What is a Retail Store?
The word “Retail” is most likely one of those words you have heard a thousand times already, but still do not completely understand what it means. By textbook definition, Retail or retailing is the act of business to customers’ sale of goods, products, or services. A transaction that falls under “retail” is transactions that control a small number or quantity of goods, products, or services as opposed to the wholesale deal/model where the purchasing of goods is done on a large scale.
A retailer is a person, organization, company, or business that is responsible for the act of retailing. They are the business you purchase goods or services from. While retailers usually don’t manufacture or create any of their own items, they still make profits from purchasing goods from big companies, manufacturers, or a wholesaler.
Finally, a retail store is a retailer’s place and operation of a business. These are the places you go to when you need to buy school supplies or clothes. Although retail stores may be owned by someone else other than a retailer, their ultimate goal and priority is to make a profit off the consumer sales.
Types of Retail Businesses
As with any business, retail businesses come in various forms and sizes, with each one having its own advantages and disadvantages. If you wish to start your own retail store, then this list will help you decide which one may work out the best for your needs and money:
- Independent Retailer: Independent retailers are your lone wolves who run a business from scratch. Typically, they do all the heavy lifting themselves but they may also hire or have assistants to assist them with managing the business. Being an independent retailer may be a good start if you are someone who has a lot of knowledge about entrepreneurship but does not have the budget to go all-in with a franchise or a dealership, which will be tackled more in detail later on.
- Franchise/franchising: Franchises are existing businesses or business plans with a trademarked name and established brand image. A franchise also already has a plethora of products and goods ready to be sold and business concepts that are built upon a solid foundation. Franchising on the other hand is the acquirement of rights to a franchise, usually done by purchasing it. Once you have acquired rights to a franchise, you are an official owner of it and must follow preset ground rules and processes in order to maximize profits and help the business grow.
- Dealership: A dealership retail store or retailer is commonly confused with the franchise type of retail store. Dealerships are a cross between the aforementioned independent retailer and franchise. With dealerships, a retailer communicates with a dealership that has access to a license to sell a batch of branded products. Unlike franchises and franchising, no fees are required to pay to the licensor. A common type of dealership is a car dealership.
- Existing Retail Store and Businesses: As the name indicates, an existing retail store or business is an established business that is currently on-going, but can be bought by someone else to inherit and take total ownership of it. The new owner will now be responsible for managing, organizing, and optimizing the business for maximum profit.
- Network Marketing: This type of retail can be associated with online retail. Network marketing, networking, or multi-level marketing, is a retail type or business model that revolves around a person selling goods or services to the people of their network. Recruitment may also take place where the “network marketer” will try to talk their way and make the person they are negotiating with sell the same set of products too. Network marketing is both present in online variants and real-life scenarios. Popular platforms for network marketing are Facebook, Instagram, and Twitter.
What does supply chain mean for retail stores?
A supply chain is the process of companies and suppliers working hand-in-hand in order to distribute products to its consumers. In simpler words, it is how goods or services are delivered to the hands of customers. It is also a network of activities, people. Entities, companies, information, and resources. This network is utilized to represent the steps it takes to get products out as quickly and efficiently as possible.
How about Online Retail Business?
As the name suggests, an online retail business functions in a similar function as your typical in-store retail business. Their goal is to get consumers the product they want and need quickly. Online Retail is also known as its modern term “ecommerce”.
Thanks to the help of the internet and technology, online retail business or ecommerce has its fair share of advantages over other business models and types. Of course, it also has its disadvantages. The advantage of online retail or ecommerce business over their brick-and-mortar counterparts are as follows:
- Online Retail Businesses are able to operate business 24/7, 365 days a year. No store closing times to follow or downtimes.
- They are able to cater to consumers around the globe without or little to no additional expense. This means that ecommerce and e-retailers (retailer definition for those who utilize online methods of retailing) have unlimited potential for expansion and growth. They may also wish to target a very specific niche of customers anytime they want.
- The level of competition is leveled out since customers won’t be seeing any physical lines of people waiting which may influence their purchase decision. There is also no need for manpower that traditional brick-and-mortar stores still have to manage and pay salaries to (cashiers, janitors, etc.).
- Buyers and customers will be able to interact and spread your brand as its ease of access and online presence are one of its strong selling points. This will also give room for potentially what can be a new customer base or niche. Online traffic can also be tracked a lot easier as data is displayed through numerous analytics sites like Google Analytics. Social media or blogging is also going to be your best friend, as a trendy page and robust photos attract the common age demographic for social media users (13-30 years old).
As mentioned earlier, and with any types of business model, online retail stores and ecommerce come with their sets of disadvantages:
- Security concerns are one of ecommerce and online retail stores’ disadvantages. While security breaches don’t happen very often, if it happens even once, it heavily damages the reputation, brand, and public trust of the e-retailer. Thousands of personal and sensitive data may be leaked and be at the hands of unknown authorities. With that said, the online community is working hard every day to keep security tight and safe.
- It is harder to build a brand image and reputation with only an online store. Compared to brick-and-mortar stores that have actual, physical stores that they can boast to customers, all you have with your online stores are photos and other customers’ reviews. With physical stores, customers may immediately gauge a shop’s quality and trustworthiness in minutes because their products are usually displayed where customers can fiddle and touch. On the flip coin, online stores have it hard since first, there aren’t much loyalty programs or returning customer promos, and second, there is no way that customers can try a product and see if it’s in line with their taste and expectations.
- Lastly, as e-retailers expand their reach to global distances, they may find it harder to cater to a variety of customers due to increasing difficulty in delivering goods and services, especially in this time of a pandemic. As a retailer, it is their responsibility to deliver products safely and quickly. If there are any problems that arise during the delivery period, it is the retailer’s full responsibility to fix or compensate for the problem.
Can I start my own Online Retail Business?
Yes! Now may be the perfect time to build and grow an e-commerce business as brick-and-mortar stores are, for the most part, closed down due to the COVID-19 pandemic. Customers are staying at home, and thus use online methods to get the products they want. Typical websites that help with this line of business are Shopify, WooCommerce, Facebook and Facebook Marketplace, and many more.
Starting a business is always going to be a leap of faith and risk. But with the right set of tools such as Strikingly’s website builder and Shopify, you are bound to no other way but up. Take your time to research what’s in and what’s not with business and trends, and know your customers well. Retail Businesses are very plausible methods to live a comfortable life while also enjoying the satisfaction of giving people the products and services they need.
You can also build your own website to get started with your retail business journey! With Strikingly’s advanced website builder, you will be able to build a website that is perfect for your business needs. We also offer hundreds of templates that will suit the theme of your business.
Good luck with your business ventures!