Wondering how to start a variety store? We take you step-by-step from start to success.
Variety Store Basics
Variety stores offer a deceptively straightforward business model to aspiring entrepreneurs. Since everything in the store is priced the same (e.g. $1), all the owner needs to do is order inventory and collect money at the cash register, right?
In reality, variety stores aren't that simple. Although consumer demand for variety store merchandise is relatively steady, variety stores have limited profit margins, making it difficult to raise prices when costs increase.
Location, inventory, marketing, cost management -- it all comes into play in a variety store. To remain profitable, you'll need to adhere closely to fundamental business principles and best practices.
Finding the Best Location for a Variety Store
It's typical for would-be variety store owners to want to locate their businesses in plazas that cater to low-income consumers. But statistically, successful variety stores transcend income demographics -- you're Just as likely to turn a profit in an upscale neighborhood as you are in an economically depressed one.
A far more important factor in location is traffic. Remember: Your business model hinges on sales volume. Pricing is a non-issue, so you'll need to make sure the location you choose is cost-efficient and capable of delivering high volumes of foot and drive-by traffic.
Variety store inventory is sourced from overstocks, discontinued product lines and foreign imports since variety stores can't afford to stock first quality merchandise.
You'll get your store's merchandise from variety store wholesalers, but you'll be responsible for inventory management. In inventory management, the name of the game is turnover. As the owner-operator, the challenge will be stocking products that fly off your shelves.
With so much riding on inventory, we recommend investing in a POS system that is integrated with an inventory management solution. It's an added startup cost, but it will pay for itself by helping you more effectively manage your inventory.
Business Plans 101 for Variety Store Startups
Startup entrepreneurs slave over the creation of their business plans, investing countless hours in the details of their startup strategy. But your business plan won't be finished until you've included material about your industry.
Industry analyses are standard chapters in variety store business plans and are often required by lenders or investors. Industry analyses are critical for contextualizing your startup within an industry setting.
To succeed, you'll need to be careful to avoid common industry analysis mistakes and to accurately represent your startup in an industry context.
Don't Be Shy
If you're a startup variety store owner, you understand how important it is to anchor your new business in the local community. Most variety stores are local businesses that are marketed to a geographically concentrated customer base. For this reason, before getting too far along with your startup business, it's a good idea to survey local residents whether they would buy from a new variety store if you were to open one nearby.
Don't Overlook Competitors
Prior to opening a variety store in your area, it's a good idea to find out how strong the competition is. Use the link below to generate a list of competitors in your area. After clicking on the link, type in your city, state and zip code to get a list of variety stores near you.
Is the local market large enough to support another variety store? If not, you had better be sure that you are doing things much better than the competition.
Talk to People Who Are Already in the Business
After you've evaluated your local competitors, be sure to learn from folks who are already in business. It's very unlikely that the local competition will talk to you. Why would they want to educate a future competitor?
However, a fellow entrepreneur who has started a variety store in a different city may be more than happy to give you a few tips, as long as they don't view you as a competitive threat. In fact, they are often very willing to share startup advice with you. If you are persistent, you can find a business mentor who is willing to help you out.
How does one quickly and easily locate a variety store manager who is willing to talk to you but doesn't live nearby?
Easy. Find them using our link below and start calling until you are successful.
Entrepreneurial Alternatives for Variety Stores
As a variety store entrepreneur, it's important to explore all of your options before you commit to a specific business opportunity. Although startup variety stores are common, many new entrepreneurs overlook the benefits of buying a variety store on the business-for-sale marketplace.
If you're on the fence consider this: There has never been a better time to acquire a variety store. The down economy has resulted in a glut of available businesses, many of which can be acquired for bargain prices.
Is Franchising the Right Option?
Your chances of achieving the entrepreneurial goal of thriving in your new business are much better if you buy a franchise instead of doing it all on your own.
Prior to starting a variety store, you should check out whether purchasing a franchise might be the right move for you.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you sell to variety stores, we've got better information for you elsewhere on our site. Try these resources instead:
If you are still exploring all of your options, please browse our directory of guides below.