The Myth About Retailing

[xhunterx]

Hi All,

New to this forum, pardon me if my qns seem abit unconstructed or ignorant. I recently got layed off from my job and this presented a great opportunity for me to start my own small retail business.

Eversince i was young i had an idea that when i reached my early 30's. I would move out of office jobs and do my own business/shop, however that chance came much earlier.

I would like to take to this moment to find out more about starting up a retailing shop and the risk involved.

1) Do retailers general make substantial income after deducting their expenses from rent, utility, hiring staff and stocking of goods on a monthly basis? Or usually struggle to make income just above break even?

Eg Venue: Bugis Village, selling ladies fashion, target audience 15-24 Females and so on.

2) How would one manage their inventory so that it doesn't accumulated old stocks? Is clearance sales the only way to go?

3) Besides setup cost, how much buffer of monthly rent does one usually need to maintain. If sales are not performing as a precautionary measure.

Can PM me.

[meinteel]

Taking Bugis Street for an example, the usual small shops on
level 1 costs about $42-$48 per square feet,
level 2 costs about $32-$36 oer square feet,
level 3 cost about $24-$32 per square feet...

When opening the shop, you need 3 months (security) deposit & 1st month rental upfront. Assuming that it costs about $3000 per month, then you need to pay the landlord about S$12 000.

Renovation, that usually costs between $20,000-$40000 for a shop shop. Probably on the lower end since its not a full-fledged mall with strict requirements.

Costs of good; depending on the amount of goods, size of shop & pricing provided by suppliers...you will need about S$20000-S$50000 initially.

Total cost for initial set up; between S$52000-S$102000.

How much to set aside each month? Monthly rental + S$5000 cash for stocks should be more than enough.

When starting out, it is advisable to stay at your shop throughout all the opening hours - for at least the first 3 months. That means you have a full time job of about 10-12 hours a day, 7 days a week.

How much can you earn?
That really depends on the attractiveness of your goods, ability to price rightly & sales pitch. This can vary from losses to huge profits.

What to do to old stocks?
1. Clearance sale.
2. Wholesale to small shops/mini-departmental stores targeting budget tourists and foreign workers looking for cheap deals or "pasar malam" runners.

[xhunterx]

Thank you very much meinteel for your detail explain. Really appreciate your valuble insight.

Here's some updates for those who're interested to know.

I called up one of the leasing agent regarding rental for Bugis Street small shop and apparently its 3 month (deposit) 1month (comission) and 1 month rental sighted!

Well, I guess GSS is also another avenue to let off old stocks if possible.

Hope this info find you all well.