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  1. #1
    Join Date
    Mar 2006
    Posts
    97

    Just curious how some businesses make money..

    I have been curios and wanting to know how these small businesses in big shopping malls make money. I am referring to the stalls that sell various stuff like hair clips and accessories, hair extenders, spa items, perfumes,caps,etc.

    It doesn't seem people are actually buying from them, at least not a lot from my observation.

    And considering the lease that they pay, the capital in buying the stuff they sell and the people (sales person) that they pay even if its their own business, they still need to make money.

    How do they make money? If they are not making money, what's the benefit of doing it? tax deductions?

  2. #2
    Join Date
    May 2006
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    Maybe the fact that they 'never stay long' indicates that they are not making money.

    It is baffleing to contemplate many of these 'stalls' [I know some are working online in the background etc., but not the majority].

    If you want to learn business / marketing skills, don't copy these guys, instead go to your local 'real street market', better than any business course.
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  3. #3
    Quote Originally Posted by zynfella View Post
    I have been curios and wanting to know how these small businesses in big shopping malls make money. I am referring to the stalls that sell various stuff like hair clips and accessories, hair extenders, spa items, perfumes,caps,etc.

    It doesn't seem people are actually buying from them, at least not a lot from my observation.

    And considering the lease that they pay, the capital in buying the stuff they sell and the people (sales person) that they pay even if its their own business, they still need to make money.

    How do they make money? If they are not making money, what's the benefit of doing it? tax deductions?
    The product is not nearly as expensive we might imagine, they get a lot of weekend spur of the moment buys, and they might get a few big sales to local companies or institutions.
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  4. #4
    Join Date
    Nov 2007
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    Two words: Money laundering

    Just kidding

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  5. #5
    Join Date
    Mar 2006
    Posts
    97
    Quote Originally Posted by Mike - Limestone View Post
    Two words: Money laundering

    Just kidding

    -mike
    Actually, this is not the first time I've heard someone says about these two words. And seeing this again is now really making me think that may be the case.


    ***Maybe the fact that they 'never stay long' indicates that they are not making money.***

    That actually is what makes me crazy and dead curious, they DO STAY THAT LONG. And makes me think the other way...they probably are making money. But every single time I watch and observe these stalls when I am in the mall, not a single person ever buys from them in an hour and if in a rare instance someone does, it's not like people buy a box-load of these goodies.

    So the only thing I can think of is that they probably declare heavy business profit loss to offset whatever they were doing or earning money from.

  6. #6
    Join Date
    Apr 2005
    Location
    La Habra, CA
    Posts
    1,775
    Just a little business tip

    Most things have 30-50% margin. Stuff you buy at those mall carts can easily run 80-90% margin. So selling that $30 product makes them $27 in profit, and they sell 20 a day, thats $540/day profit. And on the weekends, they can easily do 3-5 times the weekday revenue. So your looking at 30 days, 12 days being "weekends" (friday/saturday/sunday)

    Weekends = $32,400 in profit
    Weekdays = $9,720

    Cart runs maybe $3,000-$6,000/m

    Employees usually get paid minimum wage so maybe $2,400-3,000 in payroll plus commission which is usually 5% so $2,250

    So they are still looking around $30k/profit

    And these numbers are bloated to how the mall is doing in my area. Our mall is doing very well, it has no vacancies in carts/stores.
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  7. #7
    Join Date
    Aug 2001
    Posts
    4,861
    Open a nail salon, that's a fail proof business. There are nail salons literally on every corner jammed full of customers constantly making good dough per visitor. I never even noticed or realized this until I started getting my nails done a year ago. Crazy

    It's no wonder there are so many of them everywhere. Each time I get my nails done I go to different one, all jammed pack... so far been to about 17 nail salons all in my area... I've been counting because my friend thinks I'm crazy so I'm tracking the #'s

    I like to go to different one each time because most of them do crap job on my french acrylis boring to go to same one I ain't in love with.
    Last edited by Frosty; 07-08-2009 at 10:10 PM.

  8. #8
    Join Date
    Feb 2002
    Location
    Australia
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    Yeah the last time I had my nails done, oh wait, that was me using my teeth.
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  9. #9
    Join Date
    Mar 2006
    Posts
    97
    Quote Originally Posted by RandyT View Post
    Just a little business tip

    Most things have 30-50% margin. Stuff you buy at those mall carts can easily run 80-90% margin. So selling that $30 product makes them $27 in profit, and they sell 20 a day, thats $540/day profit. And on the weekends, they can easily do 3-5 times the weekday revenue. So your looking at 30 days, 12 days being "weekends" (friday/saturday/sunday)

    Weekends = $32,400 in profit
    Weekdays = $9,720

    Cart runs maybe $3,000-$6,000/m

    Employees usually get paid minimum wage so maybe $2,400-3,000 in payroll plus commission which is usually 5% so $2,250

    So they are still looking around $30k/profit

    And these numbers are bloated to how the mall is doing in my area. Our mall is doing very well, it has no vacancies in carts/stores.
    Ok, this makes sense if those carts or stalls are actually selling $30-worth items and actually have 2 buyers per hour (10AM-9PM Typical Mall Time).

    But have you seen those carts/stalls that sell hairclips? or dangling accessories? They are selling items that cost from $3 to $10.

    Plus, I am sure they still would have to pay for taxes, permits, credit card terminal fees, cash register machines,business insurance, etc. Still won't be enough profit to feed a lazy person like me

  10. #10
    Quote Originally Posted by zynfella View Post
    Ok, this makes sense if those carts or stalls are actually selling $30-worth items and actually have 2 buyers per hour (10AM-9PM Typical Mall Time).

    But have you seen those carts/stalls that sell hairclips? or dangling accessories? They are selling items that cost from $3 to $10.

    Plus, I am sure they still would have to pay for taxes, permits, credit card terminal fees, cash register machines,business insurance, etc. Still won't be enough profit to feed a lazy person like me
    If you really are determined to find out, then you have to sit near a cart and watch from opening time until closing. An hour or so, when you happen to be there, is not really accurate.

    The really short answer: buy low, sell higher. Same as any business.

    Your other alternative is to go see a business broker handling the sale of one of these things and get a look at the books.
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  11. #11
    Join Date
    Aug 2001
    Posts
    4,028
    My wife does hair from our basement along with her mother (retired from salons) and it's beyond insane just how much money can be made from a few hours of work per day. My guess would be the booth/kiosk makes enough money to cover the daily expenses with just a few sales. Remember... those kiosk's have a target market. If you haven't stopped to purchase then you're likely not it.

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