Thursday, December 8, 2011

Two stores, ten times the work.

Interesting article on a Bend downtown business opening a second store in downtown Redmond. "Extending The Blvd." Bulletin, 12/8/11.

I won't presume to second-guess this decision. (Well, one small quibble -- if they just opened the Bend store in July, 2010, that's awfully quick expansion.) I will assume that they have a solid plan and are well capitalized.

What caught my attention was this statement: " is fairly unusual to have a local store in Both Bend and Redmond..." In fact, they could only name one other small business -- Bella Moda.

I would add, that I know several businesses that actually have second outlets in Eugene and Portland.

I can speak with some experience here -- I had a store on 6th St. in downtown Redmond in the early 90's. (As well as stores in Sisters and the Mountain View Mall.) This was mostly due to an absolutely red hot product --that turned out to be a bubble in the end, but had some busy years. (See Andy -- I didn't mention sports cards....oops.)

Anyway, the idea at the time was to spread the copious inventory I was accumulating. I'd buy cases of cards to get the best price, and it made sense to spread the risk.

What I didn't see was the old 20/80 rule: 20% of your product will make 80% of your profits. Turns out, the 20% wasn't so easy to get or easy to spread out, and no one really wanted the other 80%. Turns out, as well, that the costs of managing the stores ate up all the profits.

Turns out, each store will provide one to one and half incomes -- less than the old Mom and Pop, model actually. So when Linda has one store, and I have another -- it works.

Anyway, when the sport card bubble collapsed, I retrenched to my downtown Bend store -- doubling it in size so it wouldn't look like a complete defeat. We managed to sell the mall store, which was still profitable.

Funny thing was, I learned that having a store in Bend and Redmond is a little bit like An Appointment at Samara: you try to avoid your fate, but it happens anyway.

I would spend a morning going to my Sisters and Redmond stores -- supplying them with material -- and then drop by the Mountain View Mall store and see my Sisters and Redmond customers at the counter....

I will admit, it was a very different time. Back then, Redmond was much, much smaller. But then again, the competition level was lower as well. The chainstores didn't really store stomping in to Central Oregon until about 1992 and thereafter.

Anyway, thems the fruits of my experience.


Andy Z said...

You made it approximately 51 hours.

Anonymous said...

Brickhouse, Hutch's and Taco Del Mar are all in Redmond and Bend. You could also include Taco Bell, Home Depot, Safeway, etc if you want to include larger chains. Direct Flooring just expanded to Albany and Eugene. Parilla tried to go to Redmond and failed.