Sunday Mailbag- Retail Caricature Biz!

Q: I’m thinking about opening a retail caricature business in my area because I’m unable to do live gigs that used to be my main source of income before the pandemic. Can you answer some questions about that for me?

A: This email question went on to ask a lot of specifics about the retail caricature business, which having owned and operated caricature concessions for over 30 years in venues ranging from county fairs to major theme parks I have a fair amount of experience in. I’m going to paraphrase a lot of these questions, and generalize a lot of the answers since every situation is different and I could write a decent sized book on all the ins and outs of the retail caricature concession business. Here it goes:

Q: What are the most important considerations when setting up and managing a caricature stand in places as amusement parks, zoos, or shopping malls?

A: There are three:

1. Location
2. Location
3. Location

Okay, there’s a bit more to it than that. Here’s the real three:

1. Location
2. Product
3. Financial Arrangement

LOCATION

My first list above was not inaccurate. Where you set up at is by far the most important thing. It doesn’t matter how good you draw or how great your display is or how advantageous your deal with your landlord is. if your location is bad. If you don’t have steady and high traffic walking past your booth, you won’t succeed.

And it can’t be just anybody walking by. Setting up in a busy thoroughfare where the same people walk by every day won’t work, at least not for long. You need constant NEW traffic going by. That’s why you could set up in a local shopping mall say for the holiday season, and over the course of a month or two do some decent business because you are a new thing they have not seen. Eventually you will find that the traffic at a local shopping mall is the same crowd over and over. Setting up int he same spot the next year, you’d be lucky to do half the sales you did the prior year. At some point you will draw all the people who wanted to be drawn, and your business will dry up. The best places to set up are tourist areas or event spaces that draw in people that travel to that area, rather than locals. That’s why you see caricaturists set up at major tourist spots and by famous landmarks, or in entertainment venues like theme parks. Those places get constant traffic from tourists, and it’s a new crowd every day.

Another things about location is for there to be a reason to buy something in that spot. A caricature is largely an impulse buy, so the traffic going past you need to have a reason to remember being there, and a pocket of money that they plan to spend because they are there. Again, tourist centers, fairs, destination areas of popular cities, theme parks… people go to these places to experience being there, and they expect to spend “disposable” money on things like souvenirs, food, drink, etc. They come looking to spend that money, and a caricature is one of those things they like spending that money on. In this way you can set up at a local fair and, while it’s likely a lot of the same people there as last year, there will be spending on souvenirs anyway.

Location is everything. Really.

PRODUCT

By this I mean having a great display, putting on a good show, and doing good work.

In that order.

Your presentation is what stops the passersby. Having an impressive and eye catching booth gets traffic to stop in. Having a booth that is well designed and full of great samples also creates confidence in your potential customer that they are going to get a good product.

“Putting on a good show” is part presentation and part customer interaction. At it’s best, live caricature is a performance art. You banter with the customers, get the watchers involved, have some fun and in turn those getting drawn and watching you draw have fun. That causes the people stopping by to stay and watch the “reveal’ of the drawing, and then they are more likely to be the next customer. Sitting there like a lump with a frown is not going to work well.

Doing good artwork should be self evident, but sadly it’s at the end of the “good product” list. Regular people have a hard time telling a good caricature from a bad one, so mediocre or even downright bad caricaturists can still do good sales in the right environment. There is no doubt, however, that really good work rises to the top. With all the other elements in place also doing top notch drawings will just add to your booth’s success. That’s a constant pursuit, of course.

Financial Arrangement

There are some more specific question below about this aspect of the business:

Q: What is the usual agreement between a caricature entrepreneur/booth owner and the owners of the location? 

A: Most caricature concessions operate under a lease agreement, making them “lessees” and the venue they are in “lessors”. There are a few different typical arrangements between a lessee and a lessor:

Percentage of Sales– In this arrangement the concession owner pays the venue a straight percentage of their sales. There is sometimes a guarantee that they reach a certain level of sales over a certain period of time, but basically the agreement is the lessee pays the lessor XX% of the money they take in. This is advantageous in that there is no monetary risk based on future sales for the lessee. If they do no sales, they owe no rent. This is typical of all theme parks and sometimes small venues. The disadvantage here is the % to be paid is usually pretty high. In theme parks it ranges from 35%-45% or more.

Base Rent plus Percentage Rent- Here the lessee agrees to pay a “base rent” upfront prior to a sales period, say monthly. Then the agreement contains a “breakpoint” in gross revenues. Once the lessee hits that breakpoint, they start to pay additional rent, called “percentage rent” on any revenues collected after that breakpoint. Usually the base rent paid is based on a percentage of a projected amount of sales for that period, giving the lessee a (hopefully) realistic target for sales in that period. That percentage is the same percentage applied to your percentage’ rent after the breakpoint. This is typical in specialty retail venues in malls, tourist retail centers, some zoos, and seasonal operations like a holiday festival or a bigger state fair.

A typical month may go like this: Your lease agreement says that your basic percentage is 20%. They project your sales in December to be $10,000. Your base rent is 15% of that $10,000, or $1,500, and the $10,000 is your “breakpoint” for percentage rent. You pay them the $1,500 base rent on Dec 1st. You then operate all month, and after Dec 31st you’ve done $15,000 in sales. You turn in a report with that figure, and pay them 15% of the difference between your actual sales and your breakpoint. In this case that would be $15,000 total sales – $10,000 breakpoint= $5000 x 15% = $750 additional percentage rent. You pay that amount. You also them pay the base rent for February, and so on.

The advantage to this arrangement is that the percentage they base your agreement on is usually less than a straight percentage arrangement because you are guaranteeing up front rent and taking risks that you will do the sales to make it work. A typical specialty retail base percentage can be between 15%-30%. The disadvantage is you are out of pocket at the beginning and if you have a bad month in sales you can struggle. Say you only do $5000 in sales in our example month above. You paid $1500 in rent for only $5000 in sales, so you paid 30% of your total sales in rent. That’s a lot more than the 15% you’d have paid had you hit your breakpoint. Also, the lessor often makes that breakpoint a very optimistic number to reach. If entering into an agreement like this, you’d want your projected sales breakpoint to be a reasonably attainable number.

Straight Rent- This is just a basic rent for your space, with no additional rent due no matter what you do in sales. This is a typical arrangement with a lot of smaller fairs and festivals that are only operating for a few weeks. This could be virtually any amount. Obviously the lessee takes all the risks here.

Q: Could it be that a park/zoo grants space for the artist just for the sake of having a cool attraction that is producing a high quality  themed souvenirs with their logo?

A: A nice dream, but no. Retail square footage is worth money, and virtually no venue will buy the “but we are going to entertain your guests for free to you!” angle. Even “buskers” who do street magic or some kind of entertainment for tips have to pay someone something for their space. It’s very rare you will find a venue willing to give you even discounted space because of your “entertainment” factor.

Obviously there is a lot more to all of this, but those are the basics.

Thanks to Lucas for the question. If you have a question you want answered for the mailbag about cartooning, illustration, MAD Magazine, caricature or similar, e-mail me and I’ll try and answer it here!