Just like any other business or store, your music instrument shop has the potential to increase its profits. While there are a lot of factors affecting the sales of your store, you can grasp the opportunity in things that you can control.
First, you have to know how much can you charge your customers. The usual mark up of this business an average of 40% above wholesale cost. You may put some items on sale to attract customers who are potentially interested to purchase other items. You can also offer additional items that can be fetched at a lower price should the customer buy premium items.
Next, you have to consider the ongoing expenses in your Music Instrument Shop. Of course, you have to spend on insurance, utilities, inventory, rent, and staff. There is what you call as triple-net leases where the tenant pays all the utility bills. There are also some tenants who pay the rent per $3 to $5 per square foot for highly visible locations.
The ongoing marketing campaigns must also be considered. You can conduct regular promotions online or on popular radio stations. These campaigns can cost money too.
Third, you have to consider how much you earn. Certain musical stores have been operating as family-owned in the same location for decades. Small communities only have one or to shops. This means they enjoy the monopoly.
If your store maintains an inventory of $100,000 and turns of inventory six times per year, then the potential earning is $140,000 multiplied by six is $840,000. from this amount, the gross profit is $240,000.
Now that you have considered these factors, you can decide how to increase your profits. It is important to have your brand and identity. Set yourself apart from the bigger chains by offering rare or vintage items. You can also set up your own online store to widen your reach and target audience. Make sure that your staff knows a lot about instruments and how to fix them.
Add to that, you can add a side business of music lessons and instrument repair.