: IFE ADEDAPO
Retail business is capable of generating more wealth if managed appropriately, IFE ADEDAPO writes
For people interested in operating a personal business, the retail industry over the years has presented an opportunity, as a result, it has experienced tremendous boost with increasing investment and abundant jobs being created in the sector.
This magnitude of growth, according to experts is expected to continue as other business areas keep arising in the sector.
A change in the business landscape in the country is favourable to some people who are aware of the opportunities it presents while others, caught unawares, are struggling to ensure their enterprise survives.
As experts note, the expanding online retail market is gradually reducing the market share of other petty retail traders in the country.
A rise in the middle class in Nigeria which is about 23 million people, based on the estimated 5.7 individuals per household reported by the National Bureau of Statistics, are demanding better and improved services, equivalent to those in developing economies of the world.
Experts advise that retailers should pay attention to the types of products offered for sale, how to best present these products to consumers, and determining what is a reasonable retail price for each unit sold.
They observe that retailers have traditionally engaged in the task of selling in a physical location but the Internet has now made it possible to apply the same basic principles in a virtual setting.
Establish relationship with suppliers
The first important step in retail merchandising is establishing working relationships with manufacturers who will provide the goods or services that are ultimately sold by the retailer.
Experts note that having a client from whom wholesale products will be procured will ensure that they are available at reasonable prices.
According to wisegeek, depending on the number of units the retailer can afford to purchase at a given time, it may be relatively easy to obtain a discounted unit price, making it easier for the retailer to be competitive in the local marketplace.
They say this type of retail buying involves determining what products will be carried in the retail establishment, negotiating the unit price that will be charged by the manufacturer, and arranging for the delivery of those goods.
Determine the price
Once the goods are secured, the retailer must determine the unit price that he or she will assign to the products.
Experts note that in most cases, the retail price will be higher than the cost of purchasing the goods from the supplier. It is this difference between the wholesale price and the retail price that allows the retailer to make a profit and remain in business.
They add that using devices like display windows, elevated platforms, and colourful backdrops to attract the attention of shoppers; the retailer increases the chances of selling units quickly.
They note that setup and display are often considered especially important with fashion merchandising and similar retail settings, in that the visual display is often the key means of attracting customers who are highly likely to make a purchase.
Make it easier for customers to buy
A business consultant, Mr. Niyi Ayodele, says even though the country is lagging behind in the adoption of mobile money technology, some entrepreneurs who have created a niche for themselves in that area are making it.
According to him, the mobile money technology is an avenue for information technology firms to be globally relevant and be at par with their counterparts everywhere by providing flexible and acceptable fraud-free methods of payment.
Ayodele says, “These IT-based companies have developed mobile money solutions for retail businesses. With increased awareness and the growing population of the middle class, small business who are into online sales require the use of credit and debit cards for payments. As a result, retailers are shopping easy by providing payments option powered by Mastercard, Visacard, Verve and many more.”
However, the fear of online fraud has made most buyers opt for cash on delivery option. According to him, embracing this technology and making it easy for buyers to purchase items and overcoming the distance barrier will convert prospects into customers faster than expected.
Get the marketing right
Experts suggest engaging in a publicity campaign to reach prospective customers.
They say this may involve simple advertisement in local publications as well as electronic advertisements on local radio and television stations.
Key benefits for the success of the business, according to experts include high quality products; this helps to ensure the customer will return for more purchases in the future.
Along with the quality, the retailer must also sell the products at prices the consumer finds reasonable. By providing quality products at affordable prices, the retailer has a much better chance of standing out from the competition and remaining in business for many years to come.
Identify your competitive advantage
After having a good understanding of the market, experts say the determinants of your profitability lies in your understanding of the rules of competition within the industry.
Ayodele says one of the ways by which business owners can stay above the competition is through continuous advertisement and building a strong brand, while creating the awareness of what you do in the process.
He says, “One of the best drinks we have in Nigeria is Coca-Cola and the packaging has been changed many times just to be competitive. A business owner should be conscious of the competitors because they are always ready to run you down.”
source: Punch
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