Wednesday, February 22, 2017

Shop keeping is a raw deal in Paris

Millefleur company’s empty bank account bothered me. Especially, as my payday was getting closer. I was also worried about the store’s colossal one quarter rent, social charges and gas and telephone bills. Jee Eun Kim said not to worry because South Korea was about to send money. And so it happened. I understood that the owner proceeded in this way every month.
I soon realized that the French owned businesses in the neighborhood were more or less like ours. A nicely dressed lady in her fifties sat in the jewelry shop next to us. I never saw any clients coming in or out. The nineteenth century’s antique dealer on the other side of the avenue was not busy with the customers either but furiously typing on his laptop computer.
Real estate is more lucrative than real business
In fact most of Paris’s charming small traditional shops are inherited family owned business properties with no real obligation to gain money. Or whenever there is, the family capital is burned bit by bit, to keep the coulisse. Apartment prices in Paris have increased almost by two hundred percent during the last fifteen years. Therefore, real estate is more lucrative than a real business.
The rent of any stamp-sized boutique in the city center is so astronomic that even a genius business idea can hardly bring enough money to cover the charges. In addition the tenant has to pay an important amount of key money to get the commercial lease. Those facts partly explain the famous “Paris prices” of the products. The shopkeepers respect the two-and-a-half rule, which means that the price of any object purchased from the manufacturer will be multiplied by 2,5. That’s how a ten euro teddy bear becomes a twenty-five euro Paris teddy. It goes without saying that a far more important margin is made with Chinese made gadgets.

Macarons at  5 €($ 5) each with no profit

After all, in spite of the “Paris multiplier” shop keeping can be a raw deal. For example, selling expensive brand macarons at five euros each in the smallest store ever sounds like an easy deal. But your bakery becomes profitable only in the case that you sell more than two hundred of these desserts every day. If there happens to be a metro strike or a terrorist attack and you don’t sell any, you should compensate your loss by selling four hundred macarons the next day and so on. Even with the April tourist flow it can be hard. A few rainy November afternoons with no clients and you’re done.

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