I always had a fascination with retail businesses. I think it is because I like the idea of having something tangible that you create. Although, I don’t think I, myself, can actually make the actual product (unfortunately, I don’t have the skill for that). For those who don’t know and probably a lot of you don’t know this, but a few years back, I actually dabbled into starting my own retail business, too. It was called HYD or Hot Young Designers. The idea was to collaborate and carry the lines of 5 new fashion designers, and help market them. In essence, it was a social enterprise.
This business only lasted a year though. My business partner and I decided to cut our losses short and just be happy with what we attempted to do and learn from it. There is part of me that still wants to pursue having my own retail business, but a part of me that also says that I have to say no. So, i’ll probably just take it easy first and chose the latter. I need to focus on the things that I am involved with now. With that, I think the help that I can give those aspiring retail entrepreneurs is through writing about my experience, sharing with you the experience of other successful retailers and to come up with learning events that you can attend.
For today, I’m listing down 5 key things to remember when creating a retail business:
Understand your Customer
In this business, for whatever it is that you will sell, it’s about understanding the customer. Oftentimes, having a tangible product can make it even more distracting to veer away from the customer and focus on the product, especially if the product that you are selling is a customised one (you created it from scratch). My suggestions is identify segment or segments of the market that you want to sell to and show the design of the product or a prototype, even before you create the actual product. By doing this, you get to garner feedback that will be crucial to how you create your business or product.
Research More about the Retail Industry
Going into retail, just like any other business, is risky. Retail usually involves creation or even just handling actual products that may be more capital intensive than a service based business. When aspiring to be a retailer, it may be beneficial to talk to already successful retailers. One of the successful ones that I have come across and interviewed is my friend, Cory Marquez of Invitation House. Here is her story on the humble beginnings of Invitation House, which now has 5 stores in the Philippines.
Check out the Different Types of Retail Businesses
* Store retailing. Store retailing is basically having a brick and mortar store, whether it is your own store or if you just have a spot given to you at a department store. Choosing this type of retailing business usually addresses the basic needs of man, like food, clothing, etc.
* Specialty stores. These kinds of stores normally focus now on a specialised “want” of the customer. Invitation House is a sample of a specialty store. It focuses on the desire of customers to have special invitations, cute artsy notecards, etc.
* Nonstore retailing. These retailers have chosen not to sell via a brick and mortar store, but through other means like building an eCommerce shop, selling via Easy or Shopify, selling via HomeTV shopping, or through catalogs that are sent out. It can also be non-digital, like having pop up stores.
* Other forms of “Retail”
– DIY Retailing. An example of this are the vending machines that you see around — from coffee to sanitary napkins. The only thing that the owner needs to do is to replenish supplies and collect payment.
– Crowd Funding platforms. Some of the new retailers also turn to crowd funding platforms like Kickstarter.com.
Check out the different Business models
There may be a dozen ways to sell your products and services, but here are some of those that I can think of:
– Consignment (be it in an actual brick-an-mortar store or via an online shop like Lazada, Zalora, etc.)
– Direct Selling or Door-to-Door
– Crowd Funding (as mentioned above)
– Sales from Social Media Channels
Create a Business Plan after doing all of your Research
It will really be beneficial if you could write down the plan, including the projections for both your expenses and income. Before the launch of HYD, we actually had this in place. What we lacked was more research about the retail industry. We didn’t know that return on investment (ROI) would be longer for retail than it is for a service based business. We also forgot to take into consideration the expenses for keeping the Quality in check. Writing it down will be beneficial since you will be able to go through different scenarios in your mind and you’ll often see it more clearly when it’s written down.
There are a lot more lessons that I have learned from other more successful retailers that I can share via this blog. I will continuously share these things with you. I hope that you have learned from these few tips. If you are a retailer with a story that others can learn from, just leave a comment below and let’s talk about it.