Retail Channels

You could choose to build your own retail channel, producing and selling your products or services directly to the end user. This approach can be costly and requires several sets of knowledge, such as

• product innovation and production
• target market contact through store or non-store distribution
• finding a location and decorating a retail store, and
• strategies for selling and marketing.

Retailing does have a much larger potential profit. A typical markup from wholesale price to retail price is 100%. For example, if your product sells for $15 at wholesale, the retailer would sell it to the consumer for $30.

It is very tempting to want all the profit. But there are many costs (and headaches) to retail. Consider carefully before you jump in. One of the largest costs will be the retail location and employees to run it. In-home sales offer low overhead costs, but could affect your family life. Some non-store retail options, such as kiosk rentals, the internet, or mail order, could be better alternatives for you.

"They say location, location, location...and they were right. Location is everything when you open a shop. " Joan Reuning started weaving and screen printing fabric for clothing and accessories and found that people were interested. She opened a shop and moved several times before she found the right location for her products.

"We opened our store in New York and it was like we hit the lottery. We put it in the right location just as that area was blooming. So we got a great rent in a hot neighborhood and it's incredible....So, we said let's open a store in LA..." Malia Mills describes the difficulty for small businesses to increase order sizes and still meet delivery times.