Retail is one of the harder business sectors to get started in, simply because it takes such a considerable investment to rent shop premises and purchase the initial stock. If you have ambitions to open a retail business, the prospect of finding the investment or carrying the burden of substantial business loans could well be putting you off taking your ideas any further.
However, there are alternatives to starting with a physical store on the high street or in a mall that will cost far less but could still provide you with a sound basis on which to grow a business. Read the following tips for guidance on the matter.
Online sales outlets
The Internet has opened up many routes to retail success for entrepreneurs who either don’t want a bricks and mortar store or don’t want to take on the financial commitment involved. You can create your own e-commerce website, or use the platforms available like eBay, Amazon, Etsy, and many others.
The pros of running an e-commerce store
- Your own website gives you the freedom to stock, sell, and manage your own products in whatever way you choose, and all the profits are yours. However, you’ll need to spend time managing the site and marketing your business, or you’ll sell very little.
- If you get your marketing right, you could build up an impressive revenue stream and become established in your niche, but you’ll have to work hard to achieve this.
- Using a retail platform enables you to use the marketing power of a big-name business, meaning your products are far more likely to be found by potential purchasers.
- You can also take advantage of services like dropship, where your products are held and dispatched at the main warehouse, so you don’t need to keep stock at home. You may have to operate under certain restrictions, like charging a set amount for postage and packing, and you’ll be paying a commission on sales and/or a monthly fee to use the platform.
If you want to start as small as possible and test the waters before investing any more, the platform option has the advantage as you won’t need to worry about marketing. What’s more, if you go for a dropship model, you won’t even see the stock you’re buying and selling.
It’s a far easier option if you’re new to business, have limited time, or limited funds. The only real downside is that you won’t make so much money on each sale as you would if you were independent, but selling more for a slightly lower margin may well work out more profitable than selling very few products and claiming all the margin.
Small but professional
Starting small and running your business from home or a small industrial unit is clearly far less costly than renting a shop, but you still need to manage your business professionally and lawfully. Your trade will depend in large part on the quality of the reviews you receive, and if you start getting a poor reputation for product quality or customer service, people will avoid using you, especially when there are plenty of higher-quality alternatives.
You can’t expect to make money from retail without a certain degree of investment, but you can make your purchases as cost-effective as possible to keep overheads down, improve productivity, and make more from each sale.
A decent computer system is essential, and you should invest in the best hardware and software you can. If your systems let you down, your business will be seriously affected, so make sure you have all the technological capabilities, security, and backup services available to prevent system problems.
It’s also worth investing in technology that can improve your operating procedures, for example, using a barcode system to manage stock control. Using barcodes or RFID chips and scanners makes managing stockholdings, orders, and sales far easier and quicker for even the smallest businesses, as well as more accurate. Have a look at this resource for more information on using barcode and scanning technology.
Selecting your products
In retail, you need to be selling something people want at a price they’re happy with. That doesn’t mean going for the cheapest items, because in certain markets a higher price is expected, and buyers will be suspicious of products that seem too cheap.
Many entrepreneurs use Chinese wholesalers to source products of all kinds that are made in China and shipped in bulk to Australia and across the world. If you go for this option, you’ll get good prices on an impressive range of products, some of which can be personalised with logos or printed phrases or names to make your products different.
The downside is that unless you fancy a trip to China, you won’t be able to view stock in person, and you’ll have to rely on the online catalogues and product descriptions. This is still an option many entrepreneurs have found success with, and it’s a commonly used model for businesses who sell online using the drop ship system.
You can create your own e-commerce website, with eCommerce website solutions like Shopify and Bigcommerce which you can find in this article or use the platforms available like eBay, Amazon, Etsy, and many others.
Selling handmade items
If you’re selling your own crafts or handmade products, you’ll need space to store your wares and logistics systems in place for your supply chain, both incoming raw materials and outgoing finished products. If you are making what you sell, you could take on the role of the manufacturer rather than the retailer, but that might suit you better. If it doesn’t, you can adjust your processes to target a retail market rather just being a supplier, but initially, the main goal is to start selling via any outlet that’s available.
There are some high-profile online platforms for handmade goods that are ideal for anyone making their own products. The advantage of using these specialist websites is that customers who use them are looking for something handmade rather than mass produced, so you’ve overcome the first hurdle to targeting your ideal customer right from the start.
If you dream of having your own shop, but the cost of such a venture is too high to contemplate, find out more about alternative options for selling products online as a first step towards making your dream a reality.