Brick and mortar

The term brick and mortar, which would translate into Spanish as “ladrillo y mortero” (the materials used to build shops and warehouses), refers to businesses or institutions that operate from physical buildings, whether a shop, a factory, etc. It is the opposite of an online shop or business (one that operates only on the Internet) that has no store or physical location where orders can be collected, known as pure play.

Halfway between brick and mortar companies and 100% online or pure play companies, there are companies that operate under the brick and click model. In this case, it is a model that mixes traditional physical sales (brick) with the online sales model (click).

Unlike this concept, brick and mortar businesses have the physical store as the sole focus of their commercial offer. That is what its name refers to (Brick means “ladrillo” and Mortar means “mortero”).

1. Brick and mortar costs

As a general rule, administering and managing a pure play business is cheaper than running one with a physical location where customers are assisted face to face, because there are fewer overhead costs to cover.

The cost of maintaining a physical store depends on the size of the store itself, the type of business, the location, etc. To calculate the costs of all this, you need to take into account the basic costs, which are as follows:

– Rent or property: If you don’t have your own physical location to sell from, you will incur the cost of renting or leasing one.

– License fees and permits: Stores, whether online or physical, involve paying fees and obtaining permits, with the costs that come with them.

– Initial stock: You need to build up an inventory large enough from the day you open to serve customers without delays.

– Signage and decoration: You must have external and internal signage, and invest in decor that makes the store attractive to customers.

– Professional services: These are the costs of employees and of any external professionals whose services you need: legal advisors, accountants, IT staff, cleaning staff, etc.

– Advertising: To make yourself known to the public, you will need to carry out online and offline marketing activities.

– Web and technology: Even if a store has no ecommerce, it needs to develop an online presence, both with its own website and on additional social media. Likewise, you will need computer equipment of greater or lesser scale, such as point-of-sale systems.

– Insurance: It is vital to have insurance that protects us, the store itself and the products it houses against misfortune.

Related entries

• Marketplace
• Ecommerce
• Digital Advertising
• Brand Awareness
• Emotional marketing
• Customer Lifetime Value CLV
• Retail
• Programmatic Advertising
• Monopolistic Competition

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