Opening a retail store is a lifelong dream for many. Filling it with products that you are passionate about, whether it be high-end clothing, rare and unique jewelry, vitamins, sporting goods, etc., being surrounding by things that make you happy and that you want to share with others can be a very rewarding career. But opening a retail store doesn’t come without risks. Keep the following risks in mind in order to run a successful store.
Most likely, your products are typically purchased with disposable income. When the economy declines and the consumers you depend on have less money to spend on non-essential items, retail businesses often suffer. If your retail store happens to open during a time when the economy is on the decline, you could be in trouble. But some retail store owners use recessions to their advantage. Rent can be significantly lower for storefronts and selling must-have and practical products that people actually need will always keep your store relevant.
Figuring out what kind of markup to place on your products can be tricky. If you sell more common goods, you can compare your prices to other stores selling similar products. But if you are selling more one-of-a-kind merchandise, it is up to you to determine pricing. Avoid marking up too high but don’t undersell yourself either. The average is usually around 50%. Entrepreneur.com touches on the topic of pricing in more detail.
People’s tastes can change in the blink of an eye. A product can be hot one minute and completely out the next. Being able to adjust with the changing tides is very important to your survival. You also can’t only purchase items that YOU like. Keep a finger on the pulse of the industry you are in to ensure you are only filling your store with items people actually want to purchase.
Damage and Theft
Theft is always a major concern for any retail store. In order to manage these risks, put an inventory management strategy in place. Add sensors to big ticket items when you can and utilize in-store security cameras. Keep staff positioned in any areas that are more prone to theft, like hidden corners and dressing rooms.
Messy or Unorganized Displays
Don’t fall into the habit of cramming as much merchandise as you can onto your store shelves. You may think that the more product you display the more you can sell, but messy, overflowing shelves are unappealing and steer customers away. Your retail displays need to be easy to shop and organized. Set aside promotional items on sectioned off retail shelving to draw attention to new products or sale items. Keep an eye on your stock and be sure to refill your more limited quantities to avoid having your retail fixtures look bare.
As long as you are aware of the risks involved with opening a retail store, you should be able to create a detailed plan to handle and avoid them. If you are starting from scratch and need assistance with store planning services, Handy Store Fixtures is an expert in the industry and a great resource. For over 50 years, Handy Store Fixtures' expert staff has transformed retail space into a pleasurable shopping environment. Handy Store Fixtures can outfit any store with top quality retail displays and storage shelving- from front to back, showroom to stockroom. Find our Handy Business Guide, here.