irreverent, thought-provoking analysis of the industry.
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
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
(Note: We think Jeanne made the correct decision. Anyone
who agrees or disagrees, email email@example.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.