Vinyl boom a double edged sword to record shops?

[ra7c7er]

I was in my local shop today (Vintage Vinyl) and was talking to a couple employees about how the clearance section keeps expanding and this is what transpired in conversation.

I asked about why the clearance section is the only section in the store that is growing and why if they are getting in more G condition records are they not getting in more records to put out for normal sale. I was given this basic answer.

Basically the boom in vinyl records has caused more people to seek out records as a means to make money. Nobody brings in records to trade anymore. They sell them on craigslist or put them on eBay. Our buyers have a harder time finding records at garage sales and flea markets because now everyone wants retail value for their records. With more and more record "flippers" we have a harder time getting records in the door. If it weren't for new records we would be seriously struggling. We used to get over 1000 a month coming in the store with about half that being VG or better this year to date we have gotten only about 1000 total and we've had to lower our standards just to be able to put them out on the sales floor. We used to only carry G condition records (clearance records) of really popular artists but now we take G condition anything. That's why the clearance section is growing and all the other sections are idle at best. We can't compete with "flippers" who are paying 2-3 dollars a record to resell online and craigslist sellers are wanting 3-5 bucks a record now even when what they have isn't worth that. You go to any flea market in the area and booths that used to have records now have records that match ebay prices. If the new record boom ends we will be hurting.

Any thoughts on this guys? I thought it was pretty telling of what eBay has done with many hobby industries.

 

[vinyldavid]

I think that if Vintage Vinyl carried and promoted more new stock records, they'd have a bigger business. I'm not sure what the retail markup is on new LP's, but I bet it's pretty high.

 

[ra7c7er]

I think that if Vintage Vinyl carried and promoted more new stock records, they'd have a bigger business. I'm not sure what the retail markup is on new LP's, but I bet it's pretty high.

They do sell new stock records. Lots of new stock records. As was said if it weren't for new stock records they would be struggling. So far this year they have made more money than any of the last few years but it's nearly all new stock records. Their used records sales are way way down because they can't get the records that people want in any condition that people will buy.

I'm planning on asking similar questions at the other record shops next weekend when I am out and seeing if I get a similar answer.

 

[Wigwam Jones]

Adapt or die. One of the laws of nature, I believe.

 

[Ths364]

The markup on used vinyl is transparent. It doesn't take long to see that the record the store bought from you at $3-4 is now on the rack for $8-12. If you've ever owned a business, you understand overhead and wages. The average guy on the street isn't thinking that- he just feels hosed because it's worth $12 when you're handing it to him, and $3 when he hands it back to you.

 

[Bob_in_OKC]

A shop near me has downsized to I think 1/5th of the floor area of what his old place had, if I remember correctly what he said. He now sells mostly new records in the shop and has over 6,000 eBay listings for used records and collectibles.

 

[Art K.]

Adapt or die. One of the laws of nature, I believe.

Exactly. The businesses I know that complain about the state of their given industry are the ones who are chasing the trends rather than setting them. I believe it was once said like this, "lead, follow or get out of the way".

 

[Grbluen]

Here in Michigan the prices have steadily crept up over the past few years. Average record prices are about 3-4 bucks for average vinyl. Its still a good deal, considering the price and quality of cds.I wish I'd bought more during the years spent sorting out the problems in my system. I would have a really nice collection by now.

 

[Andyman]

Any thoughts on this guys? I thought it was pretty telling of what eBay has done with many hobby industries.

I sell records occasionally on eBay and it's a PITA. Getting more than $5.00 for a record is tricky unless you have something really special, and grading and packing take up a disproportionate amount of time. Consider you paid a buck for an LP, and eBay takes 10% of a $5.00 sale, you make $3.50/ $5.00 LP to grade, pack, shoot, edit, list, email, ship, source and anything else connected with the entire process. That's not much at all...

As to what eBay has done to the hobby??? Well, I'm fine with that as in many cases, it's exploded the popularity of it and made it far easier for folks to get stuff they want and need.

Where did folks find any of the stuff we use before eBay? The Yellow Pages??? Ebay has exploded the hobby industries and smart brick and mortar folks have embraced it.

Thumbing through the stacks at a couple record stores last week, it sure seemed to me that prices have gone up, and I bet eBay has something to do with that too, as shipping costs need to be factored into the complete purchase price.

As to not bringing in LPs to trade, I did that once about 6 years ago and got about $0.10 on the dollar for them. It's not happening again after that; I'll sell them myself at a garage sale for $1.00 and make a whole lot more or donate them outright for a warm feeling. And my experience isn't unique, as I've read similar posts from others here on AK.

Times may be tougher for some stores, but as alluded to earlier, times change and the games gotten harder, but the merchandise has become more valuable. Sounds like kind of a push to me...

 

[ra7c7er]

Exactly. The businesses I know that complain about the state of their given industry are the ones who are chasing the trends rather than setting them. I believe it was once said like this, "lead, follow or get out of the way".

Vintage Vinyl is one of the oldest surviving record shops in the US it's been around since 72. Like I said they are not struggling financially nor are they struggling in the new market (they carry more new records than any of the 5 record shops in the St. Louis area, even more than the shop that specialized in new records). They are struggling in the used market. The worry is that when the new vinyl "trend" dies record shops won't be able to sustain themselves because the used market has been taken over by other forms of sellers.

A shop near me has downsized to I think 1/5th of the floor area of what his old place had, if I remember correctly what he said. He now sells mostly new records in the shop and has over 6,000 eBay listings for used records and collectibles.

I think that is how most everything hobby wise is going to go eventually. Look at card collecting and comic books (although they are going through a boom right now) even rc car, model train, and model kit industries have started going down and popping up on ebay only. I don't think a hobby industry brick and mortar store can really compete anymore. the cost of eBay fees and time spend making listings etc is still cheaper than insurance and keeping the lights on and taxes and unemployment etc. The possible new tax on internet purchases might curb things a bit not not enough to swing the scale back to brick and mortar businesses.

 

[Andyman]

The markup on used vinyl is transparent. It doesn't take long to see that the record the store bought from you at $3-4 is now on the rack for $8-12. If you've ever owned a business, you understand overhead and wages. The average guy on the street isn't thinking that- he just feels hosed because it's worth $12 when you're handing it to him, and $3 when he hands it back to you.

Wow, $3-4 for ONE LP from a record store?? Must be some great stuff as it's about 1/10 or less of their retail here.

That $8-12 LP would probably get a half buck offer here....

 

[blhagstrom]

I am running into the people that think anything LP is valuable.

I am seeing a lot of LPs that are just trashed. Collections that were "stored" wrong and got wet or warped.

I wonder if supply is dwindling. Its been a long time since records started to slide away to CDs.

 

[Andyman]

The worry is that when the new vinyl "trend" dies record shops won't be able to sustain themselves because the used market has been taken over by other forms of sellers.

Hence, the "lead, follow or get out of the way" and the "adapt or die" quotes. The market is in flux and one has to change with it if they want to maintain their position in it.

You gotta be quick these days...:yes:

 

[Bob_in_OKC]

On a slightly related topic: Half-Price Books pays about 10% of retail for books brought in by customers, last I heard. The books they sell for truly half, as their name implies, are then being sold at 5x markup. It's transparent, and yet it seems to work very well. Their LPs seem to be mostly around $6 at the store near me. Better stuff is higher, ranging up to maybe $15. If their 5x markup applies there too, they're paying a bit over a buck for VG+ or better records. I sometimes wonder how they do it.

 

[ra7c7er]

I am running into the people that think anything LP is valuable.

I am seeing a lot of LPs that are just trashed. Collections that were "stored" wrong and got wet or warped.

I wonder if supply is dwindling. Its been a long time since records started to slide away to CDs.

I see that nearly every time I respond to an CL listing. It's gotten to the point I hardly ever respond to them anymore. 5-10 bucks each for a collection of big band stuff that looks like a cat used it for claw sharpening isn't going to happen. then when you say no thanks the people get all bent out of shape about how records are worth serious money now and you are just trying to rip them off.

 

[NJguy]

Vintage Vinyl is one of the oldest surviving record shops in the US it's been around since 72. Like I said they are not struggling financially nor are they struggling in the new market (they carry more new records than any of the 5 record shops in the St. Louis area, even more than the shop that specialized in new records). They are struggling in the used market. The worry is that when the new vinyl "trend" dies record shops won't be able to sustain themselves because the used market has been taken over by other forms of sellers.



I think that is how most everything hobby wise is going to go eventually. Look at card collecting and comic books (although they are going through a boom right now) even rc car, model train, and model kit industries have started going down and popping up on ebay only. I don't think a hobby industry brick and mortar store can really compete anymore. the cost of eBay fees and time spend making listings etc is still cheaper than insurance and keeping the lights on and taxes and unemployment etc. The possible new tax on internet purchases might curb things a bit not not enough to swing the scale back to brick and mortar businesses.

I love ebay, but it is scary to think when 1 company can virtually take down thousands of businesses. Not very different than what Wal Mart has done with many 'Downtown Main Streets' across the country. It is a problem.

PS: Theres a Vintage Vinyl in NJ are these stores related?

 

[ra7c7er]

I love ebay, but it is scary to think when 1 company can virtually take down thousands of businesses. Not very different than what Wal Mart has done with many 'Downtown Main Streets' across the country. It is a problem.

PS: Theres a Vintage Vinyl in NJ are these stores related?

Exactly when I worked in the rc car, model kit, and model train shops. I've worked in three and at two different rc race tracks. I always heard the reference. eBay is the Walmart of the hobby industry.

No they aren't. I've asked before. I think their is or was also a Vintage Vinyl in Chicago Illinois.

 

[Roivas]

I feel sympathy for the Vintage Vinyl statement, but not an overwhelming amount. They've got the benefit of huge name recognition in their field that has enabled them to be "one of the oldest shops in the US." For what it's worth, they're name-dropped in movies and I they have their own Wikipedia entry. There are great record places in the Cleveland area like Blue Arrow and My Mind's Eye that would kill for that kind of exposure.

As for the market forces, I think we might also be seeing a saturation point. There was a long time where not many folks were buying records. My parents threw a lot away before I got into the hobby (I shudder to think of it, actually). There's only so much of that stuff that survived. The vinyl resale market probably took a while to pick up back in vinyl's heyday, and so the stores now have been benefiting from a decade's worth of backlog (ok, let's be honest, two decades). Now that this is getting cleared out, I suspect there is going to be a lull between the old stuff being largely moved to its new homes and the current vinyl-owners deciding to sell some of their stuff back. I got a White Stripes album used recently, but it is rare around here to find something that current in the used racks. Usually, it's a few gems mixed in with some Michael Stanley Band LP's (sorry Michael!). So I would expect that a lot of places will have to add more new vinyl to the mix to stay competitive. I don't wish them suffering, but that's the way the market HAS to go. There are only so many 1970's-era Ziggy Stardust discs to be had. With the demand curve shifting, at some point, the supply curve has to shift to catch up or prices are going to radically change.

 

[Andyman]

I love ebay, but it is scary to think when 1 company can virtually take down thousands of businesses. Not very different than what Wal Mart has done with many 'Downtown Main Streets' across the country. It is a problem.

No, it's not a problem, it's the new fast changing world we live in.

eBay is a LOT different that WalMart. The major and most glaring difference is that eBay doesn't sell any goods per se; they are merely a facilitator for bringing buyers and seller together. Ebay is basically a cyberspace classified ad section. Buyers don't buy ANYTHING from eBay, Zero. Zilch. Nada. Sellers pay fees, but buyers pay nothing. That's not the way WalMart works..

And the world is getting much smaller. Modern technology allows us to buy things instantaneously online from places far, far away. When I was a kid mail order was a big deal and the Sears catalog was the stuff of dreams. Well, computers and the Internet have taken that to new highs. I just sold items tonight to Italy and Japan from my home, items which ironically enough, I bought online, and one actually via phone from I-94 riding home from Chicago two weeks ago. :yes:

 

[jefrodigital]

its not just ebay, records are a big thing and that means more people are digging in the same spots the stores used to.

There are a lot of new people out at the garage sales and flea markets scooping up records for a buck. lots of kids producing hip hop songs, sampling from old records. hipsters trying to prove they were cool even before they were born. Music lovers in their 20's and 30's nostalgically rediscovering how cool records are in this futuristic era. Plus garage sales, flea markets and thrift stores are cool now and records are a staple of those spots.

ebay has an impact as well but not just from dudes buyin em cheap and putting them on ebay for more. that parts surely not debatable. but the guys who own record stores do the same thing. where you think they get stuff from? i'm sure people are coming in to sell them but im sure most are picked the same way us cheap collectors get them.

i went to one store in jersey, not vintage vinyl, forget the name but it was on route 4. anyways, my wife sees a used pretenders album. like 15 bucks. she says "oh i love the pretenders" and i tell her i have that exact record in great shape and i paid a buck. I've seen it a few times since at the thrifts, fleas etc. This guy wants 15 bucks and a lot of stuff is priced higher. his prices are pretty much ebay rates and had his ebay name posted on the door. I'm sure 75% of his store is on ebay. He's doing it too so don't cry tears for him.