How to run an Underground Record Shop

bun-u said:

Any advice? Would I be mad?

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Yes.

Records shops seem to be closing left right and centre. Hackney is ripe for gentrification which means that there is a real danger that the rents will be hiked up so the shop space can be let out as a "trendy wine bar".

Daddy Kool (arguably the most famous reggae record shop in central london) shut up shop last year and now trades exclusively on ebay.

If you went to a financial adviser and asked how to invest your money, do you think "as part of a record shop" would feature in the top ten?

Having said that, it would be very cool and you have to at least let us east siders know where the shop is!

Sorry if this sounds cynical - Paul Meme is your man for business advice.

not sure if this is the same one you're talking about but I notice that the guy who runs that shop in broadway market has just opened another in brick lane - can't be doing too badly, I can't help thinking...

bun-u said:

Thanks John and probably what the saner part of my head was saying anyway. I was thinking of it more than a punt to open a small avenue rather than a serious money-making scheme

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I reckon there would be all sorts of benefits from doing it, but just not (necessarily) a profit to you!

minusone said:

not sure if this is the same one you're talking about but I notice that the guy who runs that shop in broadway market has just opened another in brick lane - can't be doing too badly, I can't help thinking...

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that's not necessarily the case, people expand for all sorts of reasons one of which is that they aren't making enough money from their existing outlets

Sound323

There are exceptions, this one in highgate run by a mate of mine, been running a few years from scratch, there must be lessons to learn here, make it v.small and v.specialist?

I'd warn against the small and specialist tactic except in *very* special circumstances. I've worked in a small (3 employees) used record shop for some time now and the mechanics of running a shop are both hand-to-mouth and must be very pragmatic. If our shop was depending entirely on DJ dance music (all the genres!) we would have never survived the 1998-99 transition away from dance towards rock in Vancouver. Granted this is highly local context from which to make a general argument, but you can pull some general advice from my experience.
1) If the overhead isn't incredibly low, you'll probably never survive. You've got to be able to weather really shitty sales alot of the time and you can't last if your rent is high. I know this sounds simplistic, but it kills record stores all the time.
2) Location location location. This is a cliche by this point but for good reason. We have 2 stores on the same street and the one that's one block in the busier direction does twice (or triple) the business of the other. Never forget that records are luxuries and people do not need them. Also, just becuase you and I and probably everyone on this list are willing to drive across town to hit a good shop or pick up one hard to find 12", does not mean that most people are. You can't base a business on nerds like us; it's an impulse purchase for most people so you have to be placed where they can wander in.
This second point seems to be at odds with the first and it's true: good location = higher rent. This is where luck comes in. Sad but true, you need an uncommonly good deal on rent to make a go of it in an underground market.
3) Be prepared to do terribly boring work all the time. In the used business it's cleaning records and shuffling the racks to make them look fresh. In the new business it's pricing and cleaning and hustling and a million other things. Working in a record shop can be fucking boring, especially cause it's usually pretty dead in there.

** Last important note: take a really cold, hard look at your profit margin. It may be different in the UK, but I doubt it. Most new record shops are buying 12"s for only a *few* dollars less than they are selling them for. This makes it a terribly hard business to survive in, let alone provide an income. If you fuck up and order 10 copies of the new Jon E. Cash tune and no one buys it, you're out a lot of cash very quickly. Even if you sell all of them, you still haven't made much cash. **

I don't mean to be a downer, but I've watched my boss hustle for years and he's seen literally dozens of shops come and go in our little town. The only reason he's survived is becuase his rent is great, he's resisted the urge to expand beyond his means and he works there ALL THE TIME. Buying wax, selling wax, calling people and hustling for a sale.
Be this as it may, I've never had so many girls check me out than when I'm behind the counter at the shop. So, it has its perks!

Running a record shop requires firstly and foremostly knowledgable staff.

You have to have people who know what the newest tracks are to be released, what the big tracks are out there in the clubs, what tunes are doing the business on dub to make sure u contact the artist to secure early supply on release, classic tracks that people may still want to pick up and all this has to be done across a number of genres.

When you have that, then you start to think about making a decent profit.

Brokeman said:

2) Location location location. This is a cliche by this point but for good reason. We have 2 stores on the same street and the one that's one block in the busier direction does twice (or triple) the business of the other. Never forget that records are luxuries and people do not need them. Also, just becuase you and I and probably everyone on this list are willing to drive across town to hit a good shop or pick up one hard to find 12", does not mean that most people are. You can't base a business on nerds like us; it's an impulse purchase for most people so you have to be placed where they can wander in.
This second point seems to be at odds with the first and it's true: good location = higher rent. This is where luck comes in. Sad but true, you need an uncommonly good deal on rent to make a go of it in an underground market.

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I'd agree with this to a degree. Most people only own 12 CDs and see music as either an adjunct to a fashionable lifestyle (or an adjunct to an adjunct, if you think about all the 12 CD people who own iPods), or as a perfunctory form of therapy (like an air freshener, a greeting card, a fond and fleeting memory, something to drown out a barking dog).

But the fallacy of this line of thought is to say that all retailers are scrabbling only to attract the same ... oh ... 10% of the population -- those consumers who happen to be passionate about music. This percentage may never increase, but greater attempts can be made to exploit and extract resources from the consumer who needs 'music for a fashionable lifestyle.' I think a lot of potential record store owners are afraid that having a store full of rich suburban teenagers (with tastes that are aspirant but less than cutting-edge) will somehow bring their own coolness into question.

I'd say go for it. If you're good at manipulating the consumer's sense of self-worth -- turning them into your sort of consumer -- you might make out all right. Location is important, obviously, but I've seen a somewhat ill-fitting location turned into an 'added value' type scenario. It can work, but obviously it's the exception.

fldsfslmn said:

But the fallacy of this line of thought is to say that all retailers are scrabbling only to attract the same ... oh ... 10% of the population -- those consumers who happen to be passionate about music. This percentage may never increase, but greater attempts can be made to exploit and extract resources from the consumer who needs 'music for a fashionable lifestyle.' I think a lot of potential record store owners are afraid that having a store full of rich suburban teenagers (with tastes that are aspirant but less than cutting-edge) will somehow bring their own coolness into question.

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I'd certainly never argue in favour of rejecting so-called rich suburban teenagers. My shop depended to a large extent on large numbers of "uncool" patrons; be they suburban Progressive House fans, stringy haired Prog-Rock fans, or the ubiquitous 15 year old buying Dark Side of the Moon. My argument is in fact exactly the opposite, a record shop can't afford in almost any circumstance to do <i>without</i> these patrons. A record store should rarely have a problem attracting the 10% of the population that fldsfslmn is making reference to if they are doing their job; these people will seek out shops despite poor location. It's the other 90% who make up most of your business, and they generally find your shop by walking by, not by seeking you out, hence the importance of location.

As to those shops that make a go of it in locations without walking traffic, they are certainly as you say in the minority. It really depends then on who your customer base is, and on being VERY realistic as a shop owner whether you can support the business with that aforementioned 10% who will go out of their way to find you.