The idea of retail trading is a relatively new occurrence that gained ground in the past few decades due to the development of the internet. Prior to retail trading, international markets were only attainable by institutions that would trade on behalf of individual or business customers.
Retail trading is a business activity that involves the sale of finished goods and products to the final consumers, retail trade is usually the final step that takes place in a distribution channel.
Retail trading is about customers convenience. Retailers bring finished products to consumers and let them get everything they need for their satisfaction. Retailers enable consumers to access a wide variety of products and services worldwide. Retailers contact vendors and buy products in large quantities, after which they sell these items in small amounts to consumers to obtain profit.
The retail trading helps support the country’s economy and create additional workplaces.
Customers don’t have to wait for a long time to get their predated items, they can visit a grocery, clothing, convenience, drug store and lot of others, to have the items they so desire. Apart from consumers going to get their desired products from these places, retailers often offer delivery to the customers at their doorstep.
Turning your entrepreneurial hobby into a retail trade is a befitting project, nevertheless putting a plan into action is much more appealing than dreaming about a business. We will be outlining factors to consider that will impact and add value to your marketability.
Types of Retail Trading Strategies:
We have classified retail trading strategies depending on the amount of time you can put up in trading.
- Intraday Trading – This is a type of trader who is fully involved in the markets on a regular basis. Intraday traders take advantage of daily or hourly price movements in the price of a security. They hold a position for a maximum of 1 day.
- Scalping – This is a high-pressure job that takes years of practice to perfect. This is a type of professional trader who is actively involved in the markets on a daily basis. Scalpers try to take advantage of the slightest movements in the stock prices and trade on a regular basis.
- Positional Trading – These are generally traders who do not take part in trading activities on a full-time basis. They make a position in the security and can wait for a couple of months before booking their profits. They usually look for bigger margins of profits as their holding periods are much longer.
- Swing Trading – Swing traders are those who hold security positions for more than 1 week. They take positions for a slightly longer period than the above two. Swing traders can be full time or part-time traders. They try to take advantage of a higher price movement.
People often think that making money in the stock market is easy and fun. However, the reality is totally different. In order to make serious money from the markets, you must be passionate and dedicated. You have to learn and gain experience, which in time pays off handsomely.
What’s the goal of a retailer?, to make a profit and benefit financially from this enormous ocean of wealth.
We will be outlining factors to consider when setting up a retail store in a location.
1. Target Market
The ideal location that is close to your target market is one any retailer who wants to grow big should consider. You should assess the local marketplace before signing a building contract. If you operate a niche shop, the size and traits of the local marketplace play a key role. If you don’t have enough customers that match your target market characteristics, your business model won’t work. If you invest in a larger discount or department store, you have to pull customers from a broader geographic area to make enough revenue and profit.
2. Financial Capital
You have two basic ways to start a retail business. You can build one from scratch or invest in a franchise, where you purchase the rights to an existing model. In either case, you need some financial capital to start. If you don’t have enough savings on your own, you can raise money from investors or lenders, though they must recognize the viability of your business plan. Along with start-up money to open the doors, you need enough capital to buy inventory and to comfortably sustain operations while you work to achieve profit.
3. Competitive Factors
Competitive factors also impact effectiveness of a retail start-up. The ideal scenario exists when you start a distinct business that offers a sizable marketplace goods or services they value and can’t get elsewhere. In general, starting a business in a market with little to no competition is idea. However, the lack of competition may result from barriers to entry, lack of market demand or failed attempts by previous players. Management learning website Mind Tools suggests that you conduct a SWOT analysis to see whether your current strengths and weaknesses, combined with future opportunities and threats, give you a good competitive position.
4. Legal And Regulatory Environment
You also need to understand legal and regulatory facts that impact your industry. Some industries are heavily regulated, while others have minimal government regulations. PESTLE Analysis recommends that you run a PESTLE exercise to figure out the political, economic, social, legal and environmental factors that might impact the viability of your business.
Loose regulations make it easier to open up shop. However, you may need to get professional or business licenses in some cases. To sell insurance, for instance, you need various licenses. If you want to open a pet shop, you need to understand federal and local laws on proper care and sale of animals.
Types Of Retail Business
We have gathered the most popular stores people open most of the times. It’s time to figure out a business that will best profit you.
- Convenience store. A convenience store is often a small place with a limited number of product categories. It is a store in your area with all the essential items you need on a regular basis. It can have only 2-3 types of each product, but you’ll find this store almost everywhere in any City or Country. You don’t have to go to the supermarket or wait in a long queue to buy those items.
- Supermarket. It’s a marketplace with various product categories. You have varieties of choices to pick from. In a supermarket, people can find everything they need for their homes, People shop at a supermarket to stock their home with their daily consumption needs. They find everything in one place. Customers don’t need to go to different stores to buy all items. It’s convenient and time-saving. Most of the times, they offer discounts, promos, and unique products to encourage consumers to come back for patronage.
- ECommerce store. It’s an online store that sells products and services on the internet. Customers who can’t find a specific item in stores will find it online because of the choice modern platforms offer. The tendency of going online and having high profits will soon encourage all retail stores to sell products from a website.They deliver items from different countries. Famous examples of eCommerce stores include Amazon and Alibaba. Today, Amazon holds a huge market share of retail business and is at the top of customers’ minds.
- Specialty store. This store specializes in one or two product categories. Its main advantage is the availability of items you can’t find in the market. Examples of especially stores include florists, furniture stores, sporting goods stores, bookstores, etc. For instance, if you need a specific book, you better go to a bookstore. Supermarkets and malls don’t offer much choice of books.
- Drug store. It’s a store that sells medicine. The store has a wide choice of drugs to fulfill people’s needs every day. Besides pharmaceuticals, drug stores offer health and beauty products, water, snacks, and sunscreens, and have a pharmacist who can give a piece of advice.