5 ways to start your retail business

Photo by Tom Official on Unsplash

Starting a retail business means making a bunch of important decisions, and working out where to start can sometimes leave you feeling entirely overwhelmed. Some of the most important decisions you're going to need to consider involve the products themselves - like who will supply them, and how they will be distributed. Maybe you dream of starting your own retail business, but have no idea how to actually get your hands on the stock you need to get started?

But... launching your retail business doesn't have to be overwhelming. We’re here to give you an overview of some of the most popular practices in retail, and hopefully, inspire you to get started.

Dropshipping

Dropshipping is when a retailer does not keep its own inventory of products in stock. Instead, when an order is placed, the retailer will contact the manufacturer to process the order and send the product directly to the customer. Essentially, the retailer acts as a ‘middle-man’ in the transaction. Dropshipping is a great way to get started with a retail business as you do not need to spend a large sum upfront to purchase products before they have been sold. This practice also means that you do not have to worry about storing inventory, shipping purchases, or managing stock levels.

White-Labelling

White-Labelling is another common practice that is great for those looking to start a business in retail. It refers to a product that is manufactured by a third party, purchased by a retailer, and then sold to customers under their own branding. As a result, there are many brands selling the exact same products under different names. A great example of this you will be familiar with is when different supermarket chains sell ‘own brand’ versions of a product. If you have a great idea for a brand but don’t want to spend time (and money) manufacturing a bespoke product, this could be the way to go.

Wholesaling

This is a fairly common term you will probably have heard of already, but it’s worth mentioning how it operates in retail. A wholesaler is a person or business who purchases a large quantity of product from a manufacturer and then sells it on to different retailers. In this way, the wholesaler acts as the ‘middleman’ between the manufacturer and retailer. This is a great way to purchase a large amount of product for a cheaper price, but you must make sure that the wholesale price is fair and that you are still able to make a profit on the products. If you are looking to sell large quantities of a specific product, you can speak to manufacturers about buying wholesale. Or, if you want to offer a range of items (at a lower volume), you can try searching for wholesalers who specialise in the types of products you sell.

Amazon Fulfilment

Amazon Fulfilment is a great way for retailers to save time and money, and avoid complications when it comes to managing customer orders. This service allows retailers to store products at an Amazon warehouse until a sale is made. Amazon will then handle all the packing, distribution, and customer service related to the purchase. If you are new to retail, this removes the pressure of order fulfilment and allows you to focus on growing your business instead. You can find out more about Amazon Fulfilment for your business here.

Consignment Stock

Consignment stock refers to a product that is in the hands of a retailer but is still legally owned by the supplier/manufacturer. The retailer is responsible for selling the product to customers and only pays the supplier for the product once it has been sold. This is a way for retailers to reduce the amount spent upfront on inventory, as you only pay for what is sold. It benefits the supplier by helping them gain visibility in retail spaces. Obtaining consignment stock also allows retailers to trial a product with their market and see how it performs before investing fully.