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Okay so this thing has distribution backend too. I don’t get how these stores make money. At say $20/sq-ft for a 200 sq-ft store, you’re talking about $300 in margin/day just to cover rent. At say a 60% gross margin for overpriced tchotchkes, that’s $500/day revenue to cover rent
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Replying to @vgr
faire.com
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If the average item is say $25, that’s 20 sales/day. At a conversion rate of say 25% that’s 80 walk-ins, or 8/hour if you’re open 10h/day 7 days a week. And this is bare minimum performance with generous assumptions. I bet most of these stores are losing money.
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Throw in minimum wage store assistant labor even if you don’t pay yourself, at $15/hr, that’s another $150 in margin. Plus you’ve got inventory costs, write-offs (I wonder if these stores do consignment stocks with returns to the wholesaler/maker)...
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I mean, for the most part, I would suspect that the purpose of these shops isn’t to make money and the proprietors don’t need the shops to make money. In the case where they do need that, they’re in for a rough ride born of disillusionment.
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I think that these stores are the new "art galleries". Real estate developers give them store space for super cheap to fill an actually unaffordable space and up sell their new condos until they can move a Starbucks in. I think there is a cabal of developers email list.
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