Many potential entrepreneurs dream of opening up their own little store where they would be able to sell goods to a regular stream of customers. There’s only one problem, they’re short on a good retail business idea!
Retailing can be a profitable and fulfilling entrepreneurial venture assuming that the retail business idea is strategically sound. In other words, if the idea is good, riches will flow to you and unfortunately if the idea is “bad”, you will set yourself for a miserable time.
What’s the best retail business idea anyway?
1) Demand
To easiest, fastest and cheapest way to sell anything to anyone is to sell a good that is in demand. That’s the part that everyone gets. What they forget is that if there’s a high demand especially, there certainly are a lot of entrepreneurs servicing that market. Which brings us to the next point
2) Supply
The less a good is available in a high demand market, the more likely the retail business idea is sound. But you have to be smart and wonder why a good that’s high in demand has limited supply. It may be an opportunity or other entrepreneurs know something that you do not know.
3) No Demand, No Supply
No, I am not going crazy. Sometimes consumers don’t know that they need something because it does not exist yet. My classic example is the iPod. Before October 2001, no one wanted one because it did not exist. By the third quarter of 2008, 163 million iPods have been sold.
Just because there’s no demand and supply does not mean that you’re not sitting on a good retail business idea. Your entrepreneurial mission will be to stimulate the demand. I believe that there’s always a demand for anything and the entrepreneur who presents the idea properly will win.
I once advised a successful lady entrepreneur in Rio de Janeiro, Brazil who wanted to expand her business empire (she owned a few restaurants and cafes) to open a retail business that would sell clothes to be worn in temperatures lower than 0 degrees Celsius. Her aides laughed off the idea saying that this was not Canada and that in Rio, it never below ten degrees.
- Photo: danmedhurst.com
“How many Brazilians travel to cold countries to snowboard. ski or visit attractions, friends and relatives in their winter months?”, I asked.
4) Buzzworthy
Word of mouth is critical for a new store that does not have a big budget to be spent on promotion. The more interesting the store is the better the retail business idea is. Buzz is a powerful force in marketing new businesses. Not only will customers tell their friends but also so will non-customers and the media!
A few months back, an entrepreneur called me in a panic because he’d heard that Apple was opening a store in the city. He knew that his business would be lost to Apple almost overnight. He was asking for ideas on marketing aggressively and retain his customers.
I suggested to him to maybe consider getting out of the new Apple computer market and focus on selling used or refurbished Apple laptops only. I told him that most people were using desktops anyway and that the used Mac computer market was more lucrative than the PC’s. He was not sure so I advised him to email his clients and run the idea by them. He got back emails from people saying that it was a good idea, when they could come and sell their laptops, how many new used laptops he had in stock and so forth. Buzz right off the bat!
5) Competition proof
Sooner or later, competition will show up no matter the business. The best retail business idea has to be hard to compete against. Usually, having a good advance is good enough as the entrepreneur gets to create a name and a reputation before the competition arrives thus winning all the business.
I will reveal in details ways to make your retail business idea as competition resistant as possible [Update. See: Protecting Your Retail Business Idea from Competition]. I will never be competition proof as in retailing the only certain thing is that a good concept will be copied!
