The retail sector employs more people than any other part of the US economy and is responsible for as much as two thirds of the country’s GDP, so its importance is obvious. Because retail businesses are straightforward to run and can be started with comparatively small amounts of capital, they make great first ventures for new entrepreneurs. If you’re just starting out in retail, what do you need to know?
Different types of retailer
There are two main types of retailer: those who sell directly to consumers, known as B2C retailers, and those who sell to other businesses, known as B2B retailers. Being a B2B retailer doesn’t necessarily mean being a middleman, buying a product and then selling it to another retailer for a higher price, perhaps after repackaging or shipping it. More often, it means selling a product that other businesses need in order to do their work such as packing materials or machine parts.
Building relationships with suppliers
For any retailer, the starting point in doing business has to be finding a good supplier. Seeking out new and better suppliers should be an ongoing process, though some will offer discounts in exchange for long-term business agreements. Most retailers, especially those selling directly to the public, will need more than one supplier, and it’s important to find people you know will be reliable, especially if you are selling a limited range of products.
Establishing a retail outlet
There are two ways to approach finding a retail outlet. If you are targeting a small niche and don’t have much local competition, you can simply look for a cheap deal and then put your money into promotion so that people will seek you out. If you are not in this situation, however, you will have to think seriously about footfall – how many people are likely to pass by your outlet so that you can draw them in. This means seeking out premises in suitably busy places such as shopping malls in California, USA. Make sure the store you choose is big enough for your needs, and think about how you can tempt potential customers to enter and spend time there, perhaps by using eye-catching window displays or having a rack of lower cost items that people will be interested in browsing through.
Promoting your business
Once you have established a retail outlet (and even before you’ve opened it), you’ll need to make sure that prospective customers hear about it. The internet means that it’s now possible to do a lot of promotional work for free, and it’s certainly worth making an effort in this area, but you will need a lot of training, money or expert help in order to stand out there, so there is still a place for traditional advertising. For a retail business, leafleting, putting ads in local papers or on cable TV, and getting involved with newsworthy local events can all be good promotional strategies.
It’s easy to feel overwhelmed in the early days of starting any business, but bear with it, work hard, and your retail outlet may well become a success.
Further reading:
- 10 Insider Tips for Retail Success
- Keys to Run a Successful Retail Business
- Starting a Retail Business
Photo credit: Slices of Light / Flickr
