How to Open a Souvenir Store
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Many travelers want to take something home with them to remind themselves what a wonderful time they had on vacation. The customer may be looking for a coffee cup with the city skyline, a bracelet made of seashells or simply a T-shirt that says "Grandpa went to Atlantic City and all I got was this lousy shirt." By opening a souvenir store, you can fill that need. Before you do so, however, you need to have a plan.
Select a location near tourist attractions and events. For example, a shop selling printed T-shirts, ornamental seashells and beach trinkets would be better off located near or on the beach, rather than in a shopping mall. Foot traffic is important since souvenirs are often an impulse purchase.
Acquire licensing, registration and permits. A general business license is usually necessary to open a retail store. A souvenir shop is expected to collect sales tax and remit the tax to the state and perhaps the city as well. Cities and states have different requirements. For example, several states, including Alaska, don't require state sales documentation because there is no sales tax. In contrast, cities in Arizona require a sales license at each location within the city limits. Check with your local and state business authorities to learn the requirements for your location. Also, contact the Internal Revenue Service about an Employer Identification Number and any other required business documents.
Analyze the competition. Even if there are other souvenir shops in the area, that doesn't mean yours can't be successful. Visit each shop and make notes of what types of souvenirs it offers, in addition to the prices. If you don't feel comfortable scouting out the competition, ask a few friends to do it for you. If the store has a website, visit the website to gather competitive intelligence.
Determine your product mix. Review the competitors to see what gaps appear in products that are offered. For example, maybe you will see that no stores offer children's T-shirts. If most of the stores charge prices on the high side, customers might appreciate a souvenir store with lower priced merchandise.
Design the layout of your shop. Group merchandise by type, such as placing all coffee mugs, drinking glasses and shot glasses together. You can also group merchandise by price. This way, customers can see the collection of souvenirs that are less expensive. Display the most attractive or unique souvenirs in the windows to entice customers to come in. Candy, treats, cold drinks, aspirin, sunscreen and tissues displayed by the checkout can result in additional sales.
Stock the store. Order from vendors that give you the best combination of price, quality, delivery time, fees and minimum purchase requirements. If the store sales are seasonal -- such as a ski town in winter -- order souvenirs in plenty of time to receive them well before high season. You will likely have to set up accounts with vendors, which requires filling out paperwork.
Create marketing strategies. Even though the signage outside the store lets customers know you're there, additional marketing brings in additional sales. For example, establish a website that promotes your store and lets customers order souvenirs they forgot. With every purchase, include a flyer with the website's address. Ask cafes and shops that don't compete with you if you can leave flyers at their stores, and do the same for them.
Don't let inventory become old. When the high season comes to an end and business slows, slash prices to increase cash flow and make room for new inventory for the upcoming season.
Shoplifting can be a problem in busy stores. Train staff to be watchful.
- Don't let inventory become old. When the high season comes to an end and business slows, slash prices to increase cash flow and make room for new inventory for the upcoming season.
- Shoplifting can be a problem in busy stores. Train staff to be watchful.
Brian Hill is the author of four popular business and finance books: "The Making of a Bestseller," "Inside Secrets to Venture Capital," "Attracting Capital from Angels" and his latest book, published in 2013, "The Pocket Small Business Owner's Guide to Business Plans."
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