Calculating Retail Profit: Add-On Merchandise Helps Boost Self-Storage Revenue
|Copyright 2014 by Virgo Publishing.|
|By: Bill Meyers|
|Posted on: 06/18/2010|
If you own or operate a self-storage facility, you’re always looking for ways to create additional revenue. The sale of retail merchandise to your existing tenants and walk-in customers provides you with daily profit opportunities. This revenue stream not only provides additional earnings, it improves your facility’s value by increasing your net operating income (NOI).
How much revenue can you make from selling retail product such as boxes, locks, moving supplies and more? The following “profit calculator” will generate data that will help you set goals and enhance your bottom line.
To begin, you must identify a few key aspects of your everyday business. First, what is your average number of move-ins every month? Next, what is the average amount of your retail sale to each customer at move-in? Once you have those numbers, you can easily calculate your baseline retail potential.
For example, let’s assume you move in an average of 25 customers per month. The following chart shoes your average monthly and annual income for each level of sale.
Don’t overlook your opportunity to capture and increase profit from retail sales. You have a captive audience that needs certain items to properly complete its storage activity. Your products will help customers keep their belongings safe (locks), in good condition (boxes and appropriate packing material), and organized. Offering the right products provides convenience to customers and keeps them from going elsewhere to purchase those items. It might even influence their decision to store with you.
Maintaining a retail program and promoting it with effective street signage and marketing campaigns will make existing customers aware of your offerings. It may also attract customers who don’t need space but want packing materials to store belongings at home, execute a move, or complete a household-cleanup project. Finally, an effective retail program can give you an advantage over your competition.
Retail sales are part of good customer service. Your attention to every customer during move-in will increase your profit; just use the calculation outlined above and see how easy it is to add more to your bottom line. Plus, your tenants will have a positive experience and will remember to tell their friends about your facility.
Bill Meyers is the national account manager for Supply Side USA, which offers retail products for self-storage businesses, including locks, packing tape, protective products and boxes. For more information, call 800.305.6110; visit www.supplysideusa.com.