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How to Start a Record Store?


floyd_z
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Hey everyone.  So I am a 31 male who has been struggling with what to do with my life for pretty much forever.  I've always wanted to own a record store and was looking for some tips and advice from any of you that own a brick and mortar store or are a record distributor.  I sell a little online, maybe 10 records/month and do record shows when possible. I have a BA in Business Mgmt and am very entrepreneurially inclined.  I have been collecting vinyl since I was about 12 and love music.

 

About the current market.  The county I live in a county that has over well 600k and has two legit record stores.  The city is expanding rapidly with a good mix of people and new development.  The record stores  are nice, but overpriced, especially for mediocre used vinyl.  You know that... 'this is a beatles record therefore it's $25' mentality.  One of the stores is located downtown, the other in the corner of the county.  There are plenty of up and coming/established corridors that support local businesses.

 

So anyways,  does anyone have any advice on opening (or reasons not to) open a record store?  Obviously I'm in the very preliminary stages at this point.  I have about 500-700 used records that could used for stock.  How does one purchase new albums in bulk?  From record labels directly or larger distributers?  I've done a ton of research, but couldn't find a solid answer and figured an insider would be more helpful.  I've received  catalogs from a few distributers, but the prices were higher than retail.   Emails to labels have gone unanswered and I wonder if it's due to not having an established store.   I guess I'm mainly interested in the logistics of the whole thing.  I'm fairly comfortable with finding a space, accounting, management, legal, etc.

 

Any advice would be greatly appreciated or sarcastic remark for that matter.  I'm not really in this for the money, but I would be happy making $35k+ a year and not work in some shit manufacturing job..  Thanks in advance VC!

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30 minutes ago, floyd_z said:

Hey everyone.  So I am a 31 male who has been struggling with what to do with my life for pretty much forever.  I've always wanted to own a record store and was looking for some tips and advice from any of you that own a brick and mortar store or are a record distributor.  I sell a little online, maybe 10 records/month and do record shows when possible. I have a BA in Business Mgmt and am very entrepreneurially inclined.  I have been collecting vinyl since I was about 12 and love music.

 

About the current market.  The county I live in a county that has over well 600k and has two legit record stores.  The city is expanding rapidly with a good mix of people and new development.  The record stores  are nice, but overpriced, especially for mediocre used vinyl.  You know that... 'this is a beatles record therefore it's $25' mentality.  One of the stores is located downtown, the other in the corner of the county.  There are plenty of up and coming/established corridors that support local businesses.

 

So anyways,  does anyone have any advice on opening (or reasons not to) open a record store?  Obviously I'm in the very preliminary stages at this point.  I have about 500-700 used records that could used for stock.  How does one purchase new albums in bulk?  From record labels directly or larger distributers?  I've done a ton of research, but couldn't find a solid answer and figured an insider would be more helpful.  I've received  catalogs from a few distributers, but the prices were higher than retail.   Emails to labels have gone unanswered and I wonder if it's due to not having an established store.   I guess I'm mainly interested in the logistics of the whole thing.  I'm fairly comfortable with finding a space, accounting, management, legal, etc.

 

Any advice would be greatly appreciated or sarcastic remark for that matter.  I'm not really in this for the money, but I would be happy making $35k+ a year and not work in some shit manufacturing job..  Thanks in advance VC!

 

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Maybe I can help. I own a record store. For one you are not gonna make 35k a year. 2nd with Amazon closing the profit margin every day my store is lucky to make $5 off a new sealed album. It's that or be overpriced. You can't have both. I think if you open a record store you may understand why stores charge $25 for a Beatles album. If it sells why not charge $25 for a Beatles album to keep lights on. Amazon is taking over so your not gonna make money selling new vinyl. New Vinyl gets the customers in so that hopefully they buy used as well. If your looking to make anywhere near 35k a year I say don't do it. Why do I have a store? To support my addictive vinyl collecting habit. There are perks. You'll save $5 off any new album and get 1st pick of any collection that comes in. You'll find you have to sell alot of your best stuff just to keep lights on. It's a constant struggle and hussle. Be ready for it if your gonna do it. Me along with the other owner have part time jobs to support ourselves but it's definitely not a lucrative business. Hope this doesn't come off sounding too bad through text but I'm not gonna sugar coat it. It's a labor of love and nothing else

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I have no knowledge on any of this, but one suggestion I have is look into what you could do to make your store a little more unique. Live music space, coffee shop, or whatever else vinyl collectors are into. Create a destination, not just another store. 

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4 minutes ago, Saxonjulin said:

Maybe I can help. I own a record store. For one you are not gonna make 35k a year. 2nd with Amazon closing the profit margin every day my store is lucky to make $5 off a new sealed album. It's that or be overpriced. You can't have both. I think if you open a record store you may understand why stores charge $25 for a Beatles album. If it sells why not charge $25 for a Beatles album to keep lights on. Amazon is taking over so your not gonna make money selling new vinyl. New Vinyl gets the customers in so that hopefully they buy used as well. If your looking to make anywhere near 35k a year I say don't do it. Why do I have a store? To support my addictive vinyl collecting habit. There are perks. You'll save $5 off any new album and get 1st pick of any collection that comes in. You'll find you have to sell alot of your best stuff just to keep lights on. It's a constant struggle and hussle. Be ready for it if your gonna do it. Me along with the other owner have part time jobs to support ourselves but it's definitely not a lucrative business. Hope this doesn't come off sounding too bad through text but I'm not gonna sugar coat it. It's a labor of love and nothing else

Thanks!  Great points I did not think about.  Sometimes I forget Amazon is taking over the world.  Do you use different distros or purchase from labels directly or a combination of both?

 

I've even bought albums from amazon when they are a crazy deal and made profit just putting them on ebay.

 

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4 minutes ago, GloomForever said:

I have no knowledge on any of this, but one suggestion I have is look into what you could do to make your store a little more unique. Live music space, coffee shop, or whatever else vinyl collectors are into. Create a destination, not just another store. 

 I like that.  I have seen coffee shops with a small vinyl selection.  A coffee shop/vinyl shop/small venue is a really awesome idea.  Thank you!

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I have thought about this quite a bit, as I'm sure many collectors have, especially after amassing a considerable number of records in a (relatively) short amount of time. I do not own a business, so take my words with a grain of salt. I think the original idea of a cool, profitable brick and mortar record shop is slowly becoming an infeasibility. I would echo what others have said and either make your business a hybrid - a coffee shop that sells books, records, local art etc' is still a cool hangout for people and you might see some profit even if you do overcharge - or take your record collection business (since you already know some stuff about that) and run it completely online, cut out all extremities and extra charges and run as tight a profit margin as you can.

 

Seems like most people want a thing at their door rather than to go out and browse the racks and see that all new records are upcharged up the ass and leave not buying anything. At least, if we're talking about people who buy a lot of records. I've gone to a lot of exceptional record stores and not bought much simply because I know better, I know that Amazon and Discogs exist and that things like price matches exist too, and I don't agree with the stigma of checking Discogs on your phone as you're browsing - that is something the new record dealer has to contend with.  Why would I buy Daft Punk - Discovery at your store for 18.99 when it's 11 dollars on amazon? For no reason? People aren't idiots, and if they can google at a moments notice and realize you're gouging them, YOU are the one who has to keep them coming back - I don't know with what. Bands playing, giveaways, booze? It's difficult now to be a store that sells anything that Amazon sells, I get that. So you have to provide something people can't get with Amazon. The profits are razor thin strictly dealing with the media, which is where the hybrid comes in. If some hipsters buys overpriced records with his latte, GREAT. PERFECT.  If he doesn't, at least he bought overpriced coffee. It's not a reliable business model, but if you're intent on records being in there somewhere I think that's the best you can hope for. That's my opinion.

 

I also work in a coffee shop, to add legitimacy to my flailing comments

 

 

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Rs94109 in SF is a really unique shop you should check out. I don't like what they sell but they have a good coffee shop inside and rent out the space for events. Seems like it would be necessary to stay open in SF. And I know a record store owner that makes well over 35k a year but in the Ca bay area so he is still broke.

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I run a really small DIY label. Most brick and mortar stores buy my stuff through RevHQ, a middle man distributor. I'm happy to sell directly at a cheaper rate, but usually it's not worth the shipping cost if you only plan on buying a handful of records. By ordering through the distributor, you have access to hundreds of thousands of other titles, so even though the distributor may charge a dollar or two more per record, usually you can place an order larger enough to make it worth the shipping cost. So in the end, a record that I sell for $13 on my website, might cost $18 on the shelf (which definitely sucks), but it ends up in stores.

Good luck!

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Any new business you start is going to take a while to start being profitable, so you can probably count on not cutting yourself a paycheck for about a year or two, after that you're probably still not making much money.  But that's rule of thumb, so it changes business to business.

 

Ive never owned a store but I had a friend that opened one.  He made a little extra money selling his paintings in the store, and made a lot of his money from buying cheap records on eBay and reselling them for more in his store.  He overextended himself because he wanted to make the coolest shop possible and then went bankrupt after 2 years.  He ended up selling the place for about half what he invested in it.  But from what I gather, the new owners do okay.  Probably not $35k a year, but enough that they're still open 10 years later.

 

Surprisingly, what he told me was that more people were buying CDs than records.  I don't know if that still holds up, could have been because it was 10 years back or maybe regional?  Either way, something to consider.

 

If you get serious about it, feel free to PM if you want.  I worked for a small business consulting firm while getting my MBA so I might be able to help with any questions about creating a business plan, putting together projections, getting a loan, etc

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I worked at a store here for credit a few days a week here for a couple years before I ever had any professional jobs. I liked the idea of opening a store. I collected records since the late 90's. I amassed a bunch. I had store experience, sort of. Sold at record shows, online, etc. But seeing what those guys went through, it made gladly choose to work a 8 am - 4:30 pm job and have a guaranteed 40K a year.

Here's the problem currently: You need new records to be legitimate in the eyes of younger people. Old, original pressings are considered just that, old. Probably not younger VC people because they tend to be more of the obsessed music fan rather than the casual 20-something. But I sell to kids a lot and they want new. You'll have to buy reissues and new release, but you make no money on them (or very little). The money is in used records. In a city that size, you have a nice population. But there's already two stores who have been sifting through people's shit. There will inevitably be some weekend warrior record people who post ads on CL, the paper, magazines etc. Hustling to keep new stock is how you stand out to more serious collectors. Going to your store and finding something new or cool is the goal, and if you never get new stuff in, the regulars will seek it elsewhere. 

You would probably need at least 5,000 records priced to sell at minimum to open with another 5,000 of stock to-be-priced until you're able to advertise and get people calling you up. Then you have to look at endless terrible records until you find the one person who will sell them to you. 

In my opinion, the hardest thing to do but the most rewarding is just getting people to hang out at your spot. Kids talking music. People who want to feel young and relevant still. Whatever. Getting people to stop just to say hi or see what's new. Those people eventually buy. So, if you have a good month, get a keg, cook hot dogs, have a local band play a set. Getting people in there is key. I'm sort of an older collector, I hate going into a store advertised as a record store and it's a bookstore, cafe, pet store, whatever the fuck. Pick one thing and do it. If you have to worry about food, that's a whole other mess with other regulations. Books about music, band t-shirts, etc are cool.

If you have no children and no significant other who relies on you for your share of the rent, then, cool, it's a fun experiment. If you fail, you at least tried. But if you have people who rely on you, it's not worth the stress. Trust me.

My advice, if I didn't have debt and a child: I would become a Craig's List, magazine ad, newspaper classified, etc machine and buy records from people. You can amass as much as you afford. Then you can sell the best stuff online, keep other things, and stuff that you're not making much from you can sell it to the record stores. They need used stock. You're not going to make much, but if you kept the best stuff, it will help you get your initial investment back. 

Feel free to message me if you have any questions. 

 

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Yeah I work in the retail design field. A big part of what we do these days is take defunct B&M retail spaces and turn them back into revenue-generators. Think all the big names in stores that are closing up all over the country.

 

That said, what most people have already chimed in about is true. You don't want to start a record store. You want to create a gathering/community spot that also sells records. You're gonna have to figure out what the real revenue is going to come from (coffee/beverages/snack, local arts/crafts, performances, whatever) if you're going to get this thing rolling. It can work, but I wouldn't even approach it from the start as a "record store" in any traditional sense.

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I imagine opening a record store is less "this is easier than having a regular office job!" and more "this is hard work and failure that I would rather endure than an office job because I'm a very specific kind of person who can tolerate instability and being broke as long as it has to do with music/records!"

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