Making assumptions about the state of retail is a dangerous game. Several years ago, there was a lot of noise about how high-streets were on their knees, with the internet slowly taking over.
Nowadays, such noise still exists, but there are also suggestions that many retailers are starting to shun eCommerce. The high costs of returns and the hassle of ever-increasing delivery charges mean that many just don’t feel as though it is worth their while.
Nevertheless, let’s not forget that the high-street does have its own hidden costs – and this is what today will focus on. We’re not going to join the high-street versus e-commerce debate, which is sure to last for as long as the world spins around.
Instead, if you are considering the former, here are some costs to be aware of before you take the plunge and open your own retail outlet.
This is one of the biggest and most controversial expenses that retailers have to face. In fact, in some cases, business rates can be more than the rent itself! The amount you have to pay is based on the size and type of your business, so it’s difficult to generalise.
However, it’s definitely worth checking out the latest rates and seeing if you can claim any reliefs or exemptions. The Government’s Business Rates webpage is a good place to start.
The Costs Of Insurance
This is another biggie. Retailers need to be insured against a whole host of things, from theft to accidents in the store. The cost of insurance will vary depending on the size and type of your business, as well as the company you go with.
Let’s Talk About Shrinkage
Shrinkage is the term used for the loss of stock that takes place in any business. It can be due to a whole host of reasons, from theft to damage to simply forgetting to scan an item at the till.
In a high-street store, shrinkage can be a big problem due to the number of additional risks. You have more people coming into your contact with your stock, which naturally prompts more risks.
How much can shrinkage cost you? Well, there’s no definitive figure, but there have been plenty of studies on the subject that tend to suggest a business should prepare to lose about 1% of sales.
The Look And Feel Of Your Store
This is a cost that is often overlooked, but it is nonetheless important. Making your retail store look inviting and appealing is not cheap – and it’s certainly not a job that can be done quickly.
If you’re going to be successful on the high street, you need to make sure that your store looks the part. This means paying for good signage, high-quality displays, and well-trained staff.
Unfortunately, these don’t tend to be one-off costs. Stores regularly need refreshing, whether it’s to inject new life into the brand, or just to relate to a new sale period.