Common Pitfalls of Operating a Retail Apparel Store And How To Avoid Them

Thinking of opening a retail apparel store? It's an exciting and lucrative industry that allows you to connect with customers on a daily basis. If you have a knack for fashion and enjoy building relationships with new people, this is the industry for you. But like all retail industries, there are some unique hurdles that new owners need to be aware of. In this blog post, we're going to reveal some of the most common pitfalls of operating a retail apparel store and how to avoid them.

Pitfall #1) Not Selecting a Niche

Arguably, one of the biggest mistakes new apparel store owners make is not selecting a niche. Unless you're a massive retailer with an established and well-branded business, chances are you won't experience much success -- if any -- taking the 'general' route.

A more effective approach to the retail apparel industry is to choose a niche. You can read more about retail apparel niche selection in a previous blog post here, but some ideas to consider include:

• Teen apparel
• Swimsuits
• Men's big & tall
• Baby clothing
• Suits
• Trend

Pitfall #2) Not Creating a Business Plan

Launching a successful retail apparel store begins with the creation of a structured business plan. Regardless of your store's niche, you should take the time to create a business plan which details your goals, objectives, finances, and overall strategy. If you need help with your business plan, don't be afraid to seek assistance from a professional CPA.

A business plan is important for any business, but it's especially important for the retail industry. Having a written business increases the chance of approval when applying for loans. If you need a capital to help get your apparel store up and running, bring your business plan to banks and financial institutions. Doing so shows lenders exactly how you plan on running your business, which ultimately makes them feel more comfortable lending you capital.

Pitfall #3) Too Much Shrink

Shrink is defined as the loss of product between the manufacturer and point of sale. For instance, if a shirt gets knocked under a shelving unit or some other fixture where it's ruined by dirt and dust, it's counted as shrink. Allowing your store's shrink to spiral out of control can take a huge toll on its profits, which is why it's important to constantly work on identifying and reducing shrink in apparel stores.