What is a trade area?

And how to draw yours

A trade area is the part of town your customers come from. It is the neighborhood that feeds your door. Everything else in a location study, such as how many people live there or how many competitors there are, depends on where you draw the line.

Why the shape matters

A plain circle around an address is easy, but real customers do not travel in circles. A river, a highway, a hill or a rail line can cut an area in half. People often pick a place on their own side of the barrier. When you draw the shape yourself, you can follow those lines the way you would on a paper map.

How big should it be?

There is no single right size. A few things push it up or down:

How people get there. A walk-up lunch place in a dense downtown draws from blocks. A place on a highway draws from farther.
How special you are. A place people travel for draws wider than a place people pick because it is close.
How crowded the area is. In a busy area, people choose the closest of many. In a quiet one, they will go farther.

A good habit is to look at a small area and a larger one and see whether the answer changes. If it does, the spot depends on how far people will travel, and you should find out more about that.

Ways to mark your area

Draw it by hand. Best when you know the neighborhood.
A circle of 1, 3 or 5 miles. A quick first look.
A ZIP code. Handy because many public numbers are published by ZIP code, though ZIP areas are made for mail, not for customers.

AIsitefilter lets you use any of these, then counts the people, jobs and competitors inside the line you drew. See also how to pick a restaurant location.

Want the numbers for your own spot?
Mark your area on a map and get who lives and works nearby, the competition, and our Pin Score.
Check a restaurant spot Check a bar & grill spot

More guides

Sources

This guide is general information, not legal or financial advice. Every location is different, so check the details yourself before you sign anything.