Monday, January 5, 2009

Find Your Niche, Part 1

Many years ago I owned a musical instrument store. We started with $5,000 worth of musical instruments and accessories. With that small amount of capital for inventory, it is really hard to cover very many bases, but we did our best. We focused on guitars, but had drums, cymbals, a flute, a trumpet, a saxophone and a couple of amps and some accessories. As time went on, we decided to give up the band instruments entirely along with the drums and cymbals. We began to build a niche in guitars and focus about 80% of that inventory into acoustic and acoustic electric guitars.

We honed it down to two basic brands: Yamaha and Ovation. These decisions and changes allowed us in a town of about 40,000 to carry more models in these lines that the huge stores in San Francisco. We probably outsold almost all the stores in Northern California on Ovation guitars. Yamaha was our entry and beginner level. These were quality instruments so a student had a good chance by not having a bad instrument where it fights the student all the time. We would give a 100% trade-in toward the up line Ovation models and that worked extremely well. About 70% of the students who kept with it traded up. The store down the road wouldn't give them even 50% trade in. We got to sell the Yamaha as a slightly used instrument and did very well.

This strategy is something I would recommend. Find your niche. Better to have a lot of one brand than one of a lot of brands. You can also attract a wider audience who will come from far away to visit such a store. In addition, the Internet store will make you famous. Focus is a good thing. Find your niche.

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