Starting Your Own Retail Store Or On Line Merchandise Business

Written by Martin Stevens

Written by Martin Stevens

With the sluggish economy and higher unemployment rates we are seeing more people than ever looking to start their own businesses to make ends meet. Some will enter the wholesale merchandise and retailing business as a way to replace lost income on a temporary basis, while others will be replacing their previous careers and looking a complete change.

Regardless of the reason that has brought you to wanting to open your own brick and mortar or online store, the marketplace is quite different than it was ten or twenty years ago and in order to succeed new business owners must be sharp on how they operate their enterprise.

Brick and Mortar:

This is the traditional retail venue that consists of a storefront where you will set up shop. It is important that you do careful site selection before you sign a lease on a storefront. Learn what the demographics of the area are to make sure that you will be targeting the right local audience. It is foolish to think that people will travel great distances to get to your store. Focus on the local population.

If you have a store that specializes in products for young people then make sure that the area actually HAS a good deal of people in that age group. Just because you are offered a cheap rent doesnt mean that your store smack in the middle of a senior citizen community is going to be successful! There are many websites including citidata.com that will show demographics.

I cannot emphasize the importance of location enough. I started a great business years ago and had a really cheap rent in a community that had my demographics, however it was too off the beaten track and didnt have major road exposure. If I had located the business just one mile south on the major intersection I would still have that business today. By not getting the exposure I had to spend triple on advertising to draw people to the store. A good location is the best advertising and it would have been worth it to pay a higher rent to get that exposure.

Online and Internet Stores:

Of course over the last several years everyone and his brother has a website and is selling something or another. The online business landscape is highly competitive and you will find that because of the low overhead these businesses undercut pricing and work on very slim margins. We tried selling off our old inventory on Ebay and found that folks were selling the same goods BELOW what our wholesale costs were.

So, what to do?

The internet is great for unique merchandise or wholesale merchandise that you can get below wholesale and resell at higher margins for yourself. If you follow the typical rule of retailing (double up cost vs. sale price) you will have a hard time succeeding online. Unless of course you have something that is unique and not as competitive as the run-of-the-mill merchandise you see all over.

The advantage of an online business is that you have vastly reduced your overhead, can work at home in your shorts and set your own hours. The downside is that you will be competing with hundreds of thousands of websites out there and what you save on a storefront you will spend on promotion and advertising. Its easy to build a great websitenot so easy to get buyers to find it!

In summation, when you set out to start your retail business you need to determine what type of venue you will use a physical storefront or a virtual one. Then you need to source your wholesale merchandise. You should be looking for closeouts which will give you higher profit margins and should scour industry wholesale merchandise magazines to learn more about products and information on the business world.

by: Guy Pyette

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