Another super Mall for Santiago!!!!

[PICHARDO]

No of course not, but if you're an entrepreneur assessing the viability of a proposed new project you might take into account that Malls X, Y and Z are not able to fill two-thirds of their units before deciding whether to go ahead and build another one.

You are (as usual for expats) confusing "ability" with "willingness" to rent at competitive rates!


The same that happens when you walk up to a home owner with a for sale sign on their property, only to find out that they ask what it would cost to build at least 2 or 3 exact copy homes in an empty lot of the same area...

The only people that think these Malls are bleeding red or laundering assets are you (clueless) expats...

The only two examples of competitive Malls in the DR can be said to be Agora Mall and soon to open Sambil, which are geared to attract tenants based on competitive offerings unlike the local model. You'll see these two Malls with a less than 20% vancancy in the long term.

Agora opened their doors with only about 60% of the already 100% leased retail space, with the the rest to be ready before xmass. They can't afford to wait long term to have the biz in the black as they OWE money to the banks for the long term.

Most cities in the DR are growing fast and those that already are big, are growing vertically. The people behind Malls like Colinas, Bella Terra, etc... Are betting on the long term and time is proving them right.

 

[Chirimoya]

Then pray tell me what is covered in a typical business feasibility study in el pa?s de las maravillas, where the normal rules of commonsense need not apply?

 

[PICHARDO]

From the consumer's point of view it's inconvenient to have shops, banks and supermarkets spread out over several malls - the whole point of a mall is to be able to do everything under one roof.

Correct me if I'm wrong, but the more Malls pop-up the more of those one stop shopping as indicated above take place, or not?

There are several malls that work well in the DR - Bella Vista in Santo Domingo and San Juan in B?varo stand out, along with Mega Centro in the Zona Oriental and Plaza Central in the capital where people actually appear to be spending money. (I can't comment on Santiago because I've rarely shopped there.)

Your perception of what's spending money is a direct translation of your experience elsewhere but the DR...

That's mostly where a many here are still lost about. Like Cobraboy who pairs amount of foot traffic to sales, like back where he came from...

In my experience, most of the rest are huge, incomprehensible white elephants.

Your "experience" from abroad again...

There's not a single white elephant Mall in the DR! Not one!

 

[PICHARDO]

Then pray tell me what is covered in a typical business feasibility study in el pa?s de las maravillas, where the normal rules of commonsense need not apply?

Common sense for where you come from, is not the same as the common sense for the DR in biz practice.

There's no el pa?s de las maravillas, but in your notion that all systems are the same when they are not.

If that was true to the letter then why HomeDepot fail so miserably in China? Or the many other large corporations present elsewhere in the world on the long list of failures?

The biz models of some countries are not necessarily the same for all others. Yes the most basic principles are true like supply/demand - profit/cost, etc... But the application is not the same across markets, even in regions.

The DR is not a competitive model, but one deep rooted in controlled supply and artificial costs. Can you run a biz in the DR like yo do in the U.S. or U.K.? Nope! Even a simple RE biz presents new challenges you never faced back home in your model.

Can a supermarket in the DR survive one year using the same profit markup model as that of the U.S.? Nope! It would be out of cash to replenish inventory in a single wave of price increases, let alone a year in the market.

A typical business feasibility study must be based on the DR biz model and market, not the one you come from.

You really think Agora will be doing better in the DR market than Bella Terra in the long term, just because they opened their doors with no vancancies? What happens when the cost rise up and the payments to the banks for the loans must be kept unchanged for them? Can they hike the rates on their long term leases? Nope!

With all their stores leased, the biz model based on a long term bank loan's financed project will hit major disruptions!

Why you think Blue Mall shielded itself by operating all stores from a single register system?

 

[Chirimoya]

How heartening to hear that you don't need customers to spend money for a business to be viable - you've convinced me! I've always liked baby clothes, I think I'll just open a cute little shop selling them.

 

[cobraboy]

It's the same in the agricultural sector within the DR. What happens is that the first in actually do make money. Take onions for example. Some years back some farmers made a killing in onions in La Culata. In San Jose de Ocoa another group of farmers made tens of millions in tomatoes. So what followed next. There was a mad rush into these two vegetables and of course we all know what happened next. An oversupply ensued and the majority of the farmers fell flat on their face.

I figure its the same with this mall frenzy. Investors unable to produce a return via other methods are piling into the one area where it seems some have hit it big. The first in are making a killing and therefore the rest believe that their new mall construct will make even more money by cannibalizing the rest by offering what the others do not. Most will fail and a few will be left standing. It'll be those who are able to marshal their resources accordingly in this time of over-saturation and over-supply.

All of this over-supply of malls will only produce the destruction of most of them. The DR is not growing a population fast enough to meet the needs of all of these malls. So, don't sweat it. Just sit back. You'll have many investors go bust whether it's clean money or dirty. In the end independent of the source all money needs a return or else it is just destroyed.

Pretty much nails it.

Another example of what you say is in the town of Bayacanes, aka "Zona Arepera," going to Jarabacoa. One little stand might have done well selling arepas/tortas. Nor there are 53 identical little stands in one mile, all selling the same exact product.

 

[cobraboy]

That's mostly where a many here are still lost about. Like Cobraboy who pairs amount of foot traffic to sales, like back where he came from...

LOL!!!

There it is again, the Majik Dominican Business Model, understood only by those with Dominican DNA, where profits are possible without revenues or customers.

 

[yapask1]

You are (as usual for expats) confusing "ability" with "willingness" to rent at competitive rates!


The same that happens when you walk up to a home owner with a for sale sign on their property, only to find out that they ask what it would cost to build at least 2 or 3 exact copy homes in an empty lot of the same area...

The only people that think these Malls are bleeding red or laundering assets are you (clueless) expats...

The only two examples of competitive Malls in the DR can be said to be Agora Mall and soon to open Sambil, which are geared to attract tenants based on competitive offerings unlike the local model. You'll see these two Malls with a less than 20% vancancy in the long term.

Agora opened their doors with only about 60% of the already 100% leased retail space, with the the rest to be ready before xmass. They can't afford to wait long term to have the biz in the black as they OWE money to the banks for the long term.

Most cities in the DR are growing fast and those that already are big, are growing vertically. The people behind Malls like Colinas, Bella Terra, etc... Are betting on the long term and time is proving them right.

Yes , like Spain they will get 30% max on bank repossessions, Tires burning on the streets as rightful owners of property - the Dominican people - get educated and take control - as historically in democratic nations of the World - such as UK etc.

Welcome to the Tolpuddle Martyrs Museum - Welcome to the Tolpuddle Martyrs' Museum and Festival Website

yapask1

 

[PICHARDO]

How heartening to hear that you don't need customers to spend money for a business to be viable - you've convinced me! I've always liked baby clothes, I think I'll just open a cute little shop selling them.

In the DR most biz geared towards retail don't survive on high foot traffic as their mark-ups are well above 200% on average. Can you say the same for the U.S. retail market?

In the DR most biz start from the home, build up rep with clients which recommend you to other potential clients. All that whilst you pay no rent, or any of the usual formal biz expenses, let alone taxes...

In the DR most biz that do good on their home based biz and join the formal market, keep a good relation with their clients and steer them to their new formal presence. There, any new walk-in is extra income to the already home established client based build upon that relationship and steady sales stream. That's to say, you're not creating a biz income from "0" but moved the home based biz to the formal site and any and all new clients is icing on the cake. Even if only two or three only a day, there were not there at home as now!

In the DR most biz that open their doors without a previous home based established biz, do so because they have a substantial economic base to support the new formal biz for the long term. Those that don't, experience sudden and painful death...

You have a lot to learn about the Dominican biz model and it shows...

Keep your money in your pocket or donate it to a good cause, better than losing all of it as you think it's easy to make biz in the DR!

 

[PICHARDO]

LOL!!!

There it is again, the Majik Dominican Business Model, understood only by those with Dominican DNA, where profits are possible without revenues or customers.

Nope! It's your arrogance to even consider for a moment, that your foreign held notion of what makes biz work in the DR, is not the same as back home...

You run the perfect example of a DR home biz! (like the untold times I said it before).

You have a base sales already established in your informal home biz (which no matter how much taxes and seals your have, still is basically the most "formal-like" of informal biz).

If Cobraboy ver 2.0 decided to open a formal biz in a Mall, plaza or even stand alone store, the client base present today would still support the biz as usual, not just from the home but at the new location and formally introduce the biz to the main stream formal market. Even when you only decided to gear the new formal store to target expats in the country and ignored the locals (as rude as it may sound to some, but I'm ok with it since it's your biz), and only had one or two expats or foreigners walk-in to buy your product, those were two clients a day you didn't have from your home based informal biz!

So you see, the biz is not only doing the same as before, but better as new clients are also coming in on a daily point and you also project a formal image that's not the same as having people come to gear up in your Jarabacoa home's garage...

But...

 

[PICHARDO]

But...




It's The Majik Dominican Business Model, understood only by those with Dominican DNA!!!

 

[PICHARDO]

 

[the gorgon]

In the DR most biz geared towards retail don't survive on high foot traffic as their mark-ups are well above 200% on average. Can you say the same for the U.S. retail market?

In the DR most biz start from the home, build up rep with clients which recommend you to other potential clients. All that whilst you pay no rent, or any of the usual formal biz expenses, let alone taxes...

In the DR most biz that do good on their home based biz and join the formal market, keep a good relation with their clients and steer them to their new formal presence. There, any new walk-in is extra income to the already home established client based build upon that relationship and steady sales stream. That's to say, you're not creating a biz income from "0" but moved the home based biz to the formal site and any and all new clients is icing on the cake. Even if only two or three only a day, there were not there at home as now!

In the DR most biz that open their doors without a previous home based established biz, do so because they have a substantial economic base to support the new formal biz for the long term. Those that don't, experience sudden and painful death...

You have a lot to learn about the Dominican biz model and it shows...

Keep your money in your pocket or donate it to a good cause, better than losing all of it as you think it's easy to make biz in the DR!

don't you even watch TV? did you see the program on eyewear last night? most of the sunglasses sold in the world are made by one company, in Italy. a brand like Coach is made in the same factory as Gucci, and Oakley. cost to make? maybe 35 dollars. retail price...400. even if the wholesale from the factory is 3 times production cost, they are buying at, maybe, 100. add CIF, they are, maybe, 120. trust me, PICHARDO, stores in the USA are operating on margins over 200%. that is just one example.

 

[PICHARDO]

don't you even watch TV? did you see the program on eyewear last night? most of the sunglasses sold in the world are made by one company, in Italy. a brand like Coach is made in the same factory as Gucci, and Oakley. cost to make? maybe 35 dollars. retail price...400. even if the wholesale from the factory is 3 times production cost, they are buying at, maybe, 100. add CIF, they are, maybe, 120. trust me, PICHARDO, stores in the USA are operating on margins over 200%. that is just one example.

Sure! In your dreams they are!

The U.S. market is one of the most competitive ones, save for China or Japan today... Your post borders on the ridiculous...

And read again, the average for the DR is above and beyond the 200%, in the U.S. market this retail markup is only found in a handful of biz.


Biz in the those highly competitive markets have at times to sell inventory below costs, in order to move the merchandise so they can keep up with trends, let alone reach a 200% markup...

Most people that shop at places like Walmart or K, hardly notice that those perishable good offers found by the truck load, mostly are made up of short to expiration date goods. We call them dumping inventory at huge discounts that often than not are below costs from the suppliers.

What you think happens when gas hits record prices and you have 40+ stations with over 3,000 gallons of premium gas seating with a mixture of ethanol for a long period? The 20 cents over super quickly gets cut to only a 10 cents difference on the products and you avoid a total loss on inventory. Just the chemicals and added goods to that premium gas goes up in smoke when that happens. You are lucky to make back the cost, if an when you can.

Clothes? Boy! You have no idea of the how much a penny difference makes to the bottom line, let alone a 200% markup as you insinuated above that's a miracle of sorts.


Walmart's profits on inventory is measured in pennies, let alone something like 200% markups...

Or are you telling me that you believe that those price reductions tactics like 50% and 80% off MSRP offered in stores ever sold at that price in the first place!?!?!?!

 

[the gorgon]

in my dreams? i just gave you one specific example, of one particular industry. the numbers came from the CEO. then again, you being PICHARDO, you know more than he does.

 

[pdmlynek]

don't you even watch TV? did you see the program on eyewear last night? most of the sunglasses sold in the world are made by one company, in Italy. a brand like Coach is made in the same factory as Gucci, and Oakley. cost to make? maybe 35 dollars. retail price...400. even if the wholesale from the factory is 3 times production cost, they are buying at, maybe, 100. add CIF, they are, maybe, 120. trust me, PICHARDO, stores in the USA are operating on margins over 200%. that is just one example.

I know that this is very much off topic, but I just had to chime in: I did not see the program, but I would be highly surprised if these number are true. For each pair of 400 USD sunglasses, there are dozens of sunglasses sold at less than 10 USD. Further, I would be surprised that the manufacturing costs are that high; I’d say more like 2 or 3 USD, with the marginal costs maybe at less than about 0.50 USD. Remember that we are talking about a few dozen grams of acrylic, polycarbonate, and metal alloy.

Please realize that it does not matter how much something costs to manufacture when it comes to highly subjective objects such as sunglasses. As with many products, manufacturing is really a tiny portion of the sales price.

 

[Hipocrito Mejia]

Let me get this straight... So if I sell mondongo with yuca out of my home, I can make more money by moving into a mall and taking on huge overhead, if only I can manage to scrounge up an additional 2 to 3 new customers daily?

 

[Castle]

Let me get this straight... So if I sell mondongo with yuca out of my home, I can make more money by moving into a mall and taking on huge overhead, if only I can manage to scrounge up an additional 2 to 3 new customers daily?

Yes! didn't you know that's how Zara started? I knew her, humble lady in Duarte con Paris. Now she owns stores in Acropolis, Blue Mall, and Sambil...:nervous:

 

[cobraboy]

Nope! It's your arrogance to even consider for a moment, that your foreign held notion of what makes biz work in the DR, is not the same as back home...

You run the perfect example of a DR home biz! (like the untold times I said it before).

You have a base sales already established in your informal home biz (which no matter how much taxes and seals your have, still is basically the most "formal-like" of informal biz).

If Cobraboy ver 2.0 decided to open a formal biz in a Mall, plaza or even stand alone store, the client base present today would still support the biz as usual, not just from the home but at the new location and formally introduce the biz to the main stream formal market. Even when you only decided to gear the new formal store to target expats in the country and ignored the locals (as rude as it may sound to some, but I'm ok with it since it's your biz), and only had one or two expats or foreigners walk-in to buy your product, those were two clients a day you didn't have from your home based informal biz!

So you see, the biz is not only doing the same as before, but better as new clients are also coming in on a daily point and you also project a formal image that's not the same as having people come to gear up in your Jarabacoa home's garage...

But...

Oh, puh leeeeeeze.

You think locals that walk into a mall will buy a $2200+ motorcycle tour? Hell, I doubt there are 500 Dominicans in the entire country that have the training REQUIRED to go on one! AND they already have a bike! And know the country! What's the chances one would come into a mall?

This is opposed to the 100,000,000 MOL NAers and Euros I target. Now YOU tell ME where my effort and marketing $$$ should be targeted!

ALL I would do is incur more useless overhead, period, more employees with *zero* payback. WTF would I want to do that?

(BTW-my lawyer, from a high-end Dominican firm, says you're FOS about your "informal" comment; I'm as "formal" as the law recognizes. She actually laughed.)

But what you describe is typical in the market maturity process-seeing how the DR is a VERY immature market. I'm surprised many haven't seen that. Cliff Notes Version:

• New biz opens, has high margins, does well
• Competitors see high margins and do a copy with slightly lowered margins to gain share ("Look! Same stuff but cheaper.")(How typically Dominican is THIS!?:cheeky
• Original biz has to shed profits to compete.
• Third biz opens up undercutting both.
• #1 cuts costs to compete, #2 cuts profits.
• The cycle continues.
• #1 & #2 decide they can't cut any more costs and profits; they choose acquisition of competitors and shed cost from them, adding incremental profits from the incremental revenues through economies of scale.
• Later/smaller/less capitalized competitors fail.
• Pricing and margins hit rock bottom.
• Product eventually becomes generic.

The ONLY way for a market to avoid ^^^that^^^ scenario is price fixing and collusion, dividing a market La Cosa Nostra style. But maybe that's what you mean in "The Dominican Way." :cheeky:

I'll tell you what will DESTROY malls in the DR: A large Amazon.com-esque organization with an efficient delivery system for high-end consumer clothing, household items, goods and electronics. Because the innerweb growth in the DR is at a faster rate than expensive mall space, and younger Dominicans are becoming more affluent and web-saavy. Just ask Best Buy or any other large mall presence. Comp-USA *may* survive, but only because of their ownership affiliation with TigerDirect.com.

 

[Castle]

I'll tell you what will DESTROY malls in the DR: A large Amazon.com-esque organization with an efficient delivery system for high-end consumer clothing, household items, goods and electronics.

And why would you need another Amazon if we've been buying at the original for years??