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[Journey/Method] Good old fashioned retail business

Discussion in 'My Journey Discussions' started by mlg131, Jul 5, 2017.

  1. mlg131

    mlg131 Junior Member

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    That's right folks, a journey that doesn't involve instagram or dropshipping! haha

    I've got a bit of time on my hands and haven't been on here much lately so thought I might make a post that might help people out. Maybe some of the younger members on here that haven't had much experience in the workforce.

    Some new opportunities have opened up to me recently and I have the chance to pursue on old dream of mine, to have my very own retail business. Most of my work experience has been in retail and I'm now at an age where I don't want to work for somebody else, or a big corporation, managing their store. I want to be my own boss.

    My Niche
    I'm not going to reveal my niche so please don't ask. However, here are some key points regarding my niche:
    • According to data regarding consumer attitudes towards my niche, attitudes have been on an upward trend year after year for all the years in which data is available. Consumers opinions of products in my niche, and attitudes towards purchasing niche products are getting better every year. This shows that this niche is a growth industry, and demand is expected to continue to increase in the coming years.
    • Market data, and testimonies from industry leaders provide a great picture of consumers needs and values regarding buying habits within my niche. My niche appeals to all generations, however consumers of different ages have different needs, values and buying habits. Determining these differences enables me to create more effective marketing material and more effective targeting for that material. I have a very clear picture of what my 'ideal customer' is and what they value.
    • I have easy access to a number of wholesale suppliers, with prices that enable me to be competitive while still maintaining a very healthy profit margin. Also, my suppliers stock products that fall outside of my niche but are closely related to my niche, providing me the opportunity to broaden my niche as my market share grows. All my suppliers offer paypal and provide tracking numbers with their very reasonable priced shipping, minimizing risk.
    • Competition in my market is rather small. Competitors generally seemed to be either a little expensive, limited in choice of products or both. As I mentioned above, this is a growth industry. I have the opportunity to win a large market share and continue to grow as demand grows, potentially becoming a 'big fish' in my industry over the long term.
    • The niche is something that I have good knowledge about. I know a lot about the industry in general. I'm not necessarily passionate about the niche but I am quite interested in it. This gives me an idea of what I want to sell, and at what prices, as well as a good base when it comes to the specific product knowledge required to deliver excellent customer service.
    First Steps
    Register your business. You will need to have a Business Tax ID/Business Number in order to find wholesale suppliers. The process is different for every country, do your own research to determine what's best for you.

    Register your business name.
    You need to do this early on to prevent potential problems later. I know a guy that opened an ice cream shop, months later when he went to register the business name and it was taken, forcing him to waste money and time on an unnecessary rebrand. You will likely do this with the same agency that registers your business.

    Buy your domain.
    Don't need to explain that one to BHW now, do I?

    Write a business plan.
    This is important. A good business plan will get you thinking about many thinks you might not have given much thought to yet. You should write about your ideal customers, their needs and values, your competitors, potential problems and solutions to them, along with their impact and risk to your business, the structure of your business, employee roles and responsibilities, the vision and values of your business, taxation, running costs etc. etc. I suggest you find a template business plan online and use that. Your government may provide one through the website of the relevant department.

    Get the things you will need to do business.
    Or at least know what you will need. If you are running an online store you will need to take good quality photos so do you have a camera? do you need lighting? Will you send a paper invoice to your customer? do you need a printer? Get yourself prepared because you MUST provide the highest level of service and professionalism as possible.

    Suppliers
    Finding good suppliers will be very important. As mentioned above you will need to have registered your business before any wholesalers will do business with you, and even then they may ask for more information about your business to see that you're legit. Be honest and tell them that you're a new business, and tell them a little bit about your strategy (See business plan above). If you are serious and professional you shouldn't have too much trouble. It's ok to register just to see prices, no wholesaler will show you their prices without registering, and some won't even show you their products.

    What makes a good supplier?
    Do they have products that you want to sell? Having an idea of exactly what you want before you look will help. Don't assume that just because they sell it, it's worth buying. Make sure they have products in different price points, not everybody is looking for cheap.

    Prices including shipping. Their products should say the weight, so you should be able to figure out a cost per unit including shipping. Some may offer discounts depending on quantity, some may not. Obviously you will need a supplier with prices that enable a healthy profit margin.

    Customer service. Ask them questions to test what their response times are like. Do they provide materials and information that will help you sell? Are they part of an industry association? Can they create custom products? Make sure they can meet your needs, it may be worth paying a higher price at a company with great service than paying cheaper prices at a company that takes a week to reply to your emails.

    Payment options. As I said above all my suppliers offer paypal, which is good for security but also for cash flow, as all my customers will be paying with paypal I don't need to waste 3-5 days transferring funds into my bank account just to order stock. Make sure they have an option that suits you. Don't use Western Union or Bitcoin, there are a lot of scammers out there, even on sites like Globalsources.

    Once you've found your suppliers it's time to invest in your initial stock. The more market and product research you do the less your risk of dead stock will be. It may be a good idea to order a small quantity of a variety of items in order to split test what sells and what dosn't, and adjust your future ordering accordingly. Or, it may be better to focus on a small variety of products to begin with. It's going to depend on your niche, your market, your marketing. It's up to you to decide what's best.

    Store Setup
    I won't go into too much detail here, because you're already in a great place to learn about this. Important points in this step are to design a site that is easy to use with products organized in a logical way. Also make it easy for your customers to communicate with you.


    I highly recommend using your own original product photos, however your suppliers may provide you with the photos you need. DO NOT take photos from google images or your competitors websites. Not only do you want to avoid looking like an untrustworthy copycat but they may file complaints and cause problems for you.

    Also do your research on all available shipping options. Know the shipping weight of your products and how much it will cost to ship them to your market. Keep this in mind when you are setting your prices, your customer will be thinking in terms of Price + Postage = The Real Price. Your customers will also be aware of what the shipping cost in your market really is so don't try and charge a high shipping price to make up for a low product price, this is basically a scam in the eyes of your customer.

    Marketing
    Again I won't say too much about how to do this step. There's a lot of people here on BHW that know more about this than me. Facebook is one of the best ways to advertise right now, but other options include the other social networks, google adsense, youtube, blogs etc. I'm sure you know already. And don't forget about traditional print media, radio, TV and all the other forms of offline marketing. They are still very effective.

    Remember way back when I said I know what my customers needs and values are for a number of age groups? This is where that information becomes invaluable. The more information you have the easier it will be to target your intended audience with advertising that appeals to their values.

    For example, your niche is focused on products for men. You know that males 18-24 want a product that is fashionable and cool. Males 25-40 want something that performs well at it's purpose but is value for money. Males 41-65 want something that is high quality and reliable with price not being too important. With this information you decide to create an ad campaign on Facebook. You create 3 ad sets with 5 ads in each set. Ad set 1 targets men aged 18-24 promoting your most innovative new products. Ad set 2 targets men aged 25-40 promoting last seasons stock with a reduced price, the stuff you want to clear out before a new product line takes over. Ad set 3 targets men aged 41-65 with your top range models from the most famous brands. The kind of stuff that never goes out of style.

    So the above is just an example, but imagine how you might do something similar with the information you have about your ideal customers. You should have a good idea of this from your business plan but of course do as much research as you can. And I'm sure one of the first things you may read about when researching facebook ads here on BHW is split testing. This is how you determine what works and what dosn't, and therefore your customers demographics, values, needs etc. The more you split test the more you will learn about your customers and the better your advertising and targeting will become. Knowing your customer is a very important part of retail.

    As for the creative content of your ads, use your own original photos, just like with your product photos on your site. You want to create something eye catching that grabs the attention of your audience. Again, you need to research what works best in your niche and with your intended audience but you may find that using models increases customer engagement as people relate more to images of people and like to see the product being used. If you use models make sure you know about relevant legislation in your country regarding intellectual property, image rights, privacy etc. You may need to have them sign a release form. One saying that I've heard being kicked around the workplace many times is "Always make sure you cover your ass".

    Final Thoughts
    Thank you very much for reading this far! I hope this information has been helpful.

    If anyone has any questions, tips, advice or criticism, then please post away. I'll post updates from time to time.

    When it comes to retailing, always remember that Customer Service is always your top priority. The trick to delivering the best possible customer service is to always give them more than they expect. Know your customer, know what they expect, and then exceed that expectation.
     
  2. Ikbendik

    Ikbendik Newbie

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    Good luck on your journey.
    I've got a question, how do you find your suppliers? Since you are building a genuine business I assume that you are not using Ali
     
  3. Nut-Nights

    Nut-Nights Jr. VIP Jr. VIP

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    Best of luck OP.
     
  4. mlg131

    mlg131 Junior Member

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    No, no, no, no, no! Definitely not Ali.

    I found mine by searching the wholesaler directory of the relevant industry authority. For legal reasons, it's important that my business uses only suppliers who are certified members of that authority. I did google it too, and found other international suppliers certified by their respective industry authorities.

    I think I'm a bit lucky in my niche because it was fairly easy, I'm sure it will be a lot harder for some other niches.
     
  5. mlg131

    mlg131 Junior Member

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    Another tip on applying for wholesale accounts:

    In your application state that you do not drop ship or sell on ebay/auction sites.

    Today a wholesaler that usually doesn't accept online-only stores accepted me because I wrote that on my application.