

The Retail Industry - myoung8

Did about $30B in sales this year, and it continues to grow at 20%+ YOY.<p>Is there a compelling reason NOT to go into online retailing?
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iamelgringo
Hmmm... You're number $30B actually seems really low. A quick Google shows
this from the census bureau:

<http://www.census.gov/mrts/www/data/html/06Q3.html>

|Total retail sales for the third quarter of 2006 were estimated at $991.7
billion, an increase of 0.7 percent (X0.3%) from the second quarter of 2006.

so, assuming that sales are close to $900 billion per quarter, I think that we
can safely say that retail sales probably do business in the 2-4 _trillions_
of dollars per year.

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byrneseyeview
I think he meant 'online retail'. Actual retail isn't growing at 20%.

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edw519
Is there a compelling reason NOT to breathe?

I know lots of online retailing millionaires. Is it easy? No. Is competition
fierce? Of course. Are margins slim? Usually. But if you have passion for an
idea, a market, a good plan, and are willing to work your butt off, then there
are fantastic opportunities.

(Aside: You won't get a whole lot of response from people making their
fortunes in on-line retailing in December - many of them are working 20 hour
days this month.)

I have often thought about starting something, but I'd rather hack. (I think
that anyone can retail, but few can hack - I'm not so sure how empowering this
thinking is.)

Things you'd better consider before taking the plunge:

\- How will you find customers? Search engines, email blasts, catalogs, list
buying, renting, or sharing, advertising...

\- How will you fulfill orders? Your own garage, rented space, dropshipping
from your vendors,...

\- What capital will you require and where will you get it? (This may be the
biggest barrier vs. hacking)

\- How much volume will you have to do to break even? (Better be right about
this or you're dead in a hurry)

\- What people will you require and how will you manage them?

\- What systems will you require and where will you get them? (Needless to
say, there is great opportunity for competitive advantage here.)

\- What makes buying from you so much better than anyone else? (Maybe the most
important question.)

\- There are hundreds of other things to consider, but you get the idea...

People have started with a small idea are parlayed it into hundreds of
thousands (and even millions) of dollars per year in less than a few years.
The case studies are almost endless. Google a few and see how they did it. Or
watch Donny Deutch's show "The Big Idea" on cable TV.

If you decide to do something like this (not the best time of year now since
everyone will be tapped in a few weeks), find your niche and go for it. Best
wishes.

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breily
I think the main problem is that because margins are so low in online retail,
you have to run a large and efficient business to make any money - seems like
it would be difficult to start out of your garage and offer the same prices
that amazon does.

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edw519
Small and efficient can work very well if you have a niche and know what
you're doing. I have several clients that do exactly this and kick butt in the
marketplace. And, ironically, they all sell through Amazon with better prices
and service. (One of my hottest product/services is Amazon integration for
small retailers. They take 15%, but the orders just keep flowing in...)

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greendestiny
Not really, but the first bubble crushed a lot of companies that thought
online retailing was a totally distinct business to normal retailing.

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Goladus
Not to mention competition with eBay.

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edw519
Why compete? Use their plumbing to get rich. Tens of thousands already have.

