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 renthttps://twitter.com/aneel/status/1191023145546858496 …
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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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Replying to @vgr
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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Yeah that’s my guess too. It just annoys me.
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