What is Zero-Cost Operation?
What is Zero-Cost Operation? Why does COOKTIME choose high-rent locations for physical stores?
This time, we visited the store located in the E-PARK Shopping Center in Nanjing. This shopping center covers a total area of 130,000 square meters and is a bustling commercial district that combines business, culture, and entertainment. It's one of the favorite gathering spots for young people in Nanjing. COOKTIME store is strategically situated right at the entrance of the largest high-end supermarket in the mall, Sam's Club. The location is excellent, and even on a regular workday, there's a constant flow of shoppers.
The store manager, Ms. Shi, is a young and promising professional. Three years ago, she joined COOKTIME along with another partner and opened a store in Nanjing's largest building materials market. During the three years of cooperation with COOKTIME, the headquarters provided their team with customer resources and business training. At the same time, Ms. Shi's dedication to delivering exceptional customer service earned her numerous positive reviews from clients, leading to many customer referrals and word-of-mouth recommendations. Therefore, she found her career path and decided to independently open her store in a commercial plaza.
Based on the concept of zero-cost operations, the headquarters selected a location beside Sam's Club in the E-PARK Shopping Center, despite the higher rental costs. We predicted that the foot traffic here would undoubtedly cover the rental expenses. The store's decoration took three months, and it opened concurrently with Sam's Club. During the headquarters' revisit, when asked about her feelings regarding this new entrepreneurial endeavor and her thoughts on the headquarters' choice of a high-rent location, she responded as follows:
"At present, the store is operating exceptionally well, with a significant daily influx of customers. Many people often hesitate between rental costs and location when choosing a physical store's location. They frequently make the mistake of thinking that selecting a location with low rent will reduce costs. However, the reality is quite the opposite. Besides online traffic, offline foot traffic is equally crucial. In a mall with high rental costs, it inevitably attracts a large number of visitors and customers, increasing the chances of transactions and, thus, covering the rental costs. This is what we refer to as zero-cost operations."