Brick And Mortar Store Start Up

[Cowboymade]

well I hate brick but a store is the idea. Like a lot of people on this forum, we would like to have our own store that the public can walk into. My start was in a place that no one could come to unless they had a job lined up first, Antarctica but that's another story. So I have the opportunity for a downtown space with cheap rent. The idea is to do a leather studio out of it but for inventory and opportunity for others, consignment. I have consigned pieces at shops before but I'm looking for input for those of you that make leather goods and sell only on places like etsy and ebay. If you had the opportunity to sell at a local dedicated leather store, would you and what would you expect in percentage in return?.

I can open up any day with a commitment date of the first of February. I'm thinking of opening up to local artist but if its feasible I'd open up for others. Shipping the items to me would be another cost but drop shipment from anyone in the US maybe a great way.

Thoughts?

Working studio

Items for sale

Custom orders

maybe some Native American Silver in the shop

class for young folks

small place low rent in a very, very nice part of town.

[ramrod]

well, i don't know where you are located, but i was wondering what is your market? is it mainly western gear, saddles, boots? i love to make watch straps and business card holders, but it might not go if you're in the middle of a cow town. but i think your idea is well worth pondering over.

i don't know what is fair for a consignment fee. i've been offered as low as 0% for motorcycle tool bags...others were 10% and 30%.

Edited December 31, 2014 by ramrod

[TwinOaks]

I've done consignment a good bit, and 20% isn't unheard of. In my case, the store owner was also pimping out my leather and effectively using 'stock' as the hook for 'custom' orders. Yes, he got 20% of that too, but he did all the marketing, customer relations, sales, etc. If YOU have someone looking to sell through your store, I'd suggest having a minimum per month that they pay you. YOU are keeping up with inventory, overhead, utilities, AND are probably going to pay city taxes on the amount of shelf/rack space you have. You also need to do some research on consignment contracts, and when you accept something.....TAKE PICTURES and preferably have the seller sign off on them. That (hopefully)protects you from someone accusing you of damaging their goods. You should either have an escape/no-fault clause, or insurance to cover the items if they DO get damaged. That's what the 'minimum' is for. Require that the seller (if local) tends to their merchandise at least twice a month, evenly spaced. If they're high volume, more frequently. If they're high price (saddles, framed art, jewelry, etc.) watch them like a hawk. They don't get to take anything from the store without a record that YOU keep. (avoiding the "hey, where's my money for the XXXXX I put in here for you to sell (but forgot that I took it home)" type of people)

You might also offer a 'discount' if people are driving business your way with their websites. For example: "John Maker" has a website that includes the statement "products may also be seen at [[name of your store]]" A few points of your % would be worth the advertising...IF the site is actually getting customers in the door.

Contact the local radio station (whatever is popular) and inquire about ad pricing and placement (the time slot your ad airs).

Make up some "free samples" to distribute at other businesses (leather pen cups, etc.) [ a 'change tray' takes a square of leather and 4 snap sets], and include some business cards or contact info. NOTHING drives sales like jealousy and 'Keeping up with the Jones', so consider some 'freebies' for the 'popular' people....you can call it a bonus gift and hand out a braided bracelet.

[Cowboymade]

thanks Ramrod and Ambassador. Some of the mentioned I had thought about but seeing it and other info written out, helps. Helps as well coming from another view point. I like the advertisement suggestions. I also got some advice not to consign therefore eliminating the hassle with several people. I'm all for that but I'm thinking more of start up inventory, and cut back on consignment as I grow my inventory. Ramrod, this is the east coast and although I'm from the West and prefer the full blown tooled look, I'll have to be more contemporary for the city folk. Ladies bags as well as men, Harley Davidson custom orders....big bike shop nearby. Its early and I have to get to the barn...65 horses. More later

[BDAZ]

Where are you located. That's critical as to what sells and what you can charge and how much passing trade. If you purchase inventory, then you can increase your margins to 35% and set up terms like 30 days to pay. You may also look at sposoring a local music session after hours which will attract customers for straps, etc.

Sounds like fun challenging and don't forget to have a really professional website.

Cya!

Bob

[TwinOaks]

If you have a bike shop nearby, by all means.....GET A PATCH MACHINE. There's a little place in Mobile that opened up right next to a bike shop, and half of their business is walk-in, sew-on customers.

[JLSleather]

I wouldn't sell "out of " any store that wasn't mine. Between the shipping companies, the tax guys (plural), and the welfare recipients, there are more than enough people getting a 'cut' already.

[ramrod]

yeah - the heavily tooled western look goes over like a lead balloon in the east - well, for the most part. the consignment idea is a great one. putting it into practice is the tough part. i'm in the throes of something like this happening in the durham area. initial phase right now, but i'm eager to see if this will work.

i think you posted that idea in the right place. i think many craftsmen on here would like to get their stuff in a place where someone can see it - like a showroom of sorts.

BDAZ had a great idea about music. it's a real attractor.

[BDAZ]

Funny, I'm also in Durham for a few weeks for some music gigs..played SUNY Syracuse in a former life. I have met a couplel of the local leather workers at craft shows but I think the right shop in he right place would go gangbusters!

Old Time Jam session, good coffee, leather making for kids...kewl!

What part of Durham? I'm North off Roxboro.

Cya!

Bob

[BIGGUNDOCTOR]

Before you do anything you need to research the area. How much foot traffic will the location get, what is the average income of the area, is leather an item seen regularly, how are other businesses in the area doing, what price range are they selling in, will your businesses compliment each other financially, check all business related expenses ; licenses,fire dept checks,franchise tax board, city/county/state fees and other bureaucratic stuff,taxes/preparations, figure out an entire years worth of expenses and add some to that for unseen events, figure out how much product you will need to move to cover expenses let alone make a profit, shipping costs, insurances, etc.

Have an escape plan. If things go South what will you do when you still need to come up with the rent, utilities,garbage, etc till the lease runs out? We always look at the benefits of a business, but don't consider the downfalls enough, all of the what if's that can sink a company. Injuries, divorces, fire, natural disasters, economic conditions,landlord not wanting to renew a lease, rent increases, buildings get sold -- that is what ended my shop, and the list goes on depending on your situation.

Look into a book titled Entreleadership by Dave Ramsey

Most businesses will fail within 3-5 years.

If it was me doing this I would have a big cash buffer since you probably will not make a profit for the first year, or two. May even lose money till things get rolling. I cash flowed my machine and fab shop, no loans or leased equipment. Everything was paid for in cash. I bought used at auctions and saved on average 90% of new cost. As the company did better I bought more equipment. Start small, grow as needed. Do not get sucked into the credit/debt trap. If the business fails, you lose everything. If you cash flow the business all you may lose is the building, but you will still own the inventory-not the bank. But the payments are so affordable.....right until something unforseen happens. Then things just go downhill from there. This is a long term commitment, not a get rich quick scheme.

Have you thought about working out of home first? See if you can build a good base of clients before getting a storefront.

Don't get me wrong, I love seeing people venture out on their own,but running a business isn't all fun and games. I am looking to start another business myself. I just want to give you a little different opinion than others who will not be financially,or emotionally involved like you will be. All you get from them is high fives,and yipees.

[ramrod]

Funny, I'm also in Durham for a few weeks for some music gigs..played SUNY Syracuse in a former life. I have met a couplel of the local leather workers at craft shows but I think the right shop in he right place would go gangbusters!

Old Time Jam session, good coffee, leather making for kids...kewl!

What part of Durham? I'm North off Roxboro.

Cya!

Bob

lol....i'm north too. near broad st off of guess rd. interstate 85 is just behind me.

you're playing locally?

[Cowboymade]

lots of great informationof course right now I'm really busy trying to figure it all out but I wanted to let all of you know that I am taking your advice and running with it the best I can I do appreciate everyone ideas

[Lobo]

A few things that might not come to mind until after you start up the store:

1. With customers in the store you will get no production work done. Greeting, answering questions, demonstrating products, all these things take time and attention. If you expect to get a day's production work done you will probably need a sales clerk on staff, and that cost is significant.

2. Depending on the terms of your lease, and to some extent local customs and traditions, the monthly rent is not likely to be your only cost. You may be liable for some form of property taxes. Sales and use taxes are common everywhere, and the "use taxes" can be a real pain (monthly, quarterly, or annual assessments on all of your business equipment, tools, shop fixtures, inventory, etc). Utility bills add up, and commercial accounts are usually at a different rate than residential accounts (frequently double or more); water, sewer, heating, electricity add up quickly (my 450 sq. ft. commercial shop brings utility bills higher than my 2400 sq. ft. home every month). Some commercial leases include responsibility for all interior maintenance, and frequently some or all costs of exterior maintenance, parking lots, common areas, etc.

3. Business insurance. Liability coverage for accidental injuries on the property is an absolute necessity. If you are handling consignment goods you might need to think about coverage against losses to fire, theft, vandalism, etc. Then there is the value of your own tools, equipment, fixtures, supplies and inventory. How about contingent business interruption coverage, i.e.: losses of income and revenue in the event of major losses (fire, burglary, whatever). If you have even one employee you will probably need to carry workers' compensation insurance and unemployment insurance premiums (which vary widely for different occupations).

4. Are you in business as a sole proprietor, a partnership, or corporation? It is usually advisable to create some form of business entity such as a corporation, limited liability, company, etc, in order to shield your personal assets (home, bank accounts, retirement plans, etc) from claims arising from business activities.

5. Business banking needs, including credit card factoring. Many people today think nothing about using charge cards or debit cards, and many carry little or no cash. Accepting credit and debit cards requires subscribing to a service, frequently with monthly fees, equipment rentals (card swipes, etc), and a fee for every transaction. Security of transaction records and customer account information is a major consideration these days (and can be difficult to insure properly). These costs add up and need to be kept in mind when pricing products. If you are doing consignments these costs need to be part of your agreement with individual providers.

These are just off the top of my head. There will be other concerns and other costs.

Best regards.

[BIGGUNDOCTOR]

As for cards, many small businesses are using Square on their phone, or a dedicated tablet.

In some areas a consignment store is a different type of businesses license,like second hand stores are.

One thing is for sure, when you open a business it is like hitting a PowerBall lottery. People you never heard of will suddenly be at your door asking for money to pay for licenses, permits, fees, etc.

Read all of that boring fine print.

You may check to see if the local chamber of commerce, or college may have some info on local hoops you will have to jump through. Sometimes just the location will bring unexpected taxes, or other fees not needed just a mile up the road.

[cdthayer]

Mom & Pop retail brick & mortar shops are dying off like the dinosaur. It’s one of the reasons that small retail space is becoming more affordable. Small retail shops are just “scratch & sniff” showrooms nowadays, so that buyers can get the feel for what they want and then go online to make their purchases. I think that the days of having the customer come to us is about over. Even though the USA is one of the most mobile societies in the world these days, very little of the mobility is for shopping for anything more than groceries or the cheapest gas. Online and event shopping is growing by leaps and bounds.

I would urge you to look into doing a road show for making retail sales, and only use physical space for production. Renting physical space for production (or repairs) makes more sense to me than retail, since it doesn’t have to be pretty, just functional. And the nice thing about having a mobile store is that you can go to where the buyers will be. And you can move around to get new eyes on your products all of the time. Sure, you’ll still have plenty of “looky-loos”, but only for short periods of time, not all of the time when you’re trying to get some work done.

And if you consider the mobile sales effort as purely advertising at those venues that don’t produce a lot of sales, and whatever sales you did get as just helping with the expenses (of that advertising), you’ll be more inclined to sign up and head out for the next event. I think that you’ll have better luck, even with the business plan that you are considering (with consignments), to take your product to the customer instead of waiting for them to come to you. Remote sales and internet sales both take the product to the customer.

CD in Oklahoma

[leatherwytch]

I ran a brick and mortar store for many years. I was lucky, I could live there too. Well now I am unlucky, as of last year I was forced to move. So to break it down most stores you can't live in, in this city. Rents are extreme so I had to find a place to rent to live in and that took ten hours a day 7 days a week and finally at the last minute found one at extreme rent. I have since the time I had to start looking until now lost a minimum of 10K in business. I now live in an apartment that costs me double to what I paid before, it is very small and I am having issues getting the work studio up.

These are things you must consider. I have all my stock from the store, my leather, tools and everything else. I have no idea where anything will go and I also have show coming up. You need to make sure with any brick and mortar or even place you can live with your work that you don't get told you have to move by the end of the month. It is stress you will never forget. The only good part is no more extreme liability insurance and utilities that were out of this world, insanely priced business insurance and if you have to move and you set up again. Then you need building and fire inspectors out and they cost big time. There are pros and cons to everything and people will call you at midnight if you are a business.

[Cowboymade]

Thanks to everyone. Opening First week of February.

[Big Sioux Saddlery]

I wish you the best of luck!

[leatherwytch]

All the best.

[Cowboymade]

Thought I'd throw an update to all that have been great with their advice.

Been in business since February and it has taken off more than I had expected.

First month 80% sales off the sales then it has turned mainly custom orders including repairs to expensive furniture that require leather only (forget the upholstery stuff)

Social media has worked well. With Instagram getting most of the business.

I've been featured in a local magazine http://oakcityhustle.com/clark-aflague-the-leather-man/

Of course they had to call it the leather man......

There's a renaissance period going on with people looking toward artisans and not stuff from across the waters that set borders.

[leatherwytch]

Congratulations! I am so happy that it is working out for you. I would not start anything in my city now we are into a huge recession in this province more than anywhere else. I am hoping to go to BC in a couple of years and do business there.

I wish you continued luck and that your business grows exponentially.

[stevieboy7]

I am hoping to go to BC in a couple of years and do business there.

You want to talk about paying a lot of money for space in Vancouver?

Expect around $3/sqft /month for shared studio space.

Just trying to have enough room to hold all my leather and tools costs so much.

Trust me, BC is not much better.

[johnv474]

You can always have a brick and mortar store that functions as a showroom and workshop, then include online sales as well. The workshop can, in fact, be a show piece as well for those who find the craftsmanship appealing. I would suggest having a good supply of show pieces that will draw people into the store, and also lots of entry-level wallets, belts, and small accessories that will help make a sale. People are more likely to spend 20 bucks on a whim than 1200 for a holster rig.

[leatherwytch]

You want to talk about paying a lot of money for space in Vancouver?

Expect around $3/sqft /month for shared studio space.

Just trying to have enough room to hold all my leather and tools costs so much.

Trust me, BC is not much better.

Not Vancouver, love Vancouver but not there. No, thinking of down around Kimberly, Cranbrook maybe even Nakusp. Way cheaper there than in Calgary.

Edited August 24, 2015 by leatherwytch