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Author Topic: annual sales per sq foot for photo art gallery?  (Read 1524 times)
leeonmaui
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« on: August 26, 2013, 09:58:09 PM »
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Aloha,

I'm looking for any numbers any one would care to talk about for photo art gallery per sq foot annually.
I'm looking at a pretty high end area, and think 1300 is pretty doable, just calculating some  historical numbers and insights from experience.

Cheers, Lee
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Edward Starkie
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« Reply #1 on: November 05, 2013, 06:57:07 PM »
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Hi, I know this is late since the original post was in August. I do number crunchy things for downtown redevelopment and when I saw your post it occurred to me that I might be able to give you another way to think about the question.

A typical retailer can afford to pay between 5% and 10% of gross for space. If one assumes sales of $1300/sf, that translates to the ability to pay between $65/sf all expenses included to $130/sf all expenses included. A more productive way of looking at this is to take whatever the market rent is, add in all of the other expenses of real estate including all utilities and any pass-through costs from the owner or local taxes that apply to space to arrive at a complete cost figure and then divide by 5% and 10% to see where your sales target has to be to support the space. To me, $1300 sounds optimistic, but maybe it's not. As a comparison, Whole Foods does $650 a foot, Starbucks sometimes does $800 a foot and Apple stores vary from $2000 to $8000 a foot. A typical main street business with a lot of pedestrian traffic that does reasonably well is at about $300 to $400 a foot. Remember that at $1300 a foot in sales a 1,000 sf gallery will be selling $1.3 million to $2.6 million a year. For the purposes of planning, unless one is very sure of the sales potential, at $300 to $400 the same space will need to sell $300K to $400K per year and can afford  total cost of real estate of between $15 to $40 per sf. At $800/sf the total rent can go as high as $80/sf.

The above is why so many artists locate in less expensive neighborhoods that then become the next hot place because of the art, thus pricing out the artists. Smiley

Another problem for retailers is that tourism can encourage very high rents for some categories of business (like jewelry in the Virgin Islands) that make the rent untenable for other uses that are not specifically oriented toward the whims of the tourist market. Tourists will buy watches if they think they are getting a deal on a Rolex, but many don't have the capacity to judge art or the interest in buying art.

One way to evaluate this is to look at your expected sales price per photo. If it is $2000 per photo then you need to sell 650 to 1300 prints to support space at 65 to 130 a foot. The market for images at that price range may be limited. That is 2 to 5 sales every day. If on the other hand the price is $650 per print, you need to sell 2000 to 4000 photos or about 7 to 14 each day for the same space. Selling the frames and related items such as small prints that can be carried out in a pocket as a keepsake will help no doubt.

The point of all the foregoing blather is that it can be helpful not only to think of sales, but to look at space where your customers will find you and then back into what you need to sell to meet the rent. At the same time, a critical look at galleries and some research with a local commercial broker regarding what people pay can be very handy--brokers know a lot that they will tell you if they think you re a prospect.

Cheers,

Ed
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