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Retailing on a Budget: 7 Brick-and-Mortar Alternatives

Retailing on a Budget: 7 Brick-and-Mortar Alternatives
Credit: Alison Hancock/Shutterstock

When you want to start a retail business, coming up with a great product that customers will want to buy is only half the battle. The other part of the equation is finding a way to get your products in front of customers — and unless you've got a few hundred thousand dollars lying around, a traditional commercial storefront may be out of the question.

The good news is, brick-and-mortar stores aren't the only option for people with a product to sell. Whether you want a scaled-down retail space or choose to sell online only, there are plenty of affordable alternatives for small business owners. Here are seven budget-friendly ways to run your retail business.

Don't want a full retail store but still want your own space in a high-traffic area? A kiosk is the perfect opportunity for retailers with a small amount of inventory. These small retail stands got their start several decades ago as a short-term option for seasonal retailers. Today, there are thousands of kiosks in malls, transportation hubs and event venues nationwide, selling everything from jewelry to skin care products.

Deborah Georgetti-Piro, president of specialty leasing company Georgetti-Piro & Associates, said that there are many advantages to opening a kiosk, especially for new business owners. Leases on kiosks are typically "all-in," meaning any extra charges associated with the location are included in the minimum rent number. The smaller footprint and square footage also means a lower overall rent with less overhead and fewer operational expenses for the kiosk operator. 

"[Another] key advantage ... is that kiosks are typically located in areas of a shopping center that have high foot traffic and visibility," Georgetti-Piro said. "This is a terrific way to make high sales and to get name brand exposure without spending additional marketing dollars." 

According to an Entrepreneur.com article, the upfront investment for a kiosk can range from $2,000 to $10,000 and doesn't necessarily require a long-term contract — license agreements can be renewed month to month in many cases, unlike traditional commercial spaces, which require a minimum two- or three-year lease. [Big-Box Marketing Tips for Small Retailers]

In just about every state, the organizers of farmers markets, craft fairs, festivals and other local events look for vendors to set up tables and sell their goods to attendees. While spring and summer are the most popular seasons for these types of events, they're often held year-round, making it a great opportunity for entrepreneurs with a side retail business.

Nicole Bandklayder, founder and creator of The Cookie Cups, recently launched her business and sells her packaged desserts at farmers markets in her area. She said pricing and location played a big part in her decision to sign up for farmers markets, and advised other entrepreneurs — especially food retailers — to research deadlines, rules, requirements and pricing if they want to find a local sales venue that's right for them.

"From my experience, working at the farmers market will expose your brand to a very loyal customer base who wants to come back each week for new flavors," Bandklayder said.

Booth fees vary by event type and location, but you will likely end up paying a weekly or seasonal fee if you choose to sell at a farmers market. Additionally, you will need to consider costs such as licenses and permits, marketing and setup (tables, chairs, signs, etc.). If you want to keep your business going outside of local events, you may want to set up an online store and advertise it at your booth (see "e-commerce" below).

Brick-and-mortar restaurants are one of the riskiest and most expensive ventures an entrepreneur can pursue. Food trucks have become a popular, affordable alternative for would-be restaurateurs who want to turn their culinary skills into a business.

Josh Tang, founder of the mobile cuisine consulting firm Mobi Munch, said many factors have contributed to the rising popularity of food trucks, including an increased culinary talent and more demand for specialty foods like vegan and gluten-free foods. Without the added expenses of building or renting space for a restaurant and staffing a full kitchen and dining room, Tang said food truck operators are able to quickly open without making a large investment.

"Food trucks are able to offer more variety, innovation and convenience at a better price point," Tang said.

Food trucks can be rented or purchased, he said, with the price tag running from $40,000 for a used truck to $130,000 for a new one, depending on the type of kitchen equipment you want in it.

Statistics also show that food truck owners have a much better chance of surviving in the competitive culinary industry: Failure rates are between 60 and 90 percent for new restaurants, but for food trucks it's just 10 to 20 percent, Tang said.

On-the-go businesses aren't just limited to the food industry: Repurposed trailers, recreational vehicles and trucks are quickly becoming a cost-effective way to create a traveling retail store. Shops like New York City's Nomad Truck and Nashville, Tennessee's Third Man Rolling Record store have found success with this model, moving to different locations and keeping customers updated on their whereabouts via social media.

Not sure where to begin the hunt for your perfect retail truck? ExTreme ReTrailers specializes in turning 7- by- 14-foot trailers into state-of-the-art, fully functional retail businesses — complete with exterior and interior branding, shelving and other interior fixtures, wireless Internet access and heating and air conditioning.

"We have made them fully functioning retail outlets," said Julia Hutton, CEO of ExTreme ReTrailers. "It is just a little store on wheels."

Operating a business from a mobile unit offers the freedom to continually set up shop in new and lucrative spots. The main advantage is that you are not stuck in a lease, and you're always able to position your store in a good location, Hutton said.

One example of a successful mobile retail truck is Wanderlust, a Portland, Oregon, shop run by entrepreneur Vanessa Lurie. In 2010 Lurie and her husband converted an old trailer into a traveling clothing store, which was an extension of her Etsy shop. Traveling shops like Lurie's slice entrepreneurs' expenses and offer the ability to pack up and move to a location whenever it's necessary to jump-start sales or renew interest.

"It gives us flexibility if a certain location isn't working out," Lurie said. "There's not as much time and money invested into a spot, so if we need to, we can just pick up our shop and go."

After two years of successfully running her business out of the trailer, Lurie was able to open up a full storefront in 2012, but Wanderlust is still active online and on the road. Depending on size and interior features, concession trailers can cost from $10,000 to $50,000.

Selling a product you can package and ship anywhere? E-commerce is an easy and inexpensive way to get your business off the ground. Without any of the overhead expenses needed to run a full brick-and-mortar location, you can start selling your goods online almost instantly: All you'll need is a well-designed website with a shopping cart feature.

Unlike regular retail locations where a variety of merchandise is typically needed, online retail operations have the advantage of being able to focus solely on one area.

"You can target a much more specific niche than you ever could with a brick-and-mortar store," said e-commerce consultant Mark Mathis. "The more specific you can get, the better."

Though there are many advantages to e-commerce, there are a few challenges e-tailers in particular face, including shipping costs, competition with giants like Amazon and return policies. For more information on how to overcome these challenges, visit this Business News Daily article.

Pop-up shops are most common during big holidays like Halloween and Christmas, but opening a store temporarily is an option small business owners can take advantage of at any time. Christina Norsig, founder and CEO of temporary real estate exchange website PopUpInsider, said pop-up shops provide retailers with an effective way to quickly jump-start their sales, marketing and branding efforts.

Norsig defines pop-ups as temporary tenants taking empty retail or commercial real estate, outfitting it to suit their business needs, and then operating the space on a short-term basis.

Norsig, who opened eight pop-up shops of her own throughout New York City, said a great advantage is the ability to move the businesses around and open in different neighborhoods, exposing the merchandise to a wider range of customers. Pop-ups also are a great option for online businesses looking to test their product in an actual brick-and-mortar location, Norsig said.

In New York City, the cost of opening a pop-up shop varies greatly. Norsig said she has seen some stores rented for $15,000 a month, while others go for $25,000 a week, depending on the location and square footage. She advised business owners who take the pop-up route to approach it just as they would if opening a full retail location.

"Just because it is temporary, doesn't mean it shouldn't be professional," Norsig said.

If you want to get your products into a retail store but don't mind someone else doing the selling, one option is to become a wholesaler. Wholesale businesses provide inventory for retail operations, from independent boutiques to large department stores. As a wholesaler, you could produce large quantities of your products and sell them to other retailers, typically through an online platform.

Etsy is a strong supporter of wholesale entrepreneurs, and sponsors several contests and programs to help small business owners get the exposure they need to enter lucrative business partnerships. For example, the third-party marketplace teamed up with American Express for Small Business Saturday to organize wholesaler "trunk shows" at local retail establishments. Etsy also recently announced the winner of its annual Open Call program, which allows winners to display their products to Etsy partners like Nordstrom and Clementine. More details can be found at etsy.com/wholesale.

Additional reporting by Business News Daily senior writer Chad Brooks.

Nicole Fallon
Nicole Fallon

Nicole Fallon received her Bachelor's degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. She currently serves as the assistant editor. Reach her by email, or follow her on Twitter.