Calculate the profitability and the price of your pop-up store

Establish a provisional budget before starting to create its pop-up store allows you to make the most of your project. By estimating its costs as closely as possible, We avoid many misadventures which end in financial losses, thus increasing the price of your Pop-up store.

It's one of the first questions our customers ask us, and rightly so. The price varies according to your goals and the length of time you want to open your store. It is even more difficult to conceive this provisional budget when it comes to a first point of sale : in this specific case, estimating store traffic, the conversion rate (i.e. the number of passers-by who become visitors) or even the transformation rate (number of visitors who buy a product) would seem almost impossible.

However, you greatly reduce your chances of success if you create a pop-up store without calculating the price. The provisional budget is the essential step in identifying investments. that you can do according to your goals and for Calculate potential profitability of your store.

Adjust the duration and budget of your pop-up store

The first step in estimating the price of your pop-up store: take a step back. What is the purpose of your point of sale? As for the creating a pop-up store, thinking about the precise purpose of it is the cornerstone of the project. Understand your objective and you can establish your pop-up store budget, before Calculate the profitability of your store.

How much should my first pop-up store cost me?

If you are organizing your first ephemeral operation, exploring the appetite of customers for your product, testing the reaction to your brand, and collecting reviews to refine your concept, you should choose a point of sale:

• over a short period of time,
• excluding very popular periods (Christmas & spring),
• for a period of two weeks (maximum),
• In a neighborhood close to your target customers.
• Objective: profitability and lessons learned
  

As your objective is to learn lessons, agree to release a “minimum viable product”, i.e. the first version of a product, produced as soon as possible and at the lowest cost. It will allow you to quickly confront your brand with customers.

To maximize your point of sale, always listen to customer feedback to obtain the maximum amount of data (qualitative and quantitative), and limit investments as much as possible to ensure a profitable operation.

Establish your provisional budget for a “communication coup”

If you want to create a pop-up for a communication operation, then your Rather, the objective is to reach a point of”Break Even”, or a zero point, where your investments are equated by your earnings.

For this type of pop-up store, open it over a short period of time, ranging from Several days to a 3 weeks to make the most of the surprise effect. As for the location, data included in the estimated budget, choose it according to your customers. Is your customer a community that is already strongly committed? Select a secret location, little known to the general public. If you are looking to reach a new target, settle in a very busy area instead.. To maximize the chances of creating a buzz, do not hesitate to invest in the layout for a “Glossier effect”.

In summary, prioritize:

• a short duration (from one day to 3 weeks maximum),
• a brick and mortar location, if you don't have a committed community, or a secret location if you can count on your existing customers,
• a memorable space that will capture visitors, multiplying user-generated content (content created by your customers and shared on social networks).
• Objective: break-even (and maxi-buzz)
  

A pop-up store to maximize its seasonality

Si your brand is subject to seasonality (jerseys like Anja, or winter hats like Cabaia), you will maximize commercial performance over the period.

We recommend doing this type of pop-up store during 2 to 3 months, to make the most of the effects of seasonality. The estimated budget is established here in order to generate significant turnover, while taking advantage of the point of sale for collect data. To achieve these goals, do not forget to take into account the costs due to the choice of location. It should rather take place in a place generating a lot of traffic.

What do we say to each other for a seasonal pop-up?

• 2 to 3 months depending on your estimates (and your stock)
• High traffic location
• Space with your target customers
• Objective: maximizing C.A.

Think about your estimated budget to create a sustainable point of sale

You made various pop-up stores and consider opening a permanent point of sale for your brand. Or you haven't done any pop-up stores and just want to open one, to verify that creating your own store is a smart idea.

The goal to keep in mind when calculating the price of the pop-up store is to find out if you can be profitable in the long term, after an initial (estimated) investment. This pop-up is also an opportunity to better learn how to manage your sales staff.

To create such a pop-up store, you need a duration of 6 months, so that the effects of the ephemeral have time to wear off and the seasons can change. It prevents distorting the results of the operation. Finally, the last thing to consider when managing your pop-up store budget is the place, Who will be here close to the neighborhood where you want to open a permanent store. In this way, you will be dealing with the same customers as in your hypothetical future store.

Do you want a sustainable point of sale?

• 6 months (minimum)
• Same neighborhood as where you want to live
• Objective: to be profitable over time, after an initial investment

The indicators by Nestore to estimate your point of sale performance

If you have already had a physical operation, You already have the performances previous times to estimate your performance. These figures will in fact allow you to anticipate your sale, and your expected earnings, so that you can balance them with the investments you are planning. You will then be able to manage your budget and know its profitability.

But if you are just starting out, and would like to have a reference frame to which you can compare, here is the Nestore data:

💣 What conversion rate can you expect?

The conversion rate is the number of visitors vs the number of passers-by. It is the first indicator that reflects the attractiveness of your product and your brand. Experience confirms to us that a Low rate is around 1%, an average rate 2%, a high flow 5%).

💣 What is a good conversion rate?

The conversion rate, often measured on your online sales site, is often overlooked at the point of sale. And yet, it's very telling, and simple to calculate (how many people bought a product after entering the store).

For reference, this rate is low when it is around 12%, medium at 30% and high at 45%.

💣 What to expect as a ROI (Return on Investment)

Difficult to give you a precise range of ROI - this depends very much on the rent and expenses you incur (sales staff, layout, equipment rental), but also on your sector of activity. Do not hesitate to contact us if you want to know more about the ROI performance of your sector!

A file to calculate the price and profitability of the pop-up store

To support you in your approach and in opening your store, we created An excel document. This one will help you quickly estimate your costs and profits to assess the potential profitability of your ephemeral operation, taking into account your areas of expenditure and your turnover estimates.

You can download it at the top of the page:)