Great Business Ideas: Set Up a Cart in a Mall

Great Ideas for your Small Business: Set Up a Cart in a Mall

Veteran silversmith kent mCcustion used to travel to about fifty craft shows a year, often driving hundreds of miles to shows around Illinois. In 1997 he cut back to six or seven shows because of the Colorado Silversmith’s kiosk he opened in the Northwoods Mall.

He’s sold more than $100,000 worth of jewelry, with some silver buckles and necklaces selling for $500 each. McCustion, who designs and produces his own jewelry in addition to selling Navajo, Zuni, and Hopi pieces, said he planned on operating the twenty-by-eight-foot kiosk just during the holiday shopping season. But business is so strong, he has no plans to leave the mall.

Colorful kiosks and carts featuring unique merchandise have become fixtures in American malls. The first were set up in Boston’s Quincy Market in 1976 when local developers set out to rejuvenate the city’s ailing downtown area. Today, about 80 percent of America’s 1,800 enclosed and regional shopping malls have so-called “temporary tenants,” according to industry experts.

Kiosks and carts have tremendous benefits for small business owners and mall operators: Entrepreneurs are able to display their wares in a prime, high-foot-traffic setting with little investment; malls benefit from a wider variety of interesting merchandise and extra rent. “The mall doesn’t have to take a risk on a long-term lease,” said Mark Schoifet, spokesman for the International Council of Shopping Centers. “For the retailer, there’s access to a lot of customers that they would not otherwise have.”

Major mall developers, such as the Indianapolis-based Simon De Bartolo Group, aggressively promote their temporary tenant program. Jim Allen, vice president of retail development, said the company’s malls, which often have between ten and forty carts per mall, rely on carts to add color and variety, as well as to generate income. Allen said while some cart operators move in just to capitalize on the busy holiday gift-buying season, many more remain year-round.

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Danny Vaswani, a longtime Simon De Bartolo mall tenant, said the secret of success is to offer something “the anchor stores are not offering.” He began selling perfume from his Cleopatra carts in two El Paso malls four years ago.

Most of the European fragrances he sells from his carts are not available elsewhere in the mall, and some retail for as much as $100. “By selling in shopping malls with this kind of arrangement, you can come in with a small investment,” he said.

Initially he paid $2,500 to get into the mall, not counting the cost of inventory. Now he pays $1,300 a month rent for every cart he operates. “But rent for in-line stores can be four times the rent for carts or kiosks,” said Vaswani, who has become a cart magnate.

He’s expanded beyond perfume to sell Dippin’ Dots ice cream and tee-shirts. All together, he said, his carts generate annual sales of more than $1 million. “The pushcarts used to act as incubators for a potential market,” said Jennifer Ciotti, manager of specialty retail for Boston’s Faneuil Hall. “Now the retailer is a professional specialty retailer who opens more and more carts.

It’s become reputable and very sophisticated.” Unlike the pushcarts of yesterday, today’s carts feature phone lines, elaborate lighting, and computerized inventory systems. Vendors can accept credit cards and orders via computers, Ciotti said.

Minnesota’s Mall of America is not only America’s biggest mall, but it operates the largest specialty leasing program in the nation. “The temporary tenants are really the gems of the mall,” said Theresa McFarland, spokes-woman for the mall.

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Kathy Rusche, director of the mall’s temporary leasing program, said they set very high standards for vendors. All temporary tenants must pay $1,500 in “key money,” which pays for a store designer to design and build a cart with the right look. “We want to make sure the curb appeal is there for the customers,” said Rusche.

Temporary tenants can expect to pay a premium for space at a consumer wonderland like the Mall of America. Last year, 40 million shoppers visited the mall, which boasts an amusement park in one section. Cart rental rates are $2,300 a month or 15 percent of monthly sales, whichever is greater, Rusche said.

Tips for making the move to a mall

  • Visit malls in your area to check out the competition and foot-traffic
  • Meet with the specialty retail manager to discuss what merchandise they are looking for.
  • If possible, work for someone else before you invest in your own cart.
  • Speak to the other vendors to find out what life in a mall is really like.
  • Make sure your cart is attractive, well lit, and functional