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Advice wanted: Taking over an HiFi Store

Mart68

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That was exactly my problem when I had the shop in the 1980s. They didn't want an upgrade, they wanted to spend some money, and as I wouldn't take it, as it wasn't necessary, they went elsewhere. Saw this over and again, but my engineering brain set couldn't understand that.

S.
I spent 5 years in sales, 3 years B2C and the last 2 years B2B. B2B was wonderful but B2C was brutal. You had to sell something to everyone who walked through the door, whether it was any good or not, whether they wanted it or not. You either had to quit or hang up your moral scruples on a peg outside the salesroom door. The commission was good so I chose to use the peg.

Like Alec Baldwin says in 'Glengarry Glenross' - 'A man does not walk onto the lot unless he wants to buy.' I used to watch that speech every night before I went to bed as it significantly improved my sales. That's not just a movie, sales is really like that. It's not for the faint hearted, you have to be a stone-cold killer, or you'll fail.

It took quite a serious toll on my mental and physical health, in the end I had to quit.
 

Bjorn

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let's say you have a regular customer who has just upgraded his speakers. Now a month or so later he is back in the shop looking for another upgrade, but not speakers.

What do you sell him? Or do you tell him, 'The only thing that will improve your system further is even better speakers.'?

That's not what he wants to hear. He wants a better DAC, better cables, one of the magic boxes he has read about in the mags or on the internet. If you can't or won't sell him that he will go elsewhere and won't come back. Okay maybe you can sell him on DSP if he doesn't have it already, but otherwise you're stuck. I think this is going to be the problem.
You educate him in the importance of acoustics and preferably sell quality acoustic products that can work in the room. That's a major upgrade in most cases. Other options are selling him a service of working with optimal placement in the room or further improvement with custom DSP settings. Or you can sell the customer a subwoofer and provide integration with a DSP. So you have both products and services to offer and they can be upgraded along the way.

These are by far the most important aspects in audio and it's time more start to focus on them rather than the typical snake-oil or areas where the difference is minor.
 

Mart68

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You educate him in the importance of acoustics and preferably sell quality acoustic products that can work in the room. That's a major upgrade in most cases. Other options are selling him a service of working with optimal placement in the room or further improvement with custom DSP settings. Or you can sell the customer a subwoofer and provide integration with a DSP. So you have both products and services to offer and they can be upgraded along the way.

These are by far the most important aspects in audio and it's time more start to focus on them rather than the typical snake-oil or areas where the difference is minor.
in an ideal world I'd agree but many people cannot even countenance dedicated passive treatment due to WAF. You can sell a man a subwoofer once, or maybe twice if you can talk him into getting a second one. If in the course of a year he's back six times looking for upgrades, you're going to run out of road pretty fast.
 

WAMMJ45

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In the modern era, technologies evolve. People's lifestyles vary with time. Interests change. Just not a big deal anymore for the overwhelming majority of folks.
 

Bjorn

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in an ideal world I'd agree but many people cannot even countenance dedicated passive treatment due to WAF. You can sell a man a subwoofer once, or maybe twice if you can talk him into getting a second one. If in the course of a year he's back six times looking for upgrades, you're going to run out of road pretty fast.
In most cases, some WAF treatment can be accepted. Besides various services at home, the customer can also upgrade to better speakers or to larger or more subwoofers with lower distortion.

Educating customers includes teaching them that just spending more money isn't getting better sound quality. Either they get the message or they don't. Not much you can do in the latter case besides offer them products with better aesthetics or more functions. A really nice looking amplifier case costs more and so does added features. Many are willing to pay for that as well and that's fine to offer.
 

Mart68

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In most cases, some WAF treatment can be accepted. Besides various services at home, the customer can also upgrade to better speakers or to larger or more subwoofers with lower distortion.

Educating customers includes teaching them that just spending more money isn't getting better sound quality. Either they get the message or they don't. Not much you can do in the latter case besides offer them products with better aesthetics or more functions. A really nice looking amplifier case costs more and so does added features. Many are willing to pay for that as well and that's fine to offer.
But these customers do not want to be educated, they already think they know it all. For them 'Everything matters, everything makes a difference.' Your role as a hi-fi salesman is to reinforce that belief, and enable them. You will need to sell them power cables, re-clockers, anti-vibration products, and offer tweaks and upgrades to their existing equipment - better clocks, better internal wiring, better sockets.

These will be your regular customers and if your approach is 'That's all a waste of money mate, but I can sell you some diffusers' I guarantee you will go broke.

Do you know any audiophiles? I know lots, and PT Barnum applies.
 

Rja4000

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offer them products with better aesthetics or more functions. A really nice looking amplifier case costs more and so does added features. Many are willing to pay for that as well and that's fine to offer.
Yes, that's exactly it.

Sale reputable brands with proven good performances, good functionalities, real after sales service, and good looking.

Maintain a (measured) second hand sale, and be ready to offer a few special cheap but SOTA devices if requested.
But don't focus your business on those, since they'll be replaced soon by better/cheaper/newer models, and they'll always be cheaper directly from China, anyway.
 
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Galliardist

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If you list Richard Sound, you and I are using a different definition of a Hi-Fi shop. Have a look at their website. Below is an old image but other than the poster colours nothing much has changed.

Shutterstock_1588542a.jpg
So I looked..: a bit different from when I was last in one of their shops last century. They seem to be dealing in what would be house brands for the UK now. And they say that all their shops have demonstrati facilities..: but I can’t determine what they mean by that now.

But they are a shop and they do sell hifi, and it looks like I could buy LS50 Metas and a decent Cambridge Audio setup to drive them, for example. They do qualify as a hifi store on some level, then.
 

Mart68

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So I looked..: a bit different from when I was last in one of their shops last century. They seem to be dealing in what would be house brands for the UK now. And they say that all their shops have demonstrati facilities..: but I can’t determine what they mean by that now.

But they are a shop and they do sell hifi, and it looks like I could buy LS50 Metas and a decent Cambridge Audio setup to drive them, for example. They do qualify as a hifi store on some level, then.
You would have to be quite picky to say they are not a hi-fi shop. The one near me has a dedicated demo room. Although the last thing I bought there was a TV.

When the Japanese stopped supplying them with bin-end they bought some defunct Uk brands (Cambridge, TDL) and got them made by OEMs in Taiwan. Since then they've started stocking current models from Sony, Onkyo, Rega turntables, Technics turntables. About half the showroom is televisions though, some of which are bin-end at huge discounts.
 

Willem

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Rather than just look at the supply side, it may pay to have a look at the potential market. We live in a (very) posh part of a mid sized Dutch university town. Our neighbours are mostly university professors, doctors, lawyers, or ceo's in business or the public sector. I am the only one with expensive audio gear (Quad electrostats etc). I have never ever seen any expensive snake oil audio gear in my neighbours' homes. Typically they have something sensible like Quad electronics and mid sized B&W speakers. I cannot imagine any of them falling for audiophool rip offs, either because they have enough scientific background, or enough busines experience to smell a rat. Recently many have bought Sonos systems.
The challenge is to reach this market of affluent but educated and sensible consumers, who live in some of the town's most expensive houses, but also drive sensible cars and would not dream of wasting money on an expensive one. Sonos is great for them because it is easy to use, looks good in a modern interior (the Dutch by and large don't like traditional furniture styles), and performs reasonably well. If they knew something better is possible without investing a lot of time, they may well be willing to spend money for that, but I cannot think of a single store in my town that provides that.
The model for such music loving down to earth customers would be something like the old Thomas Heinitz store in London. In essence, he had preselected a few systems for different room sizes and budgets, and that was it. The big system consisted of Quad electrostats, and Quad electronics, and the small systems were based on the LS3/5a mini monitors and some other small speaker that could handle more power. These systems were offered with an optional active subwoofer, which was quite an innovation at the time. His customers were musicians, and others who cared about music and just wanted some good gear without having to think about it.
Demonstrations were by appointment in his small shop, and the music he played (and discussed) consisted of very good recordings of classical music. Customers knew he had done the market research for them, and by having only limited inventory he saved money in the days of very high interest rates.
Reaching out to such customers would have to do something similar, i.e. offer a Sonos based system, but with better speakers, and if a higher level of ambition is demanded also more powerful electronics, subwoofers and automatic dsp room eq. I am not sure one needs a shop for that.
What is important is that the choice of speakers is good looking. In the Netherlands that means good looking in a modern interior, and I would expect the same to be true for Switzerland.
 
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Bjorn

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But these customers do not want to be educated, they already think they know it all. For them 'Everything matters, everything makes a difference.' Your role as a hi-fi salesman is to reinforce that belief, and enable them. You will need to sell them power cables, re-clockers, anti-vibration products, and offer tweaks and upgrades to their existing equipment - better clocks, better internal wiring, better sockets.

These will be your regular customers and if your approach is 'That's all a waste of money mate, but I can sell you some diffusers' I guarantee you will go broke.

Do you know any audiophiles? I know lots, and PT Barnum applies.
I'm talking about taking an objective approach and non reinforcing lies. Sure, there's a customer group you can't reach with this approach. But there is one that can be reached this way and it's also growing due to more knowledge from forums and internet. It can further grow if more businesses educate customers. I don't believe this is a lost case, but not saying it's easy either. It's a battle for sure.

I both know and sell to audiophiles and I see both groups. It's very clear to me that there are lesss audiophiles today that by into snake-oil than 5-10 years ago. At least here in Norway we have seen a change.
 

Mart68

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I'm talking about taking an objective approach and non reinforcing lies. Sure, there's a customer group you can't reach with this approach. But there is one that can be reached this way and it's also growing due to more knowledge from forums and internet. It can further grow if more businesses educate customers. I don't believe this is a lost case, but not saying it's easy either. It's a battle for sure.

I both know and sell to audiophiles and I see both groups. It's very clear to me that there are lesss audiophiles today that by into snake-oil than 5-10 years ago. At least here in Norway we have seen a change.
I think the problem is that the vast majority of regular hi-fi shop customers are going to be in the group you can't reach. You can't educate someone in a subject if they think they can educate you in it. They expect their dealer to have a greater knowledge of foo than they do, not for him to reject it., no matter how non-confrontationally he does it. That's not the experience they are looking for.

I agree that there seems to be some progress generally, more people do seem to be re-assessing what they've been doing with their hi-fi expenditure. But that's on line, not sure these are the same people who regularly spend money at brick and mortar shops. Although I'm speculating now, obviously.
 

lashto

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I may be a bit naive. ASR is certainly not the "market" that would rely on a brick and mortar store or advice. Nonetheless, I can imagine that Zurich has a sufficient population who would love something nice, easy to use but don't want the hassle of reading up on everything and don't even have the time to set things up properly.
that sounds like a reasonable assumption too.
Like others said, I won't risk my life savings in such a venture. If you have ~no issues in case it fails, go for it! Guess it could also be a lot of fun..
 

DTTOM37

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Following this thread slowly, I want to express my gratitude to the posters here, lots of reasonable and good natured advice. I love to read your experiences and so much of it seems to be valid in one way or another.

For the OP I have two more thoughts regarding his project:

1) Keywords: Natural end of lifecyle for the customer relationship
Analysis: Looking on the customer base, you may want to analyze the length of relationship under the premise/prediction how often they will buy in the future.
I would assume a relationship between age and wealth, determined by the fight against any signs of hearing loss (no joke!)
I may also assume that there's some kind of Pareto distribution to be found throughout your customer base as well.
A limited number of customer may have the main impact on sales figures.
However, some of the most valuable clients won't continue their activities every year in the future, if they already did that for the last 30 years ...

2) About Room Correction and Room Treatment:
I had a discussion with a friend who has a very sensitive SO - about strategies to find audible better solutions for his appartment.
One point from there I remember clearly: The idea to have a female room acoustic consultant for Room Treatment and Room Correction - as person who can connect in a more natural way with the decider.
The question about Room Treatment or Room Correction seems to be as well interesting in terms of trade-offs, because it may allow a higher investment for electronics in order to avoid decorative changes. In modern relationships budgets need often to be discussed with the SO, too.
 

AdamG

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In the end…This “ASR” community is probably the worst case scenario for gauging interest in this subject. Consider starting some threads in Foura communities where “Snake Oil” is embraced and used as a social lubricant. They will be your target demographic and will probably give you vastly different ideas and advice.

Your biggest profit driver sales offerings will only drive us out the door rather than towards the cash register. JMHO.
 

Willem

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They will be your target demographic and will probably give you vastly different ideas and advice.
I am not so sure. In my experience there are a lot of sensible affluent people. They may be less attractive from a lazy business point of view, but overlooking them ignores a large market. The challenge is to develop an effective low cost business model.
 

sergeauckland

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I am not so sure. In my experience there are a lot of sensible affluent people. They may be less attractive from a lazy business point of view, but overlooking them ignores a large market. The challenge is to develop an effective low cost business model.
When I had my ultimately unsuccessful shop, the only people I did have success with was the 50 year old Accountant, Lawyer or Doctor. Mostly classical music or Opera, and not interested in the technology, just the results. The equipment had to be simple, unobtrusive and reliable. Quad electronics were the most popular, with KEF or B&W loudspeakers.

Unfortunately, there just weren't enough of them to have a viable business. My nightmare customer was a 20 something who'd come in with a copy of What HiFi under their arm, and checked everything I said against the oracle. Unlike Mart, I couldn't suffer those fools but they were more numerous than the 50 year old accountants.

S.
 

BlackTalon

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Ray, if I was my customer, I'd also be out of business. Bryston amps for 30+ years, Dunlavy speakers from 96 etc. Just the sources are gone due to streaming.

@PatentLawyer Don't think I want a shop just to waltz around and feel important. I am success driven and one of the factors therefore would be to grow it and turn a profit. Also, I want to have fun and much less stress than previously (although I most always had lots of fun, even when I had to re-structure entire businesses.


... but you guys are an intelligent and helpful bunch. Current owner has possibly 5% of my knowledge when it comes to digital audio reproduction, but he did an apprenticeship in a Radio/TV shop. In his mind, he is not peddling snake oil and he actually asked me, given my engineering background to explain to him why cryogenically treated cables sound better.

Not to worry, it shows how, even among enthusiasts, the actual knowledge of what the store stands for, is little known. Marketing/Advertisement even more important.


When can you start? :D
ASR can direct all trolls who come here shouting "What about the SOUND?" to the store for mail order sales. Staff the call line with ASR members. Kick a portion of profits back to ASR to fund ongoing operations. Then Amir can test some of that $$$ equipment that normally would not be sent to him. Win-win-win-win.
 

Tom C

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Like any investment opportunity, there are three considerations: cost, revenue, and the next best alternative.
Compare the purchase price of the business to the cost of starting from scratch, setting up the business yourself. Also compare the purchase price of business/store A to the price for business/store B.
Finally, there is little doubt that high-end audio brick and mortar retailer is not a growth business, it is an industry in decline. So, to succeed, you have to have an extraordinary idea for doing things differently. Me too isn’t going to succeed, it will fail, because the entire market for retail brick and mortar is in fact in a declining phase. So, unless you have a novel idea for reversing the trend, you should do an about face, and run fast and hard in the other direction.
 

Philbo King

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I may be a bit naive. ASR is certainly not the "market" that would rely on a brick and mortar store or advice. Nonetheless, I can imagine that Zurich has a sufficient population who would love something nice, easy to use but don't want the hassle of reading up on everything and don't even have the time to set things up properly.

Yes, we are in the process of doing that. This is a profitable, well run business and has been doing steady turn-over, margin and very little fluctuation. So it is truly mature as you describe and the question will be how to expand the offerings to slightly re-adjust the focus without throwing out the baby with the bath water. For example, the owner very much loved my idea of miniDSP integration, room correction etc. But he has shied away from it as he understands too little.

Yes, very much my own feeling.

Interesting view: the US is the third largest producer of agricultural products and the largest exporter world wide, thus it's competitive and dominating.

_________________________________________________________________________
I have received all transactional records and can do a detailed margin analysis now by product group, by brand, by sales channel etc. The biggest red flag that I have seen thus far is the dying business model (?), "cultural" misalignment between me and the owner (and his customers) and my lack of B-C experience. It will be interesting to dig into the numbers and understand why the shop is steady and nicely profitable. As a next step, I will have a small business plan. If I am still enthusiastic I will work in the shop for a while and observe.
True, but they are dominated by international agricorporations. Here in Iowa China has been buying farmland rapidly.
 
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