How difficult is it to start a hi end audio store?

[Joey_V]

Just brainstorming. There's a lack of hi end audio stores in Dallas. Was thinking about the logistics of starting one. Not now but maybe in 5-7 years, maybe...

How much capital would one need? And I wonder if it's better to sell higher end goods or all types of goods? Seems like just by looking around, the money is in doing HT installations...

But that's not where my passion is. I like pure 2 channel audio. And there's not enough.

I know of audiogon so I know it'll undercut some sales. But I know if you sell the good stuff and you provide good customer service, you'll get some sales and lifelong customers.

I know you'll probably have to buy speakers to demo - but I'm sure you get half price deals off the manufacturer. I think that's the cost for most. And guess what - I can write them off as a business expense! Lol!!

But seriously, nothing would make me smile more than if I had my own shop. Logistically, I'd probably still work as a doctor half the month and then man the store the other times. I can definitely get my dad and mom to help man the shop as well.

 

[risabet]

Easy to start, really, really, difficult to keep open!

 

[MPS]

I know one doctor who is running a shop at his home. Its sort of part time business, open in the evening and weekends. One large room dedicated as a shop room and it's partly separated from rest of the house, having only one heavy duty door between.
That's probably the easiest way to start business and in this neck of the woods doctors do earn better than sales person :ROFL: must be partly due to passion for music and equipment.

 

[amey01]

Yep. Easiest way to start would be from your "garage". Maybe importing? At least then you've got the whole country as your customer base.

 

[Bernard]

Joey, you could use part of the store to set up a clinic for the treatment of people with Audiophilia Nervosa

 

[TomDac]

Joey, you should talk to Shawn at DaVinci Media in Milwaukee. He is a former sponsor here and owns/operates DM.

 

[slowGEEZR]

Joey, I think it would be great if another brick and mortar store for hi end audio were to open, but it is not a simple matter to do it right. There are few who can show lots of high end gear and stay in business, but there are some. I would think that if you were to concentrate on just a few brands, of which you and your salespeople (which may not be necessary if you start small) had great knowledge of, that might be a better business model than to have lots of brands, of which the salespeople may not have great knowledge. My dealer now works out of his home, as costs to rent space keep going up. So, that tells me that even though he sells very hi end gear, his profits were seriously eroded by rental space costs. One reason I go to him is his knowledge of his products and how to get the best out of them. He is willing to loan gear and install it. He keeps himself educated on his gear by attending training at the manufacturer's facilities, etc. It is always a disappointment to me when I go to an audio store and the salespeople know so little about their product. If they can't offer the guidance, why go to them? I'd just do my own research and buy off the internet. You would also have to have excellent service after the sale, in order to keep people coming back. These are just some quick, off the top of my head thoughts.

 

[bonzo]

I think best way is to become a dealer for gear you want and stock it in your house. If you can't sell it, you have already got a good deal on it, so enjoy. If you sell it, great. I personally don't see much value in dealers etc unless they specifically mod the stock products to a much better degree than what you can buy off the net used. Also, those who do Datasat/Trinnov type installs will be in demand more, especially if they can set up lower end multichannel systems, just my guess. Else just buy and sell used liquid products off trade-ins, like Audio research etc, nothing exotic that can't sell, no matter how good it sounds

 

[Gordon Gray]

My guess is that you'll need $500k to 1M in upstart costs given the fact that many manufacturer's require you to carry many products in their line. They are somewhat adverse to "cheery picking". Other manufacturers will likely welcome your interest but these are likely to be less known specialty brands.

Another is manufacturer policy that you can't carry their "line" if there is another dealer withing "x" miles of your store. This may preclude you from carrying the lines that you want.

Finally, I think you would need to get involved with the "home theater / smart home" products since this segment will likely account for more volume versus selling two channel only.

And I do agree that there are "dealers" that operate out of their home. A far less expensive proposition but again, I think you would be limiting yourself regarding product lines and "public" exposure. And anticipate an "extended" period of time (years) before the business takes off. You will need to establish initial, satisfied customers who will provide recommendations to their friends and associates.

GG

PS: I tried this (using my residence) and was somewhat successful in the mid 90's. I was able to make arrangements with a well known dealer to provide me with access to their product lines. I marketed my services through architects and major general contractors that specialized in building upper end to uber priced residences. It was working but I had to discontinue when my wife lost her job. She provided the "regular" pay check. I am also in a much less populated area so worrying about "mom and pop" store competition and "radius blackouts" in my area was not a concern.

 

[Joey_V]

That's what I figured, around 500-1M start up. Which I can amass within the time frame I have above.

I just don't get how hi end seems to be doing well (new products, numerous shows, newer and even more expensive halo products), but then the brick and mortar store is dying.

I know a guy who operates out of his own home, has several rooms with gear for auditioning the gear.. but my house is not big and is not meant to handle more than a single serious system.

Ideally, I'd have a brick and mortar store, but I understand it's frought with problems, costs, and potential failure.

 

[Joey_V]

Joey, you should talk to Shawn at DaVinci Media in Milwaukee. He is a former sponsor here and owns/operates DM.

Ive met with Shawn before, bought my original Vantages and my BEM Vantages from him. Nice guy. NOt sure if he's going to be open to the details of setting up one's own business to a potential competitor, although not in the same location.

 

[amey01]

, although not in the same location.

With the internet being an integral part of business these days, everyone is a competitor, and everyone is "in the same location".

 

[Rich]

I just don't get how hi end seems to be doing well (new products, numerous shows, newer and even more expensive halo products), but then the brick and mortar store is dying.
...
Ideally, I'd have a brick and mortar store, but I understand it's frought with problems, costs, and potential failure.

You need to understand the sea-change transition occurring in our society. It's not that high end audio is dying off; its that the brick-and-mortar retail store sales model is dying off. No different than music and book stores. This is a dead-end business model for all but a few larger well known stores in huge markets. That's why most of the smaller guys are emphasizing home theater construction and smart home product integration. There just isn't a big enough market for high end two channel retail stores, with all the competition from the Internet and the used gear market. I think it's a recipe for failure for a startup. Better to make your money elsewhere and use it to enjoy the hobby, rather than risk losing a ton of money in an effort to make money off your enjoyment of the hobby.

 

[sleepysurf]

... Better to make your money elsewhere and use it to enjoy the hobby, rather than risk losing a ton of money in an effort to make money off your enjoyment of the hobby.

I agree. Like the old saying goes...
Q) How can you make a small fortune in high-end audio?
A) Start with a large fortune <g>

 

[Joey_V]

I agree. Like the old saying goes...
Q) How can you make a small fortune in high-end audio?
A) Start with a large fortune <g>

True. Maybe this is best left in my dreams.

Ah well. Always nice to think and dream.

Would be nice if it worked though. Will reasses later.

 

[Joey_V]

That said, at some point there will be a point where a brick and mortar hi end shop is in demand. The fact that there are less shops around just diminished the competition. There will always be a spot for hi end stores, it's hard to base everything off the internet and buy off of that. But I see your point as well. Dangerous business...

You need to understand the sea-change transition occurring in our society. It's not that high end audio is dying off; its that the brick-and-mortar retail store sales model is dying off. No different than music and book stores. This is a dead-end business model for all but a few larger well known stores in huge markets. That's why most of the smaller guys are emphasizing home theater construction and smart home product integration. There just isn't a big enough market for high end two channel retail stores, with all the competition from the Internet and the used gear market. I think it's a recipe for failure for a startup. Better to make your money elsewhere and use it to enjoy the hobby, rather than risk losing a ton of money in an effort to make money off your enjoyment of the hobby.

 

[Rich]

That said, at some point there will be a point where a brick and mortar hi end shop is in demand. The fact that there are less shops around just diminished the competition. There will always be a spot for hi end stores, it's hard to base everything off the internet and buy off of that. But I see your point as well. Dangerous business...

Let's take your current situation and use it to illustrate my point. You want the Strads. You may go to a dealer to audition them, but you have already said you can't afford the full retail and plan to find a well-priced used pair. So, in your case, the "spot for high end stores" is to be available for you to audition the product but not to sell it to you at retail price. Now take your situation and multiply it a million times. Do you start to see the problem? Even if you have a few customers that come to you and are willing to pay full price, it will never be enough to support your overhead and inventory costs because the majority of your potential market wants a better deal than you can afford to offer, and they can find those deals pretty easily over the Internet.

 

[Hocky]

Our local Hifi store here thrives and I think that a big piece of it is that they have a massive used inventory that they sell both online and in store for the reasons above.

 

[bonzo]

That said, at some point there will be a point where a brick and mortar hi end shop is in demand. The fact that there are less shops around just diminished the competition. There will always be a spot for hi end stores, it's hard to base everything off the internet and buy off of that. But I see your point as well. Dangerous business...

There is a spot around only if it requires set up skills, like with Datasat or Trinnov or with specialized dealer modded gear. I have let go buying a stock Analysis at half price over the net, because if I do buy it, makes sense to buy the modded one from the dealer.

 

[User211]

When I go to top shows I can't believe the gear. You never see it come anywhere near where I live. No one has the money. London must fair quite a bit better but how good are the London stores Kedar?