Own business is a great, but very risky way to earn a living. As an entrepreneur, it is not at all necessary to produce goods; you can only purchase them and sell them at a convenient point. Retail business is an ideal option for those who just want to trade in their area.
Unfortunately, there is a slight limitation. It is possible to sell products only for the personal use of consumers. In other words, retail trade excludes bulk deliveries.
The right kind of business is the key to success
Retail business, like any other, will be profitable only in the case of competent conduct. Business is very serious. You can’t take such a thing lightly, but you should think at the stage of drawing up the appropriate business plan. First of all, you need to decide how to sell different products, because there are many ways:
- Long-term point of sale. This is ideal for people with good capital and ambitious plans. However, it is not necessary to build a store or an entire shopping center. It is enough to rent a room, put a small van or set up a trading tent. The fact that the point is long-term does not mean that it must not be mobile. Thus, the retail business can grow even with a small van on wheels
- Mobile outlet. An interesting option for those whose business project does not include a full-fledged store. In most cases, this is home-based trading. Active sales agents will offer products right at the door of a potential buyer. Despite the apparent simplicity, this is a very difficult option. To start trading with it, if there was no previous experience, is clearly not worth it. In the first few months, this option is completely unprofitable.
- Department of mail order trade. The name does not at all reflect the essence of such a business. Parcel trade is the provision of consumables to consumers without direct contact. This includes regular deliveries of paper for office printers, clean cooler water, stationery and all that a customer needs every day. The trade is barrier, because the buyer and seller do not contact face to face. The goods are delivered by courier or mail.
- Virtual store. The most underrated and most cost effective type. The retail business, which is conducted using the online store, requires the most minimal investment. Funds are not used to open the point, but to create the site, its design and advertising company. Serious businessmen are conservative and treat this type with a fair amount of skepticism, which already gives a novice entrepreneur a good chance to take their place in the market. In the CIS countries, this type of trade is only beginning to become popular. In addition, there is good potential for innovation.
The right choice of the type of business gives the entrepreneur a confident start, but still this is not enough.
Products are different
It is equally important when developing a project to pay enough attention to the analysis of products sold. The fact is that all retail outlets have a classification based on the goods being sold, which should also include a business plan for a retail outlet:
- Special products. In this case, the entrepreneur focuses on selling one type of product. For example, bakery products. But you cannot buy a toaster in such a store.
- Highly specialized products. An even more limited type of product. Such a store sells only a certain narrow category.For example, a fishing store. Here you can find only what you need for fishing.
- Combined products. This original look allows you to create attractive retail outlets. An entrepreneur targets a specific audience of consumers and sells everything that interests her. As a rule, the audience is distributed by gender. Products for men or for girls are the most common examples.
- Universal products. There is no specific category. The ideal solution for creating a thrift store or an original gift trivia store. The same category applies to online shopping.
Retail Features
A business such as retail, has several very interesting features:
- This product is not for resale. An entrepreneur must do everything to use his goods for personal purposes.
- Work where convenient. The entrepreneur himself chooses a suitable territory or does not have it at all.
- Democratic margin. Product margins should be low. About 25%.
- Wide selection. A huge amount of products that can be traded.
At the head of all - the benefits!
Each type of entrepreneurial activity contains advantages that distinguish it from others. Retail trade gives their entrepreneur a whole series of:
- Reduced market entry threshold.
- Relatively low costs.
- Quick payback in the absence of management errors.
- The ability to quickly adapt to dynamic market conditions.
- Large selection of goods for sale.
- Low competition in young retail businesses.
Banks are no exception
A separate type of retail business is the banking retail business. A bank, unlike an entrepreneur, does not trade in goods. Rather, the bank is selling its services. Commercial banks have great potential for both individuals and legal entities. First of all, this is due to the gradual rejection of individual offers. They are replaced by completely standard agreements that are available in every decent bank.
Capitalism favors standardization, which allows banks to create a constant source of passive cash inflows. Citizens and organizations for banks are, above all, regular suppliers of financial resources. The need for an individual approach has disappeared. Debit and credit cards, consumer loans and even mortgage lending - all this is the subject of retail trade in banks.
Banking approach
Business is movement, especially if it is run by banks. The retail business in banks is always dynamic, because there are several approaches used to it:
- Active marketing strategy - the bank always develops new methods and ways to promote its services.
- Technological separation - it is important for banks to subdivide services into relevant technical operations.
- Organizational policy. Organization of sales is far from last. It is constantly being improved and always rests on the most modern technologies available in this region.
Each commercial bank uses all three approaches at once, because only in this way can it maintain its position in the market.