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A young friend whom I just met mentioned to me about a business that he is about to start. I am shocked that someone wanted to start this business. His business is:
A store selling CDs. He is not selling any type of special CDs, it's those POP & Rock album.
In my humble opinion, I don't think this is a great business to start. Here is a few reasons why I think so:
1. Music industry are face with extreme challenges as music companies are reporting making losses in their business. That means to say people are buying less albums than before. The reason is simple - Internet. Music can be downloaded online, stored in the ipod or harddrive, why do someone have to buy a CD which takes up space in his room.
2. CDs business is moving southwards because most machines that play music nowadays are able to play mp3 format. Gone are the days where the music playing machines are only CD players. It is ok not to own a CD player today. In fact if you took out a CD player today, you may look like a dinosaur.
3. Beside competition from the downloadable music from the internet, they are facing competition from other stores as well. CDs have become a commodity, with so many other competitors, this business is just another me-too business where there is no control on price. If you charge 20 cents more, I shall go to the store across.
These are three points that I have noticed. Do you noticed other points?
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Originally Posted by MoneyMagnet
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