Key steps to starting a retail business
The easiest and more efficient way to starting a retail business selling products is to create an online store.
Consider these three methods and see if they are a fit for your side business:
Wholesaler: A wholesaler buys goods in large quantities and then sells them to the consumer. An example is an eBay store where someone has purchased a large volume of cell phones or handbags and then sells them to the consumer.
Reseller: A reseller buys the rights to resell a product under their own brand. You become an authorized dealer of the manufacturer.
Resellers are generally required to obtain a reseller's license from the manufacturer.
Drop shipper: A drop shipper is someone who sells a product directly from the manufacturer. The items are shipped directly from the manufacturer, so you don't deal with inventory.
Here are a few questions to ask yourself if starting a retail business is the right choice for you:
- Do you enjoy selling?
- Do you often have specialized knowledge in a particular type of product or industry?
- Do you have a product that you love and would enjoy selling with this business model?
Pros of starting a retail business online
- You can make money around the clock. This is a great side business because you don't have to be at your computer to make a sale.
- With dropshipping, you don't have to maintain an inventory or ship the items yourself.
- There is the potential for good profit.
Cons of starting a retail business online
- You'll need to create a robust ecommerce website, including a shopping cart, return policy and customer service center. Have a look at e-commerce all in one solutions like Volusion or BigCommerce for examples.
- You may have to ship products and manage returns.
- You're dependent on the quality/service of the products you represent. For example, if a product is recalled or found to be faulty, your business can suffer.
Recommended Reading
For real life examples of successful retail stores, visit: MyWifequit.com and www.pure-ecommerce.com.- Steve Chou owns an online store selling wedding linens. You can read his often hilarious experiences and get valuable tips at MyWifequit.com
- Jennifer Gault-Varner creates pre-packaged online retail solutions for those who want to start a dropshipping business. Visit www.pure-ecommerce.com
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