How do local record stores stay in business?

Discussion in 'Marketplace Discussions' started by 12" 45rpm, Nov 1, 2019.

  1. 12" 45rpm

    12" 45rpm Forum Resident Thread Starter

    Location:
    New York City
    I've tried selling records myself via craigslist and facebook marketplace, but struggle to get more than a $1 per album. Maybe if you don't mind playing a game of twenty questions you can get a little more. But the values are still way less than what you can get selling online.

    So how do local record stores stay in business? How many record collectors can there be in a small area? These stores would have to be selling a ton just to break even with the rent, salaries, utilities, etc.. But most of the time they are empty. And the fact that I can't find buyers via local online selling tells me the market is very small.

    I no longer shop in local record stores unless I happen to already be in the area. Just the gas and time for me to check out a store would exceed the shipping cost for buying something online.
     
  2. patient_ot

    patient_ot Forum Resident

    Location:
    USA
    It's a tough business. The local stores are mainly catering to the people that stop in regularly to dig through the used bins. The profit margin on new records is pretty low.
     
  3. Chee

    Chee Well-Known Member

    Location:
    Denver
    Most have imploded the past 25 years. High rents, crummy neighborhoods, bad employees, too much competition online, people know what records are worth. Some stay in business to get the people who haven't a clue about the worth of records and put the best online then the duffers hit the store racks or museum prices to make the store look good. Silver spoon owners are another factor. They don't have to worry about rent. I know of many stores banked by Saul and Murray old school family money. Bank loans to book and record stores is hard to fathom. Store buildings owned by old school family money is another factor. No worry there. New record profit is not worth it. Non returnable CD/DVD/LP is a killer for stores.
     
    Mr. LP Collector likes this.
  4. Christian Hill

    Christian Hill It's all in the mind

    Location:
    Boston
    Princeton Record Exchange has been in business since 1980. It helps that is right next to an Ivy League University. :)


    "In spite of the growing competition that the internet has bred, the store maintains profitability by purchasing used CDs, used DVDs and used LPs for resale. In contrast with most other internet business models, they do not sell music or movies online, but they do purchase many collections online."
     
  5. uzn007

    uzn007 Pack Rat

    Location:
    Baja Virginia
    Record stores stay in business by selling records. Is this a trick question? While it's true that the 90s (which ended 20 years ago) were not kind to record stores, vinyl's popularity has been rising for at least ten years. The stores near me seem to operate on one of two models: Either price stuff on the low side, so it moves quickly, and make money on volume, or price it on the high side and sell fewer records for higher prices.

    If you're struggling to get more than $1 per album, then it sounds like you don't have any albums that people want to buy, or they're in crap condition. That doesn't mean that no records anywhere are selling for more than a buck apiece. And just for future reference, answering questions from potential customers is typically part of the deal if you're selling used merchandise online. If you don't want to deal with that, don't sell online.
     
    LivingForever, E.Baba, Ere and 2 others like this.
  6. hvbias

    hvbias Forum Resident

    Location:
    Northeast
    I imagine that many record store owners must be happy with a very small net take home profit for being able to do a job they love. Guessing many of them will be living purely off SS instead of any real savings.

    Even where I live which is not exactly a bustling with activity state, commercial rents are quite high in the capital with only ~45k population.
     
  7. Spitfire

    Spitfire Senior Member

    Location:
    Pacific Northwest
    Buy low, sell high
     
    lazydawg58 likes this.
  8. JakeKlas

    JakeKlas Impatiently waiting for an 8-track revival

    Location:
    United States
    Some of the music magazines I get have features on small record stores (not chains, individual-owned stores).

    The sense I get is that they’re just squeaking by, but they do it because they love music. To them, just getting by is better than making more money in some cubicle somewhere. And maybe they have a spouse that works. The ones I’m reading about (and they’re mostly in the U.K.) specialize in some genre so they become a go-to resource for those fans.

    So, yeah, there’s the basic economics of buying low and selling just a bit higher. But it’s kind of a lifestyle thing for some of these folks (especially people 50+) that goes beyond getting rich. Just about every profile I’ve read has the owner saying they wouldn’t recommend it to anyone else because it is hard, but it’s something that’s in their system and the relationships they build with their customers is worth a lot to them compared to a life in the corporate world.
     
    Sound of the Suburbs and uzn007 like this.
  9. ANALOGUE OR DEATH

    ANALOGUE OR DEATH Forum Resident

    Location:
    HULL ENGLAND
    Depends what you're trying to sell,and the condition.
     
  10. 12" 45rpm

    12" 45rpm Forum Resident Thread Starter

    Location:
    New York City
    Interestingly I rarely get questions when I sell on discogs. 90+% never ask any questions.. It's the craigslist/facebook local folks who ask lots of annoying questions.. I just ignore those..
     
    E.Baba likes this.
  11. Green3000

    Green3000 New Member

    Location:
    USA midwest
    Here is a good question, but are there any record shops that sell 78 Rpm Disks? so far I have not found any in my state and I am not sure of too many other states. I would think if a record store ran across a few of those they make some buisness too, or would that be a failer ?
     
  12. Raynie

    Raynie Hyperactive!

    Location:
    Portland, OR
    It's not easy. You need a good plan and a lot of luck. The three successful established shops (~30 years) where I am exist for different reasons:

    • The first is a long established tourist trap that can sell Dan Fogelberg for $8 etc. They get all the old folks bringing in valuable merch and they pay nothing. They make a killing on RSD. The owner also bought the building back in late 80s so no rent.
    • The second is a co-op and gets rent paid from rental space, they also sell.
    • The third bought a giant warehouse of records from a folding franchise (Django's) back in 80s. A lucky stroke of genius.

    I also live in a record mecca which helps. That all said, none are doing very well from what I often hear, and upstarts don't often make it past 5-10 years. New places have to work hard finding items via online purchasing, other stores, record shows, garage sales and lots of clever marketing to scrape out their existence.
     
    Last edited: Nov 1, 2019
  13. Green3000

    Green3000 New Member

    Location:
    USA midwest
    what about places like Cheepos records in MPLS/St. Paul. they at least were open for Gosh, I think since the 70's. and they still are around. i think they have been open since the 70's if I am not wrong!
     
  14. Andy Saunders

    Andy Saunders Forum Resident

    Location:
    England
    Mail order l would think and thank God for it.
     
  15. lazydawg58

    lazydawg58 Know enough to know how much I don't know

    Location:
    Lillington NC
    Customer service certainly helps. So does locating in a less that ideal space where rents are lower. The basement of a building. The alley entrance space. The converted house. That sort of thing. Also being a more or less one man or woman operation. They might have a couple of part time workers, a music loving college student and a record collecting retiree for instance. As far as product is concerned I don't think that is a problem. When I visit a shop it isn't unusual to see one or two people come through with collections to sell. Knowing what will sell in your location and what it will sell for is a key as well. Then paying maybe 25% or less of that value would certainly help.

    That said, the best way to buy and sell records in my opinion is to rent a space in a high end consignment shop. If you clean up those records, discard anything below VG and ask a reasonable price you will develop repeat customers and avoid the hassles and risks of online selling or owning your own record shop. You certainly will not make fast money but you can support your own habit and maybe even have a little walking around money the first of every month.
     
    12" 45rpm likes this.
  16. E.Baba

    E.Baba Forum Resident

    Only one within 200km.
    Population growth area .
    Right in the middle of town for visibility.
    Online sales.
    No additional employees.
    No new releases.
    Sub lease some space to visual arts.
     
    lazydawg58 likes this.

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