Candy Land

Bite-sized Business

Opening a bulk candy store isn't the only way to get a taste of the candy market. Many existing retailers--those who own greeting card shops, grocery stores, flower shops and more--are adding bulk candy sections. A study by the National Confectioners Association shows that bulk candy sales in supermarkets totalled an estimated $387 million in 1996, which translates to about 187 pounds of bulk candy sold per week, per store.

"Bulk candy can be a real profit center when it's sold in other retail environments," says David Sill, owner of Candicopia Inc., a multimillion-dollar national candy and snack foods marketer and distributor based in
Blue Bell, Pennsylvania.

He should know. The 35-year-old distributor has seen firsthand how his account list has expanded over the past few years to include nonbulk-candy venues. "There were very few people selling bulk candy when I started as a distributor in 1991, but now there are hundreds of accounts out there, including institutional snack bars and college cafeterias," Sill says.

Sill started his distributorship after a two-year stint as a bulk candy retailer left him frustrated with problems finding good bulk candy distributors. "We would run out of stock on the most popular items and would have to wait several days until the scheduled weekly delivery date rolled around," Sill recalls. "In the meantime, there was nothing I could do but lose sales."

Running out of your customers' favorites can be devastating for a candy retailer, so finding a reliable distributor, one with adequate inventory and quick turnaround, is critical. But above all else, the key is to operate in a high-traffic location. "Location is the most important factor in creating a successful candy business," says Ervin, 47.

Location has played a big part in the quick success of Ervin's two Candy Express stores--one in a mall, the other in an airport. Nontraditional locations, such as airports, are appealing to consumers and thus to retailers.

While malls may provide another ideal location, you'll have to use some creativity to get in without paying their exorbitant rents. For instance, Sill, while still in the retail end of the business, managed to find a way to avoid sky-high mall rents by squeezing a freestanding bulk candy store into an unused space near the staircase. "[The mall management] had never even thought about renting out that space, so I got a really good deal on the rent," he says. Lower rent and great foot traffic meant lower overhead and increased profit margins for this candy entrepreneur.

While the candy crowd touts the ease of operation and good margins, they admit there are some drawbacks to being a candypreneur. For instance, increased competition is beginning to cut into sales for existing business owners. Retailers also note that no matter how many tasty treats your store carries, customers will inevitably request something you don't stock.

And then, of course, there's the other danger that's unique to the candy biz. "You have to watch out because it's easy to get addicted to your product," warns Badawi. You mean there's something wrong with having licorice for breakfast, Runts for lunch and Gummy Worms for dinner?

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This article was originally published in the May 1998 print edition of Entrepreneur with the headline: Candy Land.

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