How a San Francisco record store is finding revenue streams every which way

There are many other stores who’d like a taste of this ancillary income to keep the wolf from the door

When people stopped buying physical music and record shops began to realise they were in trouble, there was no shortage of suggestions about extra ways for owners to make the most productive and profitable use of the space. Most of these had to do with new retail ideas so you had record shops partnering with cafes, bookshops and galleries.

As you step into the Amoeba record store in the heart of Haight Street in San Francisco, two things strike you right away. One, the shop is still a massive yoke of a thing, with racks of vinyl, CDs, books and other bits and pieces stretching for dozens of yards in every direction. Two, whoever had the bright idea to provide space in the shop for a medical marijuana evaluation clinic really knew what they were doing.

No doubt, there are many other stores who’d like a taste of this ancillary income to keep the wolf from the door.

A record shop needs more than bursts of interest twice a year at Christmas and Record Store Day to keep things ticking over.

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Whatever about the revenue accruing from those visiting the in-store Green Evaluations’ clinic in search of a medical marijuana card, Amoeba seems to be doing okay as things stand on the actual shop floor. It would be interesting to know if the new arrival has meant an increase of certain acts or genres.

The over-arching narrative in the recorded music sector may be about the continued growth in streaming, yet there are still folks out there who are buying records and CDs.

We’ll come back to the former in a minute, but news that people are still buying CDs will come as a revelation to many. While CD sales are nowhere near as lucrative as they were when the record industry was making out like a bandit with the new format, there’s still $1.5 billion worth of those discs sold every year in the United States alone.

Perhaps we’ll see a CD revival in time to rival that of vinyl? As things stand, you can’t go a week without hearing or reading about the resurgence in vinyl sales (the column you’re currently reading has been written to meet this week’s quota). While the number of actual units sold remains small enough - 17 million US sales in 2015 - vinyl is generating serious revenue, with more money coming from vinyl sales in 2015 than from ad-supported streaming services.

One reason for this may be unit price. One of the things apparent from an afternoon digging in the Amoeba racks is that you can charge a serious whack for a slab of 12-inch plastic, something which is truly gobsmacking for those of us who had (un)healthy vinyl habits back in the day to see.

This price gouging also applies to the ephemeral media and merchandise which a music fan gathers during their life.

If you want to re-own some of the stuff you once possessed, it now comes with a hefty price tag. Is there really someone out there willing to pay nearly 30 bucks for a second-hand copy of the Beastie Boys' iconic Grand Royal magazine, as Amoeba believes?

But as Amoeba has learned, record stores need to diversify to survive. If you’re flogging medical marijuana upstairs, you can also flog second-hand magazines on the ground floor and it all goes to pay the bills. When you’ve a store as large as this, you need turnover and volume or you’re just left with a big room which is hard to heat.