Whether it’s a small street-corner shop selling hot dogs or that huge departmental store in your neighborhood, both are independent retailers. You will find numerous independent retailers around you in everyday life.
Independent retailers usually begin small, but that is not compulsory. You may also see such retailers opening exquisite jewelry stores in the town. Independent retailers are widespread and cater to different needs of people. Let us tell you about the types of independent retailers in detail.
What are Independent Retailers?
Independent retailers refer to business owners who own the business solely. There are various advantages of being sole trader.
Independent retailers do not buy franchises or become partners in other businesses. They set up their own business according to their capital. Most business tycoons begin as independent retailers and work their way up to selling franchises. Independent stores vary from one store to up to three stores in different locations. Typically, the business needs partners or franchisers to manage the business further.
According to the National Grocers Association, independent retailers account for a quarter of the total retail industry sales.
Types of Independent Retailers
If you are looking forward to being an independent retailer, you can choose from different types of retailing businesses. Let’s tell you about them:
The most common and popular form of independent retailer is convenience stores. Convenience stores are shopping areas with minimal items majorly constituting everyday grocery needs. They are open for longer hours than other kinds of stores. Many people prefer buying fresh stuff like eggs and milk from the convenience store near their house. Convenience stores help build community and are more of a community setup. They require less capital and cater to the daily needs of people.
The next kind of independent retailing business is a departmental store. You can make significant money from a departmental store if you have sufficient capital. Departmental stores have departments that cater to different requirements. For example, a departmental store has the sports goods in the sports goods department, whereas lentils, rice, etc., are in the grocery department. They provide a large variety of options to the buyers. Most people buy groceries in bulk from departmental stores to save costs. It allows the customers to buy everything under one roof.
Besides convenience and departmental stores, specialty stores are independent retailers with their limitations. You may also find specialty stores of international chains like Sephora and Damas. But, remember that they are not independent retailers.
Let’s say that you open a store to sell skirts only. From mini-skirts to long pleated skirts – you have it all.
Sometimes specialty stores may have other related items as well. But, their focus is on that particular range people visit them for. Examples include perfume shops, candle shops, etc.
Single–Business Corporate Retailing Stores
Corporate retailing stores are a well-known type of independent retailer (some stores are also partnered, though). It refers to having stores in more than one location. It is an independent business until you do not sell one or more branches to other people. If you sell or buy franchises, it is no more independent retailing.
Automated vending is a less-popular type of independent retailing. Yet, it is becoming common in different parts of the world. People are purchasing and placing vending machines in other locations. It requires less capital and gives you a certain return on sales. You do not have to sell the product physically. The vending machine will do the job for you. However, it comes with power and maintenance costs.
Besides selling products, you can also sell your services as an independent retailer. One common example includes salons and at-home grooming services. Many people offer grooming services for women at their doorstep. Usually, these businesses are managed single-handedly without partnerships.
Advantages of Independent Retailers
Independent retailers have complete control over the operational and financial aspects of the business. They do not have to worry about anyone else’s opinions about business matters and make independent decisions.
Being an independent retailer, you can start from any amount you have. You do not require a fixed amount to buy a franchise. You can invest as less or more as you want, and all the profit is yours.
You take calculated risks and add or subtract products or stores per need. The stakes are quite less when you do not have many stakeholders involved. It further reduces the risk when you follow an affiliate or coaching leadership style to benefit your employees. You only focus on your profit, employees, and customers.
Disadvantages of Independent Retailers
If you set up your independent retail business in a community with existing competition, your business may take some time to settle. People prefer trusted companies and will hesitate to try a new place. Yet, you gain trust and customer loyalty in some time.
While entire control over the store or business is an advantage of this system, it also comes with complete responsibility. All independent retailers have to take responsibility for every action and decision. You cannot blame anyone else for a failed strategy or loss in business. As an independent business owner, you are accountable for everything regarding your company.
Difficult to Resale
Partnered businesses may have many advantages, yet they are easy to sell. In such businesses, you either buy a franchise or make sales for another company based on a profit margin. As people trust those names already, you can easily find buyers or investors. However, an independent retailing business might not attract many purchasers until it is popular. You may face difficulties in reselling your independent business.
The Bottom Line
Independent retailers do not depend on anyone for capital or decision-making. They run their own setups instead of buying franchises or working for others. The common types of independent retailers include convenience stores, departmental stores, specialty stores, service retailing, etc. Independent retailing comes with full control over the operation and finances of the company. However, it also gives you the complete responsibility for the decisions and actions.
Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project.