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Re: I don't understand business...
Consider rent as advertising expense. And the calculations will fit.
I have a friend who gets an average of 10-12 people to visit his shop per day. Thats less than 2 people per hour he remains open. His shop is in one of the posher locations in Mumbai - very high rent. And yet he makes money. (I think it was 50% of all who enters his shop ends up buying from him.) The store itself does not make his enterprise wildly profitable. But the store gives him an avenue to create a mailing list of buyers. And he makes a lot of money on repeat sales - via specialty exhibitions and sales. Many of these sales transactions don't happen in his shop - but they happen because of his shop. Its the same direct marketing model. Good audience. Good product. Good pricing. Good advertising. Good backend. You need to have all 5 in place. No idea about cheese shops. But I had heard that the Jaguar showroom that opened recently near my home needs to sell less than 2 cars a month to remain profitable. With the right product-pricing mix, you can remain profitable even with very very low foot fall. |
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