What’s it like to run a record store in 2015? My interview with Wazoo owner John Kerr

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“Notebook dump” is an old newspapering term for material gathered in the course of reporting a story that never gets used. Back when my focus as a journalist was shifting to the Web, it dawned on me that blogs were a good venue for some of this surplus content, some of which maybe just wouldn’t fit in a space-constrained newspaper but could be worthwhile if presented the right way. (Here’s one of my favorite examples from a former coworker.)

Anyway, that’s essentially what this post is — a notebook dump email interview conducted for my Ann Arbor News story about the business of running a record store.

John Kerr, the owner of Wazoo Records who first started working at the store in 1978, asked to do our initial interview over email. He was fresh off marking the store’s 40th anniversary. I’m reprinting the interview, edited only for formatting and punctuation, with his permission.

Me: Does it surprise you at all that Wazoo has lasted long enough to see its 40th birthday?

Kerr: It survives, as any business, to the extent that it has the support of its customers. Though business conditions are challenging we are fortunate to have that support. We have accepted the realities of the present day market and continue to strive to figure a way to make the business viable.

Looking back over the decades that you’ve been involved, can you characterize the peaks and valleys of the business? When would you say the store enjoyed peak sales? When was the bottom?

As far as I know sales were pretty steady and increasing from the beginning (1974), peaking around ’93 in terms of gross sales. This was era where people were still actively replacing their vinyl collection with CDs and music had not yet become widely downloadable. After ’93 the double whammy of Napster and online retailing giants such as Amazon began to negatively impact brick & mortar stores. The effect was exaggerated in Ann Arbor where there were a disproportionate number of young and tech savvy inhabitants who understood how to get free music online. We had some up years during that period, fueled by selling off a lot of collectible inventory online. The general trend was a slowdown in the business. It seems to have leveled off and is stable as of now.Vinyl sales have markedly increased, but the decrease in CD sales is more significant.

Was there ever a point where you worried about survival?

Not so much worried as wondered. I’ve felt that if there wasn’t enough coming through the doors to cover basic expenses, that would be the time to hang it up. That has not happened as of yet. We watched as many of the larger music retailers failed and predictions were dire. Being small allowed us to be responsive to customer’s changing needs and better able to react to provide exactly what people were still willing to purchase, recognizing that they had many alternatives ways of acquiring music.

Obviously streaming, file sharing and iTunes have been huge challenges for all brick-and-mortar record stores. Have there been any other, less obvious obstacles over the years?

50627558_f4efe88bf9_zCertainly the competition from online retailing giants mentioned previously. Though the resurgence in vinyl is a welcome relief for most of us involved in independent music retail, It’s a real tightrope walk. Unlike CDs, most vendors do not accept overstocked returns on vinyl so the pressure to guess right as to what to order is greater. Also, since there is a shortage created by lack of vinyl pressing plants to keep up with demand there is little incentive for vendors to discount vinyl so the margins are smaller.

When did you first sense that your business model had to change, and why? How did it change?

Actually, it has been constantly changing. In the beginning we were exclusively selling used LPs. To that extent our inventory was really a reflection of the musical tastes of the community, essentially a recycling operation. After I came on in 1978, I thought it would be wise to also carry “cut-outs” or deleted, remaindered product that was unused. This allowed us more control over what the available inventory would be and became a significant part of the business. When cassettes came in in the 80s, we started stocking them and did a huge business selling blank tapes–somewhat controversial because at the time home recording was blasted as “killing the Music Industry”.

When CDs came on the scene in the late 80s, we took a cautious approach. In the beginning it’s difficult to tell whether a new technology will be embraced or relegated to the trash heap of history. As it became clear CDs were here to stay and pundits everywhere trumpeted the death knell for vinyl, we began to devote more space to CDs. This was difficult because the store was configured to display vinyl. We managed to incorporate adaptive devices so the basic layout remained the same. At the same time we began a radical shift in approach to the business by ordering more and more new product from an increasing number of sources. This allowed further control over exactly what out inventory would look like. We continued to buy and trade for used LPs, CDs and tapes and were unique, I believe, in having equally weighted both options for the buyer.

Broadly speaking, how has the business — or your business strategy — evolved over the years? What kinds of things are you doing differently these days?

The downward trend in this segment has necessitated taking a really hard look at costs and eliminating all but the most essential expenses. Having been around since vinyl only days, we were well positioned to respond for the resurgence of vinyl sales. Fixtures that had been retrofitted could simply be returned to their original purpose. So then, returning back to displaying more vinyl was relatively easy. Since it was the Internet and all the various impacts it had that caused a sea change, we had to see the silver lining and figure out how to make it work for, rather than against us. To a degree we have succeeded in that by reaching out to the world community of record buyers to offer what we have globally. Another positive is that people are finding us through the internet in a way that is much more effective, I feel, than the print advertising I did in the past. I get calls almost daily, often from a great distance from people wanting to sell records.

Can you summarize your revenue mix? Is it still mostly in-store purchases or do you sell a lot on eBay now like many other retailers do?

Mostly in-store. I do sell online, where about I have about 1,000 items listed at third party websites. These are generally items that come into the store from walk-ins and would not likely sell as well to my clientele, but have salesworthiness to the online community. I have a link on my website where customers can view these items and, if they want to purchase them in store, will receive a significant discount. Some really high priced collector’s items are listed online as well. Online sales really only amount to 10-15 % of my sales. I prefer to sell in store.

How would you describe how business is going for you nowadays?

Wazoo Records in its original location on Liberty Street in 1976, courtest of the Ann Arbor District Library archives.
Wazoo Records in its original location on Liberty Street in 1976, courtesy of the Ann Arbor District Library archives.

I enjoy it as much or perhaps more than I ever have. The customers that are still enthusiastic about owning, collecting, and shopping for recorded music are really excited about it. They are so clearly and vocally passionate about it that it is extremely gratifying to offer the service.  I can forget that people in their twenties and thirties may not have grown up with record stores as boomers knew them. I only realize this because of the”wow” factor I hear expressed by younger people who walk in the door for the first time. they’ve clearly never (been) in a store like ours. It’s kind of weird to be thanked so often just for being in business — as if we’re keeping the flame or something. That never happened in the beginning as people just took us for granted as a place to get their music. I get people in several time a week that went to school at UM and are back visiting after a long absence. So much has changed in Ann Arbor during the last 40 years that they are relieved to see something that is familiar. Many share fond memories and experience a strong sense of nostalgia when they visit.  Also parents bringing their kids in and reminiscing about how they shopped here when they were their kid’s age is fun to see.

Having stuck around long enough to see the business come full cycle — returning to the majority of interest being in vinyl–is something I never would have predicted or necessarily pushed for, but since it’s here I’m really enjoying it. My experience has been that though younger people know they want to be involved in the special music listening experience and ritual that vinyl ownership entails, they may be uninformed about how to fully maximize the potential that vinyl offers. I enjoy filling in those who inquire about the details of that.
Does it surprise you that a town as small as Ann Arbor still supports as many record stores as it does?

There was a brief period in the 90s where there were actually 12 record stores in the downtown area. This was after the rise of the internet had begun and all the impact it caused. I knew this was crazy and unsustainable. Four record shops still remain. The area may be “overserved” to an extent, but I choose to believe the abundance of stores relative to other comparable towns may be a benefit to all of us still in business. People are more likely to come from a distance and make a day of hitting all the shops, as each is unique in its own way. This has always been a great music town and the legions of students coming and going at all times is a boon for those of use who traffic in buying and selling used recordings.

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