I’ve always loved in-person used record shopping – wandering a store, flipping through the bins, finding a few records or CDs that I’d barely heard of or never knew I wanted, and deciding I must own them.
But recently I wondered why I had to drive 45 minutes to the nearest good stores, when I live in a town (Waukegan, Illinois) with 90,000 people. And that’s when I decided to explore the idea of opening a used record store in Waukegan. It was mostly a marketing exercise (marketing is my day job) – looking into whether there’s unmet demand and, if so, figuring out the best way to meet it.
That exercise has grown into a passion. I’ve networked a lot and done some research, and I now think this idea could fly. There are only two problems:
I don’t want to quit my 8-5 day job.
I’ve never worked in a store of any kind, much less owned one.
I think I need a partner who has both record store experience and plenty of free time. (I may actually have found him, but we have a lot of conversation ahead.) And I’m very serious about doing a pop-up store during an upcoming local event, to test the waters and start building a customer base.
So, here’s why I’m posting: I’m hoping my fellow Dopers can help me avoid major mistakes before they happen. What are my “unknown unknowns”? Where do I need to focus my mental, physical and financial resources? What are the red flags I need to recognize?
Here’s a random, partial list of all the things I know I have to handle and/or learn about:
location
lease rates
capital (I have funds I can invest, but does a loan make more sense?)
I frequent used record stores as often as I can (I’m in the Boston area, so there are a few).
One thing that gets my goat is when a shop jumps all over the ‘vinyl craze’ by routinely pricing records way out of line. It’s just a real turn-off, even when I can afford what’s being asked. There is one shop nearby where LPs basically start at $25 and then upwards. Yes, I know some are rare, and blah blah blah, but generally I can live with the used CD alternative.
There are rare occasions when an LP has never been released on CD, but not enough to justify pricing Elton John’s Greatest Hits or The Best of the Carpenters in the stratosphere.
One thing you could do to test the waters is to have a weekend record shop out of your garage. There are a few like that in my city. They advertise on Craigslist and with street signs.
Are there any places that sell records in your city that aren’t record stores, like used book stores, hip coffee shops, etc.? If so, see how busy their record section is. That can give you an indication of the demand for records. If there are none, you could approach some of the stores and see if they would want to partner with you. You could setup the records in their store, they sell them and give you a cut.
A town of 90k sounds kind of small to me for a profitable record store. I’m sure there are people who would enjoy shopping at a record store no matter the size of the population, but, to me, it feels like the city would be on the small side for this kind of store. Unless you have a ton of money to throw around, start small and build up according to the demand. Jumping into a store right away is probably a good way to lose a lot of money in “record” time
Keep in mind that it’s a suburb. So it’s adjoining multiple other towns which adjoin other towns, etc with Chicago to the south. The northern suburbs are fairly well off so I’d think, at a superficial glance, that a record store could do well.
There was a very successful one for years, but the owner closed it for (his own) health reasons. I’ve spoken with him and he may sell me some seed inventory.
This is accurate. With surrounding towns the population within 30 minutes is easily a quarter million.
FTR, McHenry, a town of ~30,000 that’s 45 minutes west, supports three stores.
Is there anything unique about McHenry that allows it to support that many stores? Is it a college town?
One thing to evaluate is whether your city has the types of stores that are typically found where record stores are also found. Off the top of my head, I would think other stores serving the same audience would be used/independent book stores, hip coffee shops, vintage clothing stores, etc. If those kinds of shops are successful in your area, then I would think a record store could also be successful. It seems like the same customer base would shop at all those kinds of stores. But if the stores are the typical generic strip mall stores, then that may be an indication that there isn’t a big population of people who would be into a record store.
No, not really. I know one of the stores isn’t doing well (the owner offered to sell it me!) but AFAIK the other two are doing fine.
Waukegan has a little bit of the culture you describe, with a kind of industrial-town-on-the-rebound vibe and a spanking new community college downtown. It just feels like a good location.
That’s the guy you need to hire, even just as a consultant. Even if you can take him out to lunch once a week and pick his brain. He may well be more than happy to talk about all this (or to work there), even if he no longer wants to own a business.
He’s going to be the guy that’s going to tell you which vendors to use, where to get deals, how to price things, what the market in that area looks like, how much you should be paying for things. Plus, if he was well liked in the community, by the local officials, by his vendors, being able to drop his name will go a long way both in good will and helping to keep you from getting taken advantage of.
I appreciate all the replies, but please don’t try to convince me this whole plan is a bad idea. I may decide that on my own, but that’s not the kind of advice I’m looking for.
For this thread, let’s assume I’m going to open this store (and that it’s going to be in Waukegan). What I’m hoping to get from Dopers is advice that will help that store succeed by avoiding major mistakes.
That’s where the record stores in my area tend to be.
Surrounded by small coffee shops, art studios, vintage clothing stores, small family run barber shops, bars etc. They’re in the heart of hipster country.
You can ‘drive’ down the road on this google map, starting at the record store, and you’ll see all of those places. But this is one of those areas that almost demands a record shop. Before we had them here (in the hipster area), they were in the hippie part of town, but same idea, all coffee shops and vintage clothing places etc
Is this concept relevant? :" how many hot dogs are you worth?"
The story comes from my father, who grew up in the 1940’s, and liked to tell a story about a friend whose family owned a hot-dog cart back then. They sold nothing but hot dogs, at 5 cents apiece, and made a one-penny profit on each one. The friend never talked about prices; if he wanted to buy something, he only talked about one thing: how many hot dogs will he have to sell to pay for it. He would say, " I got a good deal on these shoes…only cost me 300 hotdogs"
So, based on that story: How many records will you need to sell each day , to cover expenses?
Suppose you sell records for $10 each , and I dunno, make $3 profit.
If rent and expenses are, I dunno, $10,000 per month, you have to sell 3,300 records each month. That’s 110 records per day, or about 10 records per hour, which is one record sold every six minutes.
Half the people who come in to browse won’t buy anything.
So you need 2 people walking into the store every 6 minutes.
Pick a location with a lot of foot traffic.
Also…in your list of expenses, maybe add one item not mentioned: advertising costs.?
If you’re going to engage in a retail operation, I encourage you to NOT to ‘test the waters’ first at your home. You could potentially run afoul of multiple local zoning codes. Check with your municipality first. Here’s what Waukegan has to say about ‘home occupations’:
I don’t know how to run a record store. However, it doesn’t sound all that complicated to me. The only difficult thing I can see would be purchasing stock. Where does the stock come from? You probably don’t have much flexibility when purchasing newly pressed vinyl, but assessing the value of used records is going to make a difference I’m sure.
A simple partner without a detailed well defined partnership contract is risky. A partner can make decisions about the business independently of you.
Seconding @Cardigan, more or less. This might be a good idea; but check your local zoning first. You might be able to do this; or you might only be able to do it if you get a permit first; or you might not be allowed to do it at all.
It might or might not be a “home occupation”. It might be a “commercial use” which might or might not be allowed under some circumstances in a residential zone (presuming that you live in what’s specifically a residential zone, which is another question.) If you’re considering doing this, call up your municipality and ask them.
Seconding this one also. That’s the guy who knows how to pull this off in your particular location.
Lots of things look simple to people who have never done them.
