Musicgoround.com
Headquarters: Minneapolis
Launched: 1993
Average store revenue: $669,573 in 2007, $708,241 in 2008
With the economy playing sour notes, musicians are eager to buy, sell and trade used musical instruments that cost 30% to 50% percent less than new ones.
The business model for Music Go Round, one of the nation's largest used musical instrument retailers, is based on controlling the margins on a product inventory that changes daily. The frequent turnover draws customers in often to check out new offerings.
When traditional music stores sell a name-brand instrument, they must buy a certain number of instruments that must be sold at a minimum advertised price, says Tim Kletti, director of Music Go Round. Since Music Go Round customers are also its vendors, instruments are bought and sold based on supply and demand, giving each store flexibility over its inventory and profit margins.
Music Go Ground is a franchise business run by Winmark Corporation, with 37 stores currently operating in 17 states. The chain had 5.5% percent growth last year in comparative-store sales, which measure sales at stores that have been operating for at least two full years.
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