August 18, 2014 at 09:26Madrobots goes to war: how we open a point in Mega
In the spring, we opened our first retail outlet in Gorbushka . It was a rather spontaneous decision - the owner of the shopping center offered us a place, and we, without hesitation, agreed. Now Madrobots is opening a second store - this time in the Mega Belaya Dacha mall.
The market situation doesn’t have this at all - the Russians are re-lending, the economy is stagnating, retail is going through hard times, and most networks selling electronics and household appliances are on the verge of ruin. Only a madman would dare to step on this scorched earth, where birds do not sing and trees do not grow.
We decided to become just such crazy. When everyone is fleeing the battlefield, on the contrary we pack our things to go to the front line. And, of course, we hope that we will be able to win where others suffer one defeat after another, because we believe: doing like everyone else, it is hardly possible to create a good business. Will Madrobots Capture Mega? Make your bets.
We still have nowhere to retreat. We were one of the first to start trading exclusive Runnings gadgets from Kickstarter and other crowdfunding sites. But less than a year later, they began to feel serious competition.
Moreover, many of our followers did not bother to conclude contracts with manufacturers. They monitor what is in demand with us, and then they buy all this from the "gray carriers". In the market for gadgets from the world of the Internet of things, price competition has begun. And competing with the gray market is extremely difficult.
In addition, we realized that scaling up success on the Internet is not so easy. This problem is probably faced by many owners of online stores who managed to somehow get on their feet. Attracting traffic is quite expensive, and making a quantum leap is a million dollar task.
The idea to open a new store, moreover, in the popular and fashionable shopping center, was born after the Robot Ball in Artplay, in which Madrobots took part. Several positions from our assortment were sold so briskly there that it became obvious: we can very well earn on the flow. So you just need to open where this stream is.
Fierce debate has begun in Madrobots. My business partner, who worked for more than ten years in the retail department of an international brand, spoke out sharply against. He is well aware of the current situation of networks selling electronics and household appliances. The costs are huge, margin tends to zero.
Our store on Gorbushka demonstrates normal dynamics - but only because it works with us as a pick-up point.
I persuaded that we are not obliged to repeat the fate of other retailers. Why are large networks bent at all? They sell equipment that is already outdated. All have long bought laptops, computers, tablets and smartphones. The market is saturated. But this is not a problem for us: we are focusing on advanced and so far not widespread gadgets from the world of the Internet of things. They are just getting into fashion.
Yes, big guys like MVideo and Svyaznoy also look our way and begin to slowly expand their product range. But in order to turn the tide, they need sales at the level of tens of thousands of units per month. The Internet of things will not save them. For us in Madrobots, in order to survive, it is enough to sell gadgets in hundreds - and this is just quite real. We can grow smoothly with the market. There is no doubt that it will grow.
In general, I persuaded my partner to spend money on one experiment. And after that we set about preparing our adventure.
The main question - where to stay - was decided quite simply. It was important for us to reach a wealthy audience, not indifferent to gadgets and advanced technologies. Users of the Forsquare app perfectly match this description - they are addicted to new technologies and can afford to buy a smartphone. Therefore, we began to carefully study in which Moscow shopping centers customers check in most often - this analytics is in the public domain, anyone can see it.
So we made a shortlist of potentially interesting shopping centers. Well, then they simply began to study all these options, sending requests to the owners of all sites. Somewhere we were simply ignored, and somewhere there were no empty seats. Having received a positive answer, we went on reconnaissance - we considered patency, talked with other retailers working around. So we got a lot of valuable information. Oddly enough, many sellers spoke quite openly about their revenue.
In the end, we decided to settle down in the Mega Belaya Dacha shopping center. This is one of the three most prestigious centers, along with the "European", "Metropolis" and "Atrium". Renting there is expensive, but worth it. There are more than one and a half million people a month at White Cottage. This is a lot. No wonder retailers are doing great.
The leadership of the center invited us to stand in a very busy place. We counted patency, it turned out - somewhere around one and a half thousand people per hour. However, while we were coordinating the store’s project, it turned out that guys who provide 3D printing services and sell 3D pens have already settled down near us . Mega even invited us to stand in another place - next to Auchan. But we refused - traffic near Auchan is poorly converted into real purchases. People loaded with sausage and potatoes are not at all concerned with electronics.
Competition doesn’t bother us so much. If you open in a place like Mega and you can’t make money, then something is fundamentally wrong with your format. With this in mind, we undertook to develop our format for our new retail outlet.
Since this is an experiment, we decided not to risk it and not open a full-fledged store. It’s better to start with an “island” - a small point located right in the middle of the floor (these are the lockers that stand around, inside which the seller sits). “Islet” is cheaper than a full-fledged store, plus it can always be dismantled and moved to another place.
To reduce the risks, we spent a lot of time to study both the business processes of direct competitors and the model of work of the islands as such. One of our employees traveled around twelve "islets" selling electronics all over Moscow, trying to understand how and what they earn.
We found that a significant part of the revenue islets make on primitive, it would seem, additional services. For example, they stick protective films on the screens of smartphones. I pasted a dozen little films a day - I earned up to eight thousand rubles (film + work). For a month you can pay off half of the rent with films.
But we hope to do without films. Unlike other "islanders", we sell interesting gadgets. When you sell jewelry, watches or e-books on an island, it’s hard for you to come up with something interesting. And our assortment can be interestingly filed.
If every tenth of those one and a half thousand is interested and suitable, we will not stay in the way.
We plan to repay the money invested in the lease in about three months. Access to this shopping center will cost about a million, not counting the cost of inventory: this amount includes a deposit for several months of rent and equipment and materials for construction. According to our calculations, a point in Mega can bring 300 thousand net profit per month. Unless, of course, everything goes as planned (which, of course, is not a fact).
Why am I, a person who essentially grew up on the Internet, started with online trading, so enthusiastically engaged in an old-fashioned business?
I like offline retail for its predictability. If you sold one hundred units in a store in one month, you will almost certainly sell the same in another. This is not so online. No one will give you guarantees.
Internet users are very price sensitive, and there are always a lot of people who want to dump. Therefore, to reach a certain level of sales, and then also keep it, is an extremely difficult task. Contrary to stereotypes, online business is much tougher and more complicated than offline trading.
Therefore, I really hope for our point in Mega. If we manage to establish retail trade, before Madrobots it will open new horizons.
Who will be right - me or my skeptic partner? We will find out soon. The opening is scheduled for August 26. Come, see our triumph (or our defeat) with your own eyes.
*
You can follow how I build Madrobots live by subscribing to my
Twitter , 
Vkontakte , 
Google+ or 
Facebook accounts .
The market situation doesn’t have this at all - the Russians are re-lending, the economy is stagnating, retail is going through hard times, and most networks selling electronics and household appliances are on the verge of ruin. Only a madman would dare to step on this scorched earth, where birds do not sing and trees do not grow.
We decided to become just such crazy. When everyone is fleeing the battlefield, on the contrary we pack our things to go to the front line. And, of course, we hope that we will be able to win where others suffer one defeat after another, because we believe: doing like everyone else, it is hardly possible to create a good business. Will Madrobots Capture Mega? Make your bets.
BALL OF ROBOTS
We still have nowhere to retreat. We were one of the first to start trading exclusive Runnings gadgets from Kickstarter and other crowdfunding sites. But less than a year later, they began to feel serious competition.
Moreover, many of our followers did not bother to conclude contracts with manufacturers. They monitor what is in demand with us, and then they buy all this from the "gray carriers". In the market for gadgets from the world of the Internet of things, price competition has begun. And competing with the gray market is extremely difficult.
In addition, we realized that scaling up success on the Internet is not so easy. This problem is probably faced by many owners of online stores who managed to somehow get on their feet. Attracting traffic is quite expensive, and making a quantum leap is a million dollar task.
The idea to open a new store, moreover, in the popular and fashionable shopping center, was born after the Robot Ball in Artplay, in which Madrobots took part. Several positions from our assortment were sold so briskly there that it became obvious: we can very well earn on the flow. So you just need to open where this stream is.
Fierce debate has begun in Madrobots. My business partner, who worked for more than ten years in the retail department of an international brand, spoke out sharply against. He is well aware of the current situation of networks selling electronics and household appliances. The costs are huge, margin tends to zero.
Large retail chains somehow manage to stay afloat only thanks to additional services, such as repaying loans or replenishing their mobile balance. Why stick your neck in a loop?
Our store on Gorbushka demonstrates normal dynamics - but only because it works with us as a pick-up point.
I persuaded that we are not obliged to repeat the fate of other retailers. Why are large networks bent at all? They sell equipment that is already outdated. All have long bought laptops, computers, tablets and smartphones. The market is saturated. But this is not a problem for us: we are focusing on advanced and so far not widespread gadgets from the world of the Internet of things. They are just getting into fashion.
Yes, big guys like MVideo and Svyaznoy also look our way and begin to slowly expand their product range. But in order to turn the tide, they need sales at the level of tens of thousands of units per month. The Internet of things will not save them. For us in Madrobots, in order to survive, it is enough to sell gadgets in hundreds - and this is just quite real. We can grow smoothly with the market. There is no doubt that it will grow.
In general, I persuaded my partner to spend money on one experiment. And after that we set about preparing our adventure.
"COTTAGES"
The main question - where to stay - was decided quite simply. It was important for us to reach a wealthy audience, not indifferent to gadgets and advanced technologies. Users of the Forsquare app perfectly match this description - they are addicted to new technologies and can afford to buy a smartphone. Therefore, we began to carefully study in which Moscow shopping centers customers check in most often - this analytics is in the public domain, anyone can see it.
So we made a shortlist of potentially interesting shopping centers. Well, then they simply began to study all these options, sending requests to the owners of all sites. Somewhere we were simply ignored, and somewhere there were no empty seats. Having received a positive answer, we went on reconnaissance - we considered patency, talked with other retailers working around. So we got a lot of valuable information. Oddly enough, many sellers spoke quite openly about their revenue.
In the end, we decided to settle down in the Mega Belaya Dacha shopping center. This is one of the three most prestigious centers, along with the "European", "Metropolis" and "Atrium". Renting there is expensive, but worth it. There are more than one and a half million people a month at White Cottage. This is a lot. No wonder retailers are doing great.
At one of our neighbors - a clothing store - revenue on a day off is at the level of 500-600 thousand rubles.
The leadership of the center invited us to stand in a very busy place. We counted patency, it turned out - somewhere around one and a half thousand people per hour. However, while we were coordinating the store’s project, it turned out that guys who provide 3D printing services and sell 3D pens have already settled down near us . Mega even invited us to stand in another place - next to Auchan. But we refused - traffic near Auchan is poorly converted into real purchases. People loaded with sausage and potatoes are not at all concerned with electronics.
Competition doesn’t bother us so much. If you open in a place like Mega and you can’t make money, then something is fundamentally wrong with your format. With this in mind, we undertook to develop our format for our new retail outlet.
TREASURE ISLAND
Since this is an experiment, we decided not to risk it and not open a full-fledged store. It’s better to start with an “island” - a small point located right in the middle of the floor (these are the lockers that stand around, inside which the seller sits). “Islet” is cheaper than a full-fledged store, plus it can always be dismantled and moved to another place.
To reduce the risks, we spent a lot of time to study both the business processes of direct competitors and the model of work of the islands as such. One of our employees traveled around twelve "islets" selling electronics all over Moscow, trying to understand how and what they earn.
We found that a significant part of the revenue islets make on primitive, it would seem, additional services. For example, they stick protective films on the screens of smartphones. I pasted a dozen little films a day - I earned up to eight thousand rubles (film + work). For a month you can pay off half of the rent with films.
But we hope to do without films. Unlike other "islanders", we sell interesting gadgets. When you sell jewelry, watches or e-books on an island, it’s hard for you to come up with something interesting. And our assortment can be interestingly filed.
Over the weekend, near our “island”, promoters will launch quadrocopters into the air, draw 3Doodler in space, move the robot ball and play with controlled cars.
If every tenth of those one and a half thousand is interested and suitable, we will not stay in the way.
We plan to repay the money invested in the lease in about three months. Access to this shopping center will cost about a million, not counting the cost of inventory: this amount includes a deposit for several months of rent and equipment and materials for construction. According to our calculations, a point in Mega can bring 300 thousand net profit per month. Unless, of course, everything goes as planned (which, of course, is not a fact).
OLD HERE ARE NOT PLACE
Why am I, a person who essentially grew up on the Internet, started with online trading, so enthusiastically engaged in an old-fashioned business?
I like offline retail for its predictability. If you sold one hundred units in a store in one month, you will almost certainly sell the same in another. This is not so online. No one will give you guarantees.
Internet users are very price sensitive, and there are always a lot of people who want to dump. Therefore, to reach a certain level of sales, and then also keep it, is an extremely difficult task. Contrary to stereotypes, online business is much tougher and more complicated than offline trading.
Therefore, I really hope for our point in Mega. If we manage to establish retail trade, before Madrobots it will open new horizons.
Who will be right - me or my skeptic partner? We will find out soon. The opening is scheduled for August 26. Come, see our triumph (or our defeat) with your own eyes.
*
You can follow how I build Madrobots live by subscribing to my
Twitter , Vkontakte , Google+ or Facebook accounts .