What Are The Pros And Cons On Retail Outlet?

Businesses uses a range of different means to get their product/service to the customer. Obviously, it is important that you choose a means of distribution that is right for your market while at the same time being aware of alternatives that might gain you access to further markets.

One of the mostly and common distribution method will be starting a retail outlet. This general term covers everything from the marketstall to large department stores and hypermarkets. The main advantages and disadvantages of selling through your own retail outlet are shared below.

Advantages

Having a retail outlet means you have a physical presence in that area. This enable your business to be easily identify by your customers. It also helps in building trust with your customers by having a physical shop.

You can draw on the passing crowd. With high level of visibility, regular shoppers are able to recognized your outlet after a few weeks even if you are new. Think about it, you just started an outlet in a new area. Regular shoppers frequent that area twice a week. In a month, they would have seen your shop eight to ten times. By then, they will know your presence there.

Retailing is a cash business. That means all customers pay cash or credit card to purchase your products or services. Unlike some businesses that uses 7 days or 30 days term. A cash business reduces the risks of bad debt.

The sales process in retailing is much shorter and easier compared to other business. Customer comes to shop, your staff serve them, customer decide to buy, pay up. The process is pretty straight forward.

Disadvantages

Setting up a retail outlet requires high capital cost. You have to purchase the inventories, set up the shelves, renovate the shop etc. The high capital outlay also means the business is in higher risk.

Retailing belongs to a much more passive kind of business. Instead of going out to get business, you basically stay in the shop waiting for customers. You can't do out and out sales that is more active in sourcing your customers.

It is not flexible to some changes that may take place in the market. For example, the neighbourhood can go into decline, parking restrictions might be imposed, your market can 'move away', etc.

Consider the advantages and disadvantages to make the best decision for your distribution channel.

Article Source: http://www.content.onlypunjab.com

Joe Lee is an out of the box entrepreneur. He explained what is real marketing in his website. Learn more about marketing. How do you create effective marketing campaign? www.millionaire-idea.com/marketing-plan.html

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