The box store concept
You’ve probably heard of the “pop up store” concept, a trend of opening short-term sales spaces (http://en.wikipedia.org/wiki/Pop-up_retail)
Well, in China, another popular store concept is “box stores” (i’m not so sure about the term, if you do know, please let me know
The concept is pretty simple : an average size shop, pretty well located in a mall (usually at the entrance on in front of the escalators), with one or two stories. The space is divided into multiple cabinets with 6 shelves each. Walls are covered by shelves too.
They have a couple of staff people, some to cash the client’s payments, some other with a little cart to “help client to shop”.
Your own shop for 208 RMB / month
You probably guessed it, it’s all about renting one shelf or more.
The price depends on :
- The location of the shelf (the middle part is more expensive, because it’s most likely where customers will look at)
- The number of shelves you’re renting.
Contracts start from 1 month to 6 monts, then you have to free the space for a while. Here is an idea of the price :
- 258 RMB / month for the upper shelf
- 500-600 RMB / month for the middle shelf
- 208 RMB / month for the lowest one
How does it work?
- Good news : you don’t need any legal procedures to get your products on these shelves. At least not in China. You can rent it as an individual.
- You pay the rent at the end of the month, and they pay you back the money you earned from the sales. I don’t think I’ve seen anything regarding sales commissions.
- You have to fill the shelves yourself, which means that there’s no stock, and that when it’s empty, you have to come back with more products and resupply your shelf .
Some numbers & thoughts
As soon as I entered this place, I had to run some “equations”, here is what I thought about or the information I found :
- There are about 78 full size shelves in the shop
- The rental price of a full shelf (if fully rent) is 2.388 RMB
- That makes 186.264 RMB to the owner of that place, per month
- I would say around 95% of the shelves were used
- I stayed there for 20 minutes, at 8PM on Tuesday night. A constant number of 20 customers were looking at products.
- They have 4 staff, who I g uess get payed around 1800 RMB a month, let’s make it 2500 RMB after taxes
- However, I don’t know how much they rent the whole place. I see two options : fixed price per month, or purcentage on the income + income targets to reach every month.
- I guess the owner of the place is making money, since they opened 38 locations just in Shanghai
I also thought about how to make some money from renting one of these shelves and selling products on it, but that’s gonna be in another article, since I have to take of for a live music session @ Beedees !