There is no denying that retail business or retailing will never die, nor overcome easily by evolving commerce strategies. This traditional approach to selling goods to consumers, which is according to their needs, and specifically in little amounts, still attracts potential entrepreneurs.
Retailing, if conceived and managed properly, will provide any business owner the desired return of investment projected from the capital investment. How so? Retail outlets offer various goods or products in a single location that consumers can bring home right away and not wait for them to arrive if ordered online. Even if the initial purpose of a consumer is to purchase a single type of product only, it is possible that he will buy another or more types of products available in that particular retail store. This picture promises sales and minimum to zero dead products on the floor.
Let’s take a look at the basic workflow in a retail business:
The cycle is repeated each day although there are variations in the operations and procedures in each retail organization.
Businessmen and entrepreneurs who plan to get into the retail business have a wide variety of options. According to Shopify, there are actually four (4) major categories to choose from:
- Hard lines for those who want to market cars, appliances or furniture
• Soft goods for those who intend to sell toiletries, shoes, or clothing (to name a few)
• Food that includes cheese, produce, and baked goods (to name a few)
• Art that includes books and musical instruments, and especially fine art.
From these categories, different types of retail stores exist. Among others, department stores, boutiques, supermarkets, variety stores, and mall, are the popular retail store types these days.
The supply chain participants in a retail business include the manufacturers that produce the goods or the products, the wholesalers or distributors that buy these goods or products in large quantities and sell them to retailers, and the retailers that sell them in small amounts to the consumers. Each of these retailing participants include a markup or profit margin in their product cost. Therefore, as a retail outlet store owner, you have to do your own math of determining the best markup for your goods.
It is important, however, before making a decision, to know what drives you to get into the retail business. Are consumers in your area going to buy your goods or products because they need them? Is there a hint that consumers in your area desire the products you want to sell? Perhaps you may need to know the demography, too, in order to analyze the sales potential of your products.
Second to consider is your ability to supply. Do you have what it takes to supply the need to your target consumers? If you have, this is good news because if you make sales, you increase the price of your goods or products, eventually it will result to an increase in supply.
Last but not the least, is the profit you will earn in selling your goods or products. Will these line of products promise a viable return of investment? Will you still gain profit when you set a considerable markup? Will you be able to meet your sales goal?
If you have positive answers to these last three concerns, then it is time to build your retail business and succeed!