Proximity to market

Proximity to market means being close to the customers a business wants to sell to. It matters most when customers have to travel to the business, such as a bakery, an optician or a dentist. A short, easy journey makes the business convenient.

Being near customers can bring a larger number of potential customers because more people live or pass within easy reach. It can also raise footfall, which helps businesses that depend on passing trade, such as a newsagent beside a busy railway station. Being close can lower distribution costs too, because stock and deliveries travel shorter distances. A nearby market also makes it easier to target customers with suitable products and to identify what they need, for example a surf shop in a seaside town stocking wetsuits and board wax because that is what local customers come in for.

A convenient location can help a business add value and charge higher prices. A convenience store on a large housing estate can charge a little more for a pint of milk in the evening, because residents value not having to drive to a supermarket. In contrast, a business that is too far from enough customers may not sell enough to cover its costs, make a profit or survive.

Footfall is the number of customers passing a particular location. High footfall is valuable to businesses that rely on passing trade, because some of those people may decide to buy. A shop on a quiet side street may have low footfall even if its products are good, so it may need to rely on advertising or online sales to attract customers.