okay, i am by no means a business or economics master, but I would consider myself, somewhat of a homegrown retail expert. starting your own business without formal training is an enlightening and humbling process. the first mixer we sold was purchased with a stolen credit card (duh, so that’s what the red “N” means?). I still remember dude’s email… Betadays…
another duh story is about margins. I think for our first month of existence, we were calculating price margins wrong, which means that we were pricing shit wrong. we’ll for all you people that want to enter the pseudo-glam world of boutiques and online shops, here’s my personal experience with margins (don’t quote me on this shit, but in my experience this is valid stuff).
price margins appear to have an indirect but strong correlation with grind (hustling, working your ass off, all-niters). if your margins are 75% or below, you’re probably grinding your ass off. ever see those luxury goods boutiques (stress luxury) where the workers and owner are just chilling with a couple things for sale? he or she probably has some nice margins. sell one thing, cover your rent for the day. if it doesn’t move, slash it in half, and sell it on sale while still making nice margins. The lower your margin, the more you have to sell, manage, and push. What about Tower? Low margins (probably around 25-40% at best), tons of products, tons to manage, tons of employees, tons of overhead…. The Grind killed them….
therefore, if you want to get into the retail biz, I really suggest checking out your potential margins. look for areas where you can offset low-margin goods like creating your own goods that you’ve produced or offering services. but if you’re hovering around 50% or below, get ready for A GRIND THAT YOU HAVE NEVER KNOWN.
– retailers make less than 15% margin on iPods! the computer industry in general has the lowest margins (sometimes 10%!). many businesses in this industry make their money on repairs and upgrades.
– in my opinion, go invent something. it’s a singular goal, and has clear fail & success signs.
– location. location. location.
– internet dudes: there are many of hidden costs when operating a successful e-commerce shop, research the hell out of it before proceeding.
– especially in retail, make sure your grind = proper compensation for yourself. always cut something off for yourself, no matter how small the piece. remember props and a cool self-image don’t equal shit in the long run.
i thought i was going to write more, but i’m hungry.
ps. not salty, just lookin out.