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million dollar business idea for free! seriously, though, someone should do this

post #1 of 19
Thread Starter 

So, after finding this site and spending ALL my tiny student budget on headphones, and promptly returning those that failed to suit my taste, I realized there is a HUGE unmet demand that this website both helps to create, and can help to alleviate. To cut to the chase, here it is:

 

This website informs people about a vast vast array of different, often expensive, headphone options. But from what I gather based on obsessively scouring the forums in search of the "perfect" (for me) headphone, I can tell that not everyone on here is totally rich. So, someone should create a headphone rental company. Period. It makes soooooo much sense. (PS, if this already exists, then this is the lamest post ever, sorry, LOL).

 

I also happen to be into photography, and I also look at digital photography forums, and I realized there are many parallels. Both offer huge varieties of super expensive, equally alluring, equally SUBJECTIVE products. The difference is, photographers have lens rental programs that allow poor people like myself to experience (albeit, briefly) the joys of a $2000 lens for a mere $20/day!!

 

Imagine how this would translate into better informed headphone purchases!! I know, I know, IEM rental, nasty. But come on ... think of bowling shoes! It would be VERY easy to clean and disinfect silicon tips, or even include fresh re-usable tips.

 

Imagine being able to rent the 5 or 6 headphones you happen to be obsessing over (for me right now I'm torn between the Westone 3 and 4, Shure 535's, and Monster Cable Turbine Coppers), pay $100/week total, and make a decision based on your own experience and perception! I think it would be perfect.

 

I know there are Canjams or whatever, and certain communities have listening parties? But I still feel this business model could thrive and really help people make better decisions. It could obviously include portable amps, high end cables, etc.

 

Whaddya think?

 

Also, feel free to tell me which IEM's to choose, I cannot decide!! And I really cannot afford to buy them all and try them.

 

I like ALL kinds of music, but tend to listen to electro, folk, and indie most often. I'm really attracted to the MCTP, but they seem like glorified Skullcandy ... are they?

post #2 of 19

Not silly idea at all, but not something that anyone would venture to do due to a couple of factors IMHO.

 

-There are just too many products that seek demand, to have even one of each in stock would be a great task in itself.  (Go browse through the thousands of IEM's alone on Amazon.)

-This kind of community we are in already seems to have there own sort of rental service in place....FS/FT Forum.  You can recoup your money quite easily by buying used from others...rinse and repeat.

-Trying to keep up with having all the newest earphones coming out at an unwieldy speed (now-a-days) from every part of the world would be another tricky task.

-Finally the cost for rental and possible deposit (In case the phones magically disappear from the renter one day)  would be my last concern.  Many thrifty Head-fier's would rather, again, recoup their money in full and resell the used pair of earphones if they disliked them. 


Edited by Enanthate - 4/24/11 at 7:51am
post #3 of 19
Sounds like a good idea to me. Ear tips are cheap, they could include new ones for every customer.

Heck, I would be happy if I could find some place locally where I could audition iems in-store. Even the local BestBuy and Staples have in store demo displays of some monster buds?? Sadly I've never heard them because there are never any tips in the drawer. Maybe I'll just bring my own tips next time...
post #4 of 19

Theft and breakage could become an issue. Plus, in order to become viable from a business standpoint, rentals couldn't be exactly inexpensive. How many people would be willing to spend, say, $65/week for the Shure 535? Or $150/week for the LCD2? What about properly amping them? Would it even be profitable to rent out headphones like the RE0 or M50? Shipping costs would be killer. Potentially having $25k+ in inventory out at any one time is quite risky.

From a consumer's perspective it's a great idea. It's just not as practical from the business end.

post #5 of 19

There simply would not be enough demand. The high end photography market is incomparably larger than the high end headphone market.

post #6 of 19
Thread Starter 
Originally Posted by theleonlion View Post

There simply would not be enough demand. The high end photography market is incomparably larger than the high end headphone market.

This would be the biggest issue, IMO. The only counter I might offer is that perhaps the intensity of people's passion for this hobby would compensate for relatively fewer people interested.

 

 

Quote:
"There are just too many products that seek demand, to have even one of each in stock would be a great task in itself.  (Go browse through the thousands of IEM's alone on Amazon.)"

       - I was thinking about a few of the most popular phones, the ones that come up most frequently, but yes, there would be the issue of deciding which get picked, and with a smaller demand pool, it would be hard to cover everyone's tastes.

 

Quote:

"-This kind of community we are in already seems to have there own sort of rental service in place....FS/FT Forum.  You can recoup your money quite easily by buying used from others...rinse and repeat."

 

      - Maybe this is what I'm missing! I should start looking into this for sure. If this is how it has evolved, better to go with the flow than try to restructure everything.

 

Quote:

 

-Trying to keep up with having all the newest earphones coming out at an unwieldy speed (now-a-days) from every part of the world would be another tricky task.

This is true, but people still talk about and want to know about phones that are 5 years old (SE530, etc), so it's not like these are forgotten. But yes, compred to photo where a new lens comes out every few years, inventory is evolving much quicker in headphones. I still think there seem to be a solid few dozen IEM that make up 95% of the discussion on here, not beyond the scope of a rental company (the co. i rent from stocks probably 100+ lenses, bodies, accessories and enough copies of each to make wait time a few days at most, if any at all!

 

Quote:

"-Finally the cost for rental and possible deposit (In case the phones magically disappear from the renter one day)  would be my last concern.  Many thrifty Head-fier's would rather, again, recoup their money in full and resell the used pair of earphones if they disliked them"

 

      - I'm no business major, but I can say that for whatever reason the costs for renting super expensive lenses is really low. There is no deposit, but since you need a credit card to rent in the first place, if you damage or "lose" the headphones, you are simply charged the cost to replace them. I really think from our perspective, if it could work, the rental plan would be much to our favor. The demand is the limiting factor, though. Do most people get fully compensated on the FS forum? If so, I *REALLY* need to look into it. Renting still seems more convenient (less waiting for something to become available, etc), but I've not tried the buying/selling method.

 

Quote:
"Theft and breakage could become an issue. Plus, in order to become viable from a business standpoint, rentals couldn't be exactly inexpensive. How many people would be willing to spend, say, $65/week for the Shure 535? Or $150/week for the LCD2? What about properly amping them? Would it even be profitable to rent out headphones like the RE0 or M50? Shipping costs would be killer. Potentially having $25k+ in inventory out at any one time is quite risky."

       - Theft and breakage are an issue but easily solved by virtue of the fact that the rental company has your credit card info, a big incentive to not break or lose them! If you can rent a $2000 lens for $50/week, then I would think a $500-$1000 headphone would be cheaper than $65/week. The photo companies have $100k+ of inventory out and I know they are making a killing because they keep expanding inventory. I'm guessing that again the demand is the limiting factor and since the FS forum kind of takes care of demand, there is less need.

 

I guess I need to look into the FS forum! Although, I would much prefer to pay $80 to audition 4 sets of phones for a week, versus throwing down a few hundred at a time (or a few thousand if you want to A/B several top of the line models). I think a renal company could actually significantly EXPAND demand because more people could have exposure to high end stuff with lower initial investment. I think lots of people are kind of on the cusp of being willing to spend more on phones, but the initial $300 totally puts them off. If they could hear the difference for $25, I bet a lot of those people would be willing to invest and join the dark side, LOL ... I know I would have joined long ago if this were the case, espcially for IEM, since many poeple probably assume you can't return them after defiling them with ear wax. I'm curious to know what the demand actually is. I mean, if the demand supports such a constantly upgrading sales base, that would seem to suggest there's enough people to support a rental market. There are half a dozen lens rental sites, equally well stocked and efficient ... one good can rental site might be able to capture lots of interest. ... something to think about.



 

 

post #7 of 19
Yup, you break them or don't return them you bought them since your credit card is on file. I'm no business major either but it seems like with a few weeks of rental fees the iems/phones are paid for and the rest of the rental fees is profit for the said company(s).

Example: Rent out a set of GR10s for eight weeks at $50/week and they are paid for. Actually they'll be paid for in less time since dealers don't pay msrp for them. After that its all profit. Of course you have figure in shipping/insurance costs but looking at it this way it doesn't seem too far fetched.

I would pay $50 to audition the GR10s for a week... smily_headphones1.gif

Edit: There could also be incentives like a discount off the purchase of new phones. If you like what you rented and want to buy them you get a small discount.
Edited by RADI0HEAD - 4/24/11 at 10:16am
post #8 of 19
Thread Starter 

Thats exactly how the lens rental places do it, whatever you pay for the rental automatically gets deducted from the cost of buying if you choose to do so .. AND they then sell the used lenses after a certain point for sometimes heavy discounts!

 

I wonder if Head Fi could start something like this within the website ... It's just so so so impractical to buy all this stuff for basically full price, knowing there's a good chance you'll return it, on and on and on ... I guess this is only an issue for people who don't have enough savings to float that cost even for a month or two.

 

 

post #9 of 19
Given the prices of most of these IEMs and headphones, inventory is actually fairly low. $25,000 inventory might sound like a lot, but as a person who works in a violin shop that does rental with those, we have nearly $500,000 (retail) in rental inventory not to mention all the new upgrade and semi pro instruments we don't rent that are only for sale. If someone is a business major and knows what to do, has $2-5k to get started and can make a webpage or hire someone to make a good one, this could certainly be successful. Hiring a good lawyer to work out your legal details with contracts, payments, etc would be critical so you don't get stuck with cancelled credit cards, etc.

Btw, rental prices quoted so far are unreasonably high. At my violin shop we charge ~$20 a month for a retail $600 instrument and are still quite profitable.

Edit: Looking at joker's thread of 162 IEMs and slimming it down to the $60-600 range gives us 119 IEMs at an average (by group price range) total retail cost of $11,565 or $97 per IEM. Net cost on items like this is likely to be around half or slightly above half of retail (depending on price range of course) so if we assume net cost to be about $6000 and we rent these 119 IEMs for an average of $20 a week they will be paid off in less than 3 weeks assuming continual rental on every IEM not accounting for shipping delays, etc. Add administrative costs (website, lawyer, your time, etc) and you could add another week to pay it all off. Note that most of the initial setup cost won't be recurring and will then turn to profit from there on. If you would rather be more affordable for the masses you could drop prices and elongate your pay off at the benefit of more volume. This is also something you could start in your home if you have some clear space for organization so there wouldn't be any building costs initially, either.

This is just some rough (obviously) theorycrafting, but it does show that even if it ended up being a bit more expensive than my example shows, it would still pay for itself quite quickly.
Edited by Maxvla - 4/24/11 at 3:53pm
post #10 of 19
Thread Starter 

Btw, rental prices quoted so far are unreasonably high. At my violin shop we charge ~$20 a month for a retail $600 instrument and are still quite profitable.


I agree! I was just throwing numbers out there, but I think if volume was high enough rentals could be quite cheap ... I feel there is just a huge unmet demand for this, but unfortunately I am terribly un-business savvy. I just wish this service existed because I want to use it ... like, right now!!! LOL ... It's not really that much of a leap, as you point out many other hobbies offer this service.

 

I'm just throwing this idea out there hoping that the right person will be inspired. Reading through all these posts, I mean, it's the one issue that comes up *constantly*, people trying to ask people how this-or-that headphone sounds (when clearly most people hear things totally differently, or at least prefer different sound qualities) ... I have observed such wildly conflicting descriptions, it's not that helpful compared to trying for yourself. Ugh! Especially for IEM's it is very difficult to get stores to let you try, and even then they won't have the selection that most people want.

 

I really believe this is a potentially super successful business. It all depends on the website, although I think if Head Fi was smart it would offer the service right here where all the people are, but yeah, lots of potential.

 

post #11 of 19
Quote:
Originally Posted by franklyshankly View Post


I agree! I was just throwing numbers out there, but I think if volume was high enough rentals could be quite cheap ... I feel there is just a huge unmet demand for this, but unfortunately I am terribly un-business savvy. I just wish this service existed because I want to use it ... like, right now!!! LOL ... It's not really that much of a leap, as you point out many other hobbies offer this service.

 

I'm just throwing this idea out there hoping that the right person will be inspired. Reading through all these posts, I mean, it's the one issue that comes up *constantly*, people trying to ask people how this-or-that headphone sounds (when clearly most people hear things totally differently, or at least prefer different sound qualities) ... I have observed such wildly conflicting descriptions, it's not that helpful compared to trying for yourself. Ugh! Especially for IEM's it is very difficult to get stores to let you try, and even then they won't have the selection that most people want.

 

I really believe this is a potentially super successful business. It all depends on the website, although I think if Head Fi was smart it would offer the service right here where all the people are, but yeah, lots of potential.

 


See my edit ^ smily_headphones1.gif
post #12 of 19
Thread Starter 

So that would be one copy of each of those headphones? I agree that it could pay for itself quickly if done right, but the problem I see is that we would need many many copies of each phone (you'd have to somehow gauge which phones generate the most interest, stock up on those), otherwise people will lose interest because they would have to wait weeks and weeks if they are 4th, 5th, 10th in line to rent ... This is where our business major would be helpful! Determining the actual demand, cost to meet the demand, etc. The nice thing about IEM's is that you could easily accommodate an inventory of hundreds of phones in a relatively small space (compared to, say, violins) ...

 

One would have to work out some kind of shipping deal with UPS where we get discount for volume. Headphones (IEM's, at least) would ship with return envelope (like Netflix for headphones!), when you're done, just slip in padded envelope and drop in UPS box. Full cans would come in a box similar to the lens rental company, the box would be heavily padded with foam, and ready for return shipping.

 

Also, allowing for 1, 3, 5 day rentals with prices being lowest for longer rentals.

 

 

 

 

post #13 of 19
Yes, that's one of each headphone and obviously wouldn't be enough supply for demand. It was just a quick example.

I like your Netflix for headphones comment, though allowing for such short rental periods might not be the best idea. You want to get a certain commitment from the renter. I would say a week (7 days) would be the ideal length and only offer that. Enough time to compare to many phones, the renter gets the most time for his shipping costs, and the business is guaranteed longer paid stretches. The more time is being used the more money you make. You don't want to allow 1-3 day rentals on something like this because it might be rented for a day then returned and sit on the shelf for a while until someone else wants it. Perhaps this could be an option on high demand items, but as a general rule a week would be best for your standard rent period. At the prices you would be charging, the difference between a few days or a week would be about $5-10 anyways. If someone is serious about trying headphones, that's chump change.
post #14 of 19
Thread Starter 

All I know is I wish it existed right now because I'm dying to try about 5 different phones and I have no access to them! Maybe I should post this in some other forums.

post #15 of 19

I would be interested in a headphone rental service also. This is only speculation, but it seems to me that online headphone retailers are the best suited to offer this kind of service. They already have a large inventory of headphones and credit card/account billing system in place, and probably have shipping discounts. All they have to do is set aside a few sets of phones for rental and they can make money off the same set of cans again and again. Because headphone rentals are not their main source of revenue, they can afford to have lower rates than a business that only provides rentals. And if a customer decides to purchase the phones after sampling, the discount can be applied much more easily than if it involved a third party retailer as well as providing incentive for the customer to buy it from them instead of another retailer.


Edited by 5370H55V - 4/24/11 at 11:04pm
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