New Retail venture in a commercial unit?

[AMG Solutions]

Hi Guys,

Some advice needed please..

I have been looking to open a shop selling action sports goods (kites, buggies, skateboards etc.) The rental in my local town is very high but a good friend of mine is opening a new Gym just outside the town center and has space that he is happy to let me use for my business idea, the only issue is that its a commercial unit with no walk-in traffic from customers, my friend is offering this space at a fantastic monthly rent and I feel comfortable he will honor his offer and agreed to signing a minimum term contract.

My question is does anyone operate a shop outside the 'usual' customer area and do you think it will work? I understand that the marketing will be very important but think that if the customers know where I am they will come and find me.

All advice greatly appreciated.

Andy

AMG SOLUTIONS

 

[gary]

I think it depends largely on who will be buying your products - if it's teenagers for example, can they get to your shop easily enough, and is there space for them to hang around there? If you're fairly specialised and you have something to attract customers (i.e. be more than just a shop) then it should be OK. Plenty of other shops are away from the high street and do just fine.

Gary

 

[gj]

I am always amazed at how well some of these specialist shops do, even if they are in a high street location, since it is only a small proportion of the footfall that are actually interested.

In fact, they are usually successful because of the reputation they build amongst enthusiasts and that comes from marketing in specialist mags etc. You would probably need to do that anyway, even if you were in a High Street location.

The High Street location gives you at least some passing trade but at a significant cost, and probably too risky.

I suggest you prepare a business plan, perhaps with pessimistic, realistic and optimistic figures, and taking into account fair figures for marketing.

If the pessimistic means the business will fail, then you may conclude that the risk is too great.

Regards


Graham

 

[Toon]

I live in a town full of industrial and business estates which mainly are factories or offices but do have the occasional shop including pizzarias, tiles, cars, clothes and PC Shops. Even though they are well out of the way of the town centre, they have been there for years which means they must be doing well. I think it's a case of if they can't get what they want at the town then they will have no choice but to visit the suburb shops. When the word gets round that you're there then more people will go to you. With the shops I mentioned above, most of them are unique and there's no other shops in the town that sell what they sell but if there were shops in the highstreet that were competitors then I'd suspect they would fail unless they majorly undercut their competitors and advertised in local papers etc.

So, my opinion and advise would be:

If there's a place in the highstreet selling what you're selling then leave well alone unless your prices are much cheaper or you have a wider choice.
If the above is not true and the set up costs of your business aren't going to be much then go for it providing you have enough cash to put a few ads in local papers to make people aware that you're there.

 

[pbresser]

I can understand why you would want to save money by not taking a High Street retail unit, but is your friend's Gym the right place to display your products? It seems to me that selling kites and skateboards is not the best fit with people coming to jog mindlessly on a running machine- but if you are selling gymware and complementary products (those springy hand strength things, chest expanders etc) then you would have a good chance of capitalising on your friend's customer base.

Do some scratch market research with the gym visitors to see if there is a cross over of interests. Then do a survey on your High Street to see what sort of interest there is there for your kind of products. - you may be suprised!

The High Street is expensive for one reason: The number of people that come to that one location. And the point made earlier about not taking a High Street position if you have competition already there? That really does not stack up. You should be in the High Street if the competition is already there so consumers can make a judgement on which outlet has the best proposition for them: It's not always about price. You will benefit through what is known as 'parasitic marketing' as your competition will already be attracting some business because consumers know that they are on the High Street.

As an aside, there is a retail outlet in Bluewater - the large shopping complex in NW Kent - that sells the same types of product as you. They seem to make a go of it there; I think they took the unit just after Bluewater was completed about six years ago. I remember someone telling me that a small retail outlet was GBP40,000pa about 5years ago and I would assume it's increased in cost in the mean time. Bluewater is very much like a High Street environment, so perhaps you should think again about taking the risk on your local one?

And don't be limited to one High Street - There are many, many High Streets up and down the country and I would suspect many within a short drive away from where you originally thought about starting up. Check out the demographic for each area and pick one that maps onto your business model the best.

HTH

Pete B

 

[Ozzy]

all very valid points, but don't forget online marketing. As a very general rule, specialist websites tend to do better than general commercial websites because they become better know.

 

[AMG Solutions]

Thanks for all the good advice guys, some real eye openers there, the shop will be quite specialist so I would hope to attract the customers to me with the right marketing. As Ozzy mentioned I have thought about a specialist website with e-commerce functions, I think in this area it would work well.

I'll keep you posted...

 

[SillyJokes]

Talking of similar shops flocking together you might like to visit the Xcape in Milton Keynes. It is the place where the snow dome is. It is packed with aspirational kite boarding shops, ski wear, snow boarding and active wear stores. They must all be making money even though the rents in MK as swingeing.

I think there is likely to be some cross over of interests between people who go to the gym and your out door sports so it might be a starting block for you.

But is your merket going to be younger kids who like hanging out in the shopping centre? They would probably love your stuff but never see it out at the gym. You'd make money off them by selling the related hoodies and keychains that they can afford even if you never sell them a kite board (or what ever it is you young folk call them)