Business Overview


As the owner of a souvenir shop, you’ll stock your retail store, cart or kiosk with inventory of interest to tourists. Your offerings will reflect the demographics and socioeconomic strata of the market. For instance, if you’re at a vacation destination that draws young families, you might stock novelty trinkets, toys, t-shirts, candy, and gum. However, if you’ll attract more sophisticated travelers, you might sell pricier jewelry with a local slant -- ie, designed with stones or gems found in the region.

Who is this business right for?

You can succeed if you know your market. You must be able to match inventory with the needs of vacationers and at an affordable price point.

What happens during a typical day at a souvenir shop?

Your typical workday could consist of a range of activities, including the following:

  • Opening and preparing your location for customer traffic
  • Scheduling and supervising staff, if you have any
  • Waiting on customers and helping them find appropriate souvenirs
  • Handling vendors, arranging credit relationships, and ordering merchandise
  • Keeping your store clean and merchandise appealingly displayed
  • Networking with other sellers in your area, so they keep you in mind if customers ask for merchandise they don’t carry -- and you’ll do the same for your neighboring sellers
  • Staying in contact with landlords, local officials, and others who can impact your business operation
  • Paying bills, maintaining financial records, and managing cash flow

What is the target market?

If you’ve anchored your business in the right location and stocked your store with appropriate inventory, your customers will find merchandise they’ll want to remember their travels by. Vacationers are primed to spend premium rates while away from home because they consider it to be part of the experience. They’re sentimental impulse buyers looking for souvenirs that will connect them with their travels. Or perhaps they’re looking for small gifts for family members, friends, or co-workers who didn’t come along. Either way, they’re motivated to spend.

How does a souvenir shop make money?

Your sole route to profitability is to sell merchandise to enough people at costs that cover your rent, staffing, inventory and miscellaneous costs and yield an appropriate profit. You’ll have an advantage over conventional retailers in that you can stock your location with items they wouldn’t have necessarily bought under any other circumstance. For instance, an inexpensive keychain with the name of the travel destination is of value only at that point in time. Similarly, you won’t compete with the Internet, since the purchase is location-inspired.

What is the growth potential for a souvenir shop?

You’ll have fewer worries when the economy is humming and people are traveling (and spending). However, people vacation even in bad times, though they’ll stick closer to home and spend less on souvenirs. You can respond to the realities of the marketplace by adjusting your inventory to sell less pricey goods when budgets are tight.

Getting Started


What are some skills and experiences that will help you build a successful souvenir shop?

It’s incredibly important to start with a realistic business plan. This valuable start-up tool will help you identify your customer profile and stock up on merchandise that will sell. You must be able to accurately track sales to unveil trends and see what’s selling and what’s not. And finally, you should have a strong sales instinct, to turn shoppers into buyers.

What are the costs involved in opening a souvenir shop?

That will be highly variable depending on your location, size of business, clientele and the merchandise you carry. But here are some cost breakdowns for illustration purposes. Lease -- $5,000 to $20,000 or more. This is highly variable because there are so many different factors involved. First, location. It will certainly cost you more to rent a store on Time Square than outside of Cedar Point in Ohio. Also, you might rent anything from a small kiosk at $800 a month for summer months only, to a year-round thousand-square-foot shop. Utilities -- Zero to $6,000 a year or more. If you go the kiosk route, you might pay nothing. But a year-round store could involve air conditioning in the summer months and heating in the winter. Inventory -- A minimum of $4,000, generally. It really depends on what you’re selling.

Staffing -- $20,000, plus. This includes the bare minimum you have on hand to support yourself as you get your business started. It might be a lower amount if you’re only open seasonally. This estimate includes no additional help. You’re likely to start alone, and add staff as the situation warrants.

Computer hardware and software and cash register -- $2,500 or more. This includes the retail management software that will enable you to manage sales, inventory, invoicing, cash flow, and other critical tracking needs.

Promotion and marketing -- $2,000, est. You won’t need much ongoing advertising and marketing if you’ve chosen your location wisely. That’s because the attraction itself, whether it’s an amusement part, a touristy part of town, a museum, or seaside destination, will draw foot traffic. But you’ll want to hire a graphic designer to design your logo, website, and signage. Decorating, remodeling and signage -- $500 to $6,000 and up. It could range from a decorative umbrella with your logo to a full store makeover. But it’s important to decorate to draw the attention of the audience you want.

Licensing and permits -- $200, est. This cost could be much higher in certain exclusively priced locations, such as Time Square. Consult the Small Business Association (SBA) website for valuable information on the licenses and permits you might need in your area.

This Inc. Magazine article gives a good breakdown of opening costs for a small retail store.

What are the steps to start a souvenir shop?

Once you're ready to start your souvenir shop, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

  1. Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
  2. Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your souvenir shop is sued.
  3. Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
  4. Open a business bank account. A dedicated checking account for your souvenir shop keeps your finances organized and makes your business appear more professional to your customers.
  5. Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
  6. Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
  7. Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
  8. Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
  9. Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Recommended: Fizzle.co offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.

What are some insider tips for jump starting a souvenir shop?

Find multiple sources for the inventory you want to carry. You can find most of that online, such as this wholesale site. Also consider attending gift fairs such as NY Now, which attracts numerous wholesale product exhibitors and retail buyers.

Unless you have a successful track record in business, it will likely be difficult to get bank loans. That might mean that you rely on savings, credit cards, or small loans from friends and family. With that in mind, it’s important that you try to earn credit with vendors and have strategies to turn over your inventory quickly.

Growing Your Business


How to promote & market a souvenir shop

Your store name and signage are important since your destination might be one of many in the area. Also, try to stand out by the originality of your displays. If you’re only selling the same t-shirts and mugs as everyone else on your boardwalk, the items will become a commodity and the sale will go to the first store in line or whoever has the lowest price.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Most of your customers will be new, impulsive buyers. So customer retention won’t be an important consideration. However, be sure to hand out business cards and fliers, and let your customers know that they can order your merchandise online if they’d like.

As for those first-time shoppers, it’s your inviting displays and personality that will turn them into buyers. Do you have the ability to dress up a store and strike up instant friendships without pressuring shoppers?

How and when to build a team

If you’re starting your shop on a shoestring budget, you might try to go it alone. However, you’ll quickly find that the long hours and multiple responsibilities (hopefully including the long customer lines at the cash register) mean you need help. You can usually start by finding part-time help at or near minimum wage.

Legal Considerations


State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a souvenir shop. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, check out our informative guide, Sales Tax for Small Businesses.

For more information about local licenses and permits:

Certificate of Occupancy

A souvenir shop is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a souvenir shop.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for your business’ location to ensure your souvenir shop will be in compliance and able to obtain a CO.

Reduce Personal Liability

Structuring your business as a limited liability company (LLC) ensures your personal assets are protected in the event your business is sued.

What is an LLC?

Form an LLC in 5 easy steps

Earning Potential


How much can you charge customers?

That will depend on your merchandise. But you can charge higher markups than might be possible elsewhere since most of the items you carry can only be easily found in your location. Once a family of customers goes home to Germany, where are they going to find a My Heart’s in San Francisco t-shirt? And why would they buy it anytime except during their San Francisco vacation?

What are the ongoing expenses for a souvenir shop?

Your ongoing costs will include staffing, inventory, rent and utilities. This can be a pricey tally depending on your location, clientele, and type of business, and it reinforces the need to sell as briskly as possible.

How much profit can a souvenir shop make?

According to figures that appeared in the Small Business Development Center Network (SBDC) National Information Clearinghouse, “Seventy-eight percent (78%) of America’s gift shops employ only one to four employees and 75% have less than $200,000 in annual sales.” But your own sales figures and profits will be determined primarily by your mix of merchandise and location.

How can you make your business more profitable?

Consider adding food or beverages to your product mix. Just remember, you must first obtain licensing from your local health department.

Next Steps

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