Starting a new shop in a small city


#1

Hi all, my wife and I have decided that we are going to look into the possibility of opening another shop, this time it would be closer to our home in Appleton, Wi. I have asked a few people and want to put it near the east side of town where I would be the closest shop to several nice suburbs and major retail shopping centers. There is already a shop 2 blocks from the building that I am looking at that has been established for a while, but I am confident that I can wipe them out in 3-6 months by offering a better buying experience (that shop is NASTY dirty and understocked). I think that capturing 50-70% of his business is doable as long as I have a clean shop that is well stocked and smiling&helpful staff, resulting in him not being able to make rent/payroll and folding.

What experience do you have with similar exploits?

Were you able to wipe out the under-performing shop?

How did you manage to grow your business after the “new shop” hype wore off?


#2

Will you be launching an ecommerce site as well?If so, I can help with the entire process.


#3

I don’t feel that eCommerce is a direction that I want to go. The main brands are already being sold as retail for less than I’m paying wholesale so how could I compete?


#4

It’s about giving your customers another way to buy from you and to browse your selection. There are pros and cons for sure with ecommerce, but IMO an ecommerce store is required nowadays. Not that you’ll compete with the big brands outright, but customers that are loyal will buy from you online if you treat them well.


#5

Not trying to be some elitist know it all. But that is not the best way to look at it, it’s not a strategy. And 3-6 months based on what? If demand is low what will actually happen is you both go out of business or run two very unprofitable annoying businesses. Likewise when you open up, your competitor will adapt (if you end up being a real threat) putting your “wipe them out” plan in the toilet. Unless you know their numbers, overhead, what moves what doesnt, their core business philosophy etc you may hit a wall. When I opened everyone was worried about me but I did not care about them I did not focus on them at all NOTHING. Just worried about how to get the smokers in the door. They sold sub ohm everything and I sold mini nautiluses, they focused on high wattage and I focuses on easy and reliable. They went out of business long ago and I am still hanging on even with 3.6K rent.

The best way to look at it is that you will match them in price and beat them in service. But this “wipe them out” stuff is very naive. Your goal is to make money, find the least competitive most profitable low hanging fruit possible and attempt to harvest money in peace, not go head to head with competitors.


#6

I am also not trying to sound like a know-it-all, but i’m sure that each of us have walked into a business (vape or otherwise) and thought to ourselves “how is this place still open?”. I am referring to one of those places. I believe that the answer is the location. Think “Central Place Theory”. His store is probably the closest shop to 100k people’s home or work and that alone has propped up his store.

I had discussions with the owner of this business as I was looking to either buy him out or start a new shop in the area, so I’ve seen his books and heard his story, unfortunately he wanted too much. Removing 50% of his sales by offering his customer’s a similar assortment of products, at a similar price, and in nearly the same location from a clean, well stocked, and friendly establishment will remove his ability to make payroll and rent.

I have also been in the other shops in the area and there is no doubt that running shop the way that I plan will lure away some of their customers.


#7

@George_From_Xtreme_W @BMandOnlineGuy

Great back and forth and good points on each side.

While on one hand, confidence is important in business …

On the other hand, as Mike Tyson said. “Everyone has a plan until they get punched in the face”.

Go into it expecting to succeed AND get punched in the face. You’ll be 100% right, and that’s what is important.


#8

A business in neglect or showing signs of struggling or neglect is not always a symbol of poor management but possibly poor demand.

I got an anecdote.

Without telling a long winded story someone tried that to me in 2015 we shared a street. They closed after 7 months. Without warning just one day a moving truck was moving them out with the quickness. They were my distributor before that!!! ( I think they used sales numbers to determine where to open, they are a big distributor) I have talked to everyone in this business and have heard of shops opening near another shop to specifically siphon an existing user base. It usually does not work and usually the new guy is closing before the established guy or so it seems in so many anecdotes. People don’t want to change, it takes a long time.

I am not anywhere near your shop or that shop so I cannot really know or be right or know the situation. Maybe his shop is a roach motel and it will be an easy kill. I only express caution. Unless that shop is very busy and there is room to siphon, you may find your shop is just like his. LOL. Also many shops have closed around me, it never makes me more busier! Same reported by many surviving owners across the board!

Let us know the outcome. I still want to know!