Tuesday, October 20, 2009

Kiosks -- for all you microretailer wannabes out there....

Here's a neat little piece about renting kiosks in the LA Times. I don't really remember seeing them in malls as a little kid, but installing them made so much sense. By putting them in what was once common area of the center you essentially create found money. (There are also common area carts, which is a slightly different beast; contact me if you want to know more.)

It can also be a win-win for both parties. As the article says, kiosks can be a cheaper way for beginning retailers to get into the business, perhaps with a cheap(er) and short(er) term lease. And for landlords, while the rent may be cheap, on a per square foot basis the kiosk can be great.

But if you are thinking about opening a bead shop for the holidays, remember a few things. The break-even costs are not low, the hours can be brutal (you have to be open whenever the mall is, which can be 70+ hours a week), and there's plenty of competition even in a recession. But if you have an itch to do retail, are not on a huge budget, but also do not want to say to yourself, "If only I'd opened my own business..." then this is an entry-level way to do it. Just be cautious in signing anything as a tenant, and get a good lawyer to look over the mall's almost certainly one-sided lease form so you are at least aware of your obligations.


CountingSheep said...

There is no way the rent could be $3,500 per month could it? It said "first month's rent."

If she sells $200 per day and the cost of sales is $100 per day then her gross profit is not enough to even cover the rent.

But still, I have an idea for a product and that might be a good way to start. But no way in Hell would I pay rent of that at a Kiosk.

Oh, since this is a dirt blog I better say something about dirt. California is auditing 1031 exchanges like there is no tomorrow. I had one that was a nightmare. Went on for over a year. But, no change in the end. I would think that there really would not be many mistakes made and the state is wasting obscene man hours on these audits.

David Stejkowski said...

Some kiosk rents on a psf rate can be really high, depending on location. There are other ways to go but you might end up with less foot traffic and a longer-term deal. Look at the deals the Halloween stores are getting on empty big boxes!

I'm surprised to see the state is auditing 1031s. But then I guess they are looking for every penny they can get these days in California. A good exchange accommodation entity is my key to success.