown piracy of torrent sites.. I can preview ANYTHING I'd consider buying.

It's interesting to note, when 78s dominated, stores had listening booths and you could listen to ANY record before buying it. Could there be a "market correction" taking place here, one that's been brewing since the 78 era?

however, I probably buy just as much music as I used to. Maybe more. One of the reasons is you can read what artists are related to others on sites like this and, in cases like Amazon, read about it and buy in one stop. I check it out and if I like it, suddenly I'm buying Eloy and Can as well as Pink Floyd, when I meant to buy only one album to begin with. I know what I am buying, and I buy it to reward artists for a job well done. I don't gamble on ANY music purchases anymore.

So the nascent music store owner must consider, what can you stock that consumers like me will buy? Best-selling music from years past, or critically acclaimed stuff? Should you group music in your store the same way they are online, in clouds based on how alike they are, or by influences? (Maybe- that would be a pretty interesting store actually.) Either way, I would think online discussion of musical releases would be invaluable to a record store owner in this day and age.

The other factor is convenience. It's nice to, as someone pointed out, sit around at home in your skivvies and place orders for music. Reputable companies will get your order to you in about the time it takes to mail a letter. Can you compete with that? How quickly can you turn special orders around?

I think there is an exception to this for vinyl- Buying local means I get to look it over for any defects (unless it's shrink-wrapped). When buying vinyl online I sometimes hold my breath as I hit the "Buy" button. That doesn't stop me from doing it, however.
 
Great discussion. FOr a while I ran an online business selling vinyl on eBay. Stictly on eBay while it was still a growing phenomenon (early 2000's). It did well for a while but ended up going back to the desk-life for more money. All-in-all I really just liked playing with records all day. Organizing, talking, packaging... sampling!

My last question to the group would be... does anyone know of any wholesale distributors for vinyl in US or preferably in Canada? My old distributor went belly-up and since then I only had 1 other guy who wasn't great.

PM or post any details on wholesale that you guys might know.
 
meggy said:
Anyone have an idea of what a typical (by today's standards) new & used record store business model might be? Or where to find some examples? Not so much the marketing concepts but more the basic financial information / projected P&L's, costs of goods sold, markup's, etc.
Click to expand...

I guess the first thing I'd do is watch "High Fidelity" several times and thoroughly enjoy it.

Then understand that if such a place existed it took a long time to build the stability required to keep the doors open and even then, it's only a movie.

high_fidelity.jpg


To your above questions, 'starting a new business' books will give you the basics of the financials. Markup is simple, at least 2x what you paid for it on used items. That is a 50-point markup or 100%. For new items, there will be a manufacturer's suggested retail list price (MSRP) or minimum advertised price (MAP) & your purchase price (RAW COST, RC). You can sell at MSRP or discount from there. Depending on the category for new items, your markup can be 20-70-points. After you have paid yourself each month your profits are your war chest for lean times. Ideally at the end of the year there is a plus balance that you can use to grow & develop your business.

Markup carries your overhead (OHD, advertising, tariffs, duties, & fees, rent, office supplies, etc.). OHD is usually a fixed percentage of 10-20%. Very simplified, your cost of goods (COG) usually is your (RC + OHD) * 2. So you buy a used LP for $1 & have 20% OHD = $1.2 * 2 = $2.40, your retail price. Or you can apply OHD after your cost markup, ($1 * 2) + $0.20 = $2.20. Everywhere I have worked OHD was a cost factor applied to the RC. There are likely other ways to do it as well. Most scream when they hear of 100% markup but remember that you will have many days when no one walks through the door. McDonalds & your local supermarket have 2-3-point markups as they know they have a near constant stream of customers 24/7 and can anticipate their monthly revenue stream pretty accurately.

The above is way, way simplified. A small business accountant is your next move. Ask around as to who is good. Find a small business with similar structure to what you want to do and ask who their accountant is & if they would recommend them? That is how I found mine and your first visit is free. You want one who is familiar with the type of business you want to conduct, i.e. retail of goods. If you don't like the feel you get from them, find another. My guy layed it all out to me: "This is how much the government wants from you, 100%. This is how much you want to keep, 100%. My job is to get you as close as we can to your 100% and remain legal." He has 2 ex-IRS accountants on staff to go to bat when he pushes right up to the line.

Good Luck!

:thmbsp:
 
We have two local record stores alive in the Grand Rapids area that I go to. The others have died or dwindled away.

One called Vertigo is mostly geared towards Indie music - with at least 50-60% of their stock being punk rock/alternative/indie. They sell new/used vinyl and CDs. Prices are a little higher than what I can get on the 'net, but I do get immediate gratification! Their vinyl selection is not the largest but always fun to dig through - I picked up some good stuff there.

The second store is called 'The Corner Record Shop' and it located on the outskirts of Grandville. They mostly specialize in vinyl and if you're friendly with the owners they will let you dig through the latest stuff they got. Prices are sometimes a little high on the newest releases. They also sell used vintage gear and some moderately priced new turntables. I've even bought a McIntosh 250 from them. Vinyl selection is large but the selection is so-so, most of the good stuff has already been bought up unless you find something in the 'new arrivals' section.

I too used to have dreams of opening a record store, but the 'net certainly has changed that idea. Both of the record stores I visit here in town seem to be surviving by the skin of their teeth. They are both lucky to have long term customers who give no thought of dropping a hundred + dollars in a single shopping spree.
 
dividebytube said:
I too used to have dreams of opening a record store, but the 'net certainly has changed that idea.
Click to expand...

I will say this, I have not been enjoying my online buying experience. I have had so many bad deals (insert large internetz site of your choice here) over the last few years that I find myself seeking out a local alternative before going online. If there is an issue, I want to go back and get taken care of by the one who sold it to me.

That said, I would have to believe that any used record store will have the best chance of survival if -

It is near a large city
The city has an active music scene
The city has many colleges & students
There are outlying areas w/ cheaper rents
People actually go to those areas to shop
There are mutually supportive businesses nearby (i.e. magnets)
 
true - my favorite stores (Flat Black and Circular in East Lansing, Liberty in Ann Arbor) are both located in college towns.
 
meggy said:
Anyone have an idea of what a typical (by today's standards) new & used record store business model might be? Or where to find some examples? Not so much the marketing concepts but more the basic financial information / projected P&L's, costs of goods sold, markup's, etc.
Click to expand...


I think you have received a lot of good advice here. I would add that maybe you should do a little traveling and talk to some record store owners. Walk in, strike up a chat and buy them lunch. Like Orson Welles said, "If you are going to steal, steal from the best."

Its a cool idea and under the right circumstances and if done correctly, it could work, although I doubt it would make you rich.
 
My only local independent record store seems to be defying trends in the industry right now. Tomorrow is their 5 year anniversary (bands are lined up to play all day), and I'll bet they stick around for a while longer. They filled a niche by appealing to the droves of university students. The vinyl bins are full of new records from indie bands, and the college crowd buys them up. "Indie" music supports "indie" stores, so it seems.
 
A search for used LP's online led me to Amazon & used LP sellers there. Interestingly, a link to playback gear is posted prominently and there is a lot of stuff -

LP Gear
 
$50 for a DISCWASHER D4+ Record Cleaning System??!!! That's insane!! I sold those at my store for $9.99 in 1983!

And a Zerostat 3 for $99!!!! We had those for $20! (still have mine, doesn't even say Milty on it and it's red)
 
You must log in or register to reply here.
Back
Top Bottom