First, cost of entry doesn't have to be steep. You don't need to compete with bullmoose to be successful. I started selling my collection to thin it out and decided I enjoyed it enough to continue. For the longest time my inventory was under 100 records.
When I decided I wanted to stop paying retail and marking up and hoping something didn't drop in price, I got a business license and contacted the biggest distributor in the business. The first thing they said was we have a $2000 minimum for your first order and the second thing they said was 'but we can work around that".
When you get started as a real business, the first thing you notice is your margins suck. Low volume sellers get crap prices, you won't get discounts until you're averaging $4k a month and then you need to ask for it.
The best thing to do Is be extremely selective of what you buy; not 20 copies of Evermore or Led Zeppelin III! Research each title in the beginning and decide if the artist past albums sell well. You're not running a store where people will impulse buy, they have to want your item and you have to compete with everyone else online.
Take into account your cost to ship, including boxes, bubble wrap, filler pads etc. And be prepared to have some things sit on the shelf. My philosophy is everything will sell on a long enough timeline. Constantly re-evaluate your prices, consider the lowest selling price you can do while covering overhead.
Alright, can't give you all my secrets but one more thing. Don't quit your day job and build this on the side. If it's not for you, you can get out without being in debt.
