Advice wanted: Taking over an HiFi Store

[sarumbear]

Chester has a demo room. As does Hanley.

https://customerservice.richersounds.com/hc/en-gb/articles/360012945598-Demonstrations

Brilliant! I was not aware of this and unlucky to live near stores that lack the facility. The at home demo option is also news to me.

 

[sarumbear]

The more successful stores seem to specialize in home theatre installations or security systems for commercial or high end residential installations.

This is my take as well. It seems to be the way Hi-Fi business is morphing.

 

[Mart68]

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.

Richer Sounds is nothing like that these days, more's the pity. Used to be like Aladin's cave for Japanese bin-end. Last year's models at a third retail. The Japanese eventually realised it was hurting sales of their new kit and cut off the supply. Bought my first ever system there back in '88

That one in the picture is understocked compared to the ones I went in back then, the equipment isn't stacked all the way to the ceiling.

 

[RayDunzl]

If I were your customer you would probably have last made a sale to me in 1998.

No fault of your own, but my later "big tickets" were private sales, and the little stuff, well...

I may be unusual in not changing gear often, but, my last car stayed with me from 1994 to 2019, for example. It left me because it had an accident.

 

[kemmler3D]

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.

Yes, that's actually very fair. I overstated how easy it would be to get new inventory - a lot of distributors or sales departments won't even return your emails if they don't know you and you aren't ordering huge qty.

So that's worth something. You can at least get into the market without much difficulty. The question is, are you sure you can stay there?

Also, keep in mind that ASR is not really your target audience. Most people here will never spend money on magic cables or super-high-end tubes or vinyl setups. We mostly DIY our installations. We do our own measurements. Among everyone here, probably only Amir and a few others know what it takes to make a business of the type you have in mind successful. The rest of us are far from ideal customers

 

[antcollinet]

Brilliant! I was not aware of this and unlucky to live near stores that lack the facility. The at home demo option is also news to me.

That was news to me too. Though I can't imagine they'd do it for the cheap stuff.

They also have a try it at home and return inside 30 days no questions asked option. Did that with the speakers I got last year - but didn't need to return them.


EDIT - sorry OP, realise we are a little off topic here - shutting up.

 

[Doodski]

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.

That would work for some but not the majority of customers. Many want a storefront and want casual walk in service.

 

[Doodski]

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.

Very cool pic! That and I like the hand writing of whomever made all those nice signs. I dig hand writing...

 

[Doodski]

you can make money from a hifi store, but you must also sell some high-end cables and whatnot. if they want it, let them buy it. your not going to make money by telling them most amplifiers sound the same etc.

I did for 9 years and I was top 10% salesmen material for several of those years. I used the savings from downgrading the amp sometimes to put more money into the speakers and the customers loved that after I demo'd why they want that.

 

[fivepast8]

If I were your customer you would probably have last made a sale to me in 1998.

No fault of your own, but my later "big tickets" were private sales, and the little stuff, well...

I may be unusual in not changing gear often, but, my last car stayed with me from 1994 to 2019, for example. It left me because it had an accident.

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.

Also, keep in mind that ASR is not really your target audience. Most people here will never spend money on magic cables or super-high-end tubes or vinyl setups. We mostly DIY our installations. We do our own measurements. Among everyone here, probably only Amir and a few others know what it takes to make a business of the type you have in mind successful. The rest of us are far from ideal customers

... 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.

EDIT - sorry OP, realise we are a little off topic here - shutting up.

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.

I did for 9 years and I was top 10% salesmen material for several of those years. I used the savings from downgrading the amp sometimes to put more money into the speakers and the customers loved that after I demo'd why they want that.

When can you start?

 

[antcollinet]

.... and he actually asked me, given my engineering background to explain to him why cryogenically treated cables sound better.

I'd have loved to be around to watch the reaction to the answer to that question.

 

[GD Fan]

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?

Be sure to let us know if you take the plunge and go for it. You might end up with some like-minded visitors when ASR members pass through Zurich.

 

[AdamG]

What other factors would you consider before making such a jump?

Is this something that you believe you will enjoy doing? Does this scratch some itch you have? You can and should remold the Store to better match what you want to make of it. Brining the current customer base into the current market and getting them educated and interested in Streaming. Conduct free seminars for how to access the streaming services market. What equipment you need and the benefits of streaming over other sources. What streaming services are best fit for each customer and how to access the various stages of quality. These are many benefits that you can bring to the table and turn learning opportunities into potential sales. Can you offer system setup and in-house calibration using measuring equipment and such? That’s another segment that is probably not being served in your market.

But is this your passion? If yes and the risks are what you say them jump in. If not, big pass…

 

[Doodski]

Conduct free seminars for how to access the streaming services market.

Back in the day when a microwave oven was $1200 for a loaded Panasonic my sales buddy would do night courses in the community center with his wife alongside teaching how to do certain operations with a microwave oven. He made heaps of dough doing that in his spare time. He would sell 1 to ~3 ovens each night/the next day or whatever and he wasn't really working. He loved people and really dug teaching them.

 

[Spkrdctr]

Wow! What a thread. I have to say in my opinion I would go into it as an expensive hobby. I mean that you plan on not making any money and at best break even. But, in reality since it probably will not break even, plan on how much per month you can lose for your fun hobby. Many thousands of people in the USA do this with small shops all over the country. I have met hundreds of people living on social security and using it to fund the small hobby business they have going. Brick and Mortar hi fi stores are dead and dying. The best that you can say is that they are slowly going to die out in Zurich and London over the years. In the US it has just happened much faster. So, if you are planning on actually making money, I would run. You would be better off trying a different business that can actually give you profits much easier or in bigger amounts. Todays audio vs 20 or 30 years ago is a big, big difference. Buying into a dying business model is a very bad idea. Seriously, please look into something else.

There, I feel I have done my duty to warn you. Now, you can do whatever you want, but your were warned!

 

[LesterNZ]

Here's an idea from the other side of the world:

From:The HiFi Store NZ<[email protected]> The Linn importer/dealer and other "reasonable brands" (Rotel, Q-Sound, etc) is quitting retail after forty years at "good" locations around Auckland NZ. He's told me their customer base has been very solid all along where he's NEVER had a personal cheque bounce for anything sold. But ? But, New Zealand? Apart from it being 4 air-hours from anywhere else, New Zealand is totally lovely and the climate, people, food etc are simply great. So for a business venture? Take a punt?

I've been over to a Zurich shared premises (across an inside aisle with tourist junk) "High-End" shop where there was a wide selection of Hi-End with medium-fi, old and new bits & pieces. The sales gentleman was honest about the fact that technology has made premium techncial performance quite inexpensive and a premium brands' performance at 10 times the cost of an equivalent good "latest" devices are lucky to provide 10% better difference for "average punters".

He claimed big sonic differences are unrecognisable by practically everyone in an informal comparison challenge. He played me a 2K $-Euro Acoustic Energy all in 3 boxes streamer-amps-speakers which sounded pretty good for mid-fi at "reasonable apartment" volume level, then the the same tracks on a nearby 40K+ "main room" (with a real barking dog) system rig. And he said, (not me) - said most people thru the door couldn't or wouldn't know or appreciate the sonic differences - AND would definitely balk at the price factor of 20 times between these two set-ups.

Had to agree with him on "the big system" there was wider frequency extension, spaciousness, clarity etc. certainly, yes. But the well engineered "life-style rig" wasn't bad at all - and it made music that was quite listenable - if not totally audiophile "goose-bumping".

So is there hope for continuance of bricks & mortar shoppes? Maybe, but only with enthusiastic and/or real hard sales tactics to get the tyre kickers to sign on the dotted line before they "have to ask the wife" ?

My three (inflation adj.) cents, thanks folks.

 

[RayDunzl]

Somewhere above was mentioned the product lines carried by the store...

What do the contracts with the distributors say about change of ownership?

 

[DMill]

Somewhere above was mentioned the product lines carried by the store...

What do the contracts with the distributors say about change of ownership?

My guess is if you can move enough inventory you can rep whatever brand you want if they give you the right margins. In the states, let’s use Upscale Audio as an example. Kevin Deal certainly looks like he’s kicking ass. He sells mostly good stuff… and audiophile BS too. He’s pretty much Switzerland in his take on objective results but leans subjective. It’s cool. The guy understands how to make money. Great marketing and he has some good products.

 

[fivepast8]

I'd have loved to be around to watch the reaction to the answer to that question.

Oh Tony, how difficult it is at times to remain diplomatic!

Be sure to let us know if you take the plunge and go for it. You might end up with some like-minded visitors when ASR members pass through Zurich.

Meeting some like minded folks would be a pleasure. Don't wait for a store opening: just give me a shout when passing through Zurich!

Is this something that you believe you will enjoy doing? Does this scratch some itch you have? You can and should remold the Store to better match what you want to make of it. Brining the current customer base into the current market and getting them educated and interested in Streaming. Conduct free seminars for how to access the streaming services market. What equipment you need and the benefits of streaming over other sources. What streaming services are best fit for each customer and how to access the various stages of quality. These are many benefits that you can bring to the table and turn learning opportunities into potential sales. Can you offer system setup and in-house calibration using measuring equipment and such? That’s another segment that is probably not being served in your market.

But is this your passion? If yes and the risks are what you say them jump in. If not, big pass…

Thank you for the encouragement and tips. Indeed, setting up and measuring systems at the clients would probably the biggest differentiator over current shops, including subwoofer integration. FM broad cast is about to stop in Switzerland and thus small DAB (Digital Audio Broadcast) are being sold. And with internet so prevalent, internet radio and then proper streaming would make a lot of sense to many folks.There, I feel I have done my duty to warn you. Now, you can do whatever you want, but your were warned!

There, I feel I have done my duty to warn you. Now, you can do whatever you want, but your were warned!

Thank you for the warning. Much appreciate your insight. One thing to watch is whether locally we get big mail order competition. Switzerland is not member of EU and thus shipping an expensive box across the boarder will require customs forms and duty. Many European businesses shy away from that (market too small, pita too big). More importantly, it is even more difficult to wind back a deal. In that sense, Switzerland is unique. Moreover, only few people will direct import something for 5 to 10k without ever listening to it or touching it, especially if the return takes a degree in logistics. I have sold equipment during exhibitions at our stand, customer was ready to pick things up, but of course, import papers were wrong (goods not for sale). So had to take everything back and re-sale and re-import properly. Customs and VAT regulation does make cross border sales difficult. For example, shipping DDP goods via Austria to Germany from Switzerland, makes it much easier for us to reclaim VAT than driving the truck straight into Germany .

Here's an idea from the other side of the world:

From:The HiFi Store NZ<[email protected]> The Linn importer/dealer and other "reasonable brands" (Rotel, Q-Sound, etc) is quitting retail after forty years at "good" locations around Auckland NZ. He's told me their customer base has been very solid all along where he's NEVER had a personal cheque bounce for anything sold. But ? But, New Zealand? Apart from it being 4 air-hours from anywhere else, New Zealand is totally lovely and the climate, people, food etc are simply great. So for a business venture? Take a punt?

My three (inflation adj.) cents, thanks folks.

Thank you for your input. Not sure what you mean.... are you trying to convince me to come to Auckland? or scaring me because this shop after 40 years is closing down? Btw, nothing on their website indicates closing down.

Somewhere above was mentioned the product lines carried by the store...

What do the contracts with the distributors say about change of ownership?

Excellent point: due to competition law, fixing retail prices and forced distribution is forbidden. Still done though just not in writing. Thus a very fine balance of power between the shops and the importer/distributor. Nobody is allowed to upset the apple cart. This is the most murky aspect. I have to double check if there are any change of ownership clauses.

My guess is if you can move enough inventory you can rep whatever brand you want if they give you the right margins. In the states, let’s use Upscale Audio as an example. Kevin Deal certainly looks like he’s kicking ass. He sells mostly good stuff… and audiophile BS too. He’s pretty much Switzerland in his take on objective results but leans subjective. It’s cool. The guy understands how to make money. Great marketing and he has some good products.

Thank you for pointing out Upscale Audio. I will have a closer look at his business and website and try to gleam some pointers.

 

[buz]

Largely importing electronics from abroad to Switzerland is pointless, electronics is just about the only competitive industry here. Every now and then, US has tremendous sales but those are only worth it if you are flying transatlantic anyhow.

Exception is Chinese stuff directly ordered from China.