Someone asked me at a barbecue recently whether running a record store was a good business. I laughed, took a long sip of my beer, and said something like, “Define good.” Because the honest answer is complicated, and I think people deserve to hear the unvarnished version.

I’ve been running my shop for over twenty years. I love it deeply. But I’d be lying if I said it was easy or financially comfortable. Here’s what it actually looks like.

The Money

Let me be upfront about margins. A new vinyl LP with a recommended retail price of $45 typically costs me $22-28 wholesale, depending on the distributor and the label. After GST, credit card fees, and the various small costs of actually selling a physical item, my margin on a new release sits around 30-35%.

That sounds okay until you factor in rent, utilities, insurance, staff wages, and the cost of dead stock — records that don’t sell and sit on the shelf depreciating. In a good month, my shop turns a modest profit. In a bad month, I’m dipping into reserves. In December and around Record Store Day, we do well. In February and July, it’s quiet enough to hear the floorboards creak.

I don’t draw a large salary. Most independent record store owners don’t. The ones who survive long-term tend to own the building, have a partner with a steady income, or supplement with online sales, DJ work, or other side income. That’s not a criticism — it’s just the reality of retail in 2026.

The Rent Problem

Australian retail rents are a killer, particularly in the inner-city areas where record stores tend to thrive. I’ve seen rents in Fitzroy and Collingwood jump 20-30% at lease renewal, and that alone can turn a viable business into an unsustainable one.

Some shops have moved to less fashionable suburbs to survive. Others have downsized. A few have shifted to online-only. Each of those decisions involves real tradeoffs — cheaper rent might mean less foot traffic, less visibility, less community presence.

My lease comes up next year, and I’d be lying if I said I wasn’t nervous. The street I’m on has gentrified significantly, and the landlord knows record stores attract foot traffic that benefits other tenants. Whether that translates to a fair rent remains to be seen.

The Competition

I don’t lose sleep over other record stores. As I said, a healthy scene helps everyone. What I do lose sleep over is the broader retail landscape.

JB Hi-Fi has expanded their vinyl sections significantly, and they can buy at better wholesale rates than I can. Amazon sells records at aggressive prices with free delivery. Discogs gives every private seller a global storefront. Major label direct-to-consumer stores undercut retail with “exclusive” variants.

None of those competitors offer what an independent shop offers — curation, community, expertise, and the experience of being in a physical space full of music. But explaining that to someone who can buy the same album for $10 less with a click is an ongoing challenge.

What Works

Despite all that, things are better now than they were ten years ago. The customer base is diverse and growing. Younger buyers are discovering vinyl in meaningful numbers. In-store events drive traffic and build loyalty. Social media — Instagram in particular — is a powerful tool for showcasing stock and connecting with collectors.

The shops that are thriving tend to have a few things in common. Strong curation that reflects the owner’s genuine taste. Community events that bring people through the door for more than just buying. Active online presence for discovery and engagement. Diversified revenue — merch, turntable accessories, gift items alongside the vinyl.

I also think the stores doing well are the ones that treat their customers as collaborators. I take recommendations from regulars seriously. If someone suggests I stock an artist I haven’t heard of, I’ll check them out. That kind of relationship is something Amazon will never offer, and increasingly, it’s what people are willing to pay for.

Interestingly, some record stores are finding that these AI specialists can help with inventory optimisation. Knowing which releases to order deeper on and which to skip is a constant guessing game, and any edge there directly impacts the bottom line.

Why I Still Do It

Here’s the part that doesn’t show up on a spreadsheet. Last Tuesday, a kid came in with his mum. He was maybe fourteen. He bought a Violent Soho record with his birthday money, and the look on his face when he held it was genuine excitement. That same afternoon, a retired teacher brought in her late husband’s jazz collection and asked me to find good homes for it. I spent an hour going through the records with her, talking about each one.

Those moments are why I’m still here. Not because I’m sentimental — I’m actually quite practical about business. But because running a record store means being part of people’s lives in a way that most retail doesn’t allow. Music matters to people, and being the person who connects them with it is a privilege.

I’m not going to sugarcoat the business side. It’s hard. The margins are thin. The hours are long. The stress is real. But I get to spend every day surrounded by music and the people who love it, and I still think that’s a good deal.

Would I recommend it? Only if you can’t imagine doing anything else.