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Advice wanted: Taking over an HiFi Store

HarmonicTHD

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Yes, that is exactly what I was envisioning, even setting up the iPad with Qobuz, transferring their library, ripping CDs etc. Full turn key operation!


Yes, that is the plan, to work and observe for a while.

Not necessarily: winding down a business has associated costs of its own, paying rent while peddling off the stock. On the other hand, as many pointed out, the business may not have much intangible assets: the past profits are not guaranteed as the main sales person is leaving (owner). I am not worried about valuation of the business, much more about the viability, integrity and business model per se.

In Switzerland, there is very little in terms of mail order and free return in the audio field (as of yet). Exception is Genelec. Also puzzling is the number of Hifi shops scattered all over Zurich city. Most of them have been around for ages. :(
View attachment 246338
Don’t.

Visit the stores around Zurich. My impression. They are already on life support or just seem to break even at best. Plus they mostly focus on peddling snake oil as the margins are higher to support their expenses. Internet sales is coming - Thomann ships to CH with 30day return policy. Mueller-Spring already offers 14days. So I wouldn’t bet my financial future on that unless you want to conduct it as a hobby without expecting any/much returns.
 
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Mart68

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if your feeling is thar you could only sell products you believe in then sales is not for you.

'The right product for the right customer' - the right product is whatever you stock, the right customer is whoever walls through the door. B2C sales is about selling dreams not reality. If you don't want to do that then walk away.
 

Blumlein 88

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if your feeling is thar you could only sell products you believe in then sales is not for you.

'The right product for the right customer' - the right product is whatever you stock, the right customer is whoever walls through the door. B2C sales is about selling dreams not reality. If you don't want to do that then walk away.
This is very good advice.

This part is especially true of everything that is marketed.
B2C sales is about selling dreams not reality.
 

sarumbear

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Google disagrees, shows quite a few. Have they all shut in the last year or two?
Please show me your results and I will try to explain.
 

Galliardist

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Please show me your results and I will try to explain.
1669639007918.png


So here's the Google map of "hifi stores London". I get that not all are necessarily hifi stores and you might disagree with Google's definition of "London" but I don't see how you get that down to just two.
 

nebunebu

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It sounds risky, but I don't have a clue about hifi business.
Is there a way to rethink sales of hifi equipment?

Example. In your own home, set up a room with hifi equiment which you rotate on a quartly schedule?
Invite customers for demo's where they can listen to the equipment while you also share the story of what the challenges were, how they were resolved and how one can apply that method at home. The expertise you show will gain their trust were you could work as a consultant (build relationships at customers home) and sell equipment you and the customers know works well.
 

sarumbear

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View attachment 246479

So here's the Google map of "hifi stores London". I get that not all are necessarily hifi stores and you might disagree with Google's definition of "London" but I don't see how you get that down to just two.
I will try to explain by listing how they defined themselves. You decide is they are considered a Hi-Fi shop as the OP is talking about.
  • Shop TV, Hi-Fi, home cinema and more at Richer Sounds (they are a stack them high sell boxed dealer, no demonstration)
  • Sevenoaks Sound and Vision - Hi-fi and home cinema retail chain offering bespoke home entertainment systems and installations. (the description says it all)
  • Grahams Hi-Fi: Salesroom showcasing and installing customised musical and audio-visual home-entertainment systems (they are major player in HT with on premises HT demo facilities)
  • Hi Fi Confidential are an online electronic shop that offers only the best electronic goods such as TV's, Speakers, Soundbars, Home Cinema, Gaming Consoles
  • Headphones & Portable Audio | OTIC (only portable)

I forgot Audio Lounge & Premium Sound. They are indeed Hi-Fi shops but Google is wrong, Lugove Audio is not a shop but a mastering facility.

This means there are actually three traditional Hi-Fi shops in London, one for every 3 million people... Compare to the ten stores in Zurich, one for every 40,000 people.
 
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Galliardist

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I will try to explain by listing how they defined themselves. You decide is they are considered a Hi-Fi shop as the OP talking about.
  • Shop TV, Hi-Fi, home cinema and more at Richer Sounds (they are a stack them high sell boxed dealer, no demonstration)
  • Sevenoaks Sound and Vision - Hi-fi and home cinema retail chain offering bespoke home entertainment systems and installations. (the description says it all)
  • Grahams Hi-Fi: Salesroom showcasing and installing customised musical and audio-visual home-entertainment systems (they are major player in HT with on premises HT demo facilities)
  • Hi Fi Confidential are an online electronic shop that offers only the best electronic goods such as TV's, Speakers, Soundbars, Home Cinema, Gaming Consoles
  • Headphones & Portable Audio | OTIC (only portable)

I forgot Audio Lounge & Premium Sound. They are indeed Hi-Fi shops but Google is wrong, Lugove Audio is not a shop but a mastering facility.

This means there are actually three traditional Hi-Fi shops in London, one for every 3 million people... Compare to the ten stores in Zurich, one for every 40,000 people.
Are there more further out in suburbia? Here in Sydney, there are plenty more than three shops, but in the "centre" of Sydney itself, there are now precisely zero. Most are tucked out of the way in former or current industrial parks, or suburban centres. Rents are cheaper, parking available and actual customers will go out of their way to visit. Since I can't drive, getting to a fair few of them is something of a trek.
 

sq225917

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Kjwest, sevenoaks, audio gold, barletts, soundstage, richers ( multiple outlets) sonata audiolounge, graham's, oranges and lemons.
 

sarumbear

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Are there more further out in suburbia? Here in Sydney, there are plenty more than three shops, but in the "centre" of Sydney itself, there are now precisely zero. Most are tucked out of the way in former or current industrial parks, or suburban centres. Rents are cheaper, parking available and actual customers will go out of their way to visit. Since I can't drive, getting to a fair few of them is something of a trek.
There are indeed many in the countryside but almost all are HT specialists. The vast majority either have demonstration theatres where customers visit or they have no showrooms and they visit the customer, acting like consultants than demonstrators. Naturally, in a country of almost 70 million there are exceptions but the traditional Hi-Fi shop is almost an anomaly.
 

sarumbear

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Kjwest, sevenoaks, audio gold, barletts, soundstage, richers ( multiple outlets) sonata audiolounge, graham's, oranges and lemons.
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
 
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thewas

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Somehow I miss those "hifi being a mainstream hobby days" and prefer those filled with honest Japanese hifi stores to the current chic and almost empty ones with few boutique esoteric high end brands, but I just feel myself lately as an old guy who thinks almost everything used to be better...
 

Bob from Florida

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Dear Forum Members

I'd like to get an hear some advice.
I am based in Zurich, Switzerland. I am in my mid fifties and was recently retrenched. The past 20 years I have been the managing director of various small to medium enterprises in the high tech field including medical electronics with 100 to 250 employees. All business experience has been B2B. Educational back ground is PhD EE and MBA. I have the wonderful opportunity to re-invent myself and I am mulling over some options.

One of them is the opportunity to take over an well established Hifi Store in Zurich city. I visited the owner and his claim to fame is the ability to "match" electronics, cable and speakers. He carries the typical Swiss brands such as Piega, Neukomm, Stenheim and some other imported stuff like T&A, Rega, Cambridge: nothing really too much in the "oligarch hifi" but also nothing that the crowds here would approve of as measuring well for its cost. Fortunately, tube gear is to a minimum but of course he caters to the hipsters and sells them vinyl players.

I quick analysis shows that his long term customers are "typical audiophile", spending around U$10k per system. The current owner and his employees are believers of "you can't measure everything we can here" and unfortunately, he described an episode of switching an Ethernet router :facepalm:. While he agrees that "speaker-room interaction" is important he told me that he tames the system by swapping cables :oops:. Also, they have done barely any work on computer audio, don't understand Roon nor REW, and shy away from local streaming as they find it to complex for their customers???

I am wondering, if taking over the store (apparently by only paying off the stock) is at all useful. Of course he has long established relationships with some distributors and local manufacturers and he has a established customer base and store brand name. There are no exclusive rights for brands or territory. My worry is that I would just piss off the current customer base by teaching them too much about Toole, psycho-acoustics, room corrections, Harman curve etc. The ones agreeing would be pissed of that they spent too much in the past, the others would be pissed off at the sacrilege of believing in measurements.

Do you guys think it is worth while or should one alternatively just start from scratch?
What other factors would you consider before making such a jump?

Financially, it is not such a complicated transaction. The owner wants his "baby" to survive past his retirement and I am secure enough that I am not reliant on the store income alone.

Your thoughts are much appreciated, especially from the members who have their own brick&mortar stores.
Cheers
If it is something you believe would be enjoyable, go for it. You don’t have to lie to customers about cables or anything. If a customer asks your advice - give it. If they already believe a cable makes a difference and you carry it - sell it to them. This way, if the customer is open to objective advice it can be given. If the customer is not open to objective advice and knows what they want then make the sale.
 
OP
fivepast8

fivepast8

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Thank you all for the wonderful advice offered. I'd be an (audio)phool to pass this opportunity with all the free consulting I am getting ;).

Somehow I miss those "hifi being a mainstream hobby days" and prefer those filled with honest Japanese hifi stores to the current chic and almost empty ones with few boutique esoteric high end brands, but I just feel myself lately as an old guy who thinks almost everything used to be better...
Reminds me of the Akihabara Hifi hay days in Tokyo in mid eighties.

Example. In your own home, set up a room with hifi equiment which you rotate on a quartly schedule?
Invite customers for demo's where they can listen to the equipment while you also share the story of what the challenges were, how they were resolved and how one can apply that method at home. The expertise you show will gain their trust were you could work as a consultant (build relationships at customers home) and sell equipment you and the customers know works well.
This is a recommendation I have heard several times. I will consider it, unfortunately, I am currently living in a flat that does not lend itself easily to such an approach. However, going the store-less audio coach/consultant could well be worth a thought. There are coaches for everything these days!

If it is something you believe would be enjoyable, go for it. You don’t have to lie to customers about cables or anything. If a customer asks your advice - give it. If they already believe a cable makes a difference and you carry it - sell it to them. This way, if the customer is open to objective advice it can be given. If the customer is not open to objective advice and knows what they want then make the sale.
Yes, super-imposing my own believe onto the customer is a recipe for disaster as others have also pointed out. It's like the waiter only taking orders for food he likes.

There are indeed many in the countryside but almost all are HT specialists. The vast majority either have demonstration theatres where customers visit or they have no showrooms and they visit the customer, acting like consultants than demonstrators. Naturally, in a country of almost 70 million there are exceptions but the traditional Hi-Fi shop is almost an anomaly.
This means there are actually three traditional Hi-Fi shops in London, one for every 3 million people... Compare to the ten stores in Zurich, one for every 40,000 people.
This thread is turning into a comparison of audio landscape between Zurich and London: I like that... maybe setup shop in London if there is an almost 10:1 advantage :p.

if your feeling is thar you could only sell products you believe in then sales is not for you.

'The right product for the right customer' - the right product is whatever you stock, the right customer is whoever walls through the door. B2C sales is about selling dreams not reality. If you don't want to do that then walk away.
Agree absolutely, each to their own. Where things will be harder is if you have to "push" snake oil just to make ends meet. If the products in the store are those that one can stand behind, all is good.

Don’t.

Visit the stores around Zurich. My impression. They are already on life support or just seem to break even at best. Plus they mostly focus on peddling snake oil as the margins are higher to support their expenses. Internet sales is coming - Thomann ships to CH with 30day return policy. Mueller-Spring already offers 14days. So I wouldn’t bet my financial future on that unless you want to conduct it as a hobby without expecting any/much returns.
My impression is and always was that they can barely make it with the cost of rent in Zurich. Nonetheless, these guys have been around for ever: maybe there is/was more money around than we estimate.
Agreed, one cannot go up against Thomann, Audiophonics, and many other mail order box movers. Müller-Spring is indeed aggressive: their current T&C states no returns except with prior approval. Not sure if they are generous but I will find out. If indeed, they let people return the stuff for a minimal re-stocking fee then there is barely a future for the stores.
My advice is this.

If this is a mission of passion and your goal is simply to not lose money, it may make sense. If you are looking at this as a business opportunity and you hope to be profitable, don't do it.

As many above have mentioned, there are many pitfalls to owning a HiFi showroom, but you may really enjoy it and if you can afford to run the shop and you don't need the investment for your retirement, you can probably find worst ways to spend the money.
Thank you, I will keep this in mind. I am not planning on investing into the store, just to take it off the owners hand.
I would be very careful taking over a store that basis it's income largely on snake-oil and turn it in the direction of an objective approach. Many audiophiles have a great need to defend their believes, thus turning them will be extremely difficult and you'll probably loose a majority of the customer base.

Better to start from scratch if you believe there's a market for this, and you have the right products and knowledg/service to offer. This will also be very challenging since most audiophiles have a different belief.
You have summed up how I feel as well. I am yet to dig into the numbers to find out exactly where the margin is made.

I did a change from a professional b2b type business to more a retail situation with one of my passions....might depend how much money you want to throw at the passion :). There can be a difference between the passion part and making a business out of the passion part. Would the passion in this case be the sheer joy of good audio gear or selling stuff you don't even believe in (or trying to convince one of those "audiophiles" to think clearer?). I don't think I could sell silly audio gear, and in this case that doesn't sound like a good business plan particularly.
Very true, I would say that at the moment it is a pipe dream rather than a good business plan. Still much leg work to be done and part of that is to solicit feedback from ASR, especially those who are in the business.
I would not do it.
I worked in one of the stores on that map for years.

If you want an actual business, pursue the high-end of the market: store opens on prior appointment only, lots of project management/home installations, not a lot of volume, small margins for errors, perhaps four big orders a year.

If you want the experience of being a shop owner, be prepared to listen to hour long ramblings of random walk-ins whose spouses dont share their "hobby" and who have figured that a hifi-merchant on the other hand must surely appreciate the pictures of their second-hand acquired gear or their musings on the varieties of isolation spikes...
Absolutely agree with you on the larger installations. Home automation and seamless integration of audio/security/lighting/appliances etc. would be a possible extension of the business. I don't think I can stomach long ramblings from anybody! I will pm you to learn more about your experience. Very interesting.

So what would you offer that none of them are not already providing? And is that marketable? those Are the questions I’d be asking myself.
Apparently, the customers get interested in a product, then google to see who carries the brand and then visit the nearest shop. Of course, if the same product can be had at a discount on the internet, one only looses out. This is a difficult balance because essentially the importer decides how many stores will carry a certain brand. Thus, a good relationship with the distributors is essential. A new kid on the block would not even be able to carry the good lines.
If you'd have to change the total ethos of the store, I agree that you're likely to lose the customer base that exists now. If all you're really buying is a bunch of inventory and a lease, you can get those things yourself without buying an existing business. If you want to keep the superstitious audiophile customer base, you'll have to cater to their fantasies about audio.
Yes, very much aware of this and many fellow ASR members are offering the same sentiment. One thing you are getting is the existing relationship with some of the distributors which is crucial to get started albeit I might want to carry different lines. But even that is easier with a 30 or 40 year history.
I have a suggestion for the OP. Offer the owner of the shop that you will work there for free for a month and see how you like it. It should give you the opportunity to catch the vibe of the place and it's customers. It will also give you a peek at the likely (real) customer numbers and the length of time you would have to take with a potential customer to make a sale. Walk-in timewasters would be a natural hazard as they are in any hobby related store and it would be useful to get a gauge of the type of frequency you encounter those types. If you are currently free of other work obligations I think this would be more instructive than poring over sales figures and so forth. At the end of the day, you're going to have to like the work to keep the doors open.
Very valuable and already planned. I will certainly do that.

Folks, one more time, all feedback, inputs and suggestions much appreciated. Let's see what happens.
 
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PatentLawyer

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If you are doing it for fun, and don't need to make a cent, it could be an interesting thing to do in your retirement. As a business opportunity, I tend to agree with the majority that it is an awful idea.

We have a few family friends that have invested in restaurants, and they get a big kick walking around the place like they own it. Gives them a place to go and hold court every weekend. But I think that's the best bits of it.
 

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Somehow I miss those "hifi being a mainstream hobby days" and prefer those filled with honest Japanese hifi stores to the current chic and almost empty ones with few boutique esoteric high end brands, but I just feel myself lately as an old guy who thinks almost everything used to be better...
Very much this.

I like richer sounds. They are competitive with internet pricing - have a good range from entry level on up, and are one of the few places who are able to demo kit I am likely to buy. It is them who'll be demoing the Atmos soundbar I want to tryout as mentioned in another thread.

If I wanted a high end boutique store vibe I'd have earned more money while I was working :D:cool:
 

sarumbear

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Very much this.

I like richer sounds. They are competitive with internet pricing - have a good range from entry level on up, and are one of the few places who are able to demo kit I am likely to buy. It is them who'll be demoing the Atmos soundbar I want to tryout as mentioned in another thread.

If I wanted a high end boutique store vibe I'd have earned more money while I was working :D:cool:
I can see how they can demo a soundbar but how can they demo a speaker or an amplifier? I have not seen a demo room at any of their branches that I have visited.
 

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DMill

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If you are doing it for fun, and don't need to make a cent, it could be an interesting thing to do in your retirement. As a business opportunity, I tend to agree with the majority that it is an awful idea.

We have a few family friends that have invested in restaurants, and they get a big kick walking around the place like they own it. Gives them a place to go and hold court every weekend. But I think that's the best bits of it.
I agree 100%. I'm not privy to their financial records, but most of the remaining Hi-Fi stores around upstate NY, at least on the surface, look very much to be a labor of love. I've had conversations with them and heard stories about customers wasting countless hours auditioning gear only to find out that the same person ordered it online to save $100 on large purchases in the thousands of dollars. They seem unable to not sell boutique cables in fear of alienating customers the have (or the profit from them). It really is unfortunate. The more successful stores seem to specialize in home theatre installations or security systems for commercial or high end residential installations.
 
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