No matter how good the location is, if you choose the wrong business model and the target customer base doesn't match, you'll still lose money.
Many people blame the location whenever their store is empty. But in reality, the location only reflects whether you truly understand your business model.
Retail is no longer just about "opening a store and customers finding their way." Some people livestream online sales and ship to customers' door. Others install vending machines in schools and offices. Some open tiny eateries in alleyways and still attract a lot of customers. And some build entire chains of large corner cafes with bright signs and prime locations.
Each sales method requires a different layout formula, but how many people bother to sit down and ask for clarification?
– What am I selling?
– Why are customers seeking me out?
– Do they prefer to visit in person or simply trust the place?
– What role does location play in that experience?
Is this model easy to replicate?
Some people sell primarily online, with the physical store only serving as a showroom to build customer trust. Therefore, the location only needs to be easily accessible for deliveries, close to the warehouse, and have low overhead costs.
Some people open family-run pho restaurants, and the location has to be near residential areas so customers can walk in.
But if you're opening a chain of cafes or franchising, then corner locations, traffic volume, and sign recognition are what really matter.
One thing is clear: a good location only performs at its best when it "fits" with the sales model.
Many people don't know this: retail is divided into three types, each with its own specific layout formula.
Group 1: Non-store sales – livestreaming, Shopee, TikTok Shop, telesales, vending machines. You need good warehouse space, a smooth flow of goods, and don't need to be in an expensive location.
Group 2: Retail sales – cafes, clothing shops, showrooms, mini-supermarkets. This group has the highest rental costs. Location is the deciding factor in the success or failure of the store.
Group 3: Selling services – bank branches, insurance companies, SIM card sales points, clinics, spas. What you sell is not just a service, but trust. The location must be easy to find, easy to access, and have convenient parking. A grand storefront isn't necessary, but it must be trustworthy enough for customers to walk in.
On the same street: Highland Coffee is doing well. But if you open an insurance office there, nobody will feel comfortable visiting, and customers will be hesitant to come.
Conversely, selling online doesn't require a big storefront. A convenient warehouse and reasonable shipping fees are all that's needed, and customers will still buy consistently.
It sounds simple, but how many business owners have actually "made a mistake once and only learned their lesson"? Opening a store is a big deal. But opening with the wrong business model or choosing the wrong location is ten times bigger.
Therefore, before renting, negotiating, or counting cars, you should clearly answer these questions: What business model do you belong to? What kind of customers are waiting for you? Is this location suitable? A suitable location isn't necessarily the most beautiful, but the one that best fits your business model.
Each time you open a new location, ask yourself: have the customers changed? Has their behavior changed? Does the business model need adjustment? The market changes daily; if you don't understand your own model, no amount of space will save you.
Remember: to choose the right location, you must first understand the store's business model. Understand yourself first, then understand where you should be.
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