Cart and Kiosk Retail – A 10 Billion Dollar Industry

Here is an excellent article from entrepreneur.com on the ever booming cart and kiosk retail industry.

In a world dominated by big-box retailers, wanting to start an independent retail business probably feels a bit like David battling Goliath. "Why bother?" you think. "I'll only get crushed." But these days, your small size could save your business. The big boxes have gotten so bloated. The good news is, retail spending has remained strong through the economic ups and downs (it totalled about $3.58 trillion in 2002, according to the U.S. Census Bureau).

While the costs of establishing a permanent retail location can be steep--you may spend up to $100,000 or more, with leases spanning three to 10 years--carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk. The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report, a quarterly trade publication for specialty retailers. And today, carts and kiosks are a $10 billion industry.

Flexibility is another advantage to staying small. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to "come in, try it out for a month, and if their product isn't working, shift to a new product line or close up shop and move to a new location," Norins says.

These temporary locations can also work well for seasonal businesses that only need to be open for a limited time. For example, a specialty candy shop may open just before Christmas, remain open through Valentine's Day, Easter and Mother's Day, then close for the remainder of the year. The most popular site for a temporary operation is a busy mall, but many operators are also finding success in airports and other transportation facilities, at sporting events, and at other creative venues limited only by their imagination and ability to strike a deal with the property manager.

At the Mall of America, about 100 temporary tenants dazzle 40 million visitors a year. Cart rental rates are about $2,300 a month or 15 percent of monthly sales, whichever is greater. All temporary tenants must pay an initial fee of $1,500 in "key money," which pays for a store designer to design and build a cart with the right look.

Not interested in doing business in a mall? Street vendors and swap meet and fair concessionaires need to check with the city or county in which they want to do business for the regulations and specifications for the types of products, hours and displays that are allowed.