Here is a guide on how to start a merchandising business.
The retail industry offers tons of opportunities to interested persons seeking to join. Starting a merchandising business can be difficult for a newbie without experience.
How to Start Merchandise Business
Here, we show you how to start a merchandising business without having to guess your way through the process. It’s a detailed guide that covers all the basics.
In discussing the process, we’ve looked at the retail niche question and the business model types available. The process of starting your merchandising business follows immediately.
Whatever your business preferences are, you’ll find this article a worthwhile read, as we’ve presented the information in a simplified manner.
What is a Merchandise Business?
The retail industry is vast, with lots of niches covered. With this reality, starting a merchandising business will require focusing on one or more niches.
These include health & wellness, apparel & fashion, print-on-demand services, food & beverage, home goods, gifts & souvenirs, technology, pet supplies, books & stationeries, and specialty foods & beverages.
We can go on and on just mentioning these merchandising niches. That said, it’s evident why you need to focus on your preferred niche.
The choice of a niche requires taking your interests and passions into consideration. Also, the niche’s potential for growth, the size of the market it caters to, your investment, and competition are all important.
Choosing a Business Model
Starting a merchandising business requires choosing a business model—two main types, franchising and starting a retail business from scratch, are your options.
The franchise model establishes a relationship between a merchandising company or business (the franchisor) and the investor (or franchisee).
Franchising involves the franchisor granting rights to the use of its business model, brand, and distribution of its products to a franchisee or partner. For this to be possible, a contract must be entered into.
The franchising model has become popular due to the support provided to help franchisees succeed. In other words, the chances for success are greatly enhanced.
However, the cons of joining a merchandising franchise is that you (as the franchisee) have limited control over the business. You also get to pay ongoing royalties, and the franchise has a limited term, after which you may or may not renew.
On the other hand, starting a merchandising business from scratch requires an entirely different approach.
In other words, you get to do all the heavy lifting regarding strategizing about the business and handling everything yourself.
With this business model, there’s no support coming from anywhere. You’ll have to figure out everything.
Starting a Merchandising Business
At this point, we focus on showing you how to establish your own merchandising business. There are several steps or processes to follow, including a plan.
You also need to name your business and get the required business permits. Does your business require staffing? You’ll need to hire your staff if there’s a need to.
Have a budget for your merchandising business, and assess your competition. What more? Starting a successful merchandise business will require contacting suppliers and renting a space.
Your location counts, so it’s essential to consider this when planning. Let’s briefly discuss each of the points raised as follows;
i. Creating a Plan
Your merchandise business will need a clear plan for actualizing it. It’s your blueprint for success and should be worked on with all the seriousness it deserves.
If you have no idea about writing a plan, there are professionals and resources to get help. These include business consultants as well as volunteer business mentors at SCORE.
You can also find valuable resources that serve as guides for newbies. Examples include online Business Plans. Small business development centers can also be of immense help.
Certain sections, like the executive summary and company description, must be included when writing a merchandising business plan.
Other sections to add to the plan include the products & services section, market analysis, strategy & implementation, organization & management team, and financial plan & projection sections.
ii. Name your Business
Your merchandise business needs an identity made possible by giving it a suitable name. However, a business name isn’t randomly selected.
You need to pick one that’s memorable and relevant to the type of merchandising business. Also, consider checking the domain name and social media availability.
It’s essential to avoid trendy names and consider longevity and scalability. You can pick better by playing with some name ideas and seeking second opinions.
However, if this sounds stressful, you might find professional help much easier and more convenient.
iii. Get Licenses & Permits
What type of merchandise do you intend to sell? This will influence the type of license and permit to get. General business licenses and permits for merchandise businesses include sales tax and business licenses.
Other types include sign permits, fire department permits, resale, and occupational licenses. Your location will also play a role in determining the type of permit or license.
iv. Have a Budget
How financially prepared are you for the undertaking? Have a budget that caters to every expense necessary for launching your merchandise business.
Here, you’ll need to consider various financing sources, including bank loans, personal savings, government loans, venture capital, crowdfunding, etc.
v. Assess Your Competition
Competition is one of the things you’ll experience as a new business owner. Your business needs to be able to survive such competition.
When planning to set up, you must survey the market to identify your likely competitors. What type(s) of service do they offer? Can you meet up? What strategies can be deployed to have a competitive advantage?
vi. Contact Suppliers
A merchandising business typically requires ready suppliers to get all your products.
Before launching the business, identify your suppliers and discuss your needs with them. It’s essential to only go with reputable suppliers as they offer better deals and profit margins.
vii. Rent a Space
Your merchandise business will need a space to establish an operational base.
While that is true, not all retail businesses have physical outlets. Online merchandise businesses can be operated from the comfort of your home without spending on rent.
Now you know what to do to start your own merchandise business. The processes outlined are straightforward and without ambiguity.
Start the process today by following the guideline provided.