Entrepreneurship & Small Business

Is small business retail/storefront business going to die out eventually?

  • Last Updated:
  • Jan 20th, 2019 7:16 pm
[OP]
Member
Apr 20, 2018
453 posts
52 upvotes
Mississauga, ON

Is small business retail/storefront business going to die out eventually?

I just read that more stores are closing like town shoes, Jean machine and Lowe's (which I already knew last year) and some smaller businesses due to consumer buying behaviour, high rent and online businesses with lower overhead

I wondered what viable retail/storefront business concepts can still be profitable in today's market? Food/restaurant, gym niche, salon related, auto mechanic related and Dollar stores for a quick convenient get and buy

If someone got like 50-100k and want to open a small business ... Are these the only options to choose from?
Last edited by raptors87 on Jan 6th, 2019 8:44 pm, edited 1 time in total.
54 replies
Deal Guru
Aug 2, 2010
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Here 'n There
No. You have to think out of the proverbial box.

Having said that, fact is that without bricks and mortar you ROI can be huge if you have a competitive advantage. I run a number of online businesses selling products entirely using outsourcing.
Deal Addict
Nov 22, 2015
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Lowe's isn't closing as far as I know... They bought Rona a few years ago and are just closing some of the stores where there's overlap
[OP]
Member
Apr 20, 2018
453 posts
52 upvotes
Mississauga, ON
eonibm wrote:
Jan 6th, 2019 8:25 pm
No. You have to think out of the proverbial box.

Having said that, fact is that without bricks and mortar you ROI can be huge if you have a competitive advantage. I run a number of online businesses selling products entirely using outsourcing.
yeah I get that ... but what I'm saying is what if some people don't want to do an online business but want a retail/storefront business instead ...because I'm sure that there are certain people don't understand or know how to run an online businesses.... I'm just curious on what products/services that are still profitable in a retail/storefront setting

what kind of online businesses do you run? you mean like buying products from alibaba and sell it on your site or amazon store?
superfresh89 wrote:
Jan 6th, 2019 8:31 pm
Lowe's isn't closing as far as I know... They bought Rona a few years ago and are just closing some of the stores where there's overlap
yeah you are correct... I didn't clarify specifically enough but they are closing some stores
Deal Addict
Feb 25, 2007
1183 posts
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Ottawa
I think there continue to be lots of options for specialized small business, high-touch retail/storefront. Where customers value the proprietor's curated selection and expertise. Or where product touch and feel matters. Usually limited to a couple of storefronts, and ideally augmented with an online presence.

Thinking just in terms of places I've patronized recently, there's curated high end gifts/decor items; a board game shop; a composting toilet vendor; solar energy gear; imported handicrafts and art; espresso machine supplies and maintenance. All of these, you either want to see and touch or have a conversation about what you're buying. None of them is at risk, though doubtless some of them feel pressured by customers who get their advice and then want to buy online or at online prices.

Of course, the combination of Amazon (and other huge online vendors) and large big box vendors like Lowe's/Home Depot, Walmart, Costco, Best Buy, and even the ongoing churn in big department stores (which as a category are doing not great, but there is and will continue to be space for a couple) is a serious threat. A small retailer will always be vulnerable on inventory/supply chain/vendor management, on overall cost structure, and on breadth of product selection. If you don't have the benefit of touch and feel, or the value add of curation or expertise, your margins will be ground to dust and you will die.
[OP]
Member
Apr 20, 2018
453 posts
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Mississauga, ON
houska wrote:
Jan 7th, 2019 8:22 am
I think there continue to be lots of options for specialized small business, high-touch retail/storefront. Where customers value the proprietor's curated selection and expertise. Or where product touch and feel matters. Usually limited to a couple of storefronts, and ideally augmented with an online presence.

Thinking just in terms of places I've patronized recently, there's curated high end gifts/decor items; a board game shop; a composting toilet vendor; solar energy gear; imported handicrafts and art; espresso machine supplies and maintenance. All of these, you either want to see and touch or have a conversation about what you're buying. None of them is at risk, though doubtless some of them feel pressured by customers who get their advice and then want to buy online or at online prices.

Of course, the combination of Amazon (and other huge online vendors) and large big box vendors like Lowe's/Home Depot, Walmart, Costco, Best Buy, and even the ongoing churn in big department stores (which as a category are doing not great, but there is and will continue to be space for a couple) is a serious threat. A small retailer will always be vulnerable on inventory/supply chain/vendor management, on overall cost structure, and on breadth of product selection. If you don't have the benefit of touch and feel, or the value add of curation or expertise, your margins will be ground to dust and you will die.
This is an interesting read ... So in a nutshell, find something that is high end and touch&feel products to sell that can fulfill a customer need that most big box can't fulfill .. plus expertise knowledge on the products that big box can't provide

I'm surprised that you mentioned board game shop lol
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Aug 2, 2010
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raptors87 wrote:
Jan 6th, 2019 8:41 pm
what kind of online businesses do you run? you mean like buying products from alibaba and sell it on your site or amazon store?
Unique high end products I have manufactured either exclusively for me or have an exclusive on for North America. Reselling Alibaba products is an extremely crowded market with little value-add or competitive advantage. I have no interest in that dog-eat-dog game.
Last edited by eonibm on Jan 12th, 2019 3:29 pm, edited 1 time in total.
[OP]
Member
Apr 20, 2018
453 posts
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Mississauga, ON
eonibm wrote:
Jan 7th, 2019 3:19 pm
Unique high end products I have manufactured either exclusively for me or have an exclusive on for North America. Reselling Alibaba products is an extremely crowded market with little value-add or competitive advantage. I have on interest in that dog-eat-dog game.
nice! ... having a unique high end product exclusively for you is hard to obtain nowadays ... having an exclusive on for north america got to be even harder to get as well

how do you figure out the need to fulfill?
Member
Dec 23, 2007
324 posts
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Hamilton
If you're just selling a product and don't offer a service of some sort good friggin luck to you. Unless the government steps in and adds some sort of internet sales tax a lot of the stores will close up. I believe there are just too many shops to begin with. I'm in a busy plaza that has seen a BOGO shoe store close down, A Bowring close down and another store close down. That's 3 out of 11 in the last 4 months. I talked to the manager at BOGO and her store is at least 10x the size of mine and I know what pay in rent and it's my biggest expense by far. I have no clue how they thought they'd survive a $20,000/month lease selling shoes lol. They had signed a 10 year lease and paid $150k to get out of the lease early. DAAAAMMMMMNNNNNN
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flying triangle wrote:
Jan 8th, 2019 11:40 am
If you're just selling a product and don't offer a service of some sort good friggin luck to you. Unless the government steps in and adds some sort of internet sales tax a lot of the stores will close up. I believe there are just too many shops to begin with. I'm in a busy plaza that has seen a BOGO shoe store close down, A Bowring close down and another store close down. That's 3 out of 11 in the last 4 months. I talked to the manager at BOGO and her store is at least 10x the size of mine and I know what pay in rent and it's my biggest expense by far. I have no clue how they thought they'd survive a $20,000/month lease selling shoes lol. They had signed a 10 year lease and paid $150k to get out of the lease early. DAAAAMMMMMNNNNNN
I could argue that there's some level of service needed for a BOGO shoe store. Assuming an average pair of shoes is $100, that's actually only 200 pairs of shoes. It's not an impossible number.

But I do agree that small stores have a tough time. Big stores offer returns/exchanges/refunds that are unbeatable. I pretty much don't buy much of anything that doesn't have a good refund policy.
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Oct 26, 2003
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flying triangle wrote:
Jan 8th, 2019 11:40 am
If you're just selling a product and don't offer a service of some sort good friggin luck to you. Unless the government steps in and adds some sort of internet sales tax a lot of the stores will close up. I believe there are just too many shops to begin with. I'm in a busy plaza that has seen a BOGO shoe store close down, A Bowring close down and another store close down. That's 3 out of 11 in the last 4 months. I talked to the manager at BOGO and her store is at least 10x the size of mine and I know what pay in rent and it's my biggest expense by far. I have no clue how they thought they'd survive a $20,000/month lease selling shoes lol. They had signed a 10 year lease and paid $150k to get out of the lease early. DAAAAMMMMMNNNNNN
there is tax for online purchases.
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Aug 15, 2015
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Hopefully not, but if it does happen, they will eventually make a come back.
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flying triangle wrote:
Jan 8th, 2019 11:40 am
If you're just selling a product and don't offer a service of some sort good friggin luck to you. Unless the government steps in and adds some sort of internet sales tax a lot of the stores will close up.
divx wrote:
Jan 9th, 2019 1:24 am
there is tax for online purchases.
I suspect flying triangle is referring to various loopholes how people don't pay tax on some mail-order purchases, e.g. purchase from an out of province vendor who ships it. I think those loopholes will at some point get conclusively shut down, deservedly so.

If it's some targeted "internet sales tax", that would be a bad idea. If consumers can't agree there's some value in having the goods physically in a store location, and a clerk there to "serve" them, then those stores *should* die. I do think when we tell our grandkids about "the mall", and how a "retail" job was almost a rite of passage for a young adult, it will be reminiscences, like when my elderly relatives talk about lamplighters lighting streetlights every evening, deliverymen with heavy horses bringing a weekly ice delivery for the icebox, or the phone operator you would tell the number you wanted to be connected to. For retail, I suspect where it's relevant, you will consult product experts/counsellors/salespeople (yes, some well informed, some sleazy like appliance salespeople today...), who may or may not have a showroom, and the product will be delivered -- and if needed, set up in your home in your absence -- by a drone.

All of this is flight-of-fancy sci-fi, and however it ends up a while away yet, but if you're thinking of launching a retail idea that is supposed to be more than a flash in the pan, you owe it yourself to at least go through a thought exercise how your business model would evolve to match (e.g., you'd be the product expert). If you can't come up with an answer, don't put in a big whack of financial or personal human capital!
Deal Fanatic
Nov 17, 2004
6683 posts
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Toronto
From my perspective, now is the best time to have an online business that sells physical product primarily because you can use crossborder services and ship out of the US for dirt cheap. In the near future we also have CETA comming into effect, that is free trade with almost 1 billion "wealthy" customers and shipping from the US to most of those EU countries is dirt cheap usually.

The real problem is that Canada produces jack squat outside of natural resources so finding something that fits into a bubble mailer is hard to find.
I workout to get big so I can pickup bricks and ****.
Newbie
Dec 8, 2015
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Toronto, ON
i run a specialty furniture/lighting store and although my industry only has Wayfair as an online competitor and customers like to see and feel the product in person before purchasing, it is not doing too great. Aside from the new mortgage rules which has significantly negatively impact the whole industry, the whole Maybe a food franchise would be a good idea. I am looking into some right now and might be closing down my store if it continues to be this bad.

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