Need Input

Retail

Has never been easy but it has become exceptionally difficult. Most markets became overly saturated in the last couple of decades and now with economic downturn the saturation has reached cut-throat levels.

The world's largest retailer has done a VERY good job of convincing many that price is the only factor that they should consider. As they can buy the complete output of foreign "factories" and have a complete and exclusive shipping/distribution/insurance/finance system they are able to put goods in their stores for significantly less than anyone else and their volume allows extremely small profit margin.

While no-one else seems to be able to duplicate this sytem entirely, they certainly try. Managers of the "big box" stores have considerable latitude in pricing much of their merchandise to their local market conditions. In the absence of mega-competition their "commodity-type" items will be priced at or below the level of local small competition, BUT they are making significantly more profit--both by selling inferior products and their huge company-wide volume. This can allow them to effectively subsidize their mid-range goods to the point that you could not keep your doors open selling the same/similar at same/similar pricing.

Their return/exchange policies are extremely liberal--often because they negotiate special "allowances" with manufacturers--a break you are HIGHLY unlikely to receive.

Those retailers who have survived have likely done so with good service and quality and their customers tend to be very loyal. It can take a LONG time to build such a base.

Niches for small retailers are becoming fewer and fewer. As competition shaves margins at the "big box" level, they add more and more categories to kill competition in the hope that they can later raise the price to reasonable levels, thus enhance their bottom line.

Little guys are often forced to deeply discount high-end merchandise, a strategy that often backfires as it is difficult to sufficiently raise volume to compensate. Remember that the truly wealthy rarely concern themselves with mundance matters as they are busy building yet more wealth. They are used to hiring people to do their selection for them and now instead of offering a relatively small discount to such, they buy from you at deep discount yet STILL charge their clients full retail PLUS fees.

In a market economy all of this is expected, BUT the big boys have been able to "negotiate" breaks from government as well. Local and state governments often subsidize their development with property and other tax concessions--I find this particularly amazing for anything retail.

As zoning laws tend to cluster these establishments together and their parking requirements are fantastic, they must find huge expanses of relatively cheap, undeveloped land. As the traffic--caused mainly by this development I might add--builds to intolerable levels, literally billions are spent by all levels of government to make access to them easier and easier. This really amounts to a GIANT, "hidden" subsidy. While the wages they pay aren't particularly high, they ARE able to provide benefits that you will find difficult to match--often retirement plans of extremely questionable worth that look REALLY good on paper. They also tend to hire lots of part-time help to which they pay no benefits. The exceptionally complex nature of our tax code isn't there to help the little guys by the way--it's there to help mega-corporations, accountants and "investment" bankers.