A statutory demand is a means of formal demand served by a creditor seeking payment of a debt that is an excess of $1,000 or more.

We hear mixed messages about whether the world will face a recession, whether dark clouds are hanging over the economy, and how some businesses are struggling to get back on top of things following lockdowns and a downturn in income. In this climate, we, unfortunately, do see an increase in more formal debt collection activity such as statutory demand. 

Whether more challenging financial times will descend on the economy may be location or business-type specific. It is essential, though, that the director is aware of their potential liabilities if they face financial difficulties. So often, we hear people telling us they thought it would go away or they could keep trading and deal with things themselves. We know that tough financial times and the inability to pay bills and keep your head above water do not usually resolve without some help or significant changes to the business and company operation.

Statutory Demand

If a statutory demand is made on a company, the director/s of the company are being made to prove the solvency of the company or pay debts that are due. 

We are commonly contacted by businesses that have received a statutory demand from the Inland Revenue Department (IRD) due to owed funds. However, the issuing of a statutory demand is not limited to IRD and may also be served by a private party owed money by a business or company. 

Before a company is put into liquidation, a statutory demand must be made for the debt to be repaid – to give a company an opportunity to avoid the potential rumination of a business. If we listen to the economists and business forecasters, they continue to predict that cash flow will be tight for Government and some businesses, and for some it already is. Those companies that don’t deal with debt and look after all their creditors in the spirit of the Companies Act 1993, do so at their peril.

What Criteria Need to be Met to Issue a Statutory Demand?

• The NZ Companies Act 1993 (the Act) provides that a statutory demand must be in respect of a debt that is due, meaning the money must be owed to a party and have gone past the terms of trade without being repaid or a payment plan put in place.
• A judgment doesn’t need to be obtained before the service of a statutory demand.
• The debt must, however, be due and presently payable as of the date on which the statutory demand is served, in the sense that the creditor is entitled to immediate payment.
• The statutory demand procedure is available only to a creditor whose debt is equal to or more than the prescribed amount, which is currently $1,000.

What Should Recipients of a Statutory Demand do When one is Served on Them?

• The first thing is to act and act quickly. The clock is ticking when a statutory demand is issued, and time moves fast.
• First, speak to your accountant to determine any immediate options to pay the debt.
• Speak with a licensed insolvency practitioner who will give expert, practical advice, and options.
• The sooner a business owner faces the issues they may have, the more opportunity they have to resolve matters before a liquidator or receiver is appointed to take control of the company outright.

One of the most significant issues we have when contacted by a business in financial distress is they have left it too late to act and deal with the demand in a responsive matter; whatever financial difficulties you are facing, the sooner you address them, the sooner you can be free of the burden.

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:

Convenience Store

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.

Departmental Store

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.

Specialty Stores

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

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.

Service Retailing

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

Complete Control

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.

Less Cost

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.

Less Risk

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

Takes Time

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.

Complete Responsibility

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.

Specialty stores are quite common globally, and many people prefer them over general stores. They allow you to choose from various products in the same category. However, specialty stores also have some drawbacks besides advantages. You cannot buy everything in one place and may need to visit multiple stores for different items. Or the products might go out of stock sooner as people needing a particular product visit specialty stores more likely.

What are Specialty Stores?

A specialty store refers to any store or shop with only products of one category. Most specialty stores have a particular product in various varieties. Let’s say a particular shop around your house has all kinds of bedsheets. As they specialize in bedsheets, it is a specialty store. But, if they start selling mats, crockery, sanitary, shoes, and everything else, it would not be a specialty store anymore. 

Specialties stores are common in areas where people have specific preferences. Many areas have specialty luxury cloth shops because the residents are more interested in buying branded clothes. Cities with a large population usually have multiple specialty stores to provide customers with a better experience. Sometimes the specialty stores expand and add other relevant items to the inventory. For example, a makeup store might also keep skincare items for sale, followed by perfumes and fragrance diffusers. They still call it a specialty store because the products are related to beauty. 

A common specialty arrangement is an apparel store. Sometimes, the stores have only particular clothing like jackets and coats. At the same time, some of them have clothes of all kinds. Both of them are specialty stores. 

Disadvantages of Specialty Stores

Here’s all you need to know about the disadvantages of specialty stores.

Less Convenient

The most noteworthy drawback of a specialty store is that it is less convenient. When people have a long list of items to buy, specialty stores are not their first choice. They prefer going to a general store or mart where you can find everything in one place. Specialty stores are also not the best choice for people looking to buy products on a large scale. Specialty stores are good if you want to buy a particular item. But, people find it inconvenient to travel to multiple stores for various purchases.

Seasonal Influence

The changing weather also influences specialty stores a lot. Many stores only specialize in objects suitable for a particular season, which can be a major disadvantage for specialty stores. For example, if you own a specialty store for beachwear, the sales will fall in the winter. It does not influence the customers as they can fulfill their needs from another source. However, store owners may experience lesser sales in the off-season. 

Less Variety

While specialty stores have various items in a particular category, they lack variety in others. Some stores have more than one specialty product related to one another. For example, a store specializing in clothes may have footwear as well. But, the variety of footwear will be less compared to other stores.

Departmental stores have sub-divisions within departments. It allows customers to look through a larger variety of items. Most people visit specialty stores when they have only one or two items on the list that they can find in the store.

Fewer Customers

Less choice also means fewer customers. Specialty stores are suitable for people looking for a particular type of product. Customers who want to explore more options usually head to a departmental store to have as many options. A person going to a specialty store typically knows what they need and is looking to pick up the item quickly. The queues are shorter in specialty stores because of limited options. 

Market Dependency

A major drawback of specialty stores is their market dependency. As specialty stores operate on only one or two kinds of items, they depend on their vendors significantly. It can be quite difficult to manage such stores in case of a back-end shortage. Specialty stores also suffer when people choose alternative methods. For example, a store sells scented candles, but the people in that area start using automatic fragrance dispensers more. It will affect the inflow of buyers and loss to the store.

The Bottom Line

Specialty stores are excellent for buying a particular product. Yet, a disadvantage of specialty stores is their inability to provide a large variety. A change in season and people’s choices also affect the sales of specialty stores. Study the needs of the neighborhood and the future of your products in the next few years before setting up a specialty store. 

FAQs 

What are the disadvantages of general stores?

While general stores offer many advantages, there are also some disadvantages associated with general stores. While general stores. Usually, finding a suitable space in a small town is difficult. A high influx of customers also means more damage.

What are some specialty stores examples?

Specialty stores for sports goods, flowers, books, furniture, and perfumes are quite common besides the examples mentioned above.

What are the features of specialty stores?

A specialty store’s main feature is that it only sells one kind of product. Other features include better customer service, high-quality products, more variety of a particular category, and better prices.

By 2024, yearly global E-commerce sales will exceed $6 billion. It shows the growing demand and popularity of online shopping worldwide. However, with this increase in competition, it is essential to make sure your e-commerce website stands out.

Companies like Pietra, Inc. offer a wide range of services like sourcing to help you get your business off the ground and running smoothly.

This guide will discuss three of the most common services these professionals offer.

1) Order Fulfillment

The first service that eCommerce business builders offer is order fulfillment. It involves taking orders from customers and shipping them the purchased products.

These business builders will take care of all of the paperwork associated with fulfilling an order, including creating invoices and packing slips. They will also make sure that the products are properly packaged and shipped to the customer promptly.

If you are opening a store, it is important to invest in order fulfillment software that can help build your e-commerce business. This way, you can focus on other aspects of your business, such as marketing and product development.

2) Social Media Integration

An e-business store is only as good as its ability to connect with potential customers on social media. Ecommerce business builders can help you create a social media strategy that will get the products in front of the right people. They can help you set up automated systems that make it easy to post your content and engage with your audience.

Building an e-business website is just the first step in creating a successful online business. You also need to make sure that your site is visible to potential customers and that they can find what they’re looking for. Ecommerce business builders can help you create a marketing plan that will get your site seen by the right people. They can help you track your results to see what’s working and what isn’t.

If you want to succeed in online commerce, you need to make sure that your website is up to par. Ecommerce business builders like Pietra can help you create a site that is fast, reliable, and easy to use. They can also help you add features that make it more likely for customers to buy from you.

3) New Product or Service Launch

If you’re launching a product or service, an e-business builder can help you get it off the ground quickly and efficiently. They can manage all the details, from setting up your online store to marketing your new product or service.

Launching a product or service is a big undertaking, and working with an e-commerce business builder can make it much more manageable. With their help, you can deal with other aspects of your business while they handle everything related to your online store.

If you’re worrying about launching a new product or service, consider working with an e-commerce business builder.

Conclusion

Starting a successful business or launching a new brand can be daunting. But with the help of e-commerce business-building services, you can get your business up and running quickly and efficiently.

E-commerce is a major contributor to sales globally, with 93.5% of internet users having made at least one purchase through the internet. E-commerce is growing at a rate of 23% per year, and it is expected that it will be a significant sales platform by the year 2040, with 95% of purchases being made online.

What is e Commerce?

E-commerce refers to making business online without interacting with the buyers physically. It is a modern approach to business, and more brands are moving towards e-commerce to boost their sales. E-commerce involves online selling and payments through online payment gateways. While it provides a space for people to sell their products without having a physical store to display their goods, there are also some disadvantages.

Advantages and Disadvantages of eCommerce

Advantages	Disadvantages
Available 24/4	Lack of direct interaction
Larger market	No tactility
Lesser cost	More competition
Convenient buying	No guarantee of quality
More choices	Long delivery time
Detailed product information	Internet access needed
No need to go out	Website crashing
Affordable marketing	Bad reviews cause losses
Access to customer data
Better sales through reviews

Advantages of eCommerce

Available 24/7

Can customers go to their favorite apparel store at 5 in the morning and get the jacket they need for a trip urgently? No.

But can they order? Yes.

When you set up an e-commerce store, you are 24/7 open and available to your customers without any time restriction. They can place an order any time of the day, and you can dispatch their goods at the soonest to engage the customer and convince them to buy from you often.

Larger Market

The world has become a global village, and e-commerce is the best product of this global village. Websites are worldwide, and you can reach potential customers across oceans if you want to. Even a high school student can do it too. E-commerce gives you access to people globally to expand your business by catering to a large number of people.

Lesser Cost

E-commerce stores are a one-time cost and do not require continuous maintenance. While you may need 4 employees to run a physical store, e-commerce stores do not require the same workforce. Online selling also saves the cost of electricity and other forms of maintenance in the store, eventually decreasing your monthly expenditure. E-commerce stores are more automated, avoiding human error and reducing the need for many staff members.

Convenient Buying

Online sales have rocketed in the past years. Do you know why?

E-commerce allows people to buy at the comfort of their homes without going out. Everything they need is readily available on the internet, and they can buy quickly, just with a single click. Many e-commerce stores also provide the option of replacements where they pick the purchased good from your home. E-commerce is every busy shopper’s dream come true.

More Choices

Anyone might not have enough time to visit one store to another, you can always scroll through multiple stores online. The presence of hundreds of options online gives you more choices to select from, offering a wide range of colors, designs, sizes, and material quality. With so many options, you are more likely to easily find what you want.

Detailed Product Information

Another benefit of e-commerce is the information mentioned with each product for ease. Customers do not have to ask the seller about the features of the product as the product description and details give it all out themselves. You can find all information about a product on the e-commerce store or search engines to make the right choice of purchase.

No Need to Go Out

Online buying has made accessibility easy than ever before. If you do not have enough time to go out and buy the pack of cheese for dinner, order it right away, and it will be at your doorstep in a few minutes. While sometimes you have to pay a minimal delivery fee, e-commerce does not only save time but also cuts down fuel costs.

Affordable Marketing

We won’t say that billboards and TV advertisements are gone, but the era of digital marketing has definitely taken over. Now, most businesses are looking forward to digital marketing and making the best use of social media platforms to market their products to a wider audience. Digital marketing costs less than traditional marketing, and your product reaches a global market.

Access to Customer Data

Online selling gives you access to customer data and enables you to design your store according to customer needs. You can add products that your customers usually look for and cater to the needs of potential customers in a better way. By targeting the right customers with the products they need, you can make them choose you more often.

Better Sales through reviews

Reviews on the internet are just like words of mouth but reach more people. Reviews and testimonials are one of the most effective ways to enhance sales through e-commerce. Reviews on the website by your satisfied customers help new buyers make a decision about the product, and you sell more.

Disadvantages of eCommerce

Lack of Direct Interaction

One of the major drawbacks of e-commerce is the lack of direct interaction. Interactivity and body language are two vital components of communication, and they both are lost during online dealing. This loss of interaction during selling products online sometimes makes the customers move to retail shopping to understand the product better.

No Tactility

Besides not being able to communicate face-to-face with the sellers, the customer also misses the experience of touching and trying the product before buying. Many customers want to try a particular product such as shoes, clothes, spectacles, and others to make sure they are the right fit, but this is not possible in online shopping.

More Competition

E-commerce allows everyone to create a website and have their online store, increasing the competition among sellers. Buyers visit multiple stores within minutes and choose the one with better quality and lower price. High competition makes business difficult on e-commerce platforms as customers tend to choose products that cost less, and store-owners have to keep prices competitive.

No Guarantee of Quality

Talking of buying something online, there is no 100% guarantee of the product’s quality when it reaches you. It may be the same product as mentioned, but the rate could be worse than you imagined. When setting up an e-commerce store, it is important to ensure that your quality is unparalleled to keep customers loyal to your brand.

Long Delivery Time

Ordering and receiving goods is incredibly easy with online shopping, but not that quick. It usually takes 2 to 3 business days for the purchases to deliver and more if you are ordering from a distant place. Sometimes people avoid shopping online if the store does not offer urgent delivery if needed and prefer to go and buy from a retail store.

Internet access Needed

E-commerce is highly dependent on the availability of the internet as you cannot buy anything online in the absence of an active internet connection. Internet access is a must for online shopping to add an item to your cart and make payment through the card. Some website functionalities need a high-speed internet connection and may not be accessible to buyers with slow internet.

Website Crashing

While the need for the internet is inevitable when going for e-commerce, it may have a few other problems. Having an e-commerce store always comes with the possibility of your website crashing or having a glitch that may push your customer to move to another site.

Bad reviews cause Huge Losses

Let’s say you have a bad day and deliver a wrong product to a customer, and they leave a bad review. You may try to fix it, but sometimes buyers are very critical about service and do not hesitate to leave a bad review right away.

Reviews are as risky as beneficial they are for e-commerce. Good reviews can help you get more customers and direct them to your website; bad reviews can stop potential customers from buying from you.

Frauds

Online shopping comes with numerous security issues and has higher chances of fraud. As people usually pay for purchases through their credit or debit cards, there’s always a risk of stealing information leading to money fraud. If any such scam happens after shopping through your site, the customer usually leaves a bad review, and the word spreads like wildfire. Ensure a safe shopping experience for your customers by providing security and cashback when needed.

The Bottom Line

E-commerce is growing massively, hundreds of females started the business with low investment in recent years at there are a wide market and hundreds of product options to sell and the dimensions of shopping are changing. Now more people are moving towards online shopping as it offers numerous advantages like having more options, getting all information about the product, and the possibility of ordering from an online store any time of the day.

Besides the advantages, some disadvantages also come along, like lengthy delivery time and uncertainty about the quality of the product. Despite the disadvantages, e-commerce is expected to expand more with most purchases and transactions made online. If you are looking to set up online, give it a try with any of these profit generating ideas.