It typically takes just $20,000 and six months for retail truck founders to see a return on their investment, according to the American Mobile Retail Association.
There are now mobile retail trucks in St. Louis, Columbia and Kansas City, and founders cite the low overhead cost as a major motivator for getting into the business. That was the case with Emily Ponath, owner of St. Louis’ first fashion truck.
Ponath graduated from the University of Missouri in 2004 with a textile and apparel management degree and worked for several years as a fashion buyer in St. Louis. However, Ponath was left without a job when the boutique she helped develop closed its women’s department. She wanted to open her own brick and mortar store, but a segment on the Today Show about retail trucks in cities like Los Angeles and New York changed her mind.
“Basically they were saying people that started them were making their money back quickly,” Ponath said, “and I liked the idea of going to the customers.”
After a year of preparation, Ponath launched Rack + Clutch in April 2013. Ponath sells jewelry, accessories and clothing from hand-made and independent designers out of a UPS- style truck painted in a funky pink and orange pattern.
Ponath has chosen about 60 parking locations that she rotates through every two months. Businesses from hair salons to coffee shops, as well as corporations and schools have asked Ponath to set up shop for the day on their property. She said both her business and the retail hosts end up gaining new customers in the partnership, and promote each other on social media. Ponath said social media is the most important promotional tool to get customers excited to visit the truck.
Ponath said she was able to pay off her small business loan about six months after opening and made a profit her first year in business.
“It’s been awesome for me,” Ponath said. “It’s been better than expected. They love the food trucks. I just knew the mobile retailer would be successful.”
That’s been the case across the country in the fast-growing industry. In January 2011, Stacey Steffe, president of the American Mobile Retail Association, opened Le Fashion Truck, the first of its kind in Los Angeles and maybe even the county. By the end of that year Steffe estimates there were already 100 trucks across the country, and she estimates that there are about 500 trucks today.
Steffe’s association started as a small organization to support retail truck owners in Los Angeles, but demand grew as the trend spread across the country. “We would hear from tons of people all across the world that wanted to get started,” Steffe said.
In 2013, Steffe took the organization national to advise retail trucks owners on business and regulation issues. The association now has more than 100 members, including 14 in the Midwest.
The retail truck industry started taking off as the nation’s economy declined. The recession led to layoffs and store closures just as the mobile nature of retail trucks became more attainable because of low overhead costs, Steffe said.
Low costs allowed Parsimonia founder Beth Styles to launch and pay for her mobile business up front in St. Louis two years ago. She started selling vintage clothes and craft projects on Etsy before revamping a 1960s travel trailer for her inventory. The success of the business allowed her to open a brick and mortar shop last year. She still sells out of the trailer, and uses the mobile business to co-market with her new store.
Many truck founders like Styles see their business as a starting point for full-blown retail stores. However, some cities have maintained hostile attitudes toward the mobile businesses. Although the city of St. Louis offers permits to food trucks, there is no formal process available to the retail trucks.
Ponath said she’s been pushing for city license and ordinance policies for the retail trucks, but has been discouraged by officials who don’t seem eager to work with the truck operators. She said she was made to feel like a homeless person at times, and Mayor Francis Slay even called the trucks “pirates” in a recent blog post.
“Those people who say we’re pirates clearly don’t know how shopping works, because I’ve had boutiques ask me to park out in front of them,” Ponath said. “Anytime there are more places to shop, more people will come. That’s why the neighborhoods that have a good boutique culture, there’s more than one boutique.”
Most retail truck owners operate only on private property to avoid the problem altogether. Ponath said she parks on private lots, but also sometimes parks near food trucks, waiting to see if she’ll get into trouble.
Steffe said there is no model licensing process for the trucks right now, and she recommends talking to city hall officials before moving forward with a business plan. She is also working to pass legislation in the state of California that would help develop regulations for the trucks in every city in the state, which could also spread across the country.
Although the city of Columbia does offer temporary business licenses, it only offers permits and vending zones to food trucks. However, Nathan Fleischmann, founder of Stadium Shoes and the only retail truck owner in Columbia, said the city has been very supportive of his business overall. He said the city prides itself on embracing new ideas.
Carrie Gartner, CEO of The District, said mobile businesses are great for the downtown area and should be supported.
“These guys are small business owners,” Gartner said. “They’re very entrepreneurial. How do we promote that?”
Fleischmann said support for his store has gone beyond the business community. He was able to raise more than $7,000 with the help of a Kickstarter campaign in 2013, and he won second place and $3,000 at the Regional Economic Development, Inc.’s #BOOM competition he was encouraged to enter. Since opening in April, Fleischmann has stopped at seven locations around town selling shoes, sunglasses and sock brands.
Mobile businesses can operate in locations and at times of day that other traditional businesses can’t, Fleischmann said. As customers walk into his truck parked at Lucky’s Market, Fleischmann greets them saying, “I’m assuming you’ve never been on a shoe truck before.”
Renee Henson wandered into the truck on her way to buy groceries. Henson said she had never been in retail truck, but that the unexpected location added a huge allure. The truck gave her something to do on a summer morning, she said.
“I think it’s a cool idea,” Henson said. “It’s pretty clever.”
Fleischmann said he gets the most business at a parking lot behind Shakespeare’s Pizza on the northern edge of MU’s campus and at Lucky’s. Both locations offer their parking lots to Fleischmann for free, and are not accessible locations for traditional stores. The idea that retail trucks pose a threat to other businesses is a misconception, Fleischmann said.
“Food trucks or mobile retailers are a really great way for a community and a city to encourage growth of business owners,” Fleischmann said. “These retailers are a great way for economic gardening and long-term growth strategies.”
Update: July 21, 2014
This story was updated to reflect the number of retail trucks across the country and information on permitting and licensing for retail trucks in Missouri.