The Prime Minister called all graduates who could not find a suitable job to go into the retail business. He was careful to word his call by saying that there is a 50% sure success rate if one is diligent and knowledgeable enough. I think he secretly knows that 50% of people fails in retailing. I have been in retailing for quite a long time, and till today, I cannot call my self a successful retailer. There are many factors that decides the fate of a retailer and if most of it is common sense.
Location is very important.
Unlike a wholesaler who goes to his customers, the retailer needs a location with high human traffic flow, easy and wide parking spaces and easy access to roads and exits. It’s not easy getting locations like these, and even if you do, it’s going to cost you. Just do a survey of the rentals in those big shopping malls. Just the rental alone is enough to deter many a would be retailer.
Renovations and decorations is also important.
A well decorated shop premise attracts people. Not necessary customers, but at least you will have people moving in your shop to give the impression that your shop is doing well. All humans have that mob mentality. When lots of people are gathered around something they will always join in to see what’s so interesting. You will get customers.
Advertisements are minimum.
Unlike manufacturers or distributors, retailers don’t need much advertisements. The most effective is the banner hanging over their front door. They don’t have to spend thousands advertising on TV or Papers. Unless you a retailer like KFC or Macdonalds, that is.
Profit Margin.
The profit margin for a retailer is much higher than a wholesaler. Where the wholesaler is happy with a 10 to 15 percent gross profit on his items, some retailers mark up their prices 100 and even 200 times. A T-Shirt that he buys for $2 will be sold at $6 or even $8., but don;t be taken in by the margin. Sometimes, the shirt could be there for a few months before he can dispose it.
There are so many things to consider when wanting to become a retailer. Even if you decide top sell goreng pisang, you have to consider the size of your wok.