Cart vendors find less space can be profitable

November 28, 1993|By Mark Guidera | Mark Guidera,Staff Writer

When Gail Rosen decided to market her handmade personalized gift items for babies and children, she was staggered by the costs of opening a storefront.

But, thanks to a new twist on an ancient idea -- the venerable wooden cart -- Ms. Rosen was able to pursue her dream.

And she didn't have to fret about inclement weather hurting business. The cart she leased was within the comfort of The Mall in Columbia.

Ms. Rosen launched her business, Warm Rainbows, nine years ago when the mall's owner and operator, the Rouse Co., was beginning to experiment with leasing carts to start-up businesses.

"A store in the mall requires a five-year lease, and then you have the cost of fixtures and renovations. It's just too much risk," Ms. Rosen says.

Today, her Warm Rainbows is still in business, and she's started a new inventory line on another cart.

As for the mall's cart-leasing program, it's more popular than ever -- and the concept has been picked up by virtually every large mall in the Baltimore region.

The seven-week Christmas shopping season -- which most retailers say began Nov. 7 and went into high gear Friday -- is the most popular time of the year for leasing carts, says Marcelle Tennenbaum, specialty retail manager for the 200-store mall.

This Christmas season, the mall has leased all 27 of its carts and its five kiosks -- venues that have more space than a cart, but still at lower cost than a store.

The wooden canvas-topped carts, which the mall owns and maintains, are leased at the weekly rate of $275 during the year -- the average rate at other large malls in the Baltimore region. Rates vary during the Christmas season.

The Christmas shopping season is the strongest sales time for retailers, accounting for as much as 40 percent of the year's sales and 50 percent of profits. But business is also brisk at the carts for Valentine's Day and Mother's Day, Ms. Tennenbaum says.

Snowstorms also are good for the cart merchandisers, who hawk everything from Stetsons to crystal jewelry.

"People are housebound for a couple of days, and then they come with a vengeance to purchase a little something for themselves. They go right for the carts," Ms. Tennenbaum says.

"After a snowstorm people want something not too expensive that makes them feel good."

When the Rouse Co. brought the concept south from its Faneuil Hall Marketplace in Boston nine years ago, it called the effort the Entrepreneur Marketplace Program.

The aim of helping fledgling businesses take flight with low financial start-up costs and risk hasn't changed, Ms. Tennenbaum says. And the low risk is what still attracts most merchants leasing the carts, she says.

The reward: revenues from $1,000 and up weekly. Most vendors say to turn a profit a cart merchant generally needs to see revenues of $1,500 weekly. Start-up costs for a cart average about $5,000.

With hard work and a strong product line, cart vendors can be successful enough to expand their operation to a store.

Diane Meyer, owner of Silver Heron, a silver jewelry store in The Mall in Columbia, got her start in business with carts there and at Rouse's Harborplace in Baltimore. Today she operates a cart and two mall stores -- Silver Heron and Sparks, a store specializing in costume jewelry and women's accessories.

"Running a cart gives you all the lessons you need to run a big business. But you can have failures without killing yourself by going bankrupt. You learn to focus, mainly on what sells and then to keep that line in stock. From there you can focus on expanding lines that sell."

Another crucial element to long-term success for a cart vendor, Ms. Meyer said, is that the owner should spend as much time as possible running the cart.

"That's the only way you can get feedback about what customers like and don't like," Ms. Meyer says.

Linda Moran, who leases a cart for her handmade dried and silk flower arrangements, practices that advice. She works seven days a week. During the day she sits at the cart, keeping busy when customer traffic is slow by making new arrangements. She also operates another cart-based business with a partner. That business, Crystal Creations, sells live plants in vases filled with colorful crystal soil.

Ms. Moran credits the cart program not only with enabling her to gain considerable experience running a business, but also with helping her forge a new career.

"I like the freedom and independence this gives me," says Ms. Moran, who gave up a job as a teacher after her cart-based business, named Designs by Linda, took off.

"Being creative for me is easy. What's hard is finding the time to keep up with making enough product to keep the carts stocked."

She is one of the few cart merchants at the mall who makes her own product line.

A stroll through the mall leaves the impression that anything goes in the cart-based businesses.

For example, one cart sells an array of trinkets, from refrigerator magnets to coffee mugs, all with a feline theme.

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