How to Start a Vinyl Record Business
Everything old is new again. In 2019, sales of vinyl records have outpaced sales of compact discs for the first time in 40 years. Although nostalgia plays a part for older music lovers, millennials are also driving the trend. Many people assumed that digital music would be the end of vinyl records but instead, their popularity is surging.
Understanding what people love about vinyl is an important part of starting your vinyl records business. Experts are divided on the subject, but vinyl record aficionados insist that the sound quality is superior to music on CDs or streaming services. Some collectors are interested in cover art and liner notes as much as the music itself. Others just enjoy the retro look and feel of albums and turntables.
Defining your target customers is the first step that will guide you in making many of your business startup decisions. Do you plan to specialize in a particular genre of music, such as jazz or world music? Will you sell pre-owned and vintage albums, newly released albums or a combination of the two? Can you track down rare finds for customers who want to add to their collections?
Successful record store owners often sell online in addition to operating a storefront facility. A physical location provides an opportunity for vinyl lovers to gather, in which case you might want to set up listening stations and even a small cafe. An online-only business reduces expenses considerably, as you can run it from home if you have the space. Whether running a store, an online business or a combination of both, consider whether you'll offer related merchandise such as turntables, t-shirts and memorabilia.
A formal business plan clarifies your thinking by organizing your ideas on paper. A business plan is essential if you are looking for investors or lenders to help with financing. Look online for business plan templates specifically created for a vinyl records business. Studying the examples will help you determine the capital and inventory needed to get started, offer market strategies and give you an idea of expected returns on your investment.
A business plan typically contains the following sections:
- Executive summary: The who, what and how of your business
- Mission statement: A short statement about why the business exists and the market it will serve
- Products and services: A description of the types of records you'll sell and how you'll acquire them, including buying vinyl records wholesale from vinyl record distributors, estate sales and individual collectors
- Financing: How much you're requesting from investors or a bank, as well as how much of your own money you will put in the business
- Corporate organization and management: Structure of the business (such as sole proprietorship or partnership), day-to-day management of the business and qualifications of the individuals
- Sales Forecast: How much you'll pay for vinyl records, your selling costs and number of records you expect to sell in a given period
- Market analysis: Overall consumer economy, industry analysis, customer profile and competition
- Marketing plan: Relationships with vinyl record distributors and those selling vinyl records wholesale, retail and on consignment, as well as advertising strategies and any plans for selling online
- Organizational budget: Operating budget (such as rent, utilities and salaries) and cost of maintaining inventory
- 3-year financial projections: Projected balance sheets, profit and loss statements and cash flow analysis
Unless you already have access to hundreds of albums to stock your store, you'll need to establish a relationship with one or more vinyl record distributors to purchase vinyl records wholesale. Top names in the field include Alliance Entertainment, Monostereo and URP Music Distributors. Visit several distributor websites to gather and compare information, then phone a representative for more details about availability, pricing, ordering and delivery.