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Gift Shops - With and Without Walls
Are you a person who likes to be the center of attention ... or do you prefer to deal with people on a one-to-one basis? Are you at your best when lots of people are swirling around you ... or do you prefer calmer surroundings? Are you open to working in an unstructured environment ... or is the more traditional set-up of walls and a door your preference?
No matter how you answer these questions, our Gift Shop/Kiosk plan can work for you.
Whether you choose to market your items from a Kiosk or a Gift Shop, the basics of each plan are similar. First we'll concentrate on Kiosks, especially the pushcart type wagons that are so popular in malls and other high traffic areas, whether indoors or outdoors. Then we'll add in Gift Shop information.
KIOSKS
WHERE DO I START?
You've seen the charming wagons in the mall. They're filled with eye-catching items and surrounded by great foot-traffic and you thought they might be a great way to sell your products. You're right, they can be. Of course, as with any sales plan, it's the time and energy you put into it that determines your success.
PLAN A LOCATION
After you've made the decision to lease one of these attractive carts, the first step in your plan is to decide which mall you want to be in. Malls may vary widely as to foot traffic, leasing costs, and type of merchandise allowed. Remember, due to the lack of storage space, you will be constantly restocking your cart and merchandise will have to be carried in on a regular basis, so you may want to lease one nearby, to reduce travel time.
CONTACT THE CART CONCESSION MANAGEMENT
Every mall has a Management Office that handles cart leasing. After you have decided which malls you are considering, a letter of introduction and purpose sent to the office is a good next step.
OBTAIN A BUSINESS LICENSE
Whichever mall or space you settle on, you'll need a business license and a resale number. Business licenses are issued by the city in which you are doing, business. A fee is charged and the license is generally valid for one year. Resale permits are required for all business owners and are free. Check with your City Hall for more information.
MERCHANDISE AND VISUAL CONCEPTS
After having seen samples of your merchandise, most associations will want to talk with you about the visual concept you have of your planned display. This is to insure that the quality of goods allowed on their carts and how it is displayed is kept at a certain level and the image is consistent with other carts in the mall.
Keep in mind that your merchandise selection for this type of operation will consist of smaller items such as Patchwork pieces, birdhouses, glass ornaments and the like, since storage area in the cart is minimal. With many kiosks, everything that does not fit inside a closed and secured cart must be stored elsewhere or removed every evening at close of day.
Note: Most malls offer some storage area but a fee is charged for the space and the fee varies from mall to mall.
ADVERTISING
Generally, malls do not allow you to advertise with flyers inside or directly outside the mall, therefore any advertising you do will need to be done by other methods. If you choose to advertise, decide on how and where you plan to do so and don't forget to add this cost into your budget.
FEES
The fee structure for cart leasing also varies from mall to mall, however, there are several fees that are common for cart leasing.
1. Base Fee: This is the basic monthly fee charged for leasing the cart.
2. Percentage Fee: In addition to the basic monthly fee, a percentage of your weekly sales will also be charged. Example: $700 per month base fee plus 12% of your weekly gross over $1500.
Note: These numbers are only examples. Fees vary widely based on area and location in the mall itself. Some malls offer a lesser base fee for leases guaranteed for over a certain number of months.
3. Security Deposit: This is usually a refundable deposit.
4. CAM (Common Area Maintenance) Fee: A small fee is charged each month that goes toward the mall's maintenance of the area around the carts.
ADDITIONAL FEES
In addition to the basic and percentage fees, security deposit and monthly CAM fee, there may or may not be additional fees. These fees are at the discretion of the mall association. They may include:
1. A small, one-time, signage fee that covers the making and installing of a sign announcing your business name. This is charged in order to keep all signage uniform.
Note: In some instances, you will only be allowed to display certain signs, (such as "SALE", "We Accept Major Credit Cards," and "Employment Opportunities Available,") and they must be pre-printed. Most malls discourage hand-lettered signs.
2. A nominal, monthly, marketing fee to cover advertising.
3. A small, monthly fee for regular cart cleaning by mall maintenance.
INSURANCE
It is generally required that the lessee (you) will provide both general liability and property damage insurance. The mall will stipulate the amount and type of insurance required. Premiums for these forms of insurance will vary according to area. Check with your local insurance agents for information and rate quotes.
CASH REGISTER
You will be expected to supply your own cash register. A secure "cash wrap" area is built into most carts in which the register is stored and secured by locks, which you will provide.
Note: Carts vary, however, each one is designed for security during off-hours and can be closed and secured, usually by locks, which you provide.
TELEPHONES AND ELECTRIC HOOK-UPS
Electrical hook-ups are generally provided for lighting and cash register. Telephone service, however, is often not available. Therefore, if you wish to accept credit cards it is suggested that you use a cellular phone hook-up or a radio transmitted device (credit card machine) for these transactions.
INDIVIDUAL RULES AND REGULATIONS
Each mall will have their own rules and regulations and these will vary. Applicable rules will be spelled out on your contract and/or on a separate sheet provided by the management. Some of these may be:
1. OPENING AND CLOSING POLICY. Most every mall requires your cart to be open prior to the opening of the mall and close after the mall has closed. A cart not open during mall hours will usually receive a warning followed by a small fine after a second fault.
2. DRESS CODE: Generally each mall has a dress code, which you will need to adhere to in order to present a professional look.
3. NEATNESS: It will be expected that you will keep your cart and stock neat and tidy in addition to the monthly cleaning the cart receives from the mall staff.
4. SEATING, EATING, DRINKING, READING AND OTHER NECESSITIES: In order to present a professional front, many malls do not allow eating, drinking, reading, or listening to personal tape or cd players while doing business. One chair is usually provided (which will have to be secured at night) for the cart operator.
Often, since the cart may be operated by only one person at a time and cannot be dosed during mall hours, it becomes necessary to eat or drink on site. In this instance most malls often bend the rules and allow the cart operator to do so if it
is done discreetly and in a short amount of time.
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GIFT SHOPS
The basics of opening and running a gift shop are very similar to those of a kiosk with a few important exceptions.
There are a number of factors to consider after you decide you want to open a gift shop of your own. A gift shop is a significant personal and financial commitment--- and the amount time and energy you put into your shop will be a big determining factor in your success. It is wise to have some marketing and sales experience under your belt before you take this big step.
TIP: Many successful gift shop owners started out by selling at swap meets!
LOCATION
The first thing that usually comes to mind when choosing a location is to find one with the largest volume of customers and foot traffic. However, you must keep in mind that a high volume of foot traffic does not necessarily mean a high volume of foot traffic "in your store."
If you choose a location in a strip mall near a large department store because the parking lot is always full, you'll might find that the majority of people in those cars are coming to that mall to go specifically to that large store, back to their car, and home again. Yes, you want foot traffic, but you don't want that traffic to walk past your shop ... you want it to come inside.
After selecting several possible locations for your shop, do your homework by spending some time in each area. Watch the shopping patterns of the people. Talk to the other storeowners. Get a feel for what you might look forward to in the future. Malls are also viable spaces for a gift shop but check out the location of the shop inside the mall. There are certain areas in malls that offer a great deal less traffic. These are usually less expensive, but make sure you weigh the rent reduction against the traffic flow.
SQUARE FOOTAGE AND DISPLAY ITEMS
The square footage you will need depends upon what you intend to sell and what quantities you want to display and keep on hand in your storage area. Determine the space you need by visiting other gift shops. Ask their area measurements. Look at the display furniture and cases they are using. Calculate the amount of stock you would need to fill an area of that size.
BUSINESS LICENSE
As with Kiosks, you will need a business license and a resale number. Again, these are issued by the city in which you are doing business, a fee is charged, and the license is usually valid for one year. Resale permits are required and are free. Check with your City Hall for more information on both these items.
If you plan on opening your store in a regular retail area, you'll want to contact the storeowner for information about rental rates, utilities, etc. If you plan on opening in a mall, you will be dealing with Mall Management. Generally the information we have given you earlier about Kiosks applies to gift shops, with a few exceptions. The fee structure will be different, and there will be a bit more freedom from the strict rules set up for kiosk dealers.
MERCHANDISE AND VISUAL CONCEPTS
You have much greater freedom in choosing the merchandise you'll be offering for sale at a gift store than you would a kiosk. Because of display and storage space limitations, kiosks generally mean you'll be dealing in smaller items. A gift shop offers you the choice of stocking larger items in greater quantities. Storage space is also a plus for the gift shop proprietor.
ADVERTISING
Advertising a gift shop will be approached from a different angle than from that of the kiosk proprietor unless you are operating your gift shop inside a mall. Malls have distinct rules about advertising on the premises and the Mall Management office will explain those.
If your gift shop is not in a mall, or if it is and you wish to advertise apart from the mall, you may use everything from flyers to ads in newspapers and on radio (or even television) to mailing lists. Investigate these thoroughly to find out the general return (buying customers) you will get for the money you spend.
Note: You usually cannot distribute flyers inside or outside a mall. You can, however, distribute flyers inside your mall shop to your customers.
Many forms of advertising can be expensive and some offer little return for your money. This is another case of doing your homework. Find out what other businesspeople near you have been doing and how successful they have been.
RENT AND FEES
Gift shop sites can be leased as a temporary tenant (month to month) or leased for a year or more. Length of lease will depend on the agreement you and the landlord decide upon.
If this is your first gift shop experience, a temporary tenant situation might be the best option. This gives you a little breathing room so that you can get your feet wet in the business, see if you like it, see how successful the location is and have the option to change anything that is not working for you without being stuck in a long-term lease.
Drawback: Being a temporary tenant means the landlord can ask you to vacate, usually upon 30 days notice. On one occasion a gift shop owner was doing well and making money but was asked to move when the landlord wanted another tenant in the space.
In general the fees for a stand-alone gift shop (a shop not in a mall) will include:
1. Base lease price
2. Utilities (mayor may not include telephone)
3. Security deposit
If you plan on hiring outside help, you will need to budget in the costs of employee wages and any benefits you might wish to offer.
Note: If you are leasing space in a mall, don't assume the Mall Management won't negotiate with you. Spaces that have been vacant for a while may be great candidates for negotiation.
INSURANCE
Insurance is a necessity in to day's business world, and your local insurance carriers will give you information on both general liability insurance and property damage insurance and the rates available for both.
If you plan on hiring outside employees, you will need to inquire at your State Offices for Worker's Comp Insurance rules and explanations of how they apply to your business.
CREDIT CARDS
It is strongly advised that you have the ability to accept credit cards whether your are selling from a kiosk or from your own shop. This will entail contacting a company that supplies the needed electronic equipment and hook-ups. The company will charge you a fee for the service and this fee, including deposits on equipment, will need to be added into your budget.
GET READY, GET SET. SELL!
All of the previous information may seem like a lot to deal with, but most of the above is a one-time energy expenditure. After the initial securing of the Kiosk or Gift Shop space, the details of running your business will revolve around ordering and restocking inventory, keeping records and making weekly work schedules.
It is at this point that the fun ... and profit ... of being a shop owner begins
About the Author
Darren Hendricks has been involved in marketing in one form or another since 1979. He has owned or co-owned 3 successful businesses. He currently owns Far Horizons Gifts & Decor and Far Horizons Home Based Business Program.
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