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Do you want to start a retail business? If you do, then you’re entering a highly profitable industry. However, profits can only be made if you’re earning more than you spend. Sadly, retail businesses can have lots of business expenses. In this piece, I’ll walk you through three of the biggest ones.
Premises Costs
Your premises are going to cost you a great deal of money all year round. Traditionally, retail companies will have a store to sell their goods. You will have to find retail space to rent, and this will come out of your budget each month. To cut these costs and make them void, you could be an online-only business. Many people are going down this route, but physical retail stores still have a place in this world. Especially if you sell clothes because people need to try them on before they buy.
However, regardless of whether you have a store or not, you’re going to need a warehouse. There has to be somewhere for you to store all your stock, and a warehouse is your best option. So, you have to pay for that, and then all the additional costs. You’ll need to pay for forklift hire, warehouse shelves, platform lifts, etc. Not to mention hiring staff, and paying them too. All these costs add up and need to be managed, so your business finances don’t suffer.
Supplier Costs
All retail businesses are going to sell items and goods. And, these things have to come from somewhere. It’s rare that a company manufactures their goods. Usually, you look for a supplier. As you would expect, suppliers cost money. You’ll have to pay for all of the items you’re going to sell. Arguably, this is the biggest business expense you’re going to face. And, it’s imperative you get a good deal with your supplier. Pay too much, and you’ll struggle to make a profit.
Even if you manufacture what you sell, you’ll still need a supplier of sorts. You need to get the raw materials to make your products. For example, if you manufacture and sell clothes, you’ll need all the clothing materials. So, you’ll still incur supplier costs; they just won’t be as substantial.
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Marketing Costs
Retail businesses require a lot of marketing. It’s an industry that’s so competitive; you need a killer marketing strategy to stand out. As such, you tend to pay for the best agencies to help you, or spend extra to get your adverts in a good place. There are loads of marketing costs you could incur, and it’s important you’re aware of them.
Of course, there are some marketing ideas that don’t cost much money at all. In fact, some things can be done without spending a penny. I recommend you make the most out of the free and cheap marketing ideas before splashing the cash.
Now that you know the biggest financial concerns, you can start thinking of ways to save money. Reduce these three costs and you can end up spending less, which translates into more potential for profits!
