Originally posted by Areeb Malik:
So what does the future hold for magic shops? Are they destined to be a thing of the past because there is no way they will be able to compete against the internet dealer (price-wise). What should the business model for magic shops of the present and future be?
That is an interesting question, and one that I am sure people like Geno Munari, Hank Lee, Joe Stevens, Denny and others are pondering quite seriously. As a business analyst, I am instinctively interested.
A few years ago I attended a food industry convention, held by one of the largest data collection firms in the world. One of the speakers was a professor of economics that predicted that the “.com” grocery companies would have little or no impact on the industry as a whole, even though at the time they seemed to be making inroads. He, of course, was proved to be correct in his analysis, and in a very short period of time. One can also look at the other failing .com businesses such as online toy, book and music stores.
That being said, small niche industries such as magic are a perfect fit for the Internet, but I believe (and remember, this is only one analyst's opinion) in a way different from what we are seeing at this place and time.
Will “brick and mortar” shops vanish? Sadly, I believe most of them will, mainly due to the high overheads that are a part of such a business. The exception will be establishments like Geno Munari's
Houdini's Magic Shop stores which are strategically placed in high traffic tourist/shopping areas and do not necessarily target magicians as their primary customer. B&M shops with a strong Internet presence will last longer, but will eventually fall to the business model that I believe will dominate the magic industry of the future: direct to vendor commerce.
It is my belief that mainstream magic manufacturers and publishers will begin, out of necessity, to retail directly to the consumer via the Internet (and good old fashioned mail-order, which will never go away). As the number of retail outlets dwindle, the manufacturers will need to sell more product at retail prices as opposed to wholesale, in order to keep their business afloat. Even the online only shops are already learning that, unless they are marketing something that they themselves produce, magic shops (even on the Internet) are a difficult way to make a profit. The profit margin at retail is much higher for the manufacturer selling direct to the consumer, vs. selling at wholesale. The Internet allows this to occur without the high overhead of a B&M retail store.
We already see this with some individuals who are selling the books, tricks and videos they produce. Yes, they also sell to shops, but that's because they can – the shops are still there. The fact of the matter is, however, they do better selling at retail themselves. I believe that it's only a matter of time before this is how most of the industry of magic will be conducting business.
Frankly, I hope I'm wrong. I love magic shops. The dingier and more cluttered the better too. I dislike the sterile perfection of some of the “mall” shops we see today. I loved Denny's ad – it made me laugh
and it made me think. It made me think and hope that shop owners can weather the rough waters ahead of them.
Regards,
Dustin
[ August 31, 2001: Message edited by: Dustin Stinett ]