View Full Version : How to know the demand of the market?

10-27-2008, 07:24 AM
Hi everybody,
I am going to start a retail business, before starting a retail business I just want to know the demand of the market. I think in retail industry itís important to have quite an intelligent look at market. I am looking for some tips which will help me in earning good amount of profit and ways which will help me to understand the need of market.
Thanks a lot for your future help!!

10-27-2008, 08:36 AM
hi,,,are you thinking brick and mortar?
,hope you can get out in the field and do some market research...
.around here independant retail is dropping like flies and being replaced with big corporate retail, tj maxx, hobby lobby, target, walmalrt etc etc.......

i have seen so few successful on line retailers...and tons of people trying to be....what i see working is a business doing a great web job AND they have a niche....a product that a buyer would not find at the local mall...like a big qualilty array of hats, or high end finches and finch food, or totally fun spicy cutting edge stuff.....
if i tried to put my basic inventory on line im sure it would fail....most of my gift stuff is easy to buy by anyone who goes to a gift show....and is already on line ...
what are you trying to do?
we have been in retail a long time...its not impossible...

Aaron Hats
10-27-2008, 01:50 PM
Ann's right. It's very difficult. What will you be selling? Search online for whatever you'll be selling and see what kind of competition is out there. In my opinion, a retail store should not be started unless you can sell the items in a B&M store and online.

10-27-2008, 11:40 PM
There are literally so many factor's here that can change all the outcomes, so knowing not just about your product demand, but also if it is a B&M store, your passing foot traffic, who your closest competition is and if they appear to be succeeding or not.

Location, Location, Location. This phrase is not only true with property but with setting up any kind of retail business, with the one exception of a destination store, where people will come to your store because of what it is rather then where it is. Ann's Green Oak Antiques is a good example of a destination store. However for many retail stores the location is very important, and the more competition you have the more important the location is.

Getting the right location, incorporates many things, the amount of passing foot traffic (the more the better), the size of the store (you cannot sell push bikes from a 10sqm store, just like you probably would not set up a digital photo printing lab in a 200sqm store, getting the scale right is the first step), if the store is suitable for your type of product, plus most important, do all the other factors mentioned justify the lease price that is being asked.

Aside from the location you also need to be aware of your competitors. Go and look around within at least 1 to 2 km, maybe even further depending on where you are, and find all your potential competitors. Once you have found them all visit there stores over the next few weeks at different times of the day, and roughly see how busy they are. Have a few specific products in mind, and compare the prices they are selling them for to what you expect to sell your's for, even compare them to each other. While i do not believe in spying on other's or going out of your way to try and get some information out of another when you shouldn't be asking for the information anyway, keep in mind to keep your ears open when in the stores. You would not believe how many times i have been in a store and overheard the person behind the count discussing how the store is on budget for the day or week and clearly discussing the actual figures over the phone with the manger or whatever. If you happen to be around and hear this it can give you a good insight at least as a base marker on what you may be able to expect. However don't think that if it is a big number that you will be able to match it unless you are matching the way they do business, and can get similar results.

Probably the final word will say at the moment is that if you are going into a B&M retail business, be sure that you are financially prepared to lose money in the first year and maybe just break even the next year. Even though it is not guaranteed. Remember if you are leasing a store, the landlord wants to get paid, and they often are not concerned about a story, some if the rent is not paid will change the lock and that is end of story. Also remember if you hire staff, they probably don't like to work for nothing, so if things start getting tight, you have to weight up options.

10-28-2008, 12:50 PM
I agree with all that has been said here so far but I want to add one more thing.

A friend of mine has always had a dream of having a retail gift shop and antique mall, she worked managing these types of stores for several years and then when her baby was born looked for an empty place that would serve her purposes. Then she found the owner of the building (in the downtown of her city - at the very edge of the revitalized area) and approached them with her idea. She also told them that she didn't want to ruin her family's finances by incurring a lot of debt and asked if they would be willing to lease her the building for the first year for a percentage of her profits. I don't know the full details of the agreement but her down-payment on the lease was fixing up the inside of the building and her lease payments for the first year or two of business are very small and/or tied to her profits. She's been open for about two months now and is seeing her business increase and doesn't have the burden of a $2k/month lease payment over her head either. In my opinion the only thing she hasn't done yet that she really should do is establish an online store - but the point is if you know what you're doing, you do your homework, you believe in your dream and you find the right people you can get your business up and running for a lot less than someone who just jumps into the middle of an idea without careful consideration first. You'll be able to find other successful people who will mentor you and invest in you without tying you down to debt.

10-28-2008, 11:59 PM
Blessed this is a perfect example of doing your research. Now maybe her location isn't prime main street retail area, however through her marketing she has the potential to make this store a destination store, that is not out of the way but, it is somewhere that people plan to go rather then just happening across in their travels.

The way it sounds like she has negotiated the lease is a bonus for her, because this is how many retail leases are set-up, with a base lease, and then a percentage of revenue. Normally though especially if in shopping centre's this ends up where the person leasing the store pays a base lease, but then pays more if that lease price drops below a certain percentage of their revenue. So for example they may pay $2,000 per month lease, and as long as this is 10% or more of their revenue then that is all they pay if their revenue makes the lease less then 10% of turnover, the center has the option to charge a higher lease. From what i have read, this is an often included clause in retail leases, but not always actioned.

10-29-2008, 02:07 AM
Yeah! It’s really very important to know the demand of the market. First of all perform a feasibility analysis to make sure that the business you want to start is going to be beneficial. Retail is a fast growing industry but it requires quite a study before actually going into it. There are some methods like SWOT analysis to have a idea about market trend and actual potion of market. As it’s important in this industry to cater to right market and in retail industry market position of area where you are going to start your business is vital. Requirement of market should always be taken care off. To earn a good amount of profit you have to hit the bull’s eye with a needle precision. Hope this will help you to some extent.
All the best for future!!

12-18-2008, 03:45 PM
Hi everybody,
I am going to start a retail business, before starting a retail business I just want to know the demand of the market. I think in retail industry itís important to have quite an intelligent look at market. I am looking for some tips which will help me in earning good amount of profit and ways which will help me to understand the need of market.
Thanks a lot for your future help!!
Still wondering what retail business your starting albertmandola. You may be too busy at this time to post. Research. I was going to mention research. A huge key for any business. New or up-and-running. Keep up on your market research.
All the best.

12-21-2008, 07:34 AM
i picked up a pretty good market research hint the other day.....look at the magazine section in a bookstore to see where people are spending their money....and if there is a big group of something it tells you there is a lot of activity in that field....for instance there are over a dozen paper and scrapbookking mags right now, where 5 yrs ago there were none....its a whole industry out there, active and spending money......

for me, guessing what the demand is is a huge part of the job....and boy can you be wrong...

01-01-2009, 04:15 PM
what are the products you want to retail?

i think starting any business right now is a bad decision....unless your laid off and start up costs are very low...then what do you have to lose!

01-30-2009, 04:17 AM
Well for retail businesses, something always have demand like the things you need for daily life such as garment, food, toiletry, electronics like MP3 players, game console like PSP, Wii, Xbox, etc are quite high demand products but how you can sell them and make a profit is another story. However, if you do want to set up a retail business, may be you can start researching at Ebay or Amazon and see what's hot at their (what hot sections) Then come up a model which is able to make a profit from. Hopes that help.

02-01-2009, 02:49 PM
Couple of comments:

As stated above, do a feasibility study – but focus more on customers in the beginning. If you talk to potential customers, they will tell you if they need your products, what products they want and, more importantly, if they will pay for them.

When you start working on how to market your business, they move your feasibility focus over to your competitors. This way you can see how you can differentiate yourself or see where these competing companies are failing their (and potential your) customers.

I see that this post was started a few months back – Then, there was a tremendous growth in big box stores. Not so much now. (just as a side – when big box store really start popping up all over the place – usually means that the market or industry is close to saturation and about to burst – there is usually a 10 year cycle – box stores come for ten years then they go away for ten years and so on.)

I always hear the horror stories of small retail shops getting shut down by large companies like walmart. But, walmart has limited space – thus, while it seems they provide everything, they don’t carry full product lines – only the products they think (or have bully into) that they can make the most profit from – thus, they leave huge product line gaps - (e.g. they may have 10 types or brands of shampoo – but they don’t carry them all). A retail store could fill the gap where a walmart leaves off (just trying to show that there is ways to compete with big box stores).

I have also seen small retail companies thrive merely by their passion. You take a niche product or set of products and combine that with the utmost passion – customers will be drawn to you – especially if they have a similar passion. I guess it is just making a connection with the customer – make the connection and people will come and buy – even if the price is higher or your location is out of the way. This goes back to the feasibility study I mentioned above – starting with customers – see where their passion meets yours.

Just some thoughts

02-01-2009, 06:29 PM
On the walmart issue: I hate going into walmart. That being said, they do a very good job of targeting the local market. I used to live near Boca Raton FL, a very upscale area. The walmart there had upscale clothing and goods.

I now live in a very blue collar area. The products in a walmart 5 minutes from me are very much tailored to the market. About 20 minutes from me there is another walmart. That area has a lot of Mexican illegal immigrants. It has food and other goods tailored to that market, where the one close to me doesn't.

I agree you can always find niches, but walmart does an incredible job of knowing their local markets.

03-03-2009, 04:01 AM
Hi everybody,
I am going to start a retail business, before starting a retail business I just want to know the demand of the market. I think in retail industry itís important to have quite an intelligent look at market. I am looking for some tips which will help me in earning good amount of profit and ways which will help me to understand the need of market.
Thanks a lot for your future help!!

First go to Google. As you probably know, lately they apply the number of apperances for the phrases you are searching for. From that data you can derive the competition.

Then, find the firsts and see what kind of users they are targeting, what are the most selling products, and for what prices.

If there are no competitors, try another niche. Don't try to reveal an emtpy niche; It's most probably that others has failed there.

04-14-2009, 05:35 AM
First you have to know that what you want to sell in retailing. I think first you have to search out the fact related retailing.Search out the market online & offline collect information & discuss with experienced retailers. Its a very vast field remember More risk more profit.