I work in headphone store in NYC. We have a good selection but retail space is small (helps keep the rent down).
You have to be competitive with price. You'll never beat Amazon, so you automatically price match whatever you can. Some things that customers buy cheap online are gray market. You never price-match gray market. You simply remind a customer that the slightly higher price comes with a valid warranty and your attentive customer service.
Some people come in and try stuff and then leave and buy online. Whatever. The world is full of people like that, and there is no saving them.
I've worked with plenty of folks who are more than happy to pay a little extra ($20-$50) for the service. High-end customers who want a good pair of headphones don't want to waste time dealing with Amazon. They want to speak with someone knowledgeable and friendly. They want an address to go to if they encounter an issue with their purchase. What does tax matter when you're buying the LCD-XC or the HD800S? Small potatoes.
Essentially, just give the BEST. DAMN. SERVICE humanly possible. And keep your prices competitive.
If you want to keep costs down, you also hire associates who know what they're doing when it comes to headphones, but who also have RETAIL EXPERIENCE.
I have coworkers who don't know how to interact with people in a respectful way. They don't know the importance of maintaining an accurate inventory count. And their product knowledge goes no further than parroting the things they hear me talking about.
Hire good retail associates and turn them into audiophiles. Give them excessive discounts on merchandise so that they buy it and become familiar with it. Hell, give them something mid-fi for free and absorb the cost into your business. The important thing is to have people working with you who care about audio - who can make suggestions based on experience and individual taste. Not just stuff they heard a coworker say once.
Some brands don't care about MAP. Other brands REALLY care about MAP. For instance, Grado cuts people off left and right for abusing the MAP. Beyerdynamic, on the other hand, isn't about to cut anyone off. Carrying Beyerdynamic headphones is almost a liability because every other retailer can and will try to undercut you, leading to less profit on a Beyerdynamic model. Conversely, you know that if you ever sell a Grado headphone, you're going to turn a profit. And as my boss says, you'll never go broke making a profit.
If you want to get on a great footing with brands, create content. Write or record reviews. Engage with the community. Become part of the community. Give props to stuff you'd honestly recommend. But don't just become a mouthpiece for the Man. Brands like good press, but customers are going to get turned off to you if all you recommend is overpriced junk.
Speaking of junk used merch is difficult because you're the face of the used equipment. If you simply sell merchandise, and something is defective/not good, that's the fault of the manufacturer. If you sell used merchandise that sucks, that comes back on you and makes you look shady. Used is tricky business. However,I would say to consider repairs/modifications...then do used equipment. It's harder to do repairs and mods than it is to hypothetically sell used, but having the expertise on hand to repair defective used stuff would be invaluable to maintaining your brand's reputation.
Honestly, I'm beginning to hate living in NYC and I'm thinking of moving back to the countryside. There is nothing I would like more than to open a headphone store/audio store. But it's no joke that you do need a metropolitan area to draw customers from.
Our customers are a mix of everyday Joes looking for better headphones, tourists, local audiophiles (some good, some bad), and working pros (mostly good). I can't imagine trying to turn a profit in any other place besides LA, San Diego, or Chicago. Maybe Boston. Definitely not Philly.
All right r/headphones...go ahead and tear me to pieces.