[Jahn]

Just idle thinking - I enjoy going to all three types of stores. All three types seem to thrive in NYC. But which is the most profitable?

 

[Aman]

I'm going to have to choose between the Record Store and the Audiophile Store.

On the one hand, a much larger audience will go to the Record Store, I believe. More sales will occur. But then again, the ellegance of an audio store, especially in the city, can attract a lot of people also. However, having experienced this myself, I know how hard it is for people to always live with audiophile gear with the most convenient setup. I mean, you have roomates, tenants, landlords, neighbors, and whatnot. A musical instrument store I say NO to because there are not many opportunities one is going to have to play a drum set or a guitar in their appartment. And even if the instruments were electric, I know that not many people will be able to stand headphones for long, and sometimes that's not even sufficient.

So down to Record Store vs. Audiophile Store:

Record Store will make many more sales, but with less profits. Audiophile Store will make a lesser amount of sales, but with a really huge profit each time (most likely). And I think that most people would travel to a city to go to an Audiophile Store, which also must be taken into consideration. If it were located in NYC, people from all over the Tri-State area would be going.

And so therefore I am going to go with, in the conditions of an Audiophile Store being located in NYC, the Audiophile Store. It makes more logical sense to me.

 

[gloco]

Definitely not the record store. Based on experience, record stores pay up roughly $10/each for new releases, so they either have to markup their prices insanely to make a profit and/or promote accessories heavily, such as blank cdr's, cd cases and other items which will rake in more profit. Companies such as J&R are the perfect melting pot for electronics, movies and music as it caters to a wide array of consumers, hence the reason why they are so popular and turn a huge profit every year. Stores that strictly sell cds are usually empty and for good reason, their prices are too high to compete with the likes of stores like J&R.

As for audiophile store vs. guitar store...i dunno.

 

[remilard]

Hard to say. I would think if I owned a shop that was very profitable I would have the means and desire to open a second location. I am prone to think, therefore, that whichever type of store has spawned the most regional and national chains is the one which is the most profitable. Then we would have (I think)

Record Store
Guitar Store
Audiophile Store

In descending order.

OTOH, perhaps the fact that we see so many record store and guitar store chains suggests that the economies of scale that come with the chain store format are necessary for profit. The reason we see so many standalone stereo stores (as a percentage of total stereo stores) is that is the type of store which can be profitable in a one location format. Then we would have.

Audiophile Store
Guitar Store
Record Store

OTOH, if you open up a store today you have to compete with the chains and the mail order outfits. Guitar Center et al seem nearly impossible to undersell so we would have:

Audiophile Store
Record Store
Guitar Store

in descending order

OTOH, there seems to be a shift away from physical media to electronic media (legal or otherwise). There may not be much of a future for the record store or for that matter the CDPs sold at the audiophile store. Then we have

Guitar Store
Audiophile Store
Record Store

in descending order

OTOH, profits are going to come quicker if your overhead is lower. It seems like guitar store patrons want a huge selection while an audiohile store can get away with carrying a few lines so then we would have:

Record Store
Audiophile Store
Guitar Store

in descending order

OTOH, perhaps if you are going to profit in this day and age of mail order outfits and large chain stores you have to offer your customers a highly individual experience. That level of customer service is important at the Guitar Store where getting the right guitar is very important and also at the record store where people want recommendations of music they haven't heard of. Pretty much anyone can walk in a room and listen to three stereos and pick the one they like. In this case we have:

Guitar Store
Record Store
Audiophile Store

in descending order

I hope that clears things up!

 

[Jahn]

*boggle*
I would say just cram all of them in the same place and get the profit from somewhere, but I can just imagine the turf wars that would ensue and having that idea backfire due to too much diversification (can you imagine the sound baffling required?) - even J&R is smart enough to put them in diff buildings on the same block lol.

 

[wrhawk]

My favorite record store downtown just went out of business. Great selection, fair prices, apparently not enough profit.

If a music shop and an audiophile store were of comparable size and in similar locations, i would assume that the music shop would do more business, but with with a lesser return on each item, whereas a hifi shop would have to sell much less to turn an equal profit. I guess it comes down to which product is more desireable to the populace. To advance my wishful thinking, i voted 'audiophile store.'

 

[gloco]

Quote:

Originally Posted by Jahn *boggle* I would say just cram all of them in the same place and get the profit from somewhere, but I can just imagine the turf wars that would ensue and having that idea backfire due to too much diversification (can you imagine the sound baffling required?) - even J&R is smart enough to put them in diff buildings on the same block lol.

Yep, J&R is done right...just look at the chaos that ensues at B&H, it's too much for me. I usually just run outta there after a few minutes, i cannot take stores that are too wide open and have too much crammed into small stations. I need walls and stairs to separate everything. I remember one time i went to an Ikea in Jersey, i literally felt like i was locked inside, the place was way too BIG and too wide open.

 

[bundee1]

Definitely Audiophile store. The profit margin on cds alone is very slim and you have places like BB and CC selling at a loss to get store traffic. A well run Audiophile store can make a huge profit while carrying less stock and hiring less people. People who shop at Audiophile stores are more likely to have a higher income as well so bigger ticket items would be easier to sell. The day I went to buy my Arcam integrated at Sound by Singer their were people there shopping for a $10,000 plasma TV.

 

[D-EJ915]

Definetely the Guitar/Sound store if Dimarzio pickups are any indication. Stores buy them for $17 each and sell them for $70 each. Hmm...that's a what...53 dollar profit? Yeah, crazy stuff.

 

[remilard]

Quote:

Originally Posted by bundee1 Definitely Audiophile store. The profit margin on cds alone is very slim and you have places like BB and CC selling at a loss to get store traffic. A well run Audiophile store can make a huge profit while carrying less stock and hiring less people. People who shop at Audiophile stores are more likely to have a higher income as well so bigger ticket items would be easier to sell. The day I went to buy my Arcam integrated at Sound by Singer their were people there shopping for a $10,000 plasma TV.

Maybe Portland is unique but we have a couple of really big local record stores and like 4,000 smaller ones and they are all busy all the time. CC and BB have crap selection and you would have to be on some serious barbituates to ask the help if they have heard anything good lately.

I think the audiophile store is the worst way to go. The stuff is big ticket but I hear the margins are pretty thin, plus you are going to have to pay your sales staff on comission, no $10 per hour hired help. On top of that, everyone wants to buy stereo stuff from the "trusted" "reputable" dealer. How much capital do you need up front to weather several years of guaranteed losses until you establish a reputation?

 

[CRESCENDOPOWER]

I say the audio store, but you need to cater to the masses with a large variety selling all home theater products, car audio, 2-channel audio, portable, mini-systems, and all accessories. I think selling online, and doing car audio installs would also be a plus.

 

[bundee1]

The only way a CD store is going to succeed is to have a great selection (and I mean deep) and good markup, but look HMV didnt survive and they had both.