Was working on taxes over the last week. My income from buying and re-selling gear was an abysmal waste of my time I thought Iād give this a try because I love music toys just like other guys love real estate and cars. And finding the deal was always a thrill. I even had friends texting me on a regular basis of new gear on the market I could buy and snag cheap off craigslist and eBay. I knew the right guys to get stuff fixed up and re-soldā¦my margins were decent on most sales, but I had struck a deal with a local music company to where I could use an entire wall to showroom my own inventory in exchange for about 10% commission to the storefront, which is far better than the 30% consignment margins youāll typically encounter in other retail outlets. I was excited about the opportunity at first, and even considered getting a pawn broker license. But still. It just wasnāt enough.
Last week they asked me to come get the rest of my stuff that didnāt sell. It was a shame. Iād always wanted a store front. But I shure as hell donāt anymore.
Best of luck to you @bholst and @Paul999. Youāre braver than I for soldiering on in this space! For me - never again.
I know how you feel. In the long haul itās not as easy as it appears to be unless you really love doing it.
I used to buy and sell from Craigslist and Kijiji. Iād only buy items that I knew were really good deals so that I could resell at a higher price. It seemed like there were tons of great deals back in 2008 but things seemed to change around 2013-2014ā¦Seemed like people started charging ridiculous prices for their music equipment. At that time I also began growing tired of that business and I just became less and less interested in it. I donāt have a salesmanās personality and I became disenchanted with all the no-shows and what some sellers call ātime wastersā. It was fun while it lasted though.
Running any business successfully on a permamnent basis is a major achievement. Very few succeed, but those that do, realise that āfailuresā are not failures at all, they are just one more way of learning how not to do it.
I went bankrupt in the 90s, when I started up in business again ten years later I knew what to watch out for. This time around Iāve managedto make it work.
Jonathan, if you changed your mind and decided to try again, and man with a gun at your head said āmake a profit, or I pull the triggerā, what would you do differently?
man, selling physical goods is tough. I donāt know how anybody does it and survives. Profit margins are low, and it seems like the only way to survive is to have huge quantities of sales. Making $50 on a $1000 item is not much when you factor in the risk of not being able to sell it, shipping costs, storage costs and everything else that goes along with selling stuff.
Itās not a good margin if you buy the item first, but in many cases you can buy the item after you have sold it, which means no capital tied up in stock and no storage costs.
You mean of my backed inventory? Iām sure Iāll be able to.
But those drumsets are a bitch! OMG. Take a mid-level drum set like a Tama Star Classicā¦its a great buy for likeā¦$500, but you canāt ship it anywhere
That was why I negotiated a floor-space agreement with a brick-and-mortar music retailerā¦so that their staff could field the headache from window shoppers and not interfere with my schedule. Didnāt work anywhere near as well as I had hoped.
I was taking inventory from repair techs. I could get my hands on broken and damaged inventory, especially stuff that had been claimed under insurance. Iād get it at real low cost, pay less than most to have it fixed, and then put it back on the market. I ended up taking a lot of the damaged gear that the repair guys couldnāt afford. Occasionally they would want to flip the instrument themselves, but didnāt have the money to buy it. Those tended to be really good transactions. Sometimes I bought the thing, the repair guys fixed it on a deferred payment arrangement, then we both got paid after it sold.
Aw man! Terribly sorry to hear that. Its really great to hear that the recording and music stuff is coming through for you now though!
Ah! Great question. It wasnāt that I lost money per se, it was looking over the books and realizing Iād only made about $6000 (net profit) over 18 months. I wasnāt nearly involved enough, and wasnāt really paying attention to how long it was taking for this showroom to actually turn sales. I guess I would hope the guy with the gun would settle for the answer that its just a hobby, and point his gun at someone else lol.
I felt that the risk of backed inventory was manageable because I thought I knew what not to buy. Like real boutique or niche guitars, high end amps, large half-stack cabs, would never touch an organ unless it was an authentic B3 or C3. I sold way more accessories than I anticipated. But no one buys a used guitar strap, or a used capo, so all that had to be ordered through wholesalers or not at all. The cost to bring it in and the commission paid to the music store made the margins laughable. I think we started in a town that was already oversaturated with music shops and way to small to begin with. Even then, what I think really killed us was no one was all-in. Lesson learned lol
This is essentially where big retailers make a big chunk of their money. I would guess that guitar center makes more selling guitar strings than they do guitars. I think the guitars and amps are just there to draw a crowd, and then they make their money selling strings and straps and kazoos.
Itās an interesting phenomenon, that people will buy guitars and amps online to save a few bucks. I always thought you had to get your hands on that stuff to see if it was right for you, but a lot of people buy it sight unseen.
I remember going into a small town music store in Florida and trying out some Strats. The owner said he would cut me a great deal to get rid of his inventory because Guitar Center was opening there soon. Retailers have been cutting each otherās throats for a long time now, and if thereās not enough misery in that, then they have to contend with Amazon. The whole world is getting to the point where you have to have a very special product to be able to make any money on it, at least in the music industry, so it would be very scary for a small guy to give it a try unless he was so specialized in what he sold that people would seek him out.
Either that or you have to be able to move massive quantities of a product to make any money. The low margin high volume world is a tough one to break into.
Reading all these stories of only just getting by (or not) I really respect all you guys trying to make some sort of a living out of music! And I am increasingly happy being nothing more than an amateur. My main (economic) aim is not to spend too much ā¦ to prevent my wife from having an excuse to spend even more And otherwise just enjoy making music.
I can complain about not being paid (or paid enough) for gigs, or about no-one buying CDās any more, but in the end all I want to do is make music and now and then hope to achieve that a few people get some sort of enjoyment out of it. High level professional recording is as far out of reach as it ever was for us amateurs, but you guys (and one or two girls) make it possible for the little people despite it being a business model thatās basically non existent.Is there really anyone out there making a decent living out of recording music?
I can say this from the comfort of a reasonably well paid job, where recording is just a nerdy hobby I do on the side. Making a living out of buying and selling second hand gear: I canāt even imagine it. Nothing but respect for trying!
thatās really not a bad position to be in. To step beyond that means diving head first into a world that is kind of sucky for most people. It is pretty cool to make something and have lots of people listen to it or use it and like it, but the business side of this stuff really sucks a lot of the fun out of it. Some people enjoy the business aspect I guess.
I just like that I donāt have to deal with an HR department.
As it turns out, bankruptcy is a great way out. If you 've got equity in your house itās not so great, because you will probably lose your house, but otherwise itās a clean slate, and relief from all the stress.
I agree with this wholeheartedly. Iām in the same boat. I am comfortable enough that I can indulge my hobby with zero pressure that Iāll ever have to do anything monetary with it. Iāve never regretted my choice to give up on the music thing and go into science when I was about 20. I love what I do, and get to keep normal hours, and never have that dread of āwell, time to go to workā when I pick up a guitar, itās always for pleasure. Iām one lucky so-and-so.
Make your mind up. Was it a hobby or a business? If itās a hobby, why would you expect it to turn in a profit? Why would you exclaim āIām done with this. I quitā purely on the basis that it has not made enough money, if itās only a hobby?
Not that Iām aware of. As far as I know people who start a business donāt stop in the middle of trading and say āoh, I just realised, itās not a business after all, itās a hobby.ā
If their business āfailsā then they might come to that conclusion. Either deciding to throw in the towel voluntarily or having the enterprise collapse for one reason or another. Probably a lot of entrepreneurs want to make money doing what they love. It seems like a fantastic notion, idealistically. Unfortunately the reality of it can be much more than expected. Many people start restaurant businesses, presumably because they love to cook (and/or eat) and they love to feed people. The third option is it being a highly lucrative business model, but I highly doubt that overall. In the U.S., restaurant businesses are a large number of start-ups and have a high failure rate. A failed restauranteur might conclude that cooking and serving food to people was a hobby that they hoped to do successfully as a business, but they didnāt know enough, or werenāt committed enough, or didnāt have the skills to actually make it turn a profit and sustain.
Jonathan seems to really enjoy this gear trading thing on the one hand, and the appeal of making a profit from it was also appealing. It seems like a good match. Was it really a business, or kind of a ābusiness in mindā? Was there a registered business name and entity, bank account, Tax ID#, etc? Did he do the market research, financial budget, time resource budget, SWOT analysis, and many other tools that come with traditionally setting up a business? Or did he āwing itā and hope for the best? Only he can answer this, Iām just pointing out that not everyone knows what they are getting into, or the fun part of it and apparent skill provides a delusional sense of hopefulness.
Many of us here on the forum like to make music, or related creative pursuits. At one point or another, many of us have considered trying to make money with it, and actually have a business (or work for someone who does). Indeed, the IRD forum now proudly flyās the tagline banner āSongwriting, Recording, and Marketing Community for Independent Musiciansā. The premise behind RR was largely that some folks are looking to develop their skills into an excellent hobby and/or recording/mixing/artist business. Turn a hobby into a business. Make money doing what you love. Etc.
There is a well known audio blogger that at this moment is marketing a 6-week program to give you the tools to be able to turn a mixing āhobbyā into a part-time business with a considerable income. Will everyone who takes that program actually move into creating that ārealā business and finding paying clients? Probably not. They may decide itās too much work, or too uncomfortable for them in certain ways, or that they simply canāt commit the amount of time and effort needed to make it succeed as a business. Some will probably start the business. Some will succeed, some wonāt. Some will continue to make music and mix other peoples songs for free without creating a business. Some will start the business, fail or give up, and then continue to make music and mix other peoples songs for free. Some will go on to be audio bloggers themselves, speaking of their great success and then teaching the next generation of music/audio hopefuls how to start a business through a similar program.
I thought Iād give this a try because I love music toys just like other guys love real estate and cars. And finding the deal was always a thrill. I even had friends texting me on a regular basis of new gear on the market I could buy and snag cheap off craigslist and eBay. I knew the right guys to get stuff fixed up and re-soldā¦my margins were decent on most sales, but I had struck a deal with a local music company to where I could use an entire wall to showroom my own inventory in exchange for about 10% commission to the storefront, which is far better than the 30% consignment margins youāll typically encounter in other retail outlets. I was excited about the opportunity at first, and even considered getting a pawn broker license. But still. It just wasnāt enough.
thanks for sharing your throught.
ā¦ to prevent my wife from having an excuse to spend even more 
And otherwise just enjoy making music.