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Understanding Retail

Operating a retail store goes beyond simply hoping a customer walks through your door. Billions of money in the retail industry is made outside of “hopes”. Money is made by being deliberate, not wishful. With the increase in competition and fickle customer demand, retailers must have a much clearer understanding of the supply chain in its entirety. There are several stops in the supply chain before getting the product to the customer. These stops each have unique objectives and different requirements. There is the manufacturer, distributor (supplier, wholesaler), retailer and consumer. Below is a diagram that illustrates this description.






Then, you must consider Sales and Marketing, Retail Operations Management, Administration, Inventory, Taxes, Expenditures, Loss Management and Human Resources (Payroll, Training, Research and Development). Despite all of these considerations, running a retail operation can be very rewarding! It really isn’t too difficult, especially if you start off on the right foot. The lack of reward to the owner/manager/entrepreneur is when they do not have a good clear understanding of how retail really works. Even the smallest retail operations are faced with the same challenges as the Big-Box Retailers such as, Target and Wal-Mart. The issues are the same, only the dollars at risk may be different.

Understanding retail means you understand profit margins and selecting the appropriate pricing objective for your market while being able to sustain unexpected expenses yet still produce profits. It means you understand that it takes commitment, and that a distributor is not someone who house their inventory in a van that solicits and delivers products. It means you understand that a successful retail operation isn't simply placing items on a shelf with an orange price tag on it. It means more "understanding" if you expect to make the most money at retailing. It is not simple, yet not complicated.

However, smaller retailers can relish in knowing they have a better profit margin and simpler operations, making them the heartbeat of the local economy. Risking savings and other personal assets is a hard pill to swallow for many aspiring retail owners and this is why we serve the purpose we do. We help you avoid all of the costly and common mistakes made by inexperienced and seasoned store owners. If you really understand retail, then you should understand that our institute MUST be your first stop! Now, let’s get you setup…

Professor Devin
Beauty Supply Institute

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