Learn how to get started in your own used album music store business, including location, collecting, buying merchandise and pricing.
There is no reason to let those old records get covered in dust. Sell them secondhand and make some money.
PHOTO: FOTOLIA/ANDREW BROWN
If you enjoy music, I don't have to tell you that records are expensive. Even when you purchase your LP's from a super discount store or one of the big mail-order clubs, the best price you can get, usually, is something like $3.79 for each album you buy.
That's the good part, the part you never see if you live way out in the sticks away from the discount stores. And I'm sure I don't have to list the hassles you have to wade through to get to the bargains offered by the record clubs.
Then, of course, there are a few non-profit cooperatives (which sell new records at next-to-nothing markups) sprinkled around the country. But they're still so few and far between that I doubt if you have one within easy commuting distance.
"No problem," you say. "Our local drugstore has a rack of 'Budget LP's', and I've seen some big names listed on a few of the albums down there. I'm sure it's only a matter of time before the records I really want begin to turn up in the display."
"You're in for a long wait," I answer. "Those 'budget' LP's priced at $2.00 were made to be sold at that price and, almost without exception, are
1. unknown artists doing currently popular songs, or
2. currently popular artists doing unknown songs."
Nor are you any more likely to find the albums you crave in that "discount" bin over at the hardware store or supermarket. You know, the one with the big sign across the top which says: "Fantastic savings. Originally $4.98 now 59 cents!" The records in such a collection are almost always either A.) old albums long since dropped from the catalogs because no one was buying them — remember "Look Out for the Cheater" by Bob Kuban and The In-Men? — or B.) LP's which were produced in huge quantities — "More of the Monkees!" — to meet a demand that has since evaporated.
Granted, it is occasionally possible to pick up a whole armload of just the music you want from a secondhand store, rummage sale, or garage sale for 10 cents on the dollar. It's also possible — and just about as easy — to balance yourself on one finger while you recite the National Anthem. In short: Unless your taste runs to Lawrence Welk, The Ink Spots, or 78 rpm albums that really look like albums (the kind that hold snapshots), you've got to be awfully lucky to find what you're looking for at any kind of a secondhand sale.
And that's why, until not too long ago, the only choices I had in the music department of my life were
1. to pay a lot of money for the records I wanted, or
2. to keep on listening to the oldies — but oldies! — I liked.
And then the people who run a nearby off-campus bookstore changed all that! They turned the situation completely upside down by building a small plywood rack and setting it up in the corner of their shop under an attractive sign which read: We Buy and Sell Used Records.
Now this store, as I just mentioned, is located quite close to a Midwestern college campus. And it carries a large selection of "underground", "counterculture", and "New Life" books and magazines. And it has a fair-sized student clientele. And college students — as you quite probably know — frequently need some fast money to tide them over a financial crisis so it wasn't long before the homemade rack was full of records. And — since not all students are broke at the same time and since the ones who have money tend to spend it — the records sold. Which is why, before long, three more racks joined the first and the new "section" took up an entire wall of the store.
Well, success always breeds imitators and — very shortly — a small record store less than three blocks from the first shop picked up the idea and filled one of its racks with used LP's. Then, just recently, the back room of a downtown leather store was also turned into a new and used record shop. So, apparently, there's a demand for good used LP's, at least this college town of less than 100,000 is now supporting three separate outlets for secondhand albums.
The moral of this story, of course, is that if the area in which you live doesn't already have this kind of alternative to the high cost of records — maybe you should consider starting a secondhand LP operation of your own.
The business, if you're a music freak, is a fun one to be in. It's also kind of a nice way to make recycling pay while you provide a useful service to a certain number of the people who live in your part of town or neighborhood. And — in addition to the money it can put in your jeans — the enterprise will allow you to meet a steady stream of new folks, learn more about music and performers, and give you the chance to add all the albums you've ever wanted to your collection at absolutely no cost.
On the other hand, it's only fair to point out that — unless you happen to live in an area (such as near a college or university) where supply and demand are both very high — the secondhand record biz should nearly always be thought of as a nice little parttime or supplemental enterprise. Not as a big-money, full-time operation. If that doesn't bother you, here's how to set up a used LP business of your own:
If you already operate a shop of some kind, you're home free. Just set in a rack and a "We Buy and Sell Used Records" sign the way my local bookstore did and let nature take its course.
And if you don't have a store? Look around for one that will let you put your rack in a corner or along one wall in exchange for a percentage of your weekly net.
This supplemental business, by the way, can work in almost any sort of outlet: a record store, bookshop, boutique, delicatessen, health food store, or craft shop. The records won't take up much space and, so, will not overwhelm the outlet's main business.
Naturally, if you have a choice between two stores, you should put your rack into the one which caters to customers who are both 1.) interested in music, and 2.) apt to be on the lookout for good LP's at a cut-rate price. That's if the two shops have equally good locations. If they don't, you might be wise to choose the store with the best location over the one with the established music-loving clientele. A few ads for your service — or maybe just a sign in the window of the more heavily trafficked shop — can draw in more customers than ever visit the out-of-the-way shop.
Once you have a location lined up, you'll need to buy or construct a display for the records you accept and sell. Before you spend too much time, energy, or money on the design and fabrication of a special bin or the purchase of an expensive new case, though, take a look around for a used rack that you can pick up for just a few bucks. There's always someone closing down a business of some sort somewhere and he or she is usually eager to unload his or her old store fixtures. I mean, just how big a market is there for used shop racks and bins on exactly the day that the average small business shuts its doors? With a little scouting, you might be able to turn up exactly what you need to make a trial run with your record operation for less than $10.00 or nothing at all! And — for no more than a dollar — you can hand-letter an attractive sign that should at least get you through that test.
If this mini-business has even the slightest chance of making it in your area, you'll soon have folks (who need some quick cash or who are just tired of their records) coming to you to dispose of their unwanted LP's. Once you're rolling, in other words, you should have no trouble maintaining your stock in trade. But how do you collect enough albums to get you started in the first place?
No problem. First, look through your own collection of records. All those LP's that you don't play anymore — the ones that just take up space on your shelves — are good start-up candidates for your new enterprise.
Second, a canvass of your friends and neighbors is most likely to reveal that they have dust collectors of their own that they're willing to give you on consignment or just give you!
It really shouldn't be too difficult to put your hands on enough albums to stock your first rack.
Once you've officially "opened for business", it's only a matter of time until someone walks up to your record bin with some LP's he or she wants to sell. When that happens, you'll want to know what to do.
In the first place, of course, there's the question of whether or not you'll be on hand to make the transaction. If the secondhand album enterprise is part of a larger store you operate, it's obvious that you — or a suitably trained employee — will be there to conduct the trade. If you've set your rack into someone else's shop, however, you may have to take a chance on that individual — or one of his or her employees — making the buy to your satisfaction. Or you can specify (on the sign you place over your display of used records) that you make all your purchases at certain times on certain days of the week (and then you should make it an unvarying practice to be there at those times).
OK. When you do make your buys, you must remember that you're looking only for "good" used albums that are not scratched or otherwise abused. You also want currently popular LP's that are in demand or "classic" older records that you know will sell. (The emphasis here is on the "currently popular LP's".)
This means that you'll want to visually inspect each and every record you buy before you buy it to make absolutely certain that it's a good LP and that you're actually purchasing the disc that the album cover says you're buying. (This last point is very important. Never judge an album by its cover. If the record jacket says "Arlo Guthrie" on the outside, make darn certain that the LP inside is by Arlo Guthrie.)
The well-established used record shops around here pay about $1.00 to $1.25 for the albums they purchase. Top rates, as might be expected, go to the most in-demand titles which are in the best condition. At those rates, a fairly large stock of merchandise can be financed for less than $100.
Or, if you're really short of cash, you can take in your secondhand albums on consignment. That is, you accept and display the LP's brought to you and then pay their former owners the amount you take in for their records — less a commission of, say, 15% to 30% — only after the discs are sold. This arrangement cuts down on your investment to be sure but it also cuts down on your markup.
The secondhand record shops I've surveyed usually sell their LP's for about twice what they've paid for them with prices topping out at about $2.25 per disc. This, however, doesn't mean that the owners of the used record racks are doubling their money or that they're getting wealthy.
The most active operation of this nature in my area does an average gross daily business in secondhand LP's of $30.00. After overhead — rent, advertising, the prices paid for the albums, some losses on lemons, etc. — is taken out, the net profit on that gross comes to only $5.00 or $10.00. Not a lot, to be sure, but a nice little supplement to the owner's regular income.
If that still sounds interesting, you should bear in mind that this little mini-enterprise really isn't for everyone. You'll need a modicum of business sense to operate a used record exchange.
You'll also need some music sense! You have to know records. Just because Mantovani is big on the charts doesn't mean that his albums will sell off your rack. You can't sell classical or jazz sounds to a rock crowd. Nor should you expect to sell a "budget" label especially if the record is secondhand for more than the same album is priced down at the local supermarket. You have to know your records.
Of course, if you're a real record freak, it'll be second nature for you to be up on all the hot discs at any given moment anyway. If not, you shouldn't even attempt to enter the used LP business unless you first get a feel for the market by hanging around the nearest record stores and burying yourself in several current issues of RollingStone, Creem, and other music publications.
No, this isn't a business for everyone. And it's not something you'll get rich at. But if you're a record nut anyway, why not pick up some spare change by dealing in a commodity you like? Especially when you'll be doing the community a service at the same time and operating a mini-recycling enterprise to boot.