Whether you’re a shop owner looking to rent out part of your shop, or a tenant thinking of embarking on a ShopShare, there are a few top tips that will help you make the most out of the experience financially. After all, whilst ShopShares can bring fantastic PR and marketing benefits for both sides, many of you will be approaching your ShopShare as a commercial arrangement, looking to make sales and bring in a tidy profit. So, here are a few points to bear in mind.
ShopShare, how does it work financially?
– When you book out the space through wearepopup.com, you’ll agree on the flat-rate rental for the rail, shelf, wall or concession space and the tenant will pay this upfront before the launch.
– Usually, the shop owner should run the till on behalf of the tenant. Sometimes there will be a small fee for credit card transactions that the tenant will need to cover. Discuss this upfront before launch, to make sure both sides are happy with the arrangement.
– Some ShopShares are set up for you to pop up with an independently run concession within an existing space. In this case you’ll need to bring your own till and POS system, etc. Be sure to check out there’s working wifi so you can run your till and take payments!
– Think about price points – does the price of your products or service chime with the price of your ShopShare collaborator’s products? It may be that they are very different, and that can work brilliantly, so long as the prices are suitable for your customer target demographic. For example, when Black Vanilla popped up in McQueens florist, the gelato was relatively much lower price points than the flowers on sale, however the gelato provided a great entry point for customers who might not normally have set foot in McQueens.
– To help with different price points, don’t forget to market your products together in a meaningful way [see here for more on that]
I want to do a revenue share pop up, how does that work?
– Revenue share gets a little more complicated but it’s feasible. When we see it work best, it’s in addition to a flat rental fee, usually to cover extras the landlord might provide like staffing, security, visual merchandising etc. Revenue share tends to be around 5-8% when combined with rent – be sure to define this upfront before you launch.
Getting clear about how you manage the finances of your business will allow you to focus your creative energies on more of the creative aspects so that your brand can continue to succeed.