Retail businesses are and have always been a staple in India. ‘Retail’ refers to purchasing finished products from manufacturers and producers and selling them to interested customers.
India is the 4th Largest retail market in the world in retail. The retail sector contributes about 10% to the nation’s Gross Domestic Product (GDP) and 8% to total employment. But at the end of the day, it might sound easy and breezy on paper but executing it is daunting.
Before we go to how to start a retail business in India, we must understand the benefits of the retail market. Below, we have outlined why beginning a retail business in India is never bad.
Why start a Retail Business in India?
With its robust population, India boasts a substantial retail market size and share, so it is only natural that hordes of benefits for business owners are underway.
Through retail, you can facilitate a direct connection with the customers, helping you analyze future trends and potential market conditions. This is conducive to efficient business planning.
With retail, it is considerably easier to expand your customer base without shifting to a different business location.
Another reason to start a retail business in India is to sell more diverse products compared to manufacturers and wholesalers. With no inventory for retailers, the input costs go down. The lack of intermediaries negates commission costs.
Retail businesses have the potential for steep, rapid growth since they offer many options to customers. If you are a retail business owner, you can manufacture your goods, bringing down the supply chain cost and giving you control over the quality and price of the items.
The bottom line is that you should start a retail business in India because it influences an item’s marketing and industry competition.
How to Start A Retail Business in India?
Now, just because you want to start retail businesses in India does not mean you can. There are decisions to be taken that can make or break your business plan. There are documents to be approved and vendors to be contacted.
A lot goes into starting a retail business, and below, we have mentioned the steps:
Choose the Industry
The responsibility is on the retail owner to consider the kind of retail business and the type of products they want to sell before setting up their retail business.
Choose an industry you want to expand on, and base your research on market competition, local demand, supply chain accessibility cost, and the scope of building a unique retail business. There are a few basic types of retail industries you can err towards:
In India, grocery stores are by far the most common kind of retail business. They sell diverse food and non-food products like cereal, rice, meat, dairy, spices, beauty aids, healthcare products, and cleaning accessories. They can be set up both virtually and physically.
Specialty stores are also a kind of retail store specializing in selling specific products. Several retail businesses fall under this particular category, from stores selling electrical accessories, auto parts, and computers to the ones selling cell phones, home furnishings, and clothing options.
General Merchandise Stores
In India, general merchandise stores are bigger grocery stores selling various products. They typically sell clothing, furniture, kitchenware, fruits, vegetables, and something entirely different, like sporting goods.
Departmental stores provide a diverse assortment of products under one roof. They serve as one-stop destinations for all your shopping needs.
Their products include toiletries, apparel, electronic appliances, jewelry, cosmetics, footwear, toys, DVDs, sportswear, CDs, and books, among numerous other items.
Discount stores provide an extensive range of products at a discounted rate but at the risk of the quality of products being slightly inferior when compared to those at departmental stores.
Analyze the Location
As a new retail business owner, you must choose a location, keeping your targeted demographic requirements in mind. If your products include stationery items and small portions of edibles, an ideal choice of location is near schools, colleges, or residential societies.
So, it all boils down to choosing the perfect location per the industry you decide to base your products on. There’s no use of a cell phone retail market outside a school.
Put yourself in the customers’ shoes and make intelligent choices to reap the fruits of your labor sooner than later!
Choose a Name
Before you start a retail business, make sure you have decided on a name for it. The name differs once again based on the industry your products fall into.
The title should be catchy and memorable- no jargon, no hard-to-pronounce or spell words, and nothing too lengthy. If your business is set up as a proprietorship, feel free to include your name for the store.
But remember always to double-check whether the name is already trademarked, in which case, you might have to start thinking up a name once again, lest it is considered an infringement under our trademark law.
You must contact suppliers and vendors to get the products for your retail business. Always go for vendors or suppliers who provide quality products at reasonable and affordable rates.
The vendors and suppliers are typically wholesalers and manufacturers, and building a solid relationship with these local wholesalers is a one-way ticket to your retail success.
Determine Store Policies
Make sure you have the right in-house store policies that will serve as the basis of your retail store, making it a success.
You must know the policies fundamental to your retail business because they will set your business apart from your competitors and help you hold onto your company’s core ethics.
Store policies will also facilitate monitoring and managing daily affairs of operations, warehousing, and the hired crew members.
Formulate A Marketing Strategy
In this age of digitalization, marketing strategies play an integral role in spreading brand awareness, and the same rings true for retail businesses and their assortment of products.
From publishing newspaper advertisements to pamphlets, marketing strategies always drive your retail’s success by attracting a wide variety of customers.
Creating a website, having active social media accounts on Meta, Instagram, and YouTube, and expanding on the products your store offers and prices can help reach customers quickly.
Pay attention to Search Engine Optimization-related technicalities and be mindful of keywords in your website content.
Include your retail business in Google’s My Business listing, and fill in all the required details to make it more visible and accessible to customers.
Hire a Team
It can be a daunting challenge for a single person to run a retail store successfully. We always recommend hiring a team of professionals to assist you in running your business effectively. You will require a cashier, a manager, sales staff, and cleaners to run your store without a hitch.
Make sure your retail business employees are well-trained with all the necessary knowledge of the products your store sells. They must know how to handle future customer-related problems and assure them as and when needed.
Acquire the Required Documents and Licenses
There are some mandatory licenses and registration-related approvals without which no retail business can be set up. If you are wondering about the documents that need to be passed through before you start retail businesses in India, below is a list of the same:
Business Entity Registration
You can establish your retail business as a partnership firm, a proprietorship firm, a Limited Liability Partnership (LLP), or a company. Once you decide on a retail structure for your business, obtaining the registration for it follows suit.
While setting up a partnership firm, get it registered with the ‘Registrar of Firms’ and to establish it as an LLP for a company, get it registered with the ‘Registrar of Companies.’
A retail business sells products and goods, and when the company crosses a turnover of Rs. 40 lakhs (Rs.20 lakhs in some states), it must attain a GST registration. E-commerce operators must obtain their GST registration irrespective of their business turnover.
Shop and Establishment Act License
A retail business must also get its shop and establishment act license from the labour department of its respective state. This license governs all stores and their proper functioning.
With retail businesses essentially being stores where items are sold to consumers, this license is necessary for both online and physical stores to establish their legitimacy.
To Sum Up: How to start a Retail Business in India?
Here’s the takeaway:
If you want to start a retail business in India, you must first narrow down your target audience and decide on various factors such as the kind of goods you would prefer to sell, the suitable location for the store, the estimated budget, the growth potential, the need for creating employment in the form of staff members, appropriate marketing strategies, and course the financial and legal necessities.
Once you tick off all these requirements, plan your grand opening, and you are ready to start a retail business in India!
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