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Going retail


#1

I’m ready to move into retail after years of doing wholesale custom
work. Here’s my dilemma. I can afford to move into an office building
with no signage or traffic and have plenty of money and time to
market and advertise or I can move to a retail location that is
convenient and within easy driving distance of a busy and affluent
shopping district but without the foot traffic and probably only be
able to afford to advertise in the yellow pages.

It’s very frustrating. I’d like to move by some time in the Spring.
For those of you who made the move to retail, how did you do it?
Which comes first, the marketing or the location? I can’t advertise
now because I work from home and don’t want to expose myself to any
security problems.

I guess I’m worried that if I move into the office building I won’t
be taken seriously enough to get the price I need for the work I do.

Any comments?


#2

Vic

Forget “location, location, location”

Think instead

“Visibility, visibility, visibility”

That said, if you’re in an office building you’ll have to for sure
advertise a LOT more be also be great at referrals and asking for
their friends to shop with you.

If you’re not shy, you can do it, but you’ll need to be outgoing and
reach out to lots of folks often to come back and shop and get their
friends to shop and get new business.

Ready to go there?

David Geller
JewelerProfit
510 Sutters Point
Sandy Springs, GA. 30328
(404) 255-9565
www.JewelerProfit.com


#3

A) Don’t market yourself in the Yellow Pages. It’s a complete waste
of money.

B) Location, location, location. That is absolutely the most
important decision you will make if you want to move into retail with
the general public (as opposed to seeing clients only by
appointment). You should be looking for the most visible location
possible, with at least a moderate amount of foot (or large amount of
automobile) traffic possible.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
617-234-4392
www.spirerjewelers.com


#4

I too have contemplated this issue. I live in a tourist town, and if
you aren’t on the main drag 1st floor… Any affordable space is off
the path. In a trade magazine recently I read about a trend in
jewelry stores that are touted as private, posh, high end. By
appointment and you cater to the customer, champagne, munchies etc.
Though this would take a large budget to really pull it off. I also
struggle with the fact that as it is a tourist area then I have to
deal with the slow times, which can be 6 months a year. I’ve thought
the affordable space could be good if you made it enticing, something
different, out of the ordinary.

Good Luck,
Candy


#5

Vic,

Oh Boy…Start-up, my second favorite sport

When you say in an office building does that mean just another
office on say the third floor? or something ‘retaily’ in the lobby?

I’ve had four incarnations as I refer to them. They ranged from
successful to disastrous.

If you already have a sizeable, loyal following of retail type
consumers the office maybe and that’s a very big maybe, could
work(better check your zoning regs). The main traits of these people
would be that they adore you and spend on your work and like to
spread the word. Even if this is the case, take into consideration
how many they are. If its less than some number of hundreds you face
an uphill battle. How often do you see these people now and what kind
of business do they bring you? Do they bring you lucrative
work/sales or routine stuff? Will they pay your most likely higher
prices? Can you count on expanding your customer list to several
thousand in a reasonable time? That is to say…before you run out of
startup capital?

The retail spot. If its good, you may be able to get along without
huge advertising. The price you pay for a retail space should be
consistent with the traffic you can reasonably expect. Talk to your
prospective new neighbors. What kinds of biz do they run
(complimentary to your own?) and are they happy with the location AND
the landlord? After inventory you will likely pay your landlord more
money than anyone else. Your lease is your single largest fixed
recurring expense. Your lease is absolutely critical to your
success. I cannot emphasis that enough.

Also look at how much you have to invest in both locations. I
thought I found a nifty location once. Until I contacted a contractor
who did several fit outs in the center. Seems the landlord did not
disclose some important things. Like I would have to pay for
sprinklers, run electric some 100 feet from the meter plus local
wiring, air ducts, etc etc. What the landlord was doing was to use
his first tenants to finish HIS work at their expense. He probably
wouldn’t care if the new biz failed, he got his space fitted out for
free. Sharks, there are sharks in the water, don’t go overboard!

What you pay for space should be somewhere under 7-8% of total
sales, assuming healthy biz practices. That may not sound like a lot
until you assign some real numbers to that. See if you can build a
financial model around the proposed rent. Factor in ALL costs.
insurance, payroll, fitout etc etc etc. there are always more etcs
than you first think. Does it make sense? Can you be reasonably
assured of doing the volume needed not just to cover costs but to be
profitable? Never lose sight of profit. That is your purpose. You
may think now that “Hey this sounds like a nice way to spend my
time”. But if you cannot be profitable it will fall apart, sooner or
later, and perhaps very painfully.

I know I may sound like a pessimist but part of the way to assure
success is to eliminate risk.

I’ve paid as much as $6K month rent for a very visible location,
with staff and all the bells and whistles. If I told you my current
rent you would not believe me, its so ridiculously cheap. Its off
street but uncannily busy. But I have that loyal following I
mentioned earlier. I agonized over whether this spot would be any
good. Sure I have less traffic, but the differential between
costs/volume is much better than a ‘traditional’ retail jewelry
location.

So yes, either spot may work for you but be certain about how you
construct your business model. Perhaps instead of giving yourself a
spring deadline you could construct the ideal business model on
paper. Then shop to see what fits it. Don’t just look for a place to
land, look for a place to thrive!

Feel free to pick my brain offline, its on sale this week.
NeilthejewelerATaol.com


#6

I think the “retail location” will be better. If you’re appealing to
shopaholics, they’re going to be more inclined to go to a place
that’s not too far from where they like to frequent. Even if there is
no foot traffic, you will have drive by traffic. If they can easily
see your signage or product while driving, they will be more inclined
to at least see what you have inside. After you’ve built up a
business with just drive by traffic and a good yellow page ad, you
will then have more advertising budget. I’ve seen too many businesses
that are off the beaten path that have failed. Not for product
inferiority, not for lack of advertising, not for cheaper rents, but
because people could not find them or would not spare the extra time
to go out of their way.


#7

Somebody has to say it, I guess. You need to follow the three rules
of business, if you are to survive. 1. Location 2. Location 3.
Location


#8

Hi Vic, You’ll probably get a lot of advice on this so I might as
well join in. Look for a third location. You need affluence, foot
traffic and a small space. If you locate in an office building, no
one will take the trouble to find you. In a poorer area you will
only get repair work. Without foot traffic, you are dead in the
water. Keep looking. All the best luck and let us know how it goes.

Tom Arnold


#9

I have a small showroom and workshop in a building full of jewellers
and I don’t get any foot-fall and I don’t really envy those who do
(not here). Having a showroom is just a tool to use in helping a
customer make an informed choice. I have let my marketing design
itself, website, photos, models, unusual pieces a nice place to sit
and talk etc. If my customers encourage me in one direction I go
that way.

The more you do the more you are exposed to theft. Working late is
my best security. Anybody who watches my movements will never know
when I won’t be there. Also, if it is easy for people to come and go
annonymously then they have a chance to check you out and make
plans. If they only come when invited and are serious about making a
purchase your safe.

I don’t advertise my suite except a small sign on the door and that
is all I am prepared to do where I am. I still do trade work, but I
could drop it altogether.

This is not such a bad way to be. I can move on later. I am miles
short of the cash I’d need to go retail and keep the customer base I
like. I would loose the ability to specialise in a shop, but in the
right area a shop would be a step forward.

I think it is ok to do it in stages. In your case, I think our
situation is similar enough to make that call, but my advice might
just suit me.


#10
you'll have to... advertise a LOT more, also be great at
referrals..(etc.) If you're not shy, you can do it, but you'll
need to be outgoing... 

A professional publicist of my acquaintance tells her prospective
clients that she doesn’t believe in “advertising”; she believes in
"promotion" - i.e., the “free” publicity which interviews in various
media will bring. Editorial stories/photos can be worth many, many
times more than you would gain from paid ads because they imply
endorsement - i.e., it’s someone else’s good opinion of you - not
merely “your” good opinion of you. (Learn how to write a good press
release of your own to get that ball rolling.)

In that vein, participation in charity events may also gain you
increased visibility, although the results are neither guaranteed nor
consistent. If you can get a name - mention in the event’s publicity,
e.g., that’s a helpful piggy-back effect.

Re viable location: Check out business areas for the presence of an
active local business association that would, e.g., promote events
that attract the public to the area. Retail shopping neighborhoods or
small centers may have dedicated street festivals and/or shopping
nights to draw traffic, e.g. and/or other group promotional events
and even publications like monthly newsletters, both printed and
online, neighborhood retail maps, etc. An office building would be an
unlikely venue for that kind of promotional boost.

margery epstein


#11
Think instead "Visibility, visibility, visibility" 

Absolutely the best idea! When a chain of carwashes built a wash in
front of my store, so that the line of waiting cars had perfect view
of my storefront, my traffic went astronomical. As I type this reply,
I am looking at 5 cars in line, waiting to be washed-- and reading my
signage, and later they come in with some miscellaneous repair or
custom idea.

Ed in Kokomo


#12

Hi Daniel,

Don't market yourself in the Yellow Pages. It's a complete waste
of money. 

Are you talking specifically about jewelers maybe? All I can say is
that the Yellow Pages is often the first resource I consult when
looking for products and services.

Beth


#13

Hi

I live in a tourist town, and if you aren't on the main drag 1st
floor.... Any affordable space is off the path. In a trade magazine
recently I read about a trend in jewelry stores that are touted as
private, posh, high end. By appointment and you cater to the
customer, 

I live in a semi-touristy place as well (lots more people here in
summer than winter). A gallery opened downtown about 2 years ago and
it was as you say. It was open by appointment and supposed to be very
high end (it was fine art however not jewelry). I think2 things went
wrong. The first was…It never had any visible clients so, maybe
potential buyers thought “oh, I never see anyone there at all…they
must not be doing well” Once you have a stigma like that, it is hard
to rise above it. The second is that it was touted as very private
and high end. This type of advertising may have the effect of
alienating many potential customers. Does anyone else have an opinion
on this? I do well, but it would be a long long stretch before I
thought of myself as “high end” and this type of gallery makes me
feel uncomfortable.

I wanted to add that if one is “off the beaten path” the internet is
becoming a more and more powerful tool for business. When I go
anywhere for even a couple days off, the first thing I do is google
"gallery jewelry" or something like it for the town I am going to.

Just a couple thoughts
Kim


#14

Hi

I thought I found a nifty location once. Until I contacted a
contractor who did several fit outs in the center. Seems the
landlord did not disclose some important things. Like I would have
to pay for sprinklers, run electric some 100 feet from the meter
plus local wiring, air ducts, etc etc. What the landlord was doing
was to use his first tenants to finish HIS work at their expense. 

I was ready to go into a small space within an established gallery
last year and the same kind of thing happened. The landlord wanted me
to pay for the sheetrock and wiring and all else that had gone into
modifying the space. He also wanted me to pay the property taxes. He
said he was ok with me paying it over time though (how thoughtful).

My gallery mate then wanted me to pay “my share” of all the
remodeling she had done (including paint). After that, I would pay my
share of the monthly plus extras like satellite radio. The fact that
I would have had to pay these things wasn’t what made me back out
though. Personally, it was all these things had been chosen without
me and then I was to step in afterwards and just pay for it all. I
want to go into business because I want to be my own guy.

My husband has been in business for himself and said that this kind
of thing is becoming more prevalent…where the tenant is expected
to pick up more and more of the tab. Does anyone else have thoughts
on this? I felt almost violated about it, in a way.

Thanks
Kim


#15

Kim,

In my area it is usually up to a commercial operation to put in
their own stuff. We had to renovate our entire new space two years
ago at our expense. Of course I wasn’t interested in plain white
walls and an ugly staircase. I wanted a place that looked great. Most
large name stores also want a look specific to their company which is
often beyond what a landlord can provide. However this varies from
area to area. In an economically depressed area with high vacancy
rates, landlords are much more willing to help with buildouts than in
an area where they know they can rent to anyone, anytime.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com


#16

Beth,

We advertised for 20 years in the Yellow Pages. Every single month we
got a bill for something around $150. Twenty years of that $1800 per
year (think about how much money that is). I can count on one hand
the number of customers I got out of the Yellow Pages during that 20
year period. ONE hand, not two. Our newsprint advertising generally
brings in $5-10 per $1 we spend.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
www.spirerjewelers.com


#17
Don't market yourself in the Yellow Pages. It's a complete waste of
money.

One thing I learned the hard way about yellow page advertising…You
have just one message that goes for a year and you can neither
change it nor opt out. I got caught up once in trying to outdo the
other advertisers but what I wound up doing was paying $800 (1980’s
dollars) a month additional just to keep the phone connected. Had I
chosen a smaller or no ad I would have been able to channel more of
my ad dollars as suits changing conditions. One thing about our
industry, its always in changing conditions.


#18
A professional publicist of my acquaintance tells her
prospective clients that she doesn't believe in "advertising"; she
believes in "promotion" - i.e., the "free" publicity which
interviews in various media will bring. Editorial stories/photos
can be worth many, many times more than you would gain from paid
ads because they imply endorsement - i.e., it's someone else's good
opinion of you - not merely "your" good opinion of you. (Learn how
to write a good press release of your own to get that ball
rolling.) 

I’m not sure what type of area your acquaintance is located in, but
free publicity is simply unavailable in our area. If you see an
article or hear a story about a business in any of the local media,
it is either bad news, or paid for by the purchase of associated
advertising space/time. The media is a business just like any other,
and is dedicated to making money the old fashioned way - making
retailers pay for any space/time in which their business appears.
Nobody in our area publishes press releases or 'human interest’
business related stories without compensation - We’ve tried for
decades to get such placement! Heck, the largest newspaper in the
area doesn’t even publish free obituaries unless you are a
celebrity.

Lee Cornelius
Vegas Jewelers


#19
Don't market yourself in the Yellow Pages. It's a complete waste
of money. 

I agree that a display ad in the yellow pages is not a good
investment. However, I have added a single line under my business
name in order to list my web address. Not only does it get the
address out to the public, it visually separates me from the next
listing, helping to make my business name stand out from what’s above
and below. It costs $25/month, and has paid for itself many times
over. The customers who have found me through this listing have
looked at all the websites listed in the local yellow pages as part
of their research, and are motivated to contact me because my site is
well-designed, the photos are reasonably high quality, and it’s not
the same jewelry they see everywhere else. And I personally believe
that having a quality website is critical these days as a marketing
tool, even if it’s just an online portfolio (which is how I use
mine).

Matthew Crawford
www.MatthewDesigns.com


#20

I don’t know if this would affect you, but I’ve seen a number of
store front galleries and retail shops fail because of a lack of
convenient, close-by parking space. Drive by traffic is great, but
they have to be able to park conveniently near your shop, otherwise
they will just continue to drive by.

Sandra