Thinking of opening a guitar store. Am I insane?

Jez6345789

I think its a sad state when its virtually impossible to open a small business like a guitar shop.

That said when I looked at doing a similar thing 10 years ago, I came to the conclusion even back then that the guitar business was  close to an illegal cartel. The authorised dealership operated by a lot of the big names that dictated stock levels of certain models and the fact that discount structures only favoured the large chains pretty much excluded even a decent well funded startup.

Ultimately I would look at something different but music related start small and perhaps part time.

There are plenty of smaller new brands out there that you could run from a home online business that seems to be a growing trend these days. 

sweepy

To have some brands you need a bricks and mortar shop unfortunately, Gibson Fender Ibanez etc don't help themselves by having prohibitively high stock levels to even get the tiniest discounts. The Distributors are not doing themselves or us any favours whatsoever

mellowsun

I can see a market for a boutique style shop stocking high end acoustics, along the lines of the North American guitar company in SW6. acoustic instruments are fashionable atm, Ed Sheeran etc.

This year's show at Olympia was enlightening - the acoustic show was busy and buzzing, but the electric show was deserted. Years ago it would have been the other way round.

crunchman

mellowsun said:

This year's show at Olympia was enlightening - the acoustic show was busy and buzzing, but the electric show was deserted. Years ago it would have been the other way round.

Wasn't it billed and publicised as an acoustic show?

Parker

I love enterprise. It's what makes us British. What no longer does is the fact that we're not a nation of shopkeepers. Shopping habits have massively changed. Tone World was mentioned, and there was also a store in Brum called Music King. It was in a warehouse type place and had s*it loads of money poured in to it (advertising, stock displays). I'm not sure it made it to it's first birthday. Guitars4You has shut his shop I believe (shame he doesn't do the same with his mouth...). Lets not forget the DV247 fiasco and IIRC even The Guitar Centre chain was in trouble at one point. Even the big boys struggle.

Whilst I sit at my desk with my responsible middle-management job, earning a reasonable living wage, I will often drift off and fantisise about what my guitar shop would look like - if I won the lottery. If you have paid off your mortgage, and don't have children or a high-maintenance wife, and just want to indulge in something fun, then I say go for it. BUT if you have any of the above and get it wrong, then you will lose it all. I started my working life in a guitar shop during the 90's guitar 'boom' years. That shop had to sell up despite being a Gibson dealership, Fender Dealership, Marshall Dealership. Times are even tougher now.

Park your dream mate - review your current career and get in to something you enjoy more. You will struggle to scrape a living. Just open the coffee shop part instead and stick some guitars on the wall for sale that you have got off ebay cheaply.

 

jonnyburgo

A guy I know has a little independent bike shop, he isn't cheap simply because he can't afford to be. However he knows everything there is to know about bikes and is always on hand to give good advice. Most of his income is from repairs/services etc. He has 1 other staff member that works Saturdays.

Just down the road from his shop another guy opened up, Massive ex car showroom, loads of high end bikes £1,500 and up, very impressive store. Went bump after less than a year.

Danny1969

Check this out, a large shop devoted to drums owned by a friend of mine

http://www.grahamrusselldrums.com/

Anyone who needs drums in the Portsmouth area goes to this place because by concentrating on used drums they can hold large levels of stock and not be held to ransom by distributors. Real gig'ing muso's rarely care is something is pre owned as long as it does what they want it to do and being cheaper is a bonus. That's probably a better business model than buying and selling new instruments 

richardhomer

Parker;440588" said:

Guitars4You has shut his shop I believe

No - he moved to an 'Appointment Only' system for personal visitors but appears to have returned to set opening hours, judging by his website.

I've never bought anything from Mark but my interactions with him have always been positive.

Axe_meister

You could just stock a second hand name brand guitars but hook up with home grown guitar makers, and sell those new maybe with a bit of a consultancy business for guitar specifications which you pass to the luthiers, maybe get them into a bidding war for the build.

Parker

There is no doubt that an interesting 'used only' store would appeal to many, but its still a tough gig! In terms of Real Giggin Muso's not really caring if its new or old is not an accurate statement. I like buying new strings! I prefer my guitars to be used as they are generally broken in a little more, but pedals, amps and anything with a plug, generally new is better due to the warantee. I find price is king on any transaction. 

beed84

If you can get a time machine and go back 20 or 30 years, then go for it.  But sadly, as much as I appreciate your traditional ideas and ambitiousness, I think society, with what's available, and their current wants and needs, will pull your pants down. However, if you have the savvy and genuine know-how to make it work, then also go for it. Against my initial thoughts,  you would have my support you in your music shop venture!

ICBM

The difficulty even with selling secondhand stuff is once again the internet... it takes a matter of seconds to find out how much your old guitar is worth to sell, so most owners don't like to sell them to a shop - or even trade them in - for enough less than that for the shop to make a workable profit, and think the shop is trying to rip them off.

It can just about be done with an agency/commission sale because a shop can typically ask a tiny bit more than the normal Ebay price, but then the margin is tiny and it's still barely worth it for the shop. Try to charge a larger commission to make it worthwhile and you get accused of profiteering! Can't win.

Most customers simply don't understand how hard it is to run a guitar shop profitably.

richardhomer

ICBM;441037" said:

The difficulty even with selling secondhand stuff is once again the internet... it takes a matter of seconds to find out how much your old guitar is worth to sell, so most owners don't like to sell them to a shop - or even trade them in - for enough less than that for the shop to make a workable profit, and think the shop is trying to rip them off.

A friend of mine ran one of the country's well-known guitar shops, which went out of business in the early-90s recession.

The problem was not just a knackered economy - there were pages of free reader ads in the back of Guitarist by this point, which was the start of the 'mass availability' of pricing information. And it created exactly the issue ICBM describes with on-line sales.

It seems to me that price IS pretty much all that matters now. You can order a guitar from anywhere and return under DSR. It almost feels like more a commitment asking to try a guitar in a shop.

I love music shops - I love seeing something you've never seen/heard of before and getting the chance to compare instruments back to back. I suspect that unless they are now exceptionally specialist, that survival will get harder.

I know two people whose financial lives were turned upside down by the failure of their shops. I wouldn't countenance the idea of owning one.

A5D5E5

If you give me your capital, I will happily give you half back. This is a much better return than you will see from opening a guitar shop.

Wolfetone

One gap in the market is for a shop that sells a good price range of secondhand gear. I can imagine the appeal of a shop full of older guitars ranging from cheap Affinity's up to the usual higher end models. A wall of all sorts of amps and PA's on the one side and a wall crammed with used guitars.

Before a guitar leaves, it has a decent set up and a clean. Trawl Gumtree for your stock, do a bit of sale or return at 20% commission. Put a big sign outside that says WE BUY GUITARS AND AMPS FOR CASH. 

Don't sell anything new, leave that to your competitors.

You'll probably make a bigger margin on a used guitar than a new one. Guitarists love an Aladdin's cave of used goodies. There's a similar shop in Wakefield town centre as I recall.

markblack

My Dad had a music shop for 35 years, we closed it down last year. Had he not owned the building it would of gone bust long ago. In it's heyday it was one of the biggest in London, and sold everything, when I used to go in a as a kid it was always busy, the phone would ring off the hook, but towards the end it was a ghost town. He did advertise every month. You could argue that he should of moved into online sales more, but that would of changed it as a business and made it sell a lot more stock, and just be a knock it out and do volume to make money. And if you were going to do that why bother with musical instruments, just sell toilet seats, or whatever people really need.

At one point he was an office Gibson dealer... that was a bit of a ball ache as you had to by A LOT of stock... and sometimes it wasn't that good and you end up with a guitar no one wants, that owes you 2K + gets expensive. Knocking out £99 starter guitars made them more money, people don't haggle at £99 (they do on a Gibson).

I think there's a romance to owning a music shop, and like the music industry it's all changed. There's no money in it, and if you are making money you don't need to buy gear, people will give you it.

Back when he opened it in the 70's he picked a part of London where it was cheap to live, as most musicians had no money and would spend it on gear, he also wanted a place where people could park, and he could get a big shop for not much money. London is over priced, and the 'shitty parts' now cost you and arm and a leg to live in. Oh, and you can't park anywhere!

In the end he sold the building and it might be a Tesco's by now...

I'd say do it if you don't want / need to make much cash and have it as a hobby... they days of getting rich might be gone.

ICBM

Wolfetone said:

Put a big sign outside that says WE BUY GUITARS AND AMPS FOR CASH.

No, don't do that.

You will have an endless stream of chavs trying to hawk knackered, stolen (or both) guitars, very soon a large collection of the same all of which need substantial work to make them even remotely sellable, and a distinct lack of cash. If you're unlucky the real owners of some of the guitars will show up too.

If you're going to buy, do NOT buy for cash - unless it's on your terms away from the shop, ie going out to car boot sales etc - and specifically say so. Pay out to customers only by bank transfer or cheque.

Bellycaster

Every bit of advice has most likely been given, so I can only say that I wish you all the luck in the World if you do it. Just try and find an intelligent location. 

ie: Where there is Money or where there are Students/their accomodation and the like and not much Competition about, I know this doesn't make any difference with online sales and most likely makes the rent more expensive, but a quirky shop in the right area lures the victims right people in.

Good Luck.

:-)

Snap

I've run a business (analytics, in blue chip sector) so I know what needs to be done to keep going, a few key principles:

Don't believe that just because you think its a good idea, other people will. You need to understand what your market is, and what they want. Do some research. Beware of the pitfalls of setting up a business model based on personal experience - "I think this will work" etc. Doesn't matter- find out what's needed first, and base this as much as you can on facts, not feelings.

What;'s it going to cost, both upfront and ongoing?
What do you a) need to earn, and b) want to earn?
What's your exit plan? Do you see this business as funding you til you retire, OR are you building it up to sell? Two very different business models and both have different ideals in terms of managing debt and cashflow.

Your basic idea sounds almost utopic - can you set this up locally, or would demand for that sort of thing mean you would have to move? For example, there might not be that sort of shop/service in (i dunno) say Kent, but if you set it up, would you get the footfall and trade to hit your margin targets, and therefore your earning?

honestly, on cursory appraisal, I wouldn't go near it. I would think the amount of upfront investment would be enormous, and the earning potential low. The ongoing rent for a premisis like that would ( I would think) be colossal, and your stock investment, very high. That lands you with one big lump of debt which gives you a massive pressure from the start.

FX_Munkee

If you do it (which I honestly think you would be mad to) I'd say that you need to be niche. You need to sell something that the big box shifters can't.
There was once a dealer in Leeds who pretty much only stocked second hand Gibsons. He'd pop off to the States for a month a year and pick up loads of stock. I could do with a place like that now