Retail Franchises...is it time to buy online?


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Just hearing the words "retail" and "economy" in the same sentence is enough to have shopkeepers covering their ears with their hands. 

Not in my lifetime has the news been bleaker for the retail sector. But, tentatively, we hear that the UK is out of recession, the economy is growing, and finally, consumers are shopping again

In fact 47% of retailers havereported that sales volumes were up on a year ago and up 43% since June.

There is no denying that a number of big-name chains have found themselves in liquidation for not offering the 'right' products, a fact that is weirdly juxtaposed with an increased demand from customers who want more from their retailers - be it  bespoke products, immediate purchasing or longer opening hours.

Click and buy

These demands are leading to changes - at a furious pace - in the online marketplace. In fact, the online retail landscape is so vibrant that The Centre for Retail Research finds Europe to have overtaken the USA as the world’s largest online shopping region. So retail is most definitely happening, but in a way that seems to circumvent a trip to the high street.

Is the shop dead? A recent piece by The Guardian suggests that Comet's recent decline lays within under-investment in its stores. This follows reports that second-hand clothing shops are currently thriving - making forecasters uncertain as to whether it is products or store look-and-feel that are to blame for falling sales.

I'm hoping that these small steps towards retail recovery will reignite the flame within those individuals who have walked into a shop and thought 'I could do better.' One way to become a shopper-turned-shopkeeper is to purchase a retail franchise. This could be a way to start your own retail business with support before branching out entirely on your own.

Who wants to run a shop?

From recent survey evidence, it seems that the urge to run a shop is strengthening along with the economy, even for those franchisees without any previous experience.

Earlier in 2012 our sister company Businessesforsale.com found that two in five of those enquiring about purchasing a retailer had never worked in retail .

However, more than half (51%) of respondents had run a shop before, with seven percent working at, but not running, a retailer.

This suggests that people are comfortable with moving into retail as they perceive this sector as easy to pick up as they go along, especially online retail. Is it merely find a product+build a website=go?

I say definitely not! But I acknowledge that these figures are for the dreamers. There is a large leap from dreaming about a perfect store to actually leaving employment to take it on  - hence the attraction of a brand already set up, which is how retail franchises operate.

The BFS survey evidence also found that age was no barrier to running a retailer, with more than a quarter of those responding to the survey being aged 55 or older. But will retail as we currently know it still be around when these over 55s decide to run their own is business? Time will tell.

Let the Seller beware

Buying an online retail business may seem easier than starting alone and leasing shop premises, but there are still a number of important practices that needs to be put in place in order to protect the owner's investment.A great retail business will need to spend time and money on the following:

  1. Strategy : acquisition needs and payment processing should be structured/simplified to boost business intelligence.
  2. Centralisation : Keep centralised reports to help manage and monitor any fraud.
  3. Currency choice : A payment system offering more currency options may incentivise customers.
  4. Reconciliation : A coordinated single payment reconciliation system is efficient saving overheads.

    Yet again, this is an argument for taking on a franchised business, as all of the above will have, at the very least, been considered by the Franchisor, and more often than not, applied.

    Many types of retailer have been franchised, and some keep both a showroom and a strong online presence. Currently purchasers could buy a water-cooler franchise, a stake in a kitchen retailer or be involved in  snack delivery.

    Shopping malls, full of buyers or window shoppers?

    The vast diversity involved in the retail franchise sector means that a franchisee can sell products that they are genuinely interested in. This is also a business that does not require a great deal of opening capital - with some franchises being offered for as little as £3,000 up-front franchise fee.

    To answer the qustion in the title - is now the time to buy online? We can never be sure, but as author Douglas Copeland says, "We're rapidly approaching a world comprised entirely of jail and shopping." - I know which one I'd prefer to be doing.

    Want to find out about how Brits are a nation of shopkeepers? Read our sector spotlight on the retail franchise industry.