How I Started A $550K/Month Flutes And Piccolos Online Store

What’s your backstory and how did you come up with the idea?

My name is Phil Unger and I own a unique, niche business in Manhattan, Flute Center of New York. We sell only flutes and piccolos but recently have added sheet music and the many accessories that our customers desire like case covers, cleaning supplies, etc. We have grown, over the past 42 years, to become the largest flute-centric company in the world. We service musicians primarily in the US but also see customers from every corner of the globe.

Basically, our flutes and piccolos range in price from $500 to the staggering amount of $75,000! The primary difference in such a wide range of pricing comes down to two primary factors, handmade versus factory-made and the materials used to manufacture a flute. Many of the instruments we sell are made of solid silver, gold, and platinum! The average price of a flute is around $5000. Because a player’s relationship to his/her instrument is almost like having another family member, the flute as we say “chooses the player”. Our customer base is truly from beginners to the top professional orchestral players in the world.

We have grown the business to a level I never thought possible. In 2019, we sold over 7M on a retail level. That number represents a ton of flutes and enough gold and platinum to marry 100s of thousands of couples, should we melt it all down into rings!

The Flute Center of New York really started after I knew that the degree my parents had paid for at Ohio University would be wasted on me! Radio-TV was just not my bag. I had six months left to graduate and this was when my mother suggested musical instrument repair! I thought it sounded like a cool profession, one where you can set your own boundaries and be your own boss.

Also, my father was a musician, playing the clarinet and doubling on all woodwinds and he owned for a time the sheet music department in a local music store in Dayton, Ohio. I had also spent some years playing clarinet, although I never considered this as a career. After some research, we found the best program in the US for musical instrument repair. I was accepted into a very rigorous program that only had twenty students.

After a full year, I graduated and was immediately offered a job at all three music businesses I interviewed. By the fate of a phone call, I ended up with a major company in the Dallas area. While there, I started learning about this fascinating flute world out there that was unique and quite well organized. Also, there was a huge difference in both the quality and repair technique between professionally manufactured flutes and student flutes.

As good as I was as a general woodwind technician, I was not qualified for repairing professional flutes and this is where I believed my future awaited me. Pro flutes are both expensive, small, and easily transportable and they had a huge international market. I made the decision to specialize but needed further training. I called the #1 flute maker in the US and offered any amount the foreman of the company wanted if he would train me. The next week, I flew to Boston, lived with the master flute maker, and went to work learning and enhancing my craft. This was the nexus of the Flute Center of New York.

I opened up my first business in Dallas in a historic building just outside of the state fairgrounds. Little by little, I became known throughout Texas and nationally. I also started attracting international flutists. I think what I did that was different than most small start-up businesses is the effort I made in establishing very personal relationships with my clients. I didn’t want to be just their repairman and flute broker, but their friend. Whenever possible, I asked them out to lunch or dinner and always kept in touch and to this day, I have flute friends that I call family throughout the world. This is very gratifying.

I would say that our strongest character as a company is unity. We work in a totally collaborative environment and we are constantly working together to find ways to further expand our brand.

The growth of FCNY was completely organic. I literally grew “one flute sale at a time”. As I sold an instrument or completed a repair, those monies would revert back into growing the business and buying more inventory. One venue that really helped me grow faster was developing a trusting relationship with players and designing a consignment program which, at the beginning cost me nothing, but gave me a nice 20% profit with no investment.

As I became more well known, I slowly became the #1 consignment flute shop in the world. Today, we sell over 1.5M in consigned instruments yearly. It is no longer free money, as there are many costs involved with consigning an instrument today that I didn’t have years ago. Some reasons are the costs involved in taking pictures, adding them to our website, handling the phone calls and the shipping costs, etc..

Describe the process of launching the online store/business.

As we grew, I realized that I needed help in integrating my company with the growing and connected social media world around me. Being somewhat old-school, I understood that I was simply just not capable of approaching that world and that if I wanted to keep in step with the world around me, I needed to find people that could do what I could not. So, I hired a new CEO and through him, we expanded our operation from 5 people to 10. Of one the most important hires were our new social media director.

Through her incentives and our communal brainstorming, we were able to achieve many firsts in my industry. We took advantage of social media “influencers” and also created a novel teachers’ club. The bottom line is finding ways to enhance your brand. This is our mission today.

I would say that our strongest character as a company is unity amongst our employees (which I prefer to label colleagues). We work in a totally collaborative environment and we are constantly working together to find ways to further expand our brand. Because we have carefully developed a wonderful working workspace, we all happily work towards a common goal, and everyone shares in the companies’ profits through incentive programs we have initiated.

Since launch, what has worked to attract and retain customers?

We have also reached our target audience through a fantastic assortment of projects which are time-consuming but help to educate and broaden our small niche market. We started our very own podcast series entitled Flutes Unscripted and are now entering our 5th season where we interview top flutists and related people.

I would just encourage anyone with a kernel of an idea to pursue this idea, because if it comes from your mind, then it must coincide with your personality and your abilities somehow.

This series has become the gold standard for the flute world. We decided to approach with a level of professionalism not yet seen with podcasts of this type in our world. Using top-notch equipment and superb editing, we end up with a superior product.

Another venture has been our in-house concert/masterclass series, called Salon Series Masterclasses. Instead of approaching this as most have, with a simple one-camera approach, we invested in a state of the art 4-camera system with an enhanced audio system as well as investing in a grand piano. The results have been spectacular. In the end, we want to be seen as the best in our field in terms of quality and service.

How are you doing today and what does the future look like?

We maintain about a 33% gross margin profit, but our expenses are high. The rent in NYC is extraordinary. As we continue to grow, we continue to invest in inventory. This is our single biggest liability, but as they say “You can’t sell from an empty pushcart.”. I have always hoped that we could someday reach the point of inventory saturation and just start to replace what we sell, but it seems that this day never comes, as we are ever-expanding to serve our ever-increasing market. This is a blessing and a curse. It is difficult, if not impossible to hoard your profits when they must constantly be reinvested to address growth.

We have been able to diminish our traditional advertising costs (print), as social media gives us multiples of return over magazines.

Our website is one of the top-visited sites in our industry. We have each month about 30,000 unique visitors. These are great numbers for a small niche market.

With the recent pandemic, we have been flexible and have had to remake our processes from a new location. So far, we have still been able to maintain a good percentage of what we did before Covid-19. It has been a trying time, but I am very proud of our team and how we have responded to this global pandemic.

We think we will emerge from this stronger and better than before. I have not had to furlough anyone and we are constantly finding reactive ways to reach our customers and expand our brand, a brand that has become consistent with quality and the best service that can be had.

Through starting the business, have you learned anything particularly helpful or advantageous?

I think the one most important lesson is that fear can really hold you back from achieving great success. I had to overcome many “in my face” fears about moving and paying huge rents, restructuring the company to make it truly global, and a host of other fears I needed to look at squarely and make a move.

I did make the decisions to move forward and today we are the largest flute shop in the world. We also enjoy being the largest seller of new flutes for almost every flute manufacturer globally. And we haven’t changed our model as we integrate our clients into the “Flute Center” culture. We are user friendly and very welcoming to our customers.

What platform/tools do you use for your business?

Our primary platform is Shopify. This really streamlines our processes. We also use Shopify for our online sales through our website. Shopify has turned out to be a powerful ally of FCNY. We are reaching so many that we don’t get to meet and have minimal contact.

This is a bit weird for me, as I built the company on face-to-face encounters, but this is a new world and online sales are a big part of this world. And we are now in the process of integrating Salesforce, a powerful program to track and convert our customers and also an easier way to service them after the sale. Our website is constantly being tweaked and just last week we launched an entirely new site, after years of development.

What have been the most influential books, podcasts, or other resources?

Honestly, what I rely on is my staff for moving forward in this electronic age. They have the pulse of what is coming down the pike in terms of communications and the resources and agility to integrate today’s media into our day to day operations.

Advice for other entrepreneurs who want to get started or are just starting out?

I really don’t consider myself a business guru. I do feel that my personality lent itself to my particular avocation, in that it is based upon very personal relationships with our clients. And we excel at this. This is my strength and this now overrides our overall philosophy.

I would just encourage anyone with a kernel of an idea to pursue this idea, because if it comes from your mind, then it must coincide with your personality and your abilities somehow. And don’t move too fast!

Where can we go to learn more?

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