Dealer Operations
An Extra 400,000 Yuan in Gross Profit a Year? Should I Franchise a Tmall Store?
On August 28, the first Tmall convenience store opened in Hangzhou. Alibaba's announcement mentioned a 45% increase in sales, a 26% increase in foot traffic, and an expected annual gross profit increase of over 400,000 yuan. What does that really mean? A simple calculation: with a 20% gross margin (domestic convenience stores typically have 18%-20%), an extra 400,000 yuan in gross profit implies an additional 2 million yuan in annual sales, or about 5,500 yuan per day. Considering the higher margins on fresh food and ice cream, the actual new sales might be between 3,000 and 5,000 yuan per day. Even that alone exceeds the current sales of many small stores.
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