If you have a great idea for a retail business, the first step is figuring out what kind of store is home for you. There are many different types of businesses that fall under the umbrella of retail, and choosing the right one will help set you up for success. The kind of home store you choose will also impact your startup costs and ease of operation. That said, it’s not an easy decision to make. Every business has pros and cons and there is no universally perfect type of store – it all depends on your interests, skills, resources, and target audience. Read on to learn more about the various options available to you as an aspiring retail entrepreneur.
What Is a Retail Business?
A retail business is one where you sell products directly to customers. You can do this face-to-face in a brick-and-mortar store, or online. The main purpose of a retail business is to generate revenue from the sales of products and services and to generate profit for the owners. Most retail businesses fall into one of the following categories:
– Online store – A digital storefront where customers can browse and purchase your products using their computers, tablets, and smartphones.
– Brick-and-mortar store – A physical storefront where customers can browse and purchase your products using their eyes and hands.
– Co-op store – A hybrid of both an online and brick-and-mortar store.
– Franchise store – A business that has been franchised from a parent company.
– Virtual brand store – An online store that doesn’t have a physical presence.
Online Store
You’ve probably heard that e-commerce is the best way to start a business. But is it right for you? This type of store will be appropriate if your customers are primarily in a specific geographical area, don’t have frequent visits to your area (such as tourists), or simply prefer to buy things online. Examples include retailers selling clothes, travel gear, books, or toys.
If your store is an online-only business, you’ll want to be careful to avoid the high overhead that comes with running a physical store. You’ll need to be smart about pricing and choosing the right products so that you don’t lose money on every sale. And if you want to expand your business and begin selling in other locations, an online store may not be the best way to go.
Brick-And-Mortar Store
The pros of a brick-and-mortar business include the fact that you’ll have a physical address, a storefront, and a “real” presence in your community. This can help you build your brand, establish trust with your customers, and simply be a fun and rewarding thing to own. Examples include retailers selling apparel, gift items, sports gear, or housewares.
If you’re opening a brick-and-mortar store, you’ll want to make sure you have enough capital to cover your start-up costs. These can be very high if you’re opening a large store or have several employees. You’ll also want to ensure that you have enough foot traffic in your area to support your business.
Co-Op Store
A co-op store is a hybrid of both an online and brick-and-mortar store. It’s like a cross between a franchise and a franchise store: you’re selling a product from a larger company, but you’re running the store independently. Examples include retailers that sell supplements, clothing, or baby products.
If you’re considering opening a co-op store, make sure you thoroughly research the company you’re buying from. You don’t want to end up in a situation where the parent company is mismanaging your business, or taking too much money from your sales. You’ll also want to make sure you have enough capital to open the store and hire employees if necessary.
Franchise Store
If you want to open a store but want a head start – a franchise could be the perfect fit. Many franchisers make their business models freely available online, meaning that you can get a good idea of what running a franchise would be like before spending any money. Examples include retailers that sell food, services, or general merchandise. You’ll want to make sure you thoroughly research any franchise you’re thinking about buying into.
You don’t want to end up with a franchise that will lead you into bankruptcy. You should also be willing to make a substantial investment when starting a franchise. You’ll likely need to buy an upfront franchise fee, as well as pay a percentage of your revenues back to the parent company. But if you’re willing to commit, a franchise could give you an advantage in the crowded retail scene. You’ll have access to the parent company’s marketing and branding campaigns, as well as the support of a larger team.
Virtual Brand Store
If you want to open a store but don’t want to deal with the headaches of managing inventory, employees, or a physical location, you could open a virtual store. This type of store deals exclusively in e-commerce and doesn’t have a physical presence. Examples include retailers that sell software, gaming gear, and subscription boxes.
If you want to open a virtual store, you’ll need to make sure you have a strong brand. Consumers will be shopping for you online, not in person, so you’ll want to make sure they understand your product and trust your brand. You’ll also need to make sure you have the funds to start your business online. You won’t have the overhead costs of a brick-and-mortar store, but you will have to invest in web design and marketing.
Conclusion
Retail businesses can be incredibly rewarding, but they come with unique challenges. You’ll have to deal with inventory and cash flow management and learn to balance the desires of your customers with your company’s goals. Choosing the right type of store is a critical first step in setting yourself up for success. So take the time to review your options, and don’t be afraid to change course if a different type of business sounds more appealing.
