Folsom Cd Store Spins Off Profits

Posted: August 25, 1988

At a time when the critics were still debating whether the compact disc would really revolutionize the music industry, Warren Krangel decided to take a gamble.

He went out in November 1986 and bought several thousand compact discs, opened a store called Dynamic Disc in Folsom and waited for customers to come in.

He didn't have to wait long.

Indeed, business was so good that he opened a second outlet in Chadds Ford in October and is now thinking about opening a third store on the Main Line before the end of the year.

"I would like to open more stores and have franchises like West Coast Video, which I think is a well-run enterprise," said Krangel.

Krangel also operates an appliance store, with his brother, Stanley, next door to the compact disc store at MacDade Boulevard and Route 420 in Folsom.

As music stores go, Dynamic Disc is hardly a run-of-the-mill operation. Unlike his larger, well-known competitors, such as Wall-to-Wall Sound & Video and Sam Goody, which stock records and audio and video systems, Dynamic Disc specializes in compact discs.

Krangel said he has an inventory of about 10,000 discs, including obscure titles in all categories of music - rock, jazz, soul, blues, pop vocals, classical, country and western, folk and soundtracks.

He said the venture represents a $150,000 investment that's paying off big dividends.

"When CDs appeared in the early '80s, I followed the trend," he said. "I knew then that it would be a great investment. I knew that when people got hooked on CDs, they would begin to replace their record collections."

His customers agree.

"I'm impressed, not so much by the prices, but by the large selection of compact discs," said Chris Sim, a first-time customer from Brookhaven who was recently browsing through the rock section.

It wasn't the first time for Anthony Scaricamazza of Clifton Heights, however, who was at the other end of the store, checking for discs by recording artists he had not been able to find at larger stores.

"I've been coming here, I guess, from the time it opened," Scaricamazza said. "I think you might pay a little bit more than you would at other stores, but the inventory is incredible."

Most of the discs sell for about $16 apiece. Some new releases sell for about $14 each, and some less popular titles sell for about $10.

As a small, independent operator doing business off the beaten path,

Krangel would seem at risk. The industry is filled with stories about independent operators who were sold on the notion that compact discs represented the wave of the future and plunged headlong into the market - and just as quickly folded in the face of stiff competition from the established chains, which operate in prime commercial sites and advertise heavily.

"Competition," Krangel said, "is always risky."

To compete effectively, he said he knew he had to be different. As a specialist, he knew he had to stock a larger selection in the belief that ''there's a buyer for every compact disc."

"If a buyer is looking for a particular CD, we want to have it," Krangel said.

In addition, he created a display system that makes it easier for the customer to browse: The discs are stocked in such a way that the customer can quickly flip through hundreds of discs and read the selections and liner notes on the back.

And the store has something you don't find in the average music store - a listening area.

"You can preview the disc before you buy it," Krangel said. "I know that people go into stores, buy a CD, take it home only to discover that it's not what they want."

His marketing strategy also includes a membership club. For a $15 fee, the customer gets up to $3 discounts on individual compact discs, special orders and a 10 percent discount on all compact discs accessories, including cleaners and car adaptors.

Tuesday is a discount day, and on Wednesday every jazz title in the store sells for a dollar less the sticker price.

In addition, Krangel said, the store employs knowledgeable clerks.

John Wolfinger, for example, is a bass player for the area rock group Decontrol. He has worked at the MacDade store since its opening.

"Anything they want to know about jazz and rock, I'm the man," Wolfinger said. "It saves the customer time and stress to educate them about the music they want to buy - like a particular sound or an artist they've never heard before. And they're always surprised at the inventory."

As for the future, Krangel said it looks bright.

"CDs will be around for some time," he said.

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