Last Updated on 7 April 2022 by Gertrude
Dictionary.com defines retail as the sale of goods to the public in small quantities for use or consumption rather than for resale.
An example of retail is local shops (duka), Naivas, salons, and shoe retailers.
Retailers don’t sell goods only but services like restaurants, hotels and bars are retailers too.
Popular retailers by industries are automotive, food and beverage, online retailers, vending machines and direct sale stores.
Retailing got affected during the pandemic but essential services like grocery and drug stores weren’t affected.
An important time of the year in retailing is the holiday season ( Black Friday, Easter, back to school, Christmas, school holidays).
How Does Retailing Work?
Retailers purchase goods from supplies and manufacturers.
They raise prices.
The price increase by retailers is called a markup or profit margin
The profit margin is 100 per cent double the cost of labour, equipment and distribution.
Retailers make more money if they purchase directly from the factory.
Retailers are also online stores like Amazon, eBay, and Netflix.
Many retailers focus on home delivery sales while others combine their distribution to maximise profits.
Online retailers buy because it’s easy to compare prices.
Online retail is destroying mall business – change according to shopper’s preferences.
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32. Toys store
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36. Fuel station
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44. Tours and travel
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46. Sweets and snacks
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49. Canned goods
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51. Card shop/paper products
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52. Gift basket service
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53. Local gift shop
54. Wedding shop
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55. Craft supplies
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56. Workwear retailer e.g selling scrubs, construction wear and pikipiki/motorbike wear
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58. Pop up shop
59. Fitness centre
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60. Internet cafe
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62. Retail distribution
64. Used car dealer
65. Home furnishing = fabrics for couches, sell bedsheets, bed covers, curtains, pillows, cushions, mats, carpets
66. Laundry and dry cleaning
67. Maternity clothing store
68. Cloth diaper
69. Farm machinery
70. Fertiliser distribution
71. Retail feed store
72. Car wash
73. Blouse shop
74. Coaching centre
75. Nail art centre/shop
76. Deep-fried spicy chicken
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Starting a Retail Venture (What to Consider)
Choose a name
For any type of retail business you choose, build your business around the name.
If you want to start a tattoo parlour, choose a name that matches or goes with the tattoo parlour.
If you choose a name like Naivas, which is a general retail store, ensure, you communicate your name to your customer.
In choosing a name, don’t restrict your business too much.
For example, saying, Jane’s Afro Comb means only people with afros are welcome.
Business names reflect your future ambitions, what are your future ambitions with your business?
What do you want to achieve, 5 years from now?.
This means, how do you see your business achieving in five years?
What will the achievement look like?
What services do you see yourself achieving in that period?
Develop a brand
When entrepreneurs hear the talk about brand, they shrivel.
Branding is more than a logo and having a sleek website.
A brand is establishing how to cater to your customers and how they should expect your delivery of services.
A brand is about having the message marketing message across your social media and marketing channels.
You get your brand story, the most powerful and important aspect of branding by developing your brand story.
What do you want to be remembered with?
What are you doing to ensure you get remembered as you want?
Retailers don’t care so much about building a brand but a business.
Yet a retail business maintains contact with customers throughout their lives in existence.
Do you want to know how to build a brand and not just a business?
READ: How to Build a Brand and Not Just a Business in Kenya
What’s a Brand and How Do I Develop a Memorable Brand in Kenya?
Meet legal requirements
Don’t start any business not just retail without meeting your legal requirements.
These legal requirements are licences, permits, insurances, business accounts and tax permits.
You don’t want to underreport your taxes then get caught during an audit or refuse to report your taxes.
Remember, kulipa ushuru ni kujitegemea.
Also, insurance helps you deal with eventualities like a fire or theft or debt in case of your sudden death in your business don’t be afraid to ask what insurance policy will be good for your business.
Have a business plan
Entrepreneurs especially small scale retailers tend to ignore the value and importance of a business plan.
A business plan isn’t a static document that you must stick with.
A business plan helps you solve a few startup problems like where do you get your customers, how do you market and what marketing strategies are the best or how do you analyse competitors or what your business structure looks like.
A business plan is a visual plan that helps you understand what you cannot complete in a sentence when talking about your business.
Your business plan will change according to what you want to offer in future but it doesn’t mean you must not write one. Let your retail business plan have some of the components and they include:
Marketing analysis of competition
A description of customer experience
A plan for future hiring
Profit and loss plan
You cannot start a business without knowing how much costs go into the operation of your business.
When starting a retail store, the startup costs may seem complicated but they don’t have to be.
The following are startup costs for retail stores to consider and they include:
Retail location and deposits needed
Updating and fixing of the store to make it appealing to customers so think of new painting, installation of shelves for displays, decors to use.
The decor, shelves and paint must match your marketing materials like brochures, website design and social media posts.
You want to have cohesiveness in your business that allows customers to remember who you are.
Inventory costs – you have to know how much it will cost you to stock up your shelves. Do you have ready and reliable suppliers?
Are your suppliers within or without the country?
Are they communicative suppliers or do you have to travel to get them?
Your inventory gets affected by how your supplier responds to changes in demand for your products.
You want a supplier that expands with your business.
Computer and phone services
Domain and email services
Point of sale software
Exterior and interior signage
General office expenses like liability insurance, cleaning, office accounting software and systems
Choose a location
Did you know choosing a location for your business is the most tasking event you can do as a retailer?
The first question to ask is where are your customers?
How do your customers want services or products delivered to them?
What are your customers’ will to spend on getting your products and services?
You don’t get these numbers by guessing but by understanding your customer’s response to your location.
There are some businesses where customers don’t mind queueing for hours in order to get their products or services. The best example is Apple products.
Customers will wait in the queue from the am to the pm to get an iPhone.
You can also get your products delivered to you no matter the location you are in the world.
Don’t be Apple, listen to what customers tell you.
Some customers despite the increase in numbers with online shopping prefer to shop in-store others prefer online others love surprises inside subscription boxes.
Understanding how to choose a location for a retail store can get daunting, it doesn’t have to.
Read how to choose a profitable location for your retail store below.
Know that customers come to your premise for more than your location, customers will locate your business no matter the corner it is in for your products, customer excellence, branding and because they feel awesome owning your products.
Don’t focus so much on a location that you forget it’s about the customer and fulfilling their expectations first.
READ MORE: How to Choose a Profitable and Winning Location for Your Small Business in Kenya
Retail loves multi-taskers
Types of Jobs Available in Retail
The following are types of jobs available in retail and they are:
Social media manager
Customer service representative
Team leaders and floor managers
Advertising and marketing manager
Clearing and maintenance
Retail warehouse worker
Loss prevention manager
Logistics = everything job/multiple skill sets.
Roles include ensuring the store meets regulations and requirements and guiding the store to meet targeted sales.
15 Highest Paying Retail Jobs
The following are the 15 highest paying retail jobs and they include:
Loss and prevention manager
Customer service supervisor
Retail franchise owner
Related Resources for Most Profitable Retail Business Ideas With Low Investment
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Low-Cost Small Business Ideas in Kenya
FAQs for Most Profitable Retail Business Ideas
What business can I start in a small shop?
The businesses to start in a small shop include:
What’s the most inexpensive business to start?
The most inexpensive business to start includes:
Which shop can I open?
You can open the following kinds of shops:
Mandazi, cookies and tea shop
What’s something unique selling?
The following are some unique things to sell and they include:
90 fastest-growing businesses?
The following are the fastest growing businesses in Kenya
Lawn care services
Starting a retail business in Kenya is the best way to employ yourself.
You don’t have to start a giant retail supermarket like Naivas to see huge and steady profits.
Start your retail business small while thinking big.
Which retail business are you interested in starting?