Which Of The Following Is Not A Factor Affecting The Size Of The Trade Area?

Learning Objectives

Identify the main factors to consider when analyzing a retail trading expanse

A trading area is the geographic area from where you describe your customers. At that place are 3 types of trading areas that are important to annotation:

Primary Trading Area. Where the store is exactly located.
Secondary Trading Expanse. The shopping center or area where the shop is located.
Fringe Trading Area. The urban center or boondocks where the store is located.

You can moving-picture show these three areas equally follows:

Three concentric circles representing the primary trading area, secondary trading area, and fringe trading area. The primary trading area is in the middle, secondary area is farther from the middle and surrounding the primary trading area, and the fringe trading area in the outermost surrounding circle

Your store is in the center of the primary area. Most of your customers will come from this smaller expanse besides. As you expand out, fewer and fewer customers will be coming to you. This is especially true if, for example, yous are a small convenience store or drugstore. If, on the other manus, you are planning to open a Trader Joe's, Marshall'southward or T.J. Maxx, yous may get your draw from a wider area. So, if yous are planning to open a pocket-size, local retail store, you lot need to make sure that the area immediately surrounding your location has:

Enough consumers. Are in that location enough people living in the expanse, with access to your retail space to create sales for your production or service?
Enough coin to spend. Spending potential index- compares the local average expenditure past product to the national average amount spent.
A need for the product or service y'all are bringing to the area. Is there a marketplace for your product? Here is where the census review, GIS services and other analysis processes will help decide if your market exists!
Contest in the trading are. Using the internet as a tool, review sites like Yelp, employ the map function and note who is located in your geographic area. It is also possible to utilize directories published by trade associations, the local chamber of commerce, municipal and city government or Chain Store Guide (published by CSG Data Services) to see who the competition might be.

And then, again, analysis is the crucial component. Even with analysis, in that location is a possibility that a business organization may not work. As an case, a yoga teacher opened a studio in a small town where no other studios existed. It seemed like a perfect opportunity to tap an untapped market correct? Well, the problem was, there were non plenty people in the market for yoga classes. And then what happened? The studio was open up for a few years, marketing heavily to the local area, but ended upwards shutting their doors when they couldn't create enough sales to be profitable.

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