Is your business in transition? How do you recognize it if it is? Better yet…what will you do about it? Often our business may be in transition, with obvious signs. However, if we do not pay attention to those signs, or are ignorant of them or even choose to ignore the signs there could be issues in our business. We could end up with less sales and decreased profits. We must pay attention to and learn from those signs during any transition times.
In late 1979, the entrepreneurial urge hit me and I quit my job to open a musical instrument store. Though we carried other musical instruments in small quantities our main push was guitars, focusing more on acoustic and acoustic-electric models. I was told music stores in general were a declining industry and that the guitar sales boom ended back in the early to mid-1970s. I’m sure they were right, but I did it anyway.
Although I owned the store for about two years, I closed it for reasons other than a declining market. Yet here in 2011, a good musical instrument store can still do very well. And we did well too. The key for us was to focus on a certain area of the wide musical market and concentrate our resources in that area. We did and thereby excelled in that area creating our own market so to speak. I believe it is a major key strategy for a store today to create a way to make significant profits in a so-called declining market.
In mid-2004, I began an online used book selling business with eBay and half.com (owned by eBay). I grew it as fast as I could as a one person show, and within a little over a year had 12,000 items online and a warehouse for storage.
The used book business is a huge market, including a huge number of sellers. As a result of this competition, sellers were competing over the lowest gross profit. That is a total waste of time and energy. It amazed me how many people tried to sell a book for $.75 to $1.00 while trying to make a profit on the shipping. The volume anyone would have to do at that ridiculous low pricing would require so much space and so many people, that I think it is impossible to make a profit. Yet people fought over the right to be the seller in this way.
My strategy was different. I wanted an average sale of $10 and I refused to even consider taking the time to list an item on the Internet and then sell it for a dollar. It made no sense. My strategy worked and to help make it work, I included an actual photo of each and every book so the potential buyer could see the real thing. Most of the other sellers didn’t take this step and it is understandable considering the low price. It worked very well. If a book was listed with 10 to 15 sellers at under $4, I would sell the same book for $10. In other words, what some were thinking was a declining market…I found a good profitable niche. . .More