Opening a telescope shop. Still worth it?

[Alaness]

After finding it frustrating not having a telescope shop near by I have been putting together a proposal to open a shop myself. I'm going in at the deep end here, and I could use some advice!

For a start I'm only 22, and I don't own a house, so getting a business loan is going to be blumming difficult. At least at any decent APR.

Secondly I'll need a supplier or two, finding one for the UK is like panning for gold.

Dose anyone out their own a telescope shop? If so, I am looking to for your wisdom!

Regards,

Alan.

[jonathan]

Here's my two pennies worth - I think you need something to keep the shop ticking over, you probably can't rely on big telescope sales every week.  Even if it's only vaguely astronomy related, so long as it's something that sells regularly and will provide enough to pay some rent or bills.

[emadmoussa]

Can't you do business from home and sell online to begin wtih? Then based on profit you can expand...

just a thought really, I'm exactly business-y

[Qualia]

I'd have a real big think about it, seriously. The first thing which springs to mind is possible market and I can't imagine there's going to be a significant one in the catchment area of Newport. Secondly, price will influence buyers a lot and owning a shop will involve extra costs over that of an online retailer for example. If folk find gear cheaper online, there's really no competition and for most folk into astronomy and have already learnt the art of patience, to wait a day or so for new gear to arrive is really no big deal.

It might not be the same in the UK, but here in Spain more and more highstreet shops are closing and it's not totally to do with the economic crisis but also to the very real fact that more and more people are buying and browsing online. Not just for astro gear but books, music, mobile phones, perfumes, holidays and so on. I'd have thought in today's world of internet, it would be wiser to establish a customer base online before venturing into the world of the high street retailing. It is less risky, requires less capital and will help you to gain finance and marketing knowledge before venturing out.

Sorry if I've put a downer on things but I feel it is better to speak from the heart.

[dmahon]

Physical presence is expensive in terms of rent, stock and staff. How many people go to a shop and buy a telescope? The internet is where it's at these days I'm afraid.

[JB80]

It might not be the same in the UK, but here in Spain more and more highstreet shops are closing

I would really hate to be opening any sort of business in Spain right now that you had to rely on for a living. That said Costa Blanca could do with a telescope shop but a client base of 1 person is probably not viable.

It's one of those things really, I agree that Emads suggestion might be the best business model for a start up but it could be tricky until you get your foot in the door. Astronomers are a suspicious lot so a lot of marketing and having a physical presence in the field means a lot but then you also need to be careful not to step on anybody elses toes.

[Reeny]

I set up my safety consultancy business and needed to offer much much more than initially planned to pay the bills.

A photography shop may attaract 2% of the general public who want to buy camera stuff.

A town of 25,000 = 500 sales per year.

A shop which only sells telescopes - might loose 95% of that 2% target audience = less than 25 sales per year.

Some of those sales will be low value plossl's, barlows, adaptors, and £10 items.

My advice is to go online first to capture a larger customer base, and remove the risk.

If you decide you need an expensive shop at a later date - you will already know if you can fund the capital investment, pay the rent, and buy new stock - all at the same time.

[MrFinster]

Physical presence is expensive in terms of rent, stock and staff. How many people go to a shop and buy a telescope? The internet is where it's at these days I'm afraid.

I did,  I prefer a brick and mortar business and a real human being to talk business with. A lot of people will quite happily pay a couple of quid extra knowing that they can return an item to the shop and not have to wrap it up and trust that the resentful and careless bloke with a van hired by the courier will get your item back to the internet supplier in one piece if at all.

[dmahon]

You did, but how many other people do? And how many go and look then buy on the internet because it's cheaper?

How many sales per day do you need to pay for it?

[Matt Scunthorpe]

I'd have to just back up what everyone else has said so far. The fact that there are very few highstreet Astronomy shops could mean that there are very little demand for them. As everyone so far has said, online is where sales are made now. I have only ever bought 2 items from a small local business, the rest have been online.

As also has been said, online prices are cheaper, as there are not as many overheads. Take for example books, in book shops, most books are £8.99. Online, most are around £2 - £3 cheaper, and thats who gets the business.

Matt.

[MrFinster]

You did, but how many other people do? And how many go and look then buy on the internet because it's cheaper?

How many sales per day do you need to pay for it?

true, but as was already stated, you need to stock a wider range than telescopes. Most astro shops online and real world carry other items such as camera gear, birdwatching equipment, bird food, bird boxes, bat boxes, bat echo transducer kits, night vision gear, books, astro related gift items.

Depending on your stance regarding hunting, you can look at rifle scopes, camo clothing, torches etc.

Its a no brainer to have both a real world shop as well as be online and it would be easier to set up online first before having a real world shop but I have bought from both and prefer one to the other, thats my choice and I will prefer to go to a real shop first before purchasing from an online site unless I really need an item and haven't the immediate time and opportunity to go to a shop.

[Reeny]

I'm 50 years old, living in a 2-person household.

We have bought 1x telescope £100 from a bricks and mortar camera shop.

and £180 worth of binoculars, plossls, Barlows, and accessories online.

50years / £280 = £5.60p per year expenditure (40% to local business / 60% online)

If the target audience is 0.1% of the 141,000 population in Newport, and your mark up is 50%

Your typical yearly profit will be a grand total of £790.00p = (£5.60p x 0.1% of 141,000)

[Reeny]

PS - the city centre camera shop where I bought the scope closed years ago.

Not enough money in it for them.

Hence there are no telescope shops in Newcastle (excluding Argos / Tesco online / Costco / Jessops / and all of the other online retailers).

[SteveNickolls]

A short while ago I stumbled on this very interesting web site of Kunming Optical Instruments Co., Ltd-http://www.binocularschina.com/guide.html It provides fascinating advice on starting your own  import business in the field of astronomy and a greater insight into the import/export of goods. Chapter 3-"Homework at your end" particularly 3.2 makes informative reading for anyone to read and this is coming from a company that must know all the ins and outs of the business. I think the telling line for anyone starting up is, "please keep in mind that today's binoculars and telescopes market is hyper-competitive".

Cheers,

Steve

[johnrt]

Well you have a perfect market research group at your fingertips here who are your potential customers. They are giving you a loud and clear message.

If you or other people are the type to go in to a shop to get that human touch and service and are willing to pay extra for it then I'm afraid you are in a staggering minority. How do I know this? I lost my job of 12 years and was made redundant earlier in the year because shoppers moved to buy the products we sold online as they were cheaper, not in bricks and mortar stores, where they would pay more for the product, petrol to drive to the store and parking while they went off shopping. Upsetting, yes, but a fact I'm afraid.

The good thing for us as customers is there are online companies out there who can and do offer that human touch to a transaction and give superb customer service, they know their products inside out. Take a bow FLO, Ian King etc etc.

[dph1nm]

But there are quite a few real bricks and mortar telescope stores out there - and most of them have been going for many years (some have even expanded). So it must be possible to do it.

NigelM

[Peter Drew]

If you have to borrow money to start up then you have to make enough to live on as well as service the debt out of the low margins available today. I was in the telescope making business for 35 years. I finally  cleared my ongoing bank overdraft out of my retirement pension pot!.  

[Astrobits]

Whatever you do you will need to put up a lot of your own cash. No-one is going to give you a loan of 100% of the money you need and many will require some sort of track record before giving you anything.

Sorry, but I don't see it ( a bricks and mortar shop ) as viable without you doing another job or having a decent income from somewhere else.

Nigel

[mikehab]

When I was looking to buy my scope I desperately wanted to see & touch a variety of scopes 'in the flesh'. There was only one shop that was within relatively easy reach for me to go and see what they had - so I toddled off there in my lunch hour to see what they had, and it turned out that they only had one out of the 3 or 4 scopes I was interested in ... so all I could actually do was to eliminate one off my list.  They did of course try to sell me something else (which wasn't on my list) which they did have in stock which was 2x more expensive than I was originally looking to spend, and when I said I wasn't really interested in spending that kind of money they pretty much lost interest in trying to help me (as it became pretty clear that they weren't going to make a sale today).... and this actually put me off ever going to that shop again.

So for me - a telescope shop is every going to be as good as 1) the stock that you can keep available on the premises 2) the prices compared to on-line shops and 3) the helpfulness/friendliness of the staff.

To keep enough stock on the premises for people to be able to walk in and buy something there-and-then, at a price that is competitive against on-line prices - you're going to need to keep a heck of a lot of stock - and that's going to cost a *lot* of money, and most of that stock you probably won't sell anyway.

So sad shame though it is, and much though I would personally love to have easy access to a fully stocked, reasonably priced telescope shop.... realistically I think you're going to struggle against on-line shops... but I wish you the very best of luck if you do decide to go down that route (I'm sure we all do!)

Mike

[Peter Drew]

To the three important points that Mike has listed I would add experience, you will really need to "know your onions" as many will rely on your advice. With the greatest respect, 22 years might not yet be enough. 

[hugobugo]

Important figures to consider, what does it cost you just to put the key in the door at the start of the month. Rent, Power, Broadband, Card processing, interest on loans plus the cash flow issue of paying a loan,. All  have to be generated from sales income net of VAT and all to be paid before you can draw a wage. 

How much are you going to spend on demonstration units even a small range of entry and intermediate level scopes is going to set you back a fair amount. 

Stock, how much stock you planning to hold? Do the suppliers work just in time or do you have to order seasons ahead?

PS don't forget to add the delivery costs of getting stuff to you into the overall costs of the product itself. 

If you do your homework run the numbers and it all checks out then fair play go for it if your happy. DON't worry about opinion of anyone other than another telescope shop owner. As I say do your numbers get them checked by friends family and info from on here to make sure your not creating something you want to see rather than what it will be.

Take your sales figures and half them, how long can you burn money at that rate before you have to pull the plug.

Fair play to you that is why there are success stories out there. BUT there are more failures because not enough research or realistic anticipation/ estimation of costs/sales.

My two pence worth if i had a scope shop within 30 miles would I use it? 60 mile round trip and can they beat the online price would be considerations so probably. How often once a year purchase, might browse two or three times if in the area but lets face it prices of our hobby nothing is really an impulse buy.

All the best whatever you do. 

[pete_l]

If you really wanted to revolutionise the amateur telescope business, you could open a shop that is ...  takes a sharp intake of breath ......  open at night. ( Shhhh! )

I have never, ever seen the point of astro shops that are closed at the only time when prospective customers could possibly take potential new toys for a test-run. Similarly, being able to actually show people the sights they could see through your range of telescopes could even turn skeptical "just looking" types into impulse-buying customers, or even enthusiasts. Being able to demonstrate products is a key part of selling them, which makes most current telescope shops of little use to potential buyers. So it's no surprise that people buy off the internet, instead.

However you'd need a location that was away from town centres, and wasn't permanently under cloud. So that might restrict the number of people who'd visit your shop - unless you could make the shop into a destination in its own right.

[Moonshane]

I am sorry to say that buying new from a shop is my last resort. my second to last resort is buying new from an online provider. my most common method of buying gear is on the used market. if I can get it used then I'll generally do so.

this may actually present a possibility. although there are means by which individuals can buy and sell on a used basis, there may be an opportunity for someone selling online items which are 'quality assured'. you'd need a good asset base to buy stock and sources for purchases but this might be feasible.

unfortunately I agree about physical retail outlets generally as they are for this particular sector, I fear, a thing of the past.

[John]

I'm not a businessman but much of what has been posted above in the way of "reality checks" seem to ring true with me.

What might be more feasible though would be to do something on a smaller scale by finding a niche in astro equipment which is poorly served at the moment, learning a bit about it and what customers seem to need and then filling it through smart importing.

Offhand I can think of a few areas such as replacement lens caps for scopes and eyepieces and probably a few others which I often see mentioned in terms of "where can I buy ..." questions on this forum.

OK. it's much smaller scale but you could provide a decent service, make some pocket money and not have to risk big bucks to get your toe in the door. 

But I'm no businessman as I said so even the above could be flawed thinking 

[Scooot]

As previously mentioned this is an ideal forum for getting market research into your prospective customer base. You'll need lots of it to prepare a business plan for you and any fund providers.

As most have already suggested it looks as if it will be very difficult. People these days need a reason to go into a physical shop, and even if they can most will then buy online if they can, not all but enough to reduce your sales potential.

Moonshane touched on this, an Astro second hand shop would provide good reasons for people to visit the shop. They could see the quality of the goods themselves without having to trust their online judgement, you wouldn't be competing with new product prices, you'd rely on your own judgement to source your goods. I think you'd need an online counter as well though. I'm not suggesting it would work, just food for thought.