Do you guys see a potential business opportunity in this niche?
Mar 24, 2010 at 8:08 PM Thread Starter Post #1 of 15

sell224

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Fellow head-fiers,

I'm a student at USC doing my thing in the entrepreneurship program.. been a headphone enthusiast for a while and have really enjoyed reading about and researching headphones in the past. I've seen how passionate the community is and it seems like this niche is large and possibly growing.

Now, my process in researching what kind of headphones to buy would start with coming to a forum like this, asking all you guys with a price range in mind, then taking those answers and looking up reviews elsewhere. Once I've spent days searching for the perfect pair I'll prob buy them for the cheapest price I can find.

What I find wrong with this is the sheer amount of difficulty in actually determining what headphones to buy, say at a 250 dollar range. I've begun to notice that there seems to be not a single Head-fi retail website out there that provides the "one-stop-shop" experience. No where to go and search specfically for "250 dollar headphones" and get a completely comprehensive list. I'm envisioning the Newegg for headphones: discounted/always lowest (other than ebay) prices, trusted warranty and brand, cheap shipping. I'm also imagining mixing this retail idea with reviews and articles, similar to Techcrunch.

The site would essentially fill the void online for online high quality headphone shopping. I have experience designing websites and have been playing around in the web development space for a while. Just recently thought of this niche as a possible business opportunity.

My questions are:

1. Are there any "newegg's" of headphone websites already?
2. Do you think there is a pain in this market that is unsatisfied currently? Perhaps still a void for a website like this that would include all sorts of sound equipment, like amps and speakers.

Cheers.
 
Mar 24, 2010 at 8:17 PM Post #2 of 15
Looks like you are thinking of Amazons business model. They just about offer exactly what you are suggesting. You should have a look at their website.
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Mar 24, 2010 at 8:24 PM Post #3 of 15
probably not. Some of the smaller (and larger) headphone manufacturers are notoriously difficult to deal with when it comes to warranties/official dealership status.

You can always try, but it just seems like there are too many sites that ALMOST do that, and the reasons they don't do it are probably pretty good reasons. Newegg works because it's not a niche market.
 
Mar 24, 2010 at 8:26 PM Post #4 of 15
I was going to say Headroom but despite all the info they provide the customer with their range of products isn't very complete and their prices must all go by the msrp for how expensive they seem. I wish there were a competitive store online which stocked many headphones and amps at competitive prices but I've yet to come across one. Is it really possible for a store such as newegg to exist in niche markets?
 
Mar 24, 2010 at 8:30 PM Post #5 of 15
Quote:

Originally Posted by Otakusound /img/forum/go_quote.gif
I was going to say Headroom but despite all the info they provide the customer with their range of products isn't very complete and their prices must all go by the msrp for how expensive they seem. I wish there were a competitive store online which stocked many headphones and amps at competitive prices but I've yet to come across one. Is it really possible for a store such as newegg to exist in niche markets?


Also remember that headroom is also there to sell its own products and services. They're not just a headphone distributor. In fact, it's kind of a reason why you can't take their suggestions of whether or not a given headphone should be amped, because they ALWAYS think a headphone should be amped, because they sell amps.

Headroom likely has to sell at higher prices to counteract their crazy generous return policy. Also, don't forget that headroom actually makes most of their money selling their amps and recabling, etc. Thus, their reviews aren't totally unbiased, as they say everything needs an amp.
 
Mar 24, 2010 at 9:03 PM Post #6 of 15
Headphones are the fastest-growing segment of the audiophile community, and IEMs are the fastest-growing segment of the headphone community.

Amazon.com would be very tough to beat or even come close to matching, however; if you did they would sell at a loss until you were crushed, IMO, so good luck with that!
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Mar 24, 2010 at 10:00 PM Post #8 of 15
Don't forget that Newegg's market was niche at one time. If you can envision a reason why headphone audio will crawl out of the niche, you'll be ahead of the game. (Maybe we will live in refrigerator-sized apartments in the future.)

HeadRoom seems somewhat like the Newegg of headphones. They were there at the very beginning, are extremely well trusted, and their site is at least somewhat educational when it comes to what to buy. Amazon generally has far more reviews, but many of them are fluff--"OMG these $43 headphones are the best ever because I can hear the highs and the bass." Amazon's low prices are tough to beat, but HeadRoom isn't completely uncompetitive. However, as fjrabon says, they exist primarily to sell something other than headphones, which prevents them from being a neutralish entity like Newegg. Plus, I think their amps are voiced for Sennheisers.
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So, is there a gap in the market for a site like this? Maybe, but probably not. As it stands, Western headphone audio currently revolves around Head-Fi, and it's doing pretty well. I doubt headphone manufacturers are interested in undercutting each other or putting undue pressure on their current retailers, and there are too many boutique equipment manufactures who do just fine on their own to want to start supplying a third party. You may want to insert a business model into that equation, but no one else really wants or needs you there.

Newegg grew up with the Internet. Headphone audio won't reach the DIY computer market's size any time soon, and if it does most of the avenues of purchase will already be entrenched--and probably still grassroots. When Sony makes a headphone amp, then the world will be ready for the store you envision.
 
Mar 24, 2010 at 10:02 PM Post #9 of 15
To be short: Unless you come up with your own or OEM headphones (think head direct), no.

You simply will not be able to compete against the big boys on price.
 
Mar 24, 2010 at 10:02 PM Post #10 of 15
To be short: Unless you come up with your own or OEM headphones (think head direct), no.

You simply will not be able to compete against the big boys on price.
 
Mar 24, 2010 at 11:45 PM Post #12 of 15
There's money to be made in buying and selling audio equipment, particularly headphones and headphone accessories, but you have to know your market, have access to good deals and be responsive to changes before they swallow you whole.

Headphone lovers are sentimental and impulsive. They'll crawl through a mile of muck to bring together the cash needed to buy some flavor of the month. Once they get it into their head that they just have to have some headphone, they'll move heaven and earth to get it. But by the same measure, these people are also finicky and restless. It can be a good thing to a merchant who sells new and used. Restless headphone lovers can be found selling off their relatively-new headphones in order to buy their next fix. This can be great for business in much the same way car dealerships make most of their money off of the trade-in and used-car markets. The margins are simply better.

But it's not so great for business when perceptions change on a massive scale. The HF-2 was the flavor of the month - until RS-1 crowd got defensive (and vocal). Recently, a batch of B-stock HF-2s just turned the HF-2 market upside down. Why pay $600 for a $500 headphone when you can get it for $350? The PS-1000 was all the rage and now that market seems to be slowing down (or at least more work). There was a time when people actually paid $500 for an Ultimate Ears Triple-Fi 10 Pro but when Logitech unloaded a bunch for $99, it created a stir from which the ripples have not stopped coming. You won't find any TF10s for $99 but nobody is paying $500 anymore.

This is a very competitive market at virtually every level. The mark-up is good but so is the amont of competition. The three-driver IEM has given way to the 6- and 8-way product at cheaper prices (when indexed for inflation). When you consider the number of firms entering this market, as well as the number of firms burned by it, you really have to know what niche to hit if you're going to do more than race to the bottom.

For what it's worth, that's one man's opinion.
 
Mar 25, 2010 at 6:23 AM Post #13 of 15
Quote:

Originally Posted by MomijiTMO /img/forum/go_quote.gif
Pffft

If I were to get into audio, I'd create custom cables. $$$ galore.



Especially if you actually have the capital to have the cable foundries manufacture the wires to your specs, uniquely, by the container load of bulk spools
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Mar 25, 2010 at 6:51 AM Post #14 of 15
Quote:

Originally Posted by sell224 /img/forum/go_quote.gif
I'm envisioning the Newegg for headphones: discounted/always lowest (other than ebay) prices, trusted warranty and brand, cheap shipping.


This is the bread and butter, if it's cheap people will use it, simple as.
 

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