Retailing Tips: How to Open a Second Store
Location and Communication Are Paramount
When business is booming, what do you do next? Retailers got the chance to explore the considerations behind opening additional store locations during a session at Toy Fair in New York. Nick and Kathleen Morolda of Cranbury Station Gallery in Monroe Township and Princeton, N.J., shared a few tips from their own journey as multiple store owners.
What to Consider
When planning for a second location, Nick advised:
- Think about unique product you can offer that’s not available in the mass market.
- Ensure the locations are far enough apart not to cannibalize each others’ sales.
- Provide a large enough cash reserve for the first store to subsidize the second while business is growing.
- Think about the people — managers and other staff — the new store will require.
A “Good” Location Can Be Deceptive
The Moroldas’ failed attempt to open a third store yielded these lessons:
Don’t trust your eyes: They’d selected a community with large houses that seemed promising in terms of spending power, but actually wasn’t. They hadn’t talked with other storeowners in the area, joined the Chamber of Commerce or gotten to know the community.
“We were so busy with managing and staffing for the first two stores that we weren’t able to get involved in the third community,” Nick explained.
“Don’t be afraid to ask other businesses in the area, ‘What’s your customer like? What’s their average income?'” Kathleen added.
According to Nick, it’s also wise to look at the demands a new location might bring, and consider available resources. In addition, he added, retailers should think about what made their first store work.
Ultimately, he said, “each location has to be its own profit center.”
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Julie L. Jones has written articles for both newspapers and magazines. Before joining the staff of TDmonthly Magazine, she worked as a communications writer and provided editorial support for a market research company. Read more articles by this author
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