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Creative Leisure News
306 Parker Circle
Lawrence, KS 66049
Phone: 785-760-5071
Email: mike@clnonline.com

 

 


Your Business Commentary

Mike's often irreverent, thought-provoking analysis of the industry.

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Why I Did NOT Go Into Retail

The odds were too high.

by Jeanne McKinnon (June 17, 2004)

(Note: We recently learned of a subscriber who after a year of study, decided not to open a store, so we asked her to tell us her story.)

I live in a "walking" neighborhood in Seattle, and I have a dream of opening a small (1,000 sq. ft.) general crafts store close to my home at an intersection that gets both cross-town traffic and a lot of local foot traffic. Having spent my 20ís at Microsoft, I am lucky to be able to invest savings instead of taking out a loan.

I felt there was a need for this shop. My neighborhood is home to many creative people, and our kids-craft supply store went out of business years ago. We miss it. We have no place within walking distance for kids to get red paper and doilies for Valentine's day.

But I also wanted to cater to the adult community and give people a place to meet, do their work, ask each other questions, and have some coffee and a good time. I planned the design for the interior. It would be very homey with painted wood bookshelves, stuffed chairs, and a small work table. I designed a logo, planned where I would advertise, and developed ideas for promotions. The mix would include general crafts, kids crafts, and hand-selected beading materials (my passion). While I'm sure people would find the supplies necessary for scrapbooking, that would not have be my focus.

Having no business experience, Iíve spent about a year reading up on retail in general, the crafts market in particular, and working through the numbers over and over. Iíve talked to friends to get their take on my ideas.

Personally, I would prefer to shop locally in a small store with carefully edited and unique merchandise, but I have found that other people donít share my willingness to pay more. Many people I have talked to said it sounds like a neat idea, but that they are perfectly willing to get in the car and drive 10 miles to Michaels to save a buck. And while I am most excited about offering beads and classes, Iíve had to accept that five miles away was a great bead shop, and I donít believe I could match their huge selection. On top of that, it seems that more and more of the bead market is moving online. Even I buy most of my beads online.

Retail space has been another issue. At the beginning of 2003, there was no retail space available in our neighborhood. Within months, though, shops that had hung on through years of declining revenue could no longer make it. By the beginning of 2004, there were as many as eight spaces available but despite evidence that local merchants canít make it, the prices are not coming down. My preferred location wanted $2,000 a month plus a percentage. No matter how I work it, I donít believe that I could sell enough to cover that kind of rent.

Finally, I could tell from reading the trade magazines that the craft supply market is a challenge. There is money to be made, but only for those who are tireless, knowledgeable, and savvy sales professionals. I worry that raising three children wonít leave me with enough time and energy to compete in such a tough market.

I have a good idea and a lot of enthusiasm, but itís a tough market, a slow economy, and I already have competitors who can offer better prices and more selection. I just canít count on people shopping locally or being willing to pay for service, atmosphere and a unique selection. Itís too risky. So I have decided to give up my dream for now.

Iíve refocused my attention on creating my own artwork. I make jewelry, and for years I have received compliments and questions about where I show it, so I am going to offer my work for sale. This is a much lower risk alternative as my overhead is negligible. My biggest investments are in materials and the costs of setting up a website. Iíve made some sales and will keep working to market myself. I still have a dream of giving my community a unique and fun place for people to explore their own creativity. But now is not the right time.

(Note: We think Jeanne made the correct decision. Anyone who agrees or disagrees, email mike@clnonline.com and we'll pass along your thoughts to Jeanne. To read previous Business-Wise columns, click on the titles in the right-hand column.

xxx

 

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