Top 9 Types of Retail Businesses
The retail industry has been around since 9000-6000 BC. As years passed, retail companies have evolved from barter systems (where cows and camels were used as a form of currency) to the era of online stores and e-receipts. As the industry becomes more complex, business owners often need the help of retail business loans to keep up with the competition and with rapid changes in the marketplace.
According to the U.S. Census Bureau, the total monthly retail sales in May 2019 went up to $519 billion in the United States. If you’re looking to start your own retail company, the following are different types of retail businesses you can choose from:
1. Specialty Stores
A specialty store is the type of retail business that sells one type of product, like books, shoes, sporting goods, mobile phones, and more. Examples of specialty stores are Nike, Barnes and Noble, Apple, and more. This type of retail business is generally smaller than other types of retail stores, yet it has higher operating costs because of the limited volume. For this reason, the prices for specialized goods are more expensive compared to other retailers who sell a larger variety of goods.
2. Online Stores
If you’re looking to start a retail business, establishing an online store is a great place to start. Many big retail companies started out online, like Snowe or Allbirds, and they now have brick-and-mortar stores. Online retail stores sell a plethora of goods, such as can be found on Shopify or Amazon. Even though you operate online, you still need to take orders, pack and ship items, manage billing, and deal with customer inquiries and complaints.
3. Grocery Stores
Grocery stores and supermarkets often offer different types of food and non-food products such as meat, produce, processed goods, cleaning products, and much more. The size of this type of retail business ranges from small convenience stores all the way up to large supermarkets. Some of the examples are Ralph’s and Trader Joe’s. There are currently more than 40,000 grocery stores in the United States and a majority of these are convenience store outlets.
4. Warehouse Stores
Warehouse stores, also known as ‘big box’ stores, display and sell products in bulk. They carry a wide variety of goods, such as clothing, sports equipment, packaged food, produce, meat, toys, electronics, and more. Most of these stores require yearly memberships and offer large price discounts and promos to members. Examples of warehouse stores are Costco, BJ’s, and Sam’s Club.
5. Department Stores
Department stores are segmented into different divisions that sell men’s, women’s, or kid’s clothing, cosmetics, jewelry, appliances, accessories, kitchenware, toys, and even furniture. This type of retail business can either be a discount or high-end. Some examples of popular department stores are Macy’s, Nordstrom, JC Penny, Neiman Marcus, Saks, and Kohl’s.
6. Convenience Stores
Convenience stores are conveniently located near you. Wherever you are, you can easily locate at least one convenience store nearby. These stores sell groceries and non-food items at a slightly higher price than your local supermarket. A good convenience store has almost all of your basic needs available, such as over-the-counter drugs, toiletries, drinks, snacks, and more.
7. Drug Stores
CVS, Walgreens, Rite Aid – these are some of the largest drug stores in the USA. These companies mainly sell healthcare products and medicines. However, larger drug stores like the ones mentioned, sell a wide range of products, including household products, snacks, protein supplements, small medical equipment, beauty products, and more.
8. Discount Stores
Discounts stores sell a wide range of products with hefty discounts. These retailers buy the products in huge volumes at a discount and sell them at a lower price. They also have supermarkets and hypermarkets so they can liquidate the products. Discount stores are able to drop their prices thanks to effective distribution and pricing methods, such as low profit margins to attract customers. Some of the famous discount stores are TJ Maxx, Costco, and The Dollar Tree.
9. Factory Outlets or Off-Price Stores
Factory outlets or off-price stores sell overrun products or products that have a slight defect during manufacturing or handling. Since these products did not pass the brand’s standards, these cannot be sold in the store. Over the years, the sale of overrun items has skyrocketed, thanks to e-commerce portals like Alibaba and Amazon.
Kick-Start Your Retail Business with the Help of Retail Business Loans
Before you start your own retail business, make sure to pick the right type of products to sell. You also need to research your local market, customer demand, barriers to market, as well as nearby competition. Retail business loans can help you do that and more.