Should You Locate Your Store in a Mall?

These are some questions to ask when you're considering placing your store in an on-line mall:

• Do they allow you to advertise your store independently of the mall?
• Do they take a percentage slice of your monthly income?
• Do they generate enough traffic and provide enough services to warrant their charges?

Malls promise to bring you more window shoppers than you'd have all by yourself. Typically, they will place an ad for your store near their front door, at least several times a year, much like stores on CompuServe do with their "What's New" list.

Another service malls commonly offer is a built-in central purchasing system. Thus you don't have to pay for shopping cart software up-front. Instead, you pay for it in higher fees over a period of time.

The way shopping cart software works, however, is to bring the customer into what is called a "state" in which the shopping system is functional. To do this you bring them in through a specific "front door". Once in this "state" you may be able to purchase items from any store in the mall, and pay once. The mall often takes care of the whole system.

Practically speaking, however, the only "front door" address which is advertised on the Internet is the mall's address, not yours. If this is the case, your potential customers can't enter your shop from the "outside" because then they wouldn't properly come into the shopping "state." Without your own unique Web address (URL), you can't market your own presence on the Internet. You have to rely on the mall owner's marketing savvy, persistence, and creativity. (Not all malls operate this way, but be sure you ask the right questions when you inquire.)

Since purchasing is controlled centrally, you may not even be able to find out your customers' e-mail addresses to contact them later.

Make sure a mall is the environment in which your store can really flourish. And when you're considering the pros and cons, realize that you can probably join the world's largest on-line mall for no charge whatsoever, and with no strings attached. When you consider the modest costs of setting up your own store's purchasing system and independent identity, you may well decide against the restrictions and costs that some malls impose.

I don't think that the window-shopper traffic assumption that works in physical malls applies very well to the Web. Most so-called "malls" are just lists of stores constructed by a particular ISP or other company. When you think about it, a virtual mall is just a list of links categorized by store type. You can get the same exposure -- and maybe much better -- by listing on Yahoo, which may just be the world's biggest -- and free-est -- cyber mall.