The Canadian Guitar Forum banner

1 - 20 of 39 Posts

·
Registered
Joined
·
73 Posts
Discussion Starter #1
Hey guys.... I got a question I’ve been pondering on for a while now so I’ll start from the top. I’ve been playing since I was 6 or 7.. I was in grade 2 and it was around Christmas. So Guitar is my literally my life, which I’m sure many of you feel the same way. I’m not good with a lot of things and came to the conclusion that when it come to occupation I need to do something Im actually good with. Where I live there is really only 1 Guitar store but there is a lot of addiction with opiates here and the only work is with call centres. When ever we did have other stores try to Open here it always seemed they focused too much on beginner brands and that sort of thing. They didn’t stock fender, Gibson, Marshall, prs, etc. So I figured that played a part in why they didn’t survive maybe. I have wanted to get into the buying and selling with gear for a while now. I usually do a lot of trades and that for my own personal gear. It’s usually with guitars and sometimes amps. What I’m wondering is how did you guys get started in this buy and selling business? Do you have any tips? And say if I pay $1000 for something to sell, what’s the minimum you’d look to make off of selling it? 25%ish? Love to get your guys input! Thanks!
 

·
Registered
Joined
·
24,713 Posts
There won't be all that much of a walk-in market in Glace Bay. Not that folks there don't have any taste, but the population is not big enough. That necessarily implies shipping. Shipping necessarily implies additional costs, and the nuisance of returns. And that eats into profit margin. If I live in Antigonish would I want to do business with you, or simply take an afternoon to drive into Halifax and check out L&M? Heck, I don't even have to drive into Halifax. There's an L&M just off the highway in Bedford.

I'm not trying to dump on your plans. I just wouldn't rely on it as my primary revenue stream if I was you. As a sideline, it could be fun.

The owner of one of the vintage shops in town here (Ottawa) closed his storefront business a decade back, when that part of the block he was on was bought out for redevelopment as highrise condos. He still deals in vintage gear, and organizes a local guitar show/swap-meet annually, but has resorted to on-line sales, and has a steady gig at the repair bench in one of the larger music stores in town. Consider the size of his potential market, compared to yours, and that he has to have a day-job on top of it.
 

·
Registered
Joined
·
1,262 Posts
When a music store concentrates the bulk of its inventory on entry level gear, that is not a recipe for failure.
Quite the contrary.
Maybe 95% of all instrument and amp sales are in the lower quarter of the pricing scale.
Very likely even more so in a small community with a limited market.
Somehow I don't think your assumption on why the stores you saw failed is correct.
I suspect it is more likely the stores failed because the market is too small.

Something important to consider is that since you say you are in an area with high incidence of intravenous drug use I would imagine store security would be a very big issue especially if you plan to sell high end gear.
You'd likely need to build a fortress with plenty of surveillance.
I'm guessing the cost of all of that could possibly preclude your venture from being economically feasible.

Perhaps a home based online business would be a better model for your situation.
Maybe a virtual store-front on eBay or Reverb.
Then your security expenditures would benefit you and your family and personal belongings along with your inventory.
 

·
Registered
Joined
·
73 Posts
Discussion Starter #6
I get what you mean population wise and that is a big part of my concern. I do figure the best way to go here would be doing to buy and selling thing from my home and try selling over the net. It’s where to start is what I. Troubling with and would love to hear how others started. I was thinking trying to get into repairing maybe as well and do some reading and practice. And if I got something to sell and paid 1000 for it generally what percentage of a profit would you want to make. That part is troubling me a bit too.
 

·
Premium Member
Joined
·
4,555 Posts
You could open a store on Reverb.com to get started
 
  • Like
Reactions: sulphur

·
Premium Member
All the usual suspects...
Joined
·
207 Posts
I get what you mean population wise and that is a big part of my concern. I do figure the best way to go here would be doing to buy and selling thing from my home and try selling over the net. It’s where to start is what I. Troubling with and would love to hear how others started. I was thinking trying to get into repairing maybe as well and do some reading and practice. And if I got something to sell and paid 1000 for it generally what percentage of a profit would you want to make. That part is troubling me a bit too.
Greco's advice is very sound. If you don't feel comfortable with learning how to do a business plan, you may not like accounting, payrolls, taxes and such. Running any kind of business involves an awful lot of time doing this kind of work, maybe much more so than delving into actual instrument buying and selling.


Envoyé de mon iPad en utilisant Tapatalk
 

·
Occasional CEO
JB Custom
Joined
·
1,852 Posts
Greco's advice is very sound. If you don't feel comfortable with learning how to do a business plan, you may not like accounting, payrolls, taxes and such. Running any kind of business involves an awful lot of time doing this kind of work, maybe much more so than delving into actual instrument buying and selling.
.....so.....much......more...... lol

+1 for Greco's advice, as well as Smylight. If you want to run a successful business doing something that interests you, the first thing you need to learn is how to run a business. What are the regulations/laws for running a business in your area? Will you incorporate or operate as a sole proprietor? Do you understand the financial management and accounting required for each (income taxes, payroll, corporate dividends, HST, etc)? Are you financing the business or starting it out of pocket? Chances are your initial investment for a guitar shop, even a very small one in a remote area, is going to be at least $50K. As for your intial question, this previous thread on this topic might interest you. I believe I jump in and share my thoughts at some point in the thread as well:
https://guitarscanada.com/index.php?threads/profit-margins-at-l-m-and-other-music-stores.207233

These might also interest you:
https://guitarscanada.com/index.php?threads/ask-canadian-music-store-lifer-anything.72020/
https://guitarscanada.com/index.php...ar-business-owner-anything.77133/#post-683993

Bottom line is if you're trying to run a "real" business with a commercial location and the operating expenses to boot, you'll need healthy margins. That most likely means providing the types of products and services you aren't a fan of (cheap gear, lessons, rentals, etc.) If you're planning to operate out of your home, just sell for the going rate online (assuming it is profitable from what you purchased the item for) and go from there.

I guess the real question is, are you planning on doing this full time, or just as a side income? How you choose to operate your business is largely determined by the answer to that question.
 

·
Premium Member
Joined
·
17,622 Posts
I was hoping that @jbealsmusic would respond to this thread.

@Lagocaster If you know someone in Glace Bay that owns a small (sole proprietor retail) business, sit down and talk to him/her about the day-to-day realities of owning a business.

I wish you all the best. It can be very exciting and enjoyable to own a business.
Be sure to keep us updated with your progress.

I promise you that I will buy something from you. There...you now have one customer.
 

·
Premium Member
Joined
·
3,296 Posts
... When ever we did have other stores try to Open here it always seemed they focused too much on beginner brands and that sort of thing. They didn’t stock fender, Gibson, Marshall, prs, etc. So I figured that played a part in why they didn’t survive maybe. ...
When a music store concentrates the bulk of its inventory on entry level gear, that is not a recipe for failure.
Quite the contrary.
Maybe 95% of all instrument and amp sales are in the lower quarter of the pricing scale.
Depends on what you mean by "beginner" or "entry-level" gear. To me there are two kinds of entry-level gear, one being the Squiers, Epiphones, Yamahas, and A&Ls of the world and the other being the crap that gets sold as entry-level gear in a lot of start-up stores.

We had a local music store start-up a few years ago and it chose to sell the latter. Initial sales were fine, but then people figured out that their low-cost guitar was actually over-priced and the downhill slide started. In a small community, it doesn't take long to build a reputation, good or bad, but it can take forever to change a reputation.

There is a small-scale store north of here that enjoys an excellent reputation, and has provided the owner with a living for many years, but he is constantly battling with sales reps that want him to purchase a dozen of a specific brand of guitar before they will make the sale, when he doesn't even have storage for a dozen more instruments. It certainly can be done, but you will need to do your homework.

You may want to consider honing your luthierie skills - you can make money repairing and tuning-up guitars with very little capital outlay and you can also make repairs and adjustments to instruments you purchase and thereby add value for re-sale.
 

·
Premium Member
All the usual suspects...
Joined
·
207 Posts
.

You may want to consider honing your luthierie skills - you can make money repairing and tuning-up guitars with very little capital outlay and you can also make repairs and adjustments to instruments you purchase and thereby add value for re-sale.
It's been some time since you last bought tools from StewMac, innit? LOL


Envoyé de mon iPad en utilisant Tapatalk
 

·
Premium Member
Joined
·
3,177 Posts
1st post: "And say if I pay $1000 for something to sell, what’s the minimum you’d look to make off of selling it? 25%ish? Love to get your guys input! Thanks!"

2nd post: "And if I got something to sell and paid 1000 for it generally what percentage of a profit would you want to make. That part is troubling me a bit too."

As you mentioned "percentage of profit" in both of your posts. I realise that this is important to you. My take on setting a profit figure will differ with every item you sell so I don't think you can set say 25% profit for every item you might be selling. You will have to set that profit expectation on every item your selling. Some items will sell quickly and some will take time to sell and may only sell if you drop the profit your trying to make. Make wise decisions on the items you may want to flip for a profit and you will do fine but don't expect to sell items for a profit that nobody wants. Also, as long as I can remember trying out gear in the local music stores, music lessons were a big part of their profit and it still is. All of the L&M stores offer lessons trying to create the next big rock star. Good luck with your venture and your wise to seek opinions from the guys & girls on this forum. We've done it all.
 

·
Premium Member
Joined
·
1,398 Posts
When you go into legitimate business, you are taking on many partners, that all demand payment. Where is this money going to come from? Out of what you thought was going to be profit. Taxes on all levels of government, rent, utilities, city by-laws, banks, accountant, etc., etc., and don’t forget insurance.

I would stay low key, and under the radar, at a hobby level. It is tough to make money at that level as well. Working from your garage or a room in your house, is more cost effective, allowing you to work as hard as you wish to, instead of have to.
 

·
Registered
Joined
·
18,563 Posts
The buying market is not the best at the moment and many sellers have complained of items sitting for months and even over a year and not being purchased. I am not saying you can't make money selling gear but you need to be very astute these days if you plan to make money at it. You would likely make a lot more working at one of the call centres.
 

·
Premium Member
Joined
·
12,268 Posts
You mention you live in an area where call centers are the majority of employment but you want to open a 'brick and mortar' store? I think the writing is on the wall. You should do more research into the direction things are going, and not from whence they've come. IMO.

Good luck with whatever endeavor you decide to pursue.
 
  • Like
Reactions: BSTheTech

·
Premium Member
Joined
·
2,184 Posts
I have run several retail businesses in small towns. If you are very lucky you will make a meagre living. In one year of 1.2 million in sales I took home $35,000 before taxes. My employees made more than I did. That was 20 years ago. The business climate is much tougher now with more overhead and competition from online stores. Your markup depends on how often you turn your inventory. I sold electronics and computers. My overall target for gross margins was 25%. The gross markup ranged from 5% on high volume consumer items (low end VCRs and TVs) to 150% on high end gear and accessories. Unless you are well financed to startup and like paperwork you will not enjoy it. You would need at least $50.000 and probably more to start up. You will not be able to finance your inventory until you have been in business for a few years. Even then you would be lucky to get 90 day financing which means you would need to turn your inventory within 90 days. The big manufacturers like Gibson and Fender would require minimum stocking levels of a pretty full product line. I agree with others that starting out very slow with used gear and selling online would be a better option. Whatever you do don't go in debt to start a business. The chances of paying off that debt are very, very slim. Just because you like something and are good at it doesn't mean you will like selling it. Running a small retail business is very stressful and will take up all your time and energy. You would have little time or energy to actually play guitars. All that said my 20 years of running different businesses was very rewarding. I loved the interaction with the public. Eventually the stress got to me and I sold the businesses. I was very lucky to get enough from the sale to pay of the debt incurred from running the business.
 

·
Registered
Joined
·
1,943 Posts
Most towns have a local group that helps small business get off the ground, and they are well worth searching for. Sydney BDC Business Centre

BDC are nice folks who will ask you to pitch them your business idea. If they like the pitch they will offer support in developing a business plan, matching you with a mentor and even helping with financing. The caveat is they want you to prove your worth and commitment at every step along the way. A lot of folks fail by not accepting their honest assessments and belief they can make it on their own. That is almost a guaranteed recipe for failure.

You have a L&M not far from you that offer lots of inventory, 30 day returns, lessons and financing. That is going to be tough to compete against.
 
1 - 20 of 39 Posts
Top