Why do milk tea shops often lose money
In recent years, milk tea shops have become a new way of consumption among young people, and market demand has grown rapidly. However, 9 out of 10 milk tea shops are losing money. This is a common phenomenon. Why is it difficult for milk tea shops to operate and what are the reasons for losses? This article discusses these reasons in detail from four aspects.
High rent has become the number one cost for milk tea shops
The funds of a milk tea shop mainly consist of two parts, one part is decoration fee, equipment fee, raw material fee, labor fee, etc., and the other part is rent. Since many milk tea shops have small business areas, rent alone often accounts for more than 50% of the entire cost. Some shops even go bankrupt due to high rents. Not only that, as urban rents continue to rise, the rental costs of milk tea shops are also rising, further reducing the profitability of milk tea shops.
Expired raw materials and short shelf life
All fresh ingredients in a milk tea shop must be processed and consumed within a short period of time, otherwise costs will be wasted. Since milk tea shops sell a wide variety of products, purchasing raw materials has become an unavoidable problem for milk tea shops. In order for a milk tea shop to obtain the best cost-effectiveness of raw materials, it must have an excellent supply network and market sensitivity. Once the shelf life of raw materials is reached, milk tea shops must find ways to consume them without reducing customer satisfaction. The repeated cost waste has eliminated many milk tea shops that cannot bear the huge cost.
Milk tea shop has too single business philosophy
The market is diversified, and so are consumer demands. To gain a firm foothold in the market, milk tea shops should have innovative concepts and products to provide consumers with more diversified and differentiated choices. Most milk tea shops have a single business philosophy, homogeneous products, and lack of uniqueness, making them targets for competitors to suppress.
Insufficient personnel training and increase in fixed costs
The daily operations of a milk tea shop are inseparable from employees. A good team of employees can handle the job smoothly, improve customer satisfaction and increase sales revenue. Unqualified employees will cause many problems, such as improper use of raw materials, poor service experience caused by sudden large passenger flow, high personnel turnover costs, etc. At the same time, fixed costs are also a test in the operation of a milk tea shop. For example, fixed costs such as store rent, employee wages, water and electricity bills, and property fees need to be paid monthly. They will increase the cost of the milk tea shop and reduce the store\’s profit margin, becoming an inherent operating problem for the milk tea shop.
Conclusion
As analyzed above, there are various reasons why milk tea shops lose money. Effective cost savings, improved work efficiency, diversified innovative ideas, and step-by-step management concepts are all factors that need to be paid attention to in the operation of a milk tea shop. Only by paying attention to these aspects can we slowly increase the profitability of milk tea shops and provide consumers with more high-quality services.
