Setting up a dealership (apologies if slightly o/t)

I appreciate this might be slightly o/t and to be honest I wasn't sure if I should post here or on the General Discussions board. If it's felt by anyone reading that it would be better placed on that board, then I'll happily re-post there.

I am seriously thinking of quitting my 'career' in IT and setting up a record/CD dealership of some sort - be it a mail-order operation, a shop or even a combination of these things. I do know of a privately-owned record store not too far from where live where the owner is thinking of retiring in the not-too-distant future. I'm going to approach him to see what his plans are for the business (in particular the stock). His words to me recently were that he is selling more vinyl now that he was 20 years ago - "the stuff is flying out the door" was his summary of the last few years.

To put it quite simply, I've had enough of the IT industry - working for arrogant a*seholes only concerned with their own wealth and status. In these times of economic uncertaintly and a stagnant IT market, it's even worse. After 12 years of it, I'm through with the petty politics and all the other **** that comes with working in a so-called lucrative industry.

Anyhow, I know that some of the forum members here have their own dealerships specialising in audiophile vinyl & CD's or just records & CD's in general. There are probably some who specialise in vinyl - heck, there's enough new stuff coming out from the reissue labels that you could build a whole business up around that...I don't know for sure but that would be my guess. I suppose what I'm after here is some advice: would it be good to start up something new or try and acquire an existing operation?

Music is my first love, everything else is my mistress That's the way it always has been and I guess that's the way it always will be for me. My girlfriend watched the High Fidelity DVD with me recently and commented that owning my own record store would just be sooooo perfect for me. She saw many similarities between myself and the John Cusack character - although she did admit some of the obsessive stuff (filing LP's autobiogrpahically, constant making of Top 5 lists, etc) was not quite the same as my persona! I would be looking not to compete with the HMV's and Tower Records of the world, but be a niche dealer specialising in vinyl (both old and new, especially the reissue stuff) but also catering for the average punter who wants the latest Britney CD if he/she wants it.

My love of music - and especially vinyl - would mean that I would probably WANT to get out bed in the morning and go to work - be around something I love, rather than doing something everyday out of sheer necessity. The only good thing about my career thus far is that it's been reasonably well paid - enabling me to feed my habit of buying loads of CD's and vinyl BUT it doesn't make me happy.

Now, OWNING a record store surrounded by thousands of records and CD's definitely would What I'm really looking for here is some advice from those of you who have set up dealerships, or have run them in the past, etc. My bank manager would probably laugh...I can hear him now: "You want me to loan £100,000 to buy a store selling VINYL records? Do you think I'm crazy? You must be. NOBODY buys that stuff anymore do they?"

Of course, I realise that this forum (and a great forum it is too) is primarily for the purpose of discussing music and not career advice (!) but I felt that the community here is so good - and people are so helpful too - that this may be a good place to start getting some feedback/advice.

My girlfriend thinks it's a brilliant idea but neither of us really know where to start with all of this - is anybody here able to make some suggestions, give me some ideas or point me in the right direction??? The pros and cons are not yet known to me so any of those sorts of comments from people here who run their own dealerships is also most welcome.

 

Hello Kipper.

My advise without knowing at all your particulars is that you hold on to your IT job.

The current environment and the likelyhood of new terrorist attacks would indicate that this is not the moment for taking risks.

If you can start a business -while keeping your day job- do it. You should do that even if you are happy with your day job.

And it is important that your personal business uses your IT expertise or other expertise you may have. It is so tough to enter into a new activity without the requiered experience, knowledge and credibility. Think that there are many people losing their shirt seling music and they have been at it for years.

My two cents. The best of luck in whatever you do in the future.

 

Can't let that stop you. That is exactly what Al Quieda wants us to do, nothing!

 

Interesting comments proufo. I would have said companies providing important infrastructure equipment and services, such as IT organisations, are at far more risk from terrorist or other forms of attack than a guy running an independent record shop.

I have thought about maybe starting something up as a sideline to my current job initially. I have thought about asking the owner of the store near me if maybe I can get involved in some way on a part-time basis. That would allow me to learn things about the business and what's involved.

Having worked in the IT business for a long time, you're right about any new venture exploiting some of that knowledge and experience. The store in question has no website, no online purchasing facilities and doesn't even do mail order!

I don't doubt that there are many people going out of business selling music. In the UK several new smaller 'chains' started up a few years back, all trying to compete with the big megastores like HMV, Virgin Megastore and Tower Records. They have all gone. I've noticed several local stores go out of business - again, because they've tried to take on the biggies and lost.

However, I'm convinced that if you can give people the product and the service they want, they'll come to you. For example there is a very small CD/vinyl store near me but I don't shop there very often because there the choice is very limited and the service isn't great. It's not bad but not that good either. Now if the choice of CD's and vinyl on offer was more substantial I WOULD shop there more often, simple as that.

I agree that at the moment it would be a big gamble to start something from scratch but if I was to take over an established business and maybe add some things to it (mail order, online purchasing) then I guess there's a good chance of it working out. It's only an idea at this stage...I need to do a lot more research before I even think about chucking my current job.

 

I'll be glad to give you more info than you could ever possibly want on the subject.
dennis

 

Thanks Dennis...private message on its' way!

 

In my experience, people who OWN small record stores that are doing a booming business usually do not sell out, unless they are planning to move and open another record store in another city. If that is the case, you may have stumbled on to something. Otherwise, you can figure that you'll be buing into a business that will consume a lot of your time with little return, and unless you know what you are doing you will just be another record store owner looking to sell in the near future.

Do you plan to stock new releases? If so, you will find that the situation is stacked against you. In most cities there are large retail stores that can sell product below your WHOLESALE cost, and in many cities there are small chains tied in to the local wholesale distributor that can offer consistently lower prices than you can. Best Buy and Circuit City frequently offer first-week sales that are at least a dollar below what YOU will have to pay for them.

If you intend to specialize in audiophile items and rare vinyl, you'll need an internet site. You cannot depend on local business to support this. And you'll need to take MC, VISA, etc., or you will limit your customer base before you start.

Websites are not hard to design, although you will need to know some html and a scripting language (VB, Perl, C#, etc.). In the begining you can probably use an MS Access database, but eventually you'll need SQL if your internet business takes off. If you're in IT you may have some of these skills, or know someone who does who will do the work for you. Otherwise, this can get expensive fast. Most people who do this kind of thing on contract grossly overcharge. My advice - if you intend to run an internet site, learn the skills and do it yourself. Otherwise, a lot of your profit will go towards maintaining something that is not hard to maintain if you know how to do it.

Also, you'll need to know something about product and how to aquire it. This is a daunting task, especially if you intend to deal in old viny. It's also what can make the whole thing fun. You might start with garage sales.

If I were you, I wouldn't invest a lot of money or quit my day job in the begining. Start small, and build an internet business before you get locked in to retail space. Unless you have the funds to live a while on a negative income, and are willing to take the risk that you will crash and burn. Also, you should contact some of the audiophile labels and determine your unit cost vs. quanity ordered, because this can be a Catch 22. if you don't have the customer base, you can't turn quantity, and if you can't turn quantity, you often will not be able to work a unit cost that will allow you to sell at prices that can attract a new customer base.

Just some things to think about...

 

I've never owned my own business or worked in the music/audiophile industry, although like you have dreamt about it and thought it would make a great carrer choice given how much knowledge and time I donate to the subject. But being in business management, I would agree with some of the previous advice and start out slow while keeping your day job. Maybe you could buy out the owner and then keep him on staff for a transitional period as a consultant.

See how it goes and if you can afford quiting the IT job. I don't know your situation such as kids, mortgage, savings, etc. but it seems that the music business can be risky as their is a lot of competition (online and brick & mortar) and relatively low profit margins. It appears you will need to carry a large inventory and be responsible for defective returns which can eat up your cashflow relatively quickly. If you lose some transactions due to shift in economy, competition, etc. it can spell disaster.

I hope that you can and will do this (and of course give us Forum members a healthy discount) but preceed with caution. If it starts to work out and you can pay the bills and put a little money in the bank, then go for it full time.

Good luck and let us know what happens.