Hi-End Business

I haven't owned a high-end audio business, but I have been an audio salesman several times. I live in Seattle, but have spent time in southern Oregon. I don't mean to discourage you, but my immediate reaction is that you will have a tough time running a successful high-end business there. The population is quite low, many of the people earn modest incomes, and the economy -- while not depressed -- is certainly not robust. I have a very close friend who bought a business a year ago in Eugene, and he has just declared bankruptcy because the overall economic situation for small businesses is not very good right now.

I think you will find that many of the audio-only stores are having a tough time making ends meet. The ones who are succeeding have generally been forced to become a combination audio / home theater business, with most of their cash flow coming from HT. In southern Oregon, I have real doubts that you will find enough clientele to succeed. You could, of course, have a "clicks and mortar" business, where you rely on Internet business as well as walk-in sales and home installations.

You would be well advised, it seems to me, to call the few high-end dealers in the Portland and Eugene areas (there are several in Portland, and one in Eugene if my memory is correct). They can give you very specific advice about lines to carry, start-up and operating costs, etc. You should probably have enough cash to live on and pay bills for 6-12 months. And, of course, you should develop a sound business plan, which may require the services of a pro, although there is a good software application called "BizPlan Pro" that will generate a plan that is acceptable to banks (if you are seeking financing).

I don't mean to sound unduly pessimistic in my response to you, but given the general uncertainty of the economy, even in areas where the economy is strong, you may be trying to launch your endeavor at a bad time. Talk to other dealers, however, and solicit their honest input. Before you invest any money, do a LOT of research and listen to the advice you get.

Have you considered representing some of the high end European lines that are difficult to access in the states? This could be done "through" already established high end dealers. I had thought of doing this myself, but cannot handle the travel that would be involved. Expenses would be for travel, transportation and marketing (including trade shows) and some of this may be partially offset by the manufacturers. For example O.S. Services reps Audion (UK), Reynaud (France) and a few other manufacturers as well. This could start out as just a side line. If you enjoy traveling and working with people it might pan out in the long run. Interestingly, Reynaud speakers and Audion amps are a match made in heaven. I purchased the speakers from an authorized dealer and picked up the amp on the used market, to later discover that both lines were carried by the same US rep. I like this kind of "synergy" game plan and it looks like you would be able to really have some fun with it from a hobbyists standpoint.

Dear Paint,

Howdy, this is Joe Abrams in Ashland. I've been in the high end industry for over 20 years. We may have something to talk about. I'm in the Ashland phone book. Please give me a call anytime Monday or after.

ATB,
Joe

paint: i'll be happy to talk with you off-thread, too. just remember the ancient chinese curse, tho: "may you live in interesting times." ask particularly why someone wants to sell you his business. ain't cuz he's tired of being a millionaire or is ready to retire, irrespective of his claims.. -kelly

Go to stereophile.com and then to the Archives section. There's an article written in 1995 (I believe) that addresses exactly what you are looking to do. It's rather negative to the idea but if you're going to do this, you'll need to have your eyes open. And keep in mind what sdcampbell said.....have at least 6-12 months living expenses in reserve.

I'm involved in business development and it's important to be sure you know all the hidden expenses and what kind of cash flow you anticipate. You should also have an idea of when you walk away....both from the deal and the business.

Hi Paint; I live in southern Oregon too-- on the coast. I'd say there are easily a dozen gun stores in Coos county but exactly zero high-end audio stores, including HT. Population of the county is about 50K. I've been into high end audio for 10 years or so and only know two audiophiles in my vicinity, and we're all strange;>)

Early on I did most of my business with Bradford's HiFi in Eugene, later some mail order, and then also via internet. I've maintained a good relationship with Bradfords. I too hate to sound negative about your business prospects, but the general population in this neck of the woods just isn't much interested in high end audio IMO.

I'd certainly want to talk to Joe in Ashland though. At least the Medford-Ashland area has a somewhat greater population, and a State University, which could help, but how much money do students have? Maybe the professors? Guys in this area are hunters and fishermen, and that's pretty much the end of the story. I think you'd have to reach out to a greater population via the i-net to have a chance at success. But I surely do wish you Good Luck. Craig

Hi Paint, I wanted to post again because everyone, including me, appears to be so negative about your idea. As a disclaimer, let me state that I don't know the first thing about the demographics or competition you'd face in southern Oregon (though some others seem concerned about this). If this is not a significant issue I do believe you can make a go of it.

As has been mentioned, HT will play a major role in your overall volume and profit particularly from full installations. I wouldn't consider an audio only store. Keep your inventory low. Keep your number of employees low. Keep your rent low....though you'll need to be in as high a traffic (population) area as possible and you'll pay for that. Market, market, market. If you're going to go for it, give yourself the best chance to succeed and that means regular advertising, promotions, etc. In other words, take reasonable risks....don't try to stretch the money you have too far. If it fails, at least know you gave it your best shot. Good Luck, Dave

Good luck! I've dreamed of going into the High End business myself, but never had the guts. Did you see the movie "Field of Dreams"? I worked my way through dental school managing the highest end store at the time and have never been so happy. Go for it!!!!!!!!!!

home theater will have a big impact in your sales. The one thing you need to remember is that you must carry brands people know and love. It doesnt have to be high end only at least not at the begining. Sell sony denon and such. And get names like B&K Acurus Adcom & then try and pull some high end gear in also. Like Levinson Krell Rowland and such People want to see things they have heard of. You should also try to get Classe. You should have no problem getting the harmonic technology line. As you build a name for yourself you must beable to please both ends of the spectrum, High and low. Good luck