How did Best Buy put Indie Stores Out of Business?

Discussion in 'Music Corner' started by nbakid2000, Mar 2, 2015.

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  1. Pizza

    Pizza With extra pepperoni

    Location:
    USA
    I remember when BBs first started to pop up. I was at the Rock Hall for a promotion party for Meatloaf's new album and they had local record shop owners there. I knew the one guy who's store I'd go to and he told me how he wasn't happy about the cut BB took away from his business. He made it sound like they were selling CDs for less than he could buy them let alone sell.
     
    Dino likes this.
  2. rockclassics

    rockclassics Senior Member

    Location:
    Mainline Florida
    He was telling the truth. Due to BB's volume, their wholesale cost was below the wholesale cost that independent stores could buy them at.
     
  3. bhasenstab

    bhasenstab Forum Resident

    Location:
    Brooklyn, NY
    I went to a record fair a few weeks back, run by the people who put on The Brooklyn Flea, and was surprised to see that one of the best vendors there (guy had real, quality merchandise) was, in fact, proprietor of one of the long-standing indie used/new records shops on Long Island. He told me he closed his shop because the landlord wanted to use the space for a coffee bar. In the era of Stabucks and Peet's and Green Mountain...? Anyway, we can't overlook trends like this, too. Higher-margin retail is squeezing record shops out of the burbs and the cities.

    I felt bad for this fellow, who is now selling at record fairs and promoting concerts, at the margin, to get by. (Bought the red-vinyl 3LP version of The Clash Hits Back from him, to pay my respects.)
     
  4. Glenn Christense

    Glenn Christense Foremost Beatles expert... on my block


    Plus, to make matters worse, Best Buy was in bed with the record companies . The new Jimi Hendrix CD ? Buy it at Best Buy and get an exclusive 45 !`Yellow Submarine Songtrack ? Get an exclusive Yellow Submarine poster ! And on and on.

    So not only was Best Buy selling the CDs for almost zip, they were giving away extra's that indies didn't get !

    And of course I cannot even count how many times I have played those exclusive interview CDs Best Buy included with the Beatles Anthology CDs.:rolleyes: :D
     
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  5. Bruno Republic

    Bruno Republic Forum Resident

    Location:
    Toronto, Canada
    I find that quite surprising. I know a couple of people who are... well, I guess were at this point... in the adult entertainment business, and they had built up a small but steady and profitable film studio over the years, starting in the VHS era and moving on to DVD. Their business has been decimated over the past few years by the huge amount of online options, not just paid ones, but the vast amount of free/stolen stuff posted online.
     
  6. samurai

    samurai Step right up! See the glory, of the royal scam.

    Location:
    MINNESOTA
    Pretty frick'n tough to compete with free.
     
  7. Analogman

    Analogman Well-Known Member

    Guess there's enough wankers out there who are afraid, or don't want to get caught at doing the download thing (or maybe creepy old dudes still living with Ma who don't even own a computer)
    Safer on your computer too I would imagine
    It stared out with about 50 titles and now it's about 25% of the stores floor space

    A family member of mine worked for them for 5 years
     
  8. Bruno Republic

    Bruno Republic Forum Resident

    Location:
    Toronto, Canada
    I don't think we can fault Best Buy for that. Just as with CDs, the problem is not that sales died because Best Buy stopped offering them, it's that the market itself died. Best Buy would be happy to sell that stuff if there was still demand for it.

    In my part of the world, Best Buy is having problems filling their stores, since so much of what they based their business on is gone (plus they don't do major appliances up here). Desktop PCs are now a niche market. People use the same laptop for years, unlike the glorious 90s when you had to buy a new one every two years just to run the latest version of MS-Office. Software is all sold by the download now. There's no market for stereo equipment or music anymore. Movies are moving to Netflix et al. More and more people just use their phones as their digital camera. That leaves video games, TVs, mobile phones, and small appliances. Not enough things left to keep those huge stores from looking empty and pathetic.
     
    ARK likes this.
  9. Glenn Christense

    Glenn Christense Foremost Beatles expert... on my block

    Interesting. How close was a Best Buy to your friends stores ?

    I mentioned Chicagoland's Rose Records and Chicago folks here will agree that Rose Records had two of the qualities you mention , but Best Buy still wiped them out.
    As has been mentioned by myself and others, Best Buy was selling many things at cost or less than your friend was paying for them. So unless the Best Buys were located fairly far from his stores and people didn't mind paying s couple of bucks extra to save a drive I don't know how he could really have offered competitive pricing.

    I had a Best Buy, a Circuit City and an indie CD store literally ACROSS THE STREET from the Rose Records so, if I was buying six or seven CDs at a time even an extra couple of bucks per CD added up fast.
     
    Last edited: Mar 2, 2015
  10. pscreed

    pscreed Upstanding Member

    Location:
    Land of the Free
    A little bit, because Best Buy bought direct from the majors while the indie was buying through a one-stop (think middle man distributor). But that's maybe 5% - 7% difference on a new hit title at cost.

    The killer was that Best Buy was buying $16.98 list CDs, at their cost of ~ $11.30, and selling them for $9.99 or $10.99. No way in the world an indie paying $11.30 + 7% is staying in business that way, you're paying your customer to take your merchandise out the door.
     
    Last edited: Mar 2, 2015
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  11. japes

    japes Senior Member

    Location:
    richmond, va
    May I ask who or what store it was? I used to live on Long Island.
     
  12. Glenn Christense

    Glenn Christense Foremost Beatles expert... on my block

    Exactly. That just isn't the ideal business model.
    How do we make up for losing money on every CD we sell ? Volume! :D
     
    pscreed likes this.
  13. Smiths22

    Smiths22 Well-Known Member

    I don't buy used anymore, disgusting.
     
  14. nbakid2000

    nbakid2000 On Indie's Cutting Edge Thread Starter

    Location:
    Springfield, MO
    There is absolutely no need to download that material. The equivalent of YouTube sites exist in plentiful number online. No viruses, no "caught watching" and no credit card traces.
     
    Bruno Republic likes this.
  15. Finch Platte

    Finch Platte Lettme Rundatt Bayou

    Location:
    NorCal
     
  16. Michael

    Michael I LOVE WIDE S-T-E-R-E-O!

    but was lessened with their ridiculous shipping charges..
     
  17. Michael

    Michael I LOVE WIDE S-T-E-R-E-O!

    not in my world...vinyl is dead CDs rule..I am not alone.
     
  18. Michael

    Michael I LOVE WIDE S-T-E-R-E-O!

    Best Buy=volume buying...hard to compete with for Mom & Pop...
     
  19. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA

    This is absolutely true. And it's even more true for bookstores. All new bookstores make the majority of their profits from bestsellers. Once Amazon/Target/Costco/WalMart/etc. started selling bestsellers at or around wholesale, the new bookstores couldn't stay open. It's why Barnes and Nobel, the last man standing, is on the ropes, and almost all other new book retailers are gone.
     
    Glenn Christense likes this.
  20. Analogman

    Analogman Well-Known Member

    Sounds like a man in the know...........but

    I wasn't trying to start a debate about the best way to watch porn.........just telling you what one of the few money makers is at Rasputin's Records and Tapes, San Francisco Bay Area and I don't know about the rest of the World (not a big porn fan myself)

    And I only say this because I have a very close family member who was the DVD department manager

    I also speculated as to who the market MIGHT be for this material in post #57; I don't know and don't really care, but if you do, the next time I see my relative I will inquire as to who makes up the demographic still consuming their smut via DeeVeeDees

    I really don't need to be schooled on the state of the porn industry, but thanks anyway

    The one successful record store in the area devotes about 25% of their floor space to it so it must be doing something for somebody, wouldn't you agree?

    And it's funny you said what you said about viruses; I almost was locked out of my machine just this morning, following a link to a SONG LYRICS site..........you don't have a clue when, or where, so never say never

    False sense of security 'til you get bit
     
  21. SoundAdvice

    SoundAdvice Senior Member

    Location:
    Vancouver
    What stopped indie stores from buying the stuff on Tuesday for $2 cheaper? I know stores were doing that in 2008 when ACDC was Walmart only.

    Anybody have p0rn stores in their town dedicated to DVD sales/rentals? Blu-ray didn't seem to take off for them.
     
  22. Analogman

    Analogman Well-Known Member

    I don't know if any of them are dedicated to it anymore
    The only porn shop in the Concord, Ca area is in Pleasant Hill; used to be called "The Adult Book Store", now it has some sort of "classy" name about lingerie or something

    Haven't been in there since the '80s My brother and I checked it out once, they even had a pool table and those little token operated 16mm "viewing booths", but this was way back when VHS was still King

    A sordid murder occurred at that locale, shut the place down for a while Grammar school children have to walk past the place to get to school, still do, even to this day (if the school's still there).............but it was especially raunchy during the coke fueled '80s Now it's just a joint for bored house wives and pervs, based on the cars I see in the parking lot

    Our independent video rental shop started out with a closet of porn (pre-DVD) and before they closed their doors about 10 years ago that closet had grown to about 40% of the floor space, almost exclusively DVDs
     
    nbakid2000 likes this.
  23. DreadPikathulhu

    DreadPikathulhu Senior Member

    Location:
    Seattle
    Software and video games are also increasingly moving towards download. I don't see how they can survive selling appliances and electronics that people buy once every ten years, at best.
     
  24. Jacob Johnson

    Jacob Johnson Active Member

    Location:
    Portland, Oregon
    Whoa.
     
  25. DreadPikathulhu

    DreadPikathulhu Senior Member

    Location:
    Seattle
    I drive by them and they don't seem too busy. I would hestate to rent a DVD from a place like that, it might gum up my player.
     
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