Retail trade in the United States is a $5-trillion industry.
So, if you’re planning to start a small retail store, whether online or offline, you’re entering an industry with massive cash flows. However, with over 3 million businesses in the space, competition is super fierce.
In fact, a vast share of the market is dominated by large retailers like Walmart, leaving millions of small retailers to scramble for the rest. As such, you need to take the right steps when entering the retail industry.
Here’s a guide on how to start a retail business that will succeed.
Find Your Niche
Small retail stores that are very successful have one thing in common: they sell niche products. This means they only carry a specific range of products that targets specific consumers.
Therefore, the first step to establishing a retail store is to settle on an ideal niche.
There’s a lot that goes into picking a profitable retail niche. While your primary focus will be on finding one where there’s low competition, it’s also important to consider your ability to manufacture or acquire the products you’ll be selling.
For instance, if you’ve settled on selling proprietary beauty and cosmetic products, do you have the manufacturing capacity to make the products on a larger scale?
Storefront, E-Store, or Both?
After figuring out the product side of the business, turn your attention to the customer side.
How would you want your customers to access your products? You have the option of setting up a storefront, launching an ecommerce website, or operating both models.
Each model has its own pros and cons, but considering that the vast majority of people in the United States now shop online, setting up an ecommerce store would be the savvier decision. Plus, startup costs for a web-based business are lower.
If you’ve got an adequate amount of capital, though, you can set up both a brick and mortar and online store, especially if you’re planning to sell the kind of product customers prefer purchasing physically, such as clothing.
Register Your Business
Whether you’ll be selling online or offline, you have a legal obligation to register your business and obtain the necessary permits and licenses.
Registering your retail business is a fairly easy process. Just head over to the relevant department in your state and provide details about your business, including name, location, and contacts.
Depending on the nature of the biz, you might be required to obtain a special license or permit. For instance, if you’ll be manufacturing and selling food items, you might need to obtain an FDA permitted.
Be sure to do extensive research on the regulations businesses in your industry face and prepare accordingly. You can hire a business lawyer to help you understand these regulations.
After obtaining the necessary papers, you’re free to start selling your products.
How to Start a Retail Business: Get the Basics Right
A retail store is one of the easiest businesses to set up. It’s also one of the hardest to run profitably. Often, it comes down to whether you got the basics right.
With this guide, you now know how to start a retail business that can grow into an empire.
All the best and keep reading our blog to learn more about retail businesses.