Australian Retail Selling - Charging Customers to Try on Clothing & Footwear

http://www.smh.com.au/act-news/the-ugly-side-of-online-shopping-20120411-1wq5q.html

This piece of news isn't new news - it's been reported several times before but, every time it surfaces again, journalists seem to treat it as a new phenomenon. Well, there's no news to report so lets hash out the same old same old again, after all the bills won't pay themselves. Like all who work on contractual or freelance arrangements, the income is never steady and you have to look like you're still in the game to get more work.

As for comments from readers, you get the usual mash - those who are a bit better informed about the actual costs of running a retail outlet and those who assume they know something about it. In my opinion, if you don't have first hand knowledge of the real costs of running a business, then you're better off being silent rather than sounding silly which, to me, is what a lot of them do. Starting out in retail, after years in a paid job, was a major revelation and huge learning curve for me even though my parents had always been self-employed and I had some knowledge of how tough it was working for oneself.

So for those of you who think being a self employed retailer is easy, allow me to share with you some of my pearls of wisdom as a clothing retailer, whatever it's worth:

• A successful business takes at least three years to build - just have a bricks and mortar presence will not drive customers through your doors - even when they know you are there, it may take ages for someone to even come in and browse. And I emphasize the word "browse".
• For that reason, make sure you have the funds to see you through the first three years and never assume that your sales will cover your costs.
• You will need funds for insurance, rent, advertising, an accountant, stock, utilities, staff, internet access, website costs if you run a website.
• The costs of running a website is not as cheap as some may think. Sure, there are cheap hosting services but the service reflects their price. Also, if you have many products, cheap hosting services will cause your site to run slowly and this frustrates potential customers who are then likely to look elsewhere.
• Make sure your mark up costs are reasonable - it needs to cover the wholesale cost of the product, 10% GST, but also be affordable.
• Your target market is people who will become your returning customers - work out who these will be, what they are looking for from a specialty shop such as yours, and stock accordingly.
• Consider s loyalty card system - there may be startup costs but it's worth it.
• Research whether there are any viable buying groups you can join to get discounts on wholesale stock. Often these also offer non-trade benefits.
• Wholesale costs for clothing are much more expensive in Australia than in the UK or US - that's because we are a much smaller population with smaller production needs so manufacturers will demand higher costs per unit. We don't have the buying power to negotiate costs in the same way a US wholesaler would. We also pay GST on imports over $1,000. There are also other costs involved in wholesaling that pushes costs up eg agent fees, freight, admin costs.
• Some UK lingerie brands set higher wholesale costs to Australian retailers than to UK & US retailers - when I asked why, my sales rep. was unable to give me a logical explanation. This brand has a large advertising budget for their UK operations but spends little or none in Australia. Unfortunately for the Aussie retailer, their products are excellent and not stocking them would not be a good business decision. Also unfortunately for the Aussie retailer, their products can be purchased from online UK stores at a much cheaper price, even with freight, than in Australia. Catch 22. As a retailer in Australia, that means having to deliver high service standards because this is the only means by which we can retain customers.
• Other UK brands sell through Australian importers who are then responsible for the promotion of the brand into stores and in the media, hence the markup costs.
• Focus on quality brands not available in the larger stores. That way you will not be competing with them or have to tolerate their constant discounting.

I'm going to stop here because I could run on forever on this topic and bore you to tears. So more next time I post...