Regarding selling online - one of my friends opened a retail vintage video game shop a few years back and he spends his time at his shop posting stuff on ebay and Facebook marketplace, and shipping sales from those online listings.
I honestly don’t know how you could have a small used goods shop and not do that. What are you going to do all day?
He’s got the best of both worlds - a fun local business with used inventory coming in, and inventory to sell and display in the store, and a second sales channel to spend his time on when foot traffic is low.
I know a guy who owns a used record store about a mile from my house, and he is very happy.
He also owns the building, started with his own vast collection of records and he is retired. People wander in occasionally to flip through the boxes or sell off records they no longer want-he probably buys and sells about the same number of items. He told me that he pretty much breaks even, and is grateful for his pension.
There’s some wisdom I trot out whenever somebody wants to start a business.
If you like doing whatever is the main task/activity, go get a job in that kind of business working for somebody else.
If you like paying bills, making and signing contracts, setting up advertising, recruiting, hiring, firing, budgeting, and yes, obtaining inventory, then go ahead and start a business. Because all the stuff in this paragraph is the stuff a business owner must do to succeed. If this stuff isn’t all done and done enthusiastically, your business will fail even with plenty of would-customers.
Lotta people love to bake and start a bakery. If they’re spending time baking, they’re planning to fail. If they’re spending time being a business exec / administrator they’re planning to succeed. Which is the OP intending to be/do?
I’d rather not say how much I’m investing. As for the second part – I can’t say exactly, but I can be fairly patient.
I know. I’m hoping that my partner and I can be all the staff we need until the business truly gets rolling.
Defintely! T-shirts with the store brand are great marketing. I’m also thinking about various merch and music-related books.
I know I’ll be facing web competition with no overhead, along with private individuals. Of course it concerns me, but it’s just not where I want to play. Other brick and mortar record stores are thriving, so I know it can be done.
Listen to great tunes?
Man, what a buzzkill.
Seriously, I know I’m likely to find a lot of this stuff to be drudgery. I’m just hoping it’s worth it for the chance to be around music all day and meet other music lovers.
Honestly, this is my goal. Not a huge profit machine, but a business with positive cash flow where I can “retire” but still be active and enjoy what I do. Of course, owning the building would be a big help, too.
Not a “big help” in his case-it was essential. it was the fact that he already had the building, the inventory, the time and the pension, all of these things together, that allows him to break even. Btw, these other successful used record stores-do they do online business?
I miss the days when people would give away or pay you to take their collections. I used to go to big in-person auctions and buy up lots that started at $1 bids. Crates of vinyl usually went for $1
At one of the auctions a guy noticed I was bidding on albums and asked if I wanted to come over to his house and just take away all of his. his house was filled with probably million$ in antiques and all this junk vinyl. I’m not saying I could’ve started a used record store (though I DID do exactly that with a books a couple years later, buying out stores), but I made a good chunk of money selling them all online.
Beatles white album on white vinyl. First Canadian pressing of Queen Night at the Opera.
And condition matters. Most of these were played once to put onto cassette, and then put away with a plastic cover.
For what little it’s worth, there’s a couple record stores near me that don’t do online sales. They’ll list inventory online (one on their website, the other via Discogs) but you gotta come in to buy something. I don’t know how “well” they’re doing but both have been around for a few years at least.
I actually prefer it since I assume any place selling used stuff online is picked over and not worth a physical trip to explore. That said, what I like and what makes a store money ain’t necessarily the same thing.
Because starting the thread is soooo much more fun than working at your day job.
My attitude is if you have a spare couple hundred thousand to burn each and every year for the next 5, go right ahead and buy yourself a very expensive hobby mislabeled as a business.
But have no illusions: that’s what it is and that’s what it’s going to cost. I wish you every happiness and I honestly hope you aren’t chaining an anchor around your neck then jumping into deep economic water. 'Cuz that’s sure what it looks like from my great distance.
We had a record store/head shop called Discount Records. I spent many evenings browsing the record bins. You could buy concert tickets too. The bongs and other paraphernalia eventually caused legal problems for the owner.
Today record/CD shops compete against Spotify. But older consumers still like buying physical media.
Wishing the OP the best luck with the new business.
You need to find out what percentage of revenue from other record stores come from vinyl and what comes from related sales.
Gaming stores, for example, make almost no money from board games even when 75% of their space is devoted to shelves of games and tables for playing them. They make their money on trading cards (Magic and Pokemon primarily), wargaming figures (mainly Warhammer) and concessions (for people using the gaming spaces). They use the board games and gaming space as tools for building their presence in the community but that’s not where their profit is.
Since you’re going to avoid online sales, this becomes even more important.
You’re probably not going to turn a profit on vinyl, so figure out how much other product you’ll need to move. What’s your equivalent of trading cards: stuff that your customers will come in for on a regular basis and maybe buy other stuff at the same time? What can you do to build a community and get people to see your store as a gathering space?
Neither of those activities generate income or profit. ISTM you want a hobby as a “librarian” of a public record collection.
If you magically owned a building, it could be rented out to somebody else for cash income or sold for a bunch of cash that could then be passively invested for a mix of income or growth. You parking that value in your “business” amounts to spending that incremental income foregone. C.f. “opportunity cost”.
If you don’t already own a building (or a storefront within a building) you could buy one whether for cash or a business mortgage, triggering all the opportunity cost arguments above.
Or you can rent a storefront. IANA expert on retail real estate, but by and large, landlords have figured out what a decently profitable business could earn in that location and will price the rent so they get almost all the profit that hypothetical solid established profitable business will generate ex- rent. If your business is less profitable than the hypothetical one, the rent will exceed your profit ex- rent.
FYI, many strip centers are actually business condos where each storefront is a separately purchasable parcel. In other cases, some real estate investor has already bought up all the storefront condos, now owns the whole thing, and now operates it more like an apartment building, leasing each storefront to somebody else for a monthly rent payment.
I strongly suggest you contact a commercial real estate pro in your area and do some “sport-shopping” for storefronts pretty soon. And learn from them what other building-related expenses are bundled into leases on top of the basic rent payment. Just like buying / renting anything else these days, there are a bunch of bundled fees and charges that aren’t included in the headline (“teaser”) price, but that you’re totally stuck paying. So learning about those extra top-up charges and how large a percentage they commonly are is an essential part of deciding what you can afford.
There are lots of other business expenses beyond rent + top-ups, but that one line item is likely to be the lion’s share of your total monthly nut. Getting clarity early on whether you’re talking $5,000 or $30,000 per month would be a great place to start your business budget. Payroll would probably be your second largest fixed expense.
I have two decently successful start-ups to my name, albeit neither were retailers. All this stuff matters greatly. Don’t fall in love with the sizzle (… “meet other music lovers.”… ) until you know what the steak costs. Please.
I sincerely wish you well, but your posts here add up to one of the most obvious economic suicide notes I’ve ever seen written.
And, of course, on that end of the market you’re competing with the Targets and Walmarts selling Taylor Swift’s new album in Target-Exclusive Pink & Gold vinyl with three bonus tracks.
Just by doing a CTRL-F search, I didn’t see it mentioned, so …
When I worked in commercial real estate, I represented the ‘location’ aspect of many new entrepreneurs. Some had vast experience and solid plans. Others had a bold vision but no strategy, experience, or road map.
Some had nary a clue.
I used to recommend SCORE pretty freely, and never heard a negative comment from anybody vis-a-vis their interactions with the group.
On a very practical issue: though it may not be attractive to a prospective landlord, I’d probably recommend trying to negotiate some sort of ‘out clause --’ maybe tied to gross revenue.
IOW (making up particulars): if, at the end of the 24th month of the lease term, gross revenue has never reached nor exceeded an annualized $250,000, you have the right to terminate with three months notice (and maybe a prepayment penalty of $X).
One (slightly complicated) way to make that at least a bit attractive to a landlord is to offer a percentage rent proposal, effectively making the landlord something like an equity partner in your business without you giving away equity.
I say “slightly complicated,” because it implies accounting and reporting requirements not generally associated with space rental. OTOH, it also brings up a very important subject for a small business owner: a good accountant – worth their weight in gold, and – in terms of percentage rent – a no-brainer for them.
Along with the excellent SCORE suggestion, there’s a good deal of support/advice you can get from the Small Business Administration. My wife works for an outfit affiliated with them and whenever she tells someone about what they can offer, the person is almost always surprised at the amount of stuff.
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