Vinyl’s New Groove

A vinyl bin in a Newbury Comic store.

(from Billboard Magazine, September 21, 2013) Vinyl sales have grown from 1.9 million in 2009 to approximately 4.6 million in the last year. With the recent growth in vinyl album sales, merchants are looking to get in the business of vinyl; companies such as Target and Whole Foods are testing the waters by putting displays in their stores. Target is using the music as a loss leader to attract more customers, whereas Whole Foods is using it to set themselves apart from other stores in the market. Whole Foods executive Mike Bowen states, “Vinyl has created a fun factor in our stores.” Although some stores, such as Target and Whole Foods, aim to attract new customers with their new additions, Newbury Comics, a Boston based niche store, sees vinyl as profitable. Mike Dreese, Newbury Founder/CEO, shares, “We are just looking at the space and can see that ultimately there are going to be three or four players that will serve this market three years out.” Newbury has seen the need for a strong buying staff and plans to equip their staff to be the best for buying vinyl. Independent retailers, however, are concerned that major labels will favor big-box retailers over independent retailers on selling terms. Despite these concerns, labels are standing firm and not allowing return privileges to retailers, giving independent retailers who have experience selling vinyl a leg up on the big-box retailers who have little-to-no experience. For example, Target and Whole Foods are only stocking ten to fifteen titles per store, whereas stores like Newbury Comics who want to attain profitability are stocking up to 1,000 titles. A vinyl albums costs approximately $3.50 to manufacture, ten times the amount it costs to manufacture a CD. This additional cost has turned most big-box retailers away from vinyl because when ordering inventory, a miscalculated order can be very costly. On the other hand, commitment is growing in independent retailers who have the resources and experience to approximate how much product to inventory. These independent retailers aim to bring vinyl back as a key player in the market.