Money music. Success story "instrumental" business

The company "Allegro-Music" a little more, and will overcome the 20-year milestone. She is one of the five largest distributors of musical instruments in the country, and in the future, perhaps, their manufacturer. The founder, Evgeny Ustinov, told how teenage hobbies became a matter of his life.

In childhood, like every third of us, Eugene went to a music school, dreamed of performing on stage. He played the drums - which is not so typical. When I grew up, I tried to earn a DJ at weddings and parties, I organized a disco ... All these tests were not in vain - a novice entrepreneur "felt" the market for which there is demand.
“Each drummer wanted to have the best drums, and then there was a shortage, there were literally a couple of stores where installations cost from $ 600. At that time I dreamed of Premier. It was crazy money, so the second-hand product was in demand, ”recalls Eugene. - From this start. My friend and I organized a company and became a dealer for one of the distributors of musical instruments. We started from scratch, we actually had no money, so we agreed with the supplier about working for a specific buyer, on order. We had an effective, as at that time, business scheme: we worked as a mobile sales department. There was no warehouse, inventory, only an office at 12 meters. There was no salary either - the remuneration depended on real sales. And accordingly, the expenditure part was minimal.”
In the “pre-Internet” era, sales were carried out using advertisements in newspapers, on poles, and thanks to “drum radio” among their musical parties. And it went.

True, Eugene's favorite drums went into the background - this is not such a massive product. At that time, synthesizers and guitars became the basis of the assortment. Violins and other "noble" products were added much later. Rather, they did not compete with music stores, but with people who privately sold instruments, often theirs. The partner went out of business, and Eugene continued to develop it himself.Two decades later, this type of business is quite different. The market has developed, the competition is tough, good equipment and tools can be bought in the official store at an adequate price. Through online sites like Aliexpress, you can order products from abroad, and you can buy new ones without hands without any problems through OLX, FB and other resources. How did the company manage to resist, moreover - to be successful in the new realities?

The recipe, says Evgeny Ustinov, is to be “in tune” —to follow the changes, adapt, offer the consumer what he needs.

Now Allegro-Music has thirty employees, there is a full-fledged office, two stores: in Kiev and Odessa. There is a specialized online store of musical instruments, which was originally conceived as a communication platform for people who are fond of music.
The entrepreneur diversified business and identified three areas. The main profit, but also the most difficult, is distribution. The company is engaged in its own import, then sells goods in bulk to other music stores.

According to the study "Allegro-Music", which was conducted in 2017, in Ukraine there are 140 stores specialized in musical instruments. About 25 of them are stores of distribution companies, which are themselves importers and mainly sell their own goods. And there are 115 stores that work with all distributors. High-quality online sites just up to a dozen. It is very small. At the same time distributors who can close all the necessary range of products, 7-8 companies. And this is a lot. As a result, the mentioned stores are trying to work with everyone a little bit, to look for where it is more profitable, to take from those who are dumping. And it turns out that such conditions are not suitable for any of the distributors, and they are forced to go into retail.“Allegro-Music” is no exception, the second direction of the company's activity is its own retail, where the main focus is on e-commers (website www.Musicant.Ukr). The site sells goods and their own, and someone else's, the principle of operation - as in "Sockets". Delivery is carried out in traditional ways - "New Mail", couriers in Kiev, "Ukrposhta".

Online and offline sales today are about 50 to 50, with an obvious annual growth rate of the first.

The company is selling and alternative methods. The most effective channel, says Evgeny, is Rosette: “They work with us as an official dealer, they buy the goods themselves for their customers. We also use their marketplace functionality. We also work with other marketplaces - with the same PromUA, where we “unload” our goods, our prices. Orders come through social networks, but so far they can not be called essential. In my opinion, this is more for the image. ”
Instagram is an interesting social resource, but also more likely to support communications. YouTube - the company also has a channel, but, according to the entrepreneur, this is a very costly tool. In order for it to work, you need a high-quality video made by a pro, and not on the phone. Standard contextual and banner advertising works, e-mail news are a thing of the past. The main buyer is an amateur musician, because a professional buys somewhere abroad, something expensive and “for himself”.
“Another solution is to look for new markets. For example, a supermarket chain of household appliances can sell our product line, for example, speaker systems, headphones and microphones, audio equipment ... A store of interests, a gift shop, or even children's toys — sell an ukulele, because this tool is bought for both adults and children. ” - the entrepreneur shares his plans.
The strength of the company, which helps to stand out among competitors - the range. For example, in the ukulele tool (Hawaiian four-string guitar), a little-known for an ordinary Ukrainian, “Alegro-Music” leads the market. “We represent only exclusive brands, that is, we are the“ first hands ”in Ukraine,” says Yevgeny. “If the supplier says that“ we will sell to you, and to them, and to those, ”we do not subscribe to such contracts. We are taking a new brand unknown to anyone in Ukraine and are starting to promote it. It is difficult, it is work "in long."
The third is a fairly new, but promising line of business for the company, the production of active speaker systems with batteries that can work autonomously. Eugene found contractors in China who produce the right devices, picked up their basic version, made some design changes, other parameters, and better components. Thus, a unique product appeared, which Allegro-Music produces under its registered trademark Maximum Acoustics. But plans are not limited to acoustics - an entrepreneur has many other ideas on his own products, some of which he is going to realize soon. This includes the production of own musical instruments.

“To be successful, you need to believe in your business. Do not be afraid of anything and just do what you love. Do not throw halfway, facing difficulties. Maybe some factors will interfere: the situation in the country, the economic crisis, competition - based on them, you need to adjust the strategy, change direction, be flexible ... But to turn 180 degrees - no. It is necessary to beat at one point, and you will break through the wall. ”

Evgeny Ustinov, Director of Allegro-Music

A very important factor affecting the efficiency of a company is currency fluctuation. After all, so far in the range only imported tools, their prices are tied either to the dollar or the euro. In Ukraine, by the way, there are also local manufacturers of musical instruments - Woodstock and Universal Guitars. They make good electric guitars, but mainly on the foreign market. And Star Sticks produces high-quality drumsticks.
Seasonality is also a factor that cannot be replaced. For example, classical guitars, violins, and accordions go well at the beginning of the season, when children go to school, this is September-October. In winter there are excellent violins at a good price, but nobody needs them.
There is an opinion that crises do not affect goods for a hobby. Evgeny Ustinov partly agrees with this: “Yes, this is what you will give up last. But you will begin to look for where it is cheaper to take used, rent ... We now have another problem: a potential buyer - the intelligentsia - is leaving the country, emigrating. The competitors have the same situation, they also have overflowing warehouses and they also do not know what to do with it. But we all survive this period. The music business is interesting because it will always be. There are no super profits or super profits here, but this music will last forever ... ”

No matter how it was, but the entrepreneur’s look into the future is rather optimistic: after 10 years, he sees his business as a specialized Internet supermarket of musical instruments No. 1 in Ukraine. And, perhaps, as one of the leading manufacturers in the country.

Bank partnership

“We are serviced by Raiffeisen Bank Aval. For many years of work, we have been convinced that this is a bank that is most convenient for small businesses. Our company uses almost all services. Lending - for the purchase of goods. Overdraft, loan for working capital replenishment - products that help in current activities. We recently had a cash gap when we moved to a new office at the end of December and we were very helpful with financial assistance. It was a credit line. She was also helping out with a decline in sales: we were able to normalize the situation with our suppliers. We use longer credit funds mainly for the development of our brand. This is what helps us to really bring products to the market.

When you yourself are engaged in production, you create the product yourself, you need to purchase components and materials, pay for work, delivery, think about promotion. But your own brand of products is more promising, because then you dictate your conditions to the market. And Raiffeisen Bank Aval helps us in this. ”