Starting a retail business has cost considerations, particularly relating to stock and premises that many other small business owners don’t have to endure. After all, if you’re intending to sell a stock, you need to have stock in the first place and a platform from which to sell, both of which cost money.
Starting a retail business is one of the first steps many take into the world of business, particularly for those first leaving full-time employment. The retail sector is booming at present, with a new retail chain business springing up every single day.
Starting a retail business is a great way to get involved in business, and in generating enough money to keep you in full-time employment within your enterprise. But what are the risks associated with starting a retail business, and is a retail business the most effective way to enter the world of business for the first time?
Starting a retail business has cost considerations, particularly relating to stock and premises that many other small business owners don’t have to endure. After all, if you’re intending to sell the stock, you need to have stock in the first place and a platform from which to sell, both of which cost money.
One way to limit this initial cost burden is to opt for an online dropshipping retail business. Like other retail business owners, you’re still providing goods to customers, except you don’t hold any stock – deliveries are made directly from the warehouse to your customers.
Provided you can find a reliable supplier, this can be a great start in the retail business allowing you to earn a respectable margin.
An alternative is to retail over eBay or online auction sites. Business owners choosing online auction sites don’t have to incur the costs of premises or any physical overheads and can sell from their garage space. This is certainly a cheap way to go about it, but it does limit your distribution capacity and it’s important not to become too dependent on any single auction site for your sales.
Nevertheless, this can be a great introduction to the world of retail. It’s also possible, and financially feasible to go the full distance and open up shop premises for your business. This can allow you some form of scale, and you’ll also benefit from passing trade through your shop front.
You’ll also be able to store stock on premises, have a base for your business, and close sales throughout the day interacting face to face with your customer. In line with an online retail business, this can be a great way to add revenues to your business and improve your sales overall.
Starting a retail business is a popular but tricky route into self-employment. While there are profits to be had in the retail industry, any retail business is difficult to establish, and growing a chain takes both time and effort, as well as a good bit of luck.
There are numerous risks associated with starting a retail business, but there are also extreme rewards for those that get it right, in the form of an evergreen, sustainable business, ready to scale and grow.
However, by making sure you’re prepared to overcome the initial obstacles of getting started, you should be able to quickly realize a successful and profitable business from your retail venture.
ABOUT THE AUTHOR: Naz Daud