Advice wanted: Taking over an HiFi Store

[anmpr1]

Well, in my analysis, this business will go the way the sale of computers have gone in the last 40 years. Back then needing advice on peripherals, drivers, SW compatibility. Digitization, transparency and ease of use made buying a laptop as easy as shopping for a hair dryer.... cost came down, utility went up and the numbers sold increased tremendously.

As I remember it, at the beginning of consumer PC you shopped a dedicated store, and you had to have a fat wallet. A lot of proprietary stuff. The most accessible was probably Tandy, where you could find a range of machines in Radio Shack stores, running from 'inexpensive' Color Computers, to business oriented boxes.

Likewise, software was bought either at the PC store, or one of the many specialty retailers.

Open architecture did away with that. I remember Computer Shopper magazine. Like a monthly telephone book of interchangeable parts you could mix and match, mostly plug and play (with a little--to sometimes a lot--of trial and error). You also had all-in-one mail order: Gateway, Zeos, and a dozen other now forgotten brands, fully assembled 'cheaper than you could do it at home' boxes, most with a choice of bundled software--Lotus 123, Quattro Pro, Excel... Put brick and mortars out of business.

But the difference with PCs to hi-fi is that the former's function can be easily recognized and then rank ordered based upon objective criteria. And the more you spend, usually the better your system will be.

Totally different with today's (and yesterday's) so-called high-end, where many times the more you pay, the less you get. There is no 'magic' in a personal computer. It just does its job. PC oriented magazines of the day never talked about that sort of thing-- I mean the magic. Pick up a copy of Stereophile, and most of the reviewers talk magic. That's what they know, and that's the selling point.

 

[Overseas]

OP talks about a client base or target segment that spends an average of 10k euro per system... that is quite specific segment.

 

[Descartes]

I'm toying with the idea of opening a shop when I retire (many many years from now). Reading this thread is depressing. It is depressing because you all painted a clear picture of how depressing it would be to own a HiFi shop.

At least this thread had an happy ending where the OP came to his senses and invest in something else.

Rather than opening a store, transform a couple of rooms in your house!
Better yet if you have the room a detached garage transformed into a home theater and music room .
Then just cary a few brands and schedule demos!
Benefits:
- No rent, since it’s your house
- Lower operating costs and expenses
- Flexible working hours and conditions
- No commute
- No inventory, just the demo pieces
Added bonus you have a home theater that is done by your business and you can deduct the costs from your profits.

 

[Tom C]

I’ve sometimes wondered if you could at least break even with a lounge. Cozy, intimate, comfortable seating, serve drinks, nice wine list, some food items, and have different rooms, each with its own system, like retro hifi phonograph/tape machine, then an all digital, two-channel SOTA room with, idk Blades or Salons, and maybe a third with 3-d surround using Genelec or Neuman, like that. That way you can indulge your wish for all the different kinds of gear, and at least have it pay for itself.

 

[Chrispy]

One thing comes to mind with having rooms in your home dedicated to systems for demo....it's rather expensive without a good amount of turnover or a very high price for what you can't do for yourself (i.e. hiring a designer/builder/installer)

 

[Doodski]

I’ve sometimes wondered if you could at least break even with a lounge. Cozy, intimate, comfortable seating, serve drinks, nice wine list, some food items, and have different rooms, each with its own system, like retro hifi phonograph/tape machine, then an all digital, two-channel SOTA room with, idk Blades or Salons, and maybe a third with 3-d surround using Genelec or Neuman, like that. That way you can indulge your wish for all the different kinds of gear, and at least have it pay for itself.

In Japan and other Asian countries and now becoming more common around the world in major centers are a bar/lounge with either vintage gear or really great gear and big speakers etc. People come to drink all sorts of nice beverages and rare drinks that they usually would not have access to while they listen to music chosen by the patrons.

 

[fivepast8]

Quick update since the thread was revived:

1. Said Hifi Store is still not sold.
2. Got hired to turn-around another micro-electronics company: so no early retirement .

Totally different with today's (and yesterday's) so-called high-end, where many times the more you pay, the less you get. There is no 'magic' in a personal computer. It just does its job. PC oriented magazines of the day never talked about that sort of thing-- I mean the magic. Pick up a copy of Stereophile, and most of the reviewers talk magic. That's what they know, and that's the selling point.

... that is exactly what my ethics would not agree with.

Rather than opening a store, transform a couple of rooms in your house!

.... there at least one member who does this. I would not be comfortable with having strangers in my house and I am a bit in the country side.

I’ve sometimes wondered if you could at least break even with a lounge. Cozy, intimate, comfortable seating, serve drinks, nice wine list, some food items, and have different rooms, each with its own system, like retro hifi phonograph/tape machine, then an all digital, two-channel SOTA room with, idk Blades or Salons, and maybe a third with 3-d surround using Genelec or Neuman, like that. That way you can indulge your wish for all the different kinds of gear, and at least have it pay for itself.

... surely a good idea: not sure for Zurich- based on the rental costs for such a lounge in the city center. Since many of these brands are sold on-line, I would fear that many come to listen and experience the sound and then buy elsewhere.

I'm toying with the idea of opening a shop when I retire (many many years from now). Reading this thread is depressing. It is depressing because you all painted a clear picture of how depressing it would be to own a HiFi shop.

At least this thread had an happy ending where the OP came to his senses and invest in something else.

... indeed, a happier ending for me.

PS:
My sister wanted to go the streaming route because FM stations are being switched off here. Her hifi dealer, who has brain washed her, brought her a B&W Formation Audio Hub in exchange for her Accuphase tuner! I was upset at that crook! Luckily, the dealer was unable to get the terrible B&W app to work and took everything back. So I had a chance to bring her a WIIM Mini, hook it up thru her Accuphase CD Player/DAC and had her dancing using Qobuz in less than 10min! She was dumbfounded.
Moral of the story: Couldn't even convince my own sister to buy from me : WiiM Mini and installation in exchange for only a glass of wine!

 

[Doodski]

... that is exactly what my ethics would not agree with.

You don't have to be a sneaky fast talking samoooth charlatan as an example. I sold on merit, reliability, service, actual demonstrable sound quality differences which meant selling them a huge proportion of the system being the speakers. Always max out the budget on speakers and because I had the absolute best selection of speakers in the city and of course YAMAHA electronics I was a success and life was easier for me compared to the competition. I can't emphasize this statement enough. I had the best selection and best electronics for the money. Otherwise I would have been a poor, desperate soul grinding through my day like the others that had nothing like me to offer. I had issue with my workmates, they labelled me, The Entertainer as a slight against my propensity for hogging the sound rooms when demonstrating speaker sound quality differences and selling them the majority of the budget being speakers. My managers tolerated me because I had the highest profit margins in the entire company and my total sales where very attractive for them too. I simply shared my brains with my workmates, explained exactly how I sold gear, made them like me and we got along very well... Loyal to each other is the name of the game.

.... there at least one member who does this. I would not be comfortable with having strangers in my house and I am a bit in the country side.

I dislike this idea immensely but some can work it very well. I dislike it for reasons like:
- Strangers can sometimes be very strange, stuff happens and I need my safe space away from work where strangers can't arrive unannounced and create a scene because they have mental issues or are simply disgruntled.
- Insurance rates vary according to the building, classification of zoning and bylaws etc and having a business in the home makes for some interesting stuff that way.
- The business of audio gear does attract criminals. I have seen it a lot in the form of various scams, schemes and break-ins they use to create cash flow for their needs. I don't want them coming to my home.

 

[Mart68]

Quick update since the thread was revived:

1. Said Hifi Store is still not sold.
2. Got hired to turn-around another micro-electronics company: so no early retirement .

... that is exactly what my ethics would not agree with.


.... there at least one member who does this. I would not be comfortable with having strangers in my house and I am a bit in the country side.


... surely a good idea: not sure for Zurich- based on the rental costs for such a lounge in the city center. Since many of these brands are sold on-line, I would fear that many come to listen and experience the sound and then buy elsewhere.


... indeed, a happier ending for me.

PS:
My sister wanted to go the streaming route because FM stations are being switched off here. Her hifi dealer, who has brain washed her, brought her a B&W Formation Audio Hub in exchange for her Accuphase tuner! I was upset at that crook! Luckily, the dealer was unable to get the terrible B&W app to work and took everything back. So I had a chance to bring her a WIIM Mini, hook it up thru her Accuphase CD Player/DAC and had her dancing using Qobuz in less than 10min! She was dumbfounded.
Moral of the story: Couldn't even convince my own sister to buy from me : WiiM Mini and installation in exchange for only a glass of wine!

View attachment 356992

That's lovely, no way that's ever going to sound bad!

My own idea was to set up a coffee shop that also sells vinyl, CD and equipment - mostly second-hand. With maybe a couple of rooms and a system in each one.

Make most of the profit on the coffee and cake The equipment sales coming naturally as patrons decide they want the same musical experience in their own homes.

I did idly cost it a few years back, and the main problem is the ludicrous levels of rent and business rates. Despite there being multiple empty retail locations pretty much everywhere now, it seems to be an area where supply and demand has absolutely no effect on cost.

 

[Doodski]

That's lovely, no way that's ever going to sound bad!

My own idea was to set up a coffee shop that also sells vinyl, CD and equipment - mostly second-hand. With maybe a couple of rooms and a system in each one.

Make most of the profit on the coffee and cake The equipment sales coming naturally as patrons decide they want the same musical experience in their own homes.

I did idly cost it a few years back, and the main problem is the ludicrous levels of rent and business rates. Despite there being multiple empty retail locations pretty much everywhere now, it seems to be an area where supply and demand has absolutely no effect on cost.

^^^ THIS...
You nail'd it with the floor space expenses being so high and a total cash loss as far as what is done with the profits.
Also the cake'n coffee experience might work in some areas but in my experience things can get out of hand pretty fast and it is extremely difficult to pass by a opportunity for the business to make money and so clogging the floor space with mingling patrons that drink coffee and surf and gab is not the best use of valuable floor sales space but I get that coffee can and will generate cash flow and profits. For a mom'n pop or boutique operation used gear sales come from trade-ins and if done well they are a great source of both traffic flow and high margin sales. I always encouraged trade-ins even though my bosses/managers did not want that because they wanted exclusively new product on the sales floor for a variety of reasons not related to margins or traffic flow. Choose the trade-ins models and condition wisely and everything will go very well in that matter.

 

[Mart68]

^^^ THIS...
You nail'd it with the floor space expenses being so high and a total cash loss as far as what is done with the profits.
Also the cake'n coffee experience might work in some areas but in my experience things can get out of hand pretty fast and it is extremely difficult to pass by a opportunity for the business to make money and so clogging the floor space with mingling patrons that drink coffee and surf and gab is not the best use of valuable floor sales space but I get that coffee can and will generate cash flow and profits. For a mom'n pop or boutique operation used gear sales come from trade-ins and if done well they are a great source of both traffic flow and high margin sales. I always encouraged trade-ins even though my bosses/managers did not want that because they wanted exclusively new product on the sales floor for a variety of reasons not related to margins or traffic flow. Choose the trade-ins models and condition wisely and everything will go very well in that matter.

I live in what is now known as the 'University Quarter' and they have built and are still building huge ocean-liner sized accommodation buildings for the students. There's one going up just round the corner from me and several others already completed or in planning

There's also a huge apartment block (500 rented flats) nearing completion which will all be rented by young upwardly mobile types.

I figure these are the two main demographics to capture.

A Starbucks opened here not so long ago, and all their profit seems to come from expensive coffee and cake. So they clearly think there's money to be be made from that in this area.

We also have another specialist coffee/ tea /waffle bar. When that opened I gave it six months but still there six years on and always busy.

When I first moved here it was a post-industrial ghetto, it always reminded me of that Steely Dan lyric - 'The people on the streets have all seen better times.' But, 'The times they are a changin'.

 

[radix]

My sister wanted to go the streaming route because FM stations are being switched off here. Her hifi dealer, who has brain washed her, brought her a B&W Formation Audio Hub in exchange for her Accuphase tuner! I was upset at that crook! Luckily, the dealer was unable to get the terrible B&W app to work and took everything back. So I had a chance to bring her a WIIM Mini, hook it up thru her Accuphase CD Player/DAC and had her dancing using Qobuz in less than 10min! She was dumbfounded.
Moral of the story: Couldn't even convince my own sister to buy from me : WiiM Mini and installation in exchange for only a glass of wine!

I had a flash back to the movie The Ninth Gate, where the book dealer swindles out the heirs. Wow, who would trade in Accuphase!

 

[Doodski]

I live in what is now known as the 'University Quarter' and they have built and are still building huge ocean-liner sized accommodation buildings for the students. There's one going up just round the corner from me and several others already completed or in planning

There's also a huge apartment block (500 rented flats) nearing completion which will all be rented by young upwardly mobile types.

I figure these are the two main demographics to capture.

Very cool. I strongly suggest including personal electronics in the golf bag of clubs or the quiver of arrows. Personal electronics can range widely in price, require very little floor space and are very popular with this sort of crowd for a variety of reasons and one being they can use them and not disturb the neighbors and are portable. They generally make profit margins dependent on brand ranging from ~28% to 40% profit margins at real selling prices and not retail prices. Headphones of all types are veryyyy veryy profitable and very cool for patrons and the list goes on and hang from the display wall(s) so effectively it will make your heart sing when they are being bought and making you maximum margins for minimal floor space. They will be a daily seller for sure. Be sure to carry a large inventory of many choices and prices and you will see the sales bloom rapidly. I worked with many Personal Electronics Department sales peeps for many years and they where selling up to 100K$ each of inventory per month in a major sized AV store. That's all they did was sell that kinda stuff and made lotsa money doing it.

A Starbucks opened here not so long ago, and all their profit seems to come from expensive coffee and cake. So they clearly think there's money to be be made from that in this area.

Myself I spend ~$5 per day including a $1 tip everyday at Starbucks. They just make me my Vente Dark Roast with 3 cream and 4 sugar and don't even ask now what I want. It's a money maker for sure if the unit price is kept up so that the overall sales figures are good and not all dollar or two dollar sales.

 

[Mart68]

Very cool. I strongly suggest including personal electronics in the golf bag of clubs or the quiver of arrows. Personal electronics can range widely in price, require very little floor space and are very popular with this sort of crowd for a variety of reasons and one being they can use them and not disturb the neighbors and are portable. They generally make profit margins dependent on brand ranging from ~28% to 40% profit margins at real selling prices and not retail prices. Headphones of all types are veryyyy veryy profitable and very cool for patrons and the list goes on and hang from the display wall(s) so effectively it will make your heart sing when they are being bought and making you maximum margins for minimal floor space. They will be a daily seller for sure. Be sure to carry a large inventory of many choices and prices and you will see the sales bloom rapidly. I worked with many Personal Electronics Department sales peeps for many years and they where selling up to 100K$ each of inventory per month in a major sized AV store. That's all they did was sell that kinda stuff and made lotsa money doing it.

I hadn't considered headphones and such since I never use them - I was thinking more about refurbished vintage kit - but you're right, that would be the sort of thing to carry.

I'm nearing the end of working life so if the thing could cover its costs and let me take a few grand out of it each year that would do. Not looking to make millions!

How about this for a showroom/cafe? - on the market and near to me - asking too much but I could probably knock them down:

19 photos of former Minton Library in Stoke

Take a look inside this stunning Grade II listed building, which is on the market for £295,000

www.stokesentinel.co.uk

 

[Doodski]

I hadn't considered headphones and such since I never use them - I was thinking more about refurbished vintage kit - but you're right, that would be the sort of thing to carry.

I'm nearing the end of working life so if the thing could cover its costs and let me take a few grand out of it each year that would do. Not looking to make millions!

How about this for a showroom/cafe? - on the market and near to me - asking too much but I could probably knock them down:

19 photos of former Minton Library in Stoke

Take a look inside this stunning Grade II listed building, which is on the market for £295,000

www.stokesentinel.co.uk

OMG, that place reeks of coolness and character! Seriously, I love it. I would love being there, working there and generally just absorbing the vibe while I shopped for my Bluetooth headphones, checked out some delicious rejuvenating bean and drooled over the very large high end audio system used for the patrons to select music from online or a library and hang loose relaxing before or after a major serious study session for the next examination at the school/uni. >@^_*@< Great choice I must say!

 

[Mart68]

OMG, that place reeks of coolness and character! Seriously, I love it. I would love being there, working there and generally just absorbing the vibe while I shopped for my Bluetooth headphones, checked out some delicious rejuvenating bean and drooled over the very large high end audio system used for the patrons to select music from online or a library and hang loose relaxing before or after a major serious study session for the next examination at the school/uni. >@^_*@< Great choice I must say!

Be good wouldn't it? Get some big Altec or Tannoy, multiple subs...

 

[Doodski]

Be good wouldn't it? Get some big Altec or Tannoy, multiple subs...

It seems the Japanese coffee/jazz music shops are using big JBLs of both new and vintage models. I'm not sure what is up with that but big JBLs do have a great room filing sound.

 

[CleanSound]

Quick update since the thread was revived:

1. Said Hifi Store is still not sold.
2. Got hired to turn-around another micro-electronics company: so no early retirement .

... that is exactly what my ethics would not agree with.


.... there at least one member who does this. I would not be comfortable with having strangers in my house and I am a bit in the country side.


... surely a good idea: not sure for Zurich- based on the rental costs for such a lounge in the city center. Since many of these brands are sold on-line, I would fear that many come to listen and experience the sound and then buy elsewhere.


... indeed, a happier ending for me.

PS:
My sister wanted to go the streaming route because FM stations are being switched off here. Her hifi dealer, who has brain washed her, brought her a B&W Formation Audio Hub in exchange for her Accuphase tuner! I was upset at that crook! Luckily, the dealer was unable to get the terrible B&W app to work and took everything back. So I had a chance to bring her a WIIM Mini, hook it up thru her Accuphase CD Player/DAC and had her dancing using Qobuz in less than 10min! She was dumbfounded.
Moral of the story: Couldn't even convince my own sister to buy from me : WiiM Mini and installation in exchange for only a glass of wine!

View attachment 356992

Your sister's system is great!

And congrats on the new job, but sorry you can't enjoy early retirement.