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Coworking spaces continue to pop up around the country. The popularity of this office-sharing model raises some interesting questions about applications in the retail world. More specifically, you might be wondering, how could this play out in my own business? Splitting costs could multiply your revenue, but it might not be worth it if it’s not a great partnership. From high-level concerns to practical issues, here are some things to consider before you go all in on co-retailing.
Be picky when choosing a partner.
Opposites might attract in romantic relationships, but when it comes to co-retailing, it’s best to opt for a complementary business. For example, a smoothie bar within an indoor cycling studio makes sense, but a blow-dry bar within a meditation space? Not so much. In addition to aligning with a business with synergistic appeal, make sure that you and your co-retailing partner are a good fit. It’s not enough to just get along with them (though that’s important, too). You should also share common business values and a vision for your space. So spend time getting to know each other before committing to anything, and if you spot any red flags, walk away and hold out for a more like-minded partner.
Consider all the costs.
Of course you and your co-retailing partner should be splitting the rent (the percentage should be determined by the amount of square footage you each have), but you should also figure out how you’ll deal with the other fees you’ll incur. Discuss how you want to handle costs like utilities, cleaning services, repair work, and anything else you can think of, and agree on not only whether you’re both willing to share the cost but also how and when you will each pay.
Negotiate the terms of your lease.
If things go south with your partner or your space, your lease can be your escape clause. For example, you can stipulate that if either you or your co-retailer aren’t satisfied with your arrangement after a designated period of time, the person who is unhappy can leave the space. Or, if you have issues with the building or landlord, make sure you can get out of the lease if necessary. Whatever your concerns, design the lease so that you are covered from a legal standpoint should you need to terminate the relationship or vacate the space.
Maintain your brand identity.
Think of co-retailing as a partnership, not a merger. While you may share a space, you should be careful to distinguish your brand from your co-retailer’s. Separate signage, packaging, décor, and even the space within your shared space should signal to customers that you are two separate (if like-minded) brands.
Team up on marketing efforts.
In your efforts to stay separate and distinct from your co-retailer, don’t lose sight of why you were interested in co-retailing to begin with. When you team up with a complementary business, you can not only boost your profits but also build brand awareness and your audience by sharing a space with a retailer that already has a loyal clientele. In addition to sharing in-store visitors, work together on marketing campaigns. From a co-branded giveaway to an email marketing campaign or shared social media efforts, with the right partner, there’s no limit to the ways you can work together to build your audiences and draw new customers to your joint venture.