Don’t look down on the roadside hawkers peddling those hawker food or those roadside stall owners selling those cheap imitation handbags. These businesses are real money churners and profit margins are almost always 100%. Several reasons contribute to their better than average profit margins.
Low Overheads
A road side stall definitely will cost very much less in rental. On top of that, there is almost no utility bill or even if there is, it is at the minimum.
There is no maintenance cost for the premises.
Most of the time, it is a one man show or at the most, maybe 2.
There will be no Advertising costs, no fancy lights of fancy signboards.
It’s easier to get
Low Cost Price Of Goods.
There are syndicates specially catering for these peddlers and night time marketeers. These syndicates specializes in getting cheap products from manufacturers. Clothes with a little bit of defects, fashion wear that has gone out of style, and most lately, latest looks made in abundance and imported from China.
Most of the time, these will coast only a fraction of their selling price. A T-shirt with a similar design will cost twice the price if you buy it from a upper class shopping center. A roadside peddler can list their price at 15 bucks for something that cost them 5 bucks. Some even top up their price to 25 if they know the item is hot selling. Of course they have to go through the process of bargaining from the customers, but even if he gives in and sells the shirt at 10 bucks, he is still making a 100% gross profit with minimum overhead.
Limited Competition.
It is as unwritten rule, but all peddlers doing business in and around the same location has an understanding to price all the similar good at the same price. This will not spoil the market. Of course, how much they can eventually sell their goods is up to an individuals convincing powers and their bargaining skills.
Pricing all item similarly puts them at an advantage of knowing that they are competing on a same level. If one stall decides to go dirty and hang up a big price tag that is lower than every body, the others will definitely suffer and everyone will be flocking to that particular stall.
High Sales Volume.
Since their price is very much lower than goods sold at Shopping Centers, there will always a good pool of shoppers browsing at night markets or roadside stalls looking for cheap and quality products. So these stalls sells more than say the guy who rents a shop to sell those items.
All this and more, makes the running of a small business very viable. If you drop out of school, cannot get a god paying job, try venturing into this field. It has very low risk. Low start up capital and no need for any special training.