Friday, February 11, 2011

Goliath and the Flea.

I had a fellow in yesterday who had had a hobby store in La Pine, and was contemplating a store in Bend.

He'd found a government site with demographics that gave raw numbers on what each 'hobby' was selling in the area. Apparently, if you write in an address, it will tell you how much sold within a certain distance.

So the numbers for some of the hobbies was pretty high; millions, or at least, hundreds of thousands.

Now I applaud him for doing research; but I tried to warn him that, in this case, it probably didn't have as much meaning as he thought.

"Dude," I said. "That isn't going to be your money. It isn't distributed evenly."

What I was trying to express is that the raw demographic numbers don't really reflect what Bend will give you. I believe because of the isolation, the lack of a college, the lack of interstate, the type of industry and the type of residents we get in Bend, that the national averages don't hold up.

But after he left, I realized that we hadn't gotten to the real problem with the raw numbers; the mass market.

I would advise anyone thinking of opening a small business to expect to access only 10% of the total sales in any product line. That 10% has to be divided among all the other independent stores. Actually, 10% is a really high number, 5% is probably more realistic.

For instance, independent bookstores accounted for 6% of book sales last year.

Yes, 6%.

I think the general public has the notion that there is some kind of battle between the small local stores and the national chains. They think in terms of some sort of David and Goliath fight.

Uh, uh. Not even close. That battle was lost long ago.

It's more like a battle between Goliath and a flea, where the flea just hopes the big stupid human won't notice him long enough to swat him down.

2 comments:

H. Bruce Miller said...

"What I was trying to express is that the raw demographic numbers don't really reflect what Bend will give you. I believe because of the isolation, the lack of a college, the lack of interstate, the type of industry and the type of residents we get in Bend, that the national averages don't hold up."

Exactly. When we moved here in 1985 there was only one good men's store in town -- Roberts on Wall Street. There's still only one good men's store in town -- Roberts on Wall Street. With a population of almost 90,000 there should be at least two or three by now, but the demographics and the local culture aren't right. Most of the men here seem to wear jeans, T-shirts, hoodies and sneakers for all occasions, probably including weddings and funerals. Those who don't buy their clothes in Portland.

Duncan McGeary said...

And I'm thinking neither the outdoorsy crowd nor the retired crowd, is the best demographics for a comic shop.

Not kids, either.

College age crowd and slightly older, the exact group that finds "poverty with a view."