Consumer electronics stores offer a broad range of appliances and electrical goods as well as home entertainment products like TVs, DVD players, and stereo systems. These kinds of businesses are growing in importance and scale as more and more people look for ways to work at home or help their children thrive in a more digital environment.
This competitive but expanding market is expected to continue its rapid growth (both in brick-and-mortar and virtually) as our world economy becomes more dependent upon technology to maintain connectivity. According to Statistica.com, the industry was expected to grow an astounding 6 percent across 2020 and 2021.
Like other retail businesses, electronics stores are connected closely with other industries, purchasing the goods they sell from domestic and international (in some cases) manufacturers and wholesalers.
New purchases dominate the market, while the replacement and refurbishment market represents a smaller portion of sales.
Starting an Electronic Retail Store Business
So you’re passionate about electronics and want to start a business to capitalize on your passion by starting an electronics retail store. Besides having adequate funding and a stellar business plan for electronics stores, the latter of which Wise Business Plans’ MBA writers can help you create, there are a number of factors to consider in this competitive industry.
Here are a few things to consider when considering starting your own electronics retail store business.
Obtain Required Permits
Does your state, city, or other jurisdiction require you to obtain a retail license? Are there other permits required before you start? Do these need to be renewed, whether annually or at other times in increments? Making sure your business is in compliance with state and local laws is a necessity.
Also, do you plan to form your business as a Limited Liability Company, S-Corporation, C-Corporation, or some other entity? Each of these legal entities has advantages and disadvantages, so you may consider speaking with an accountant who can counsel you on your specific situation.
While you can operate as a sole-proprietorship (i.e., no legal distinction between you and your business), it is usually not recommended because you can be held personally liable if a customer sues you, whereas the other legal entities mentioned here, in most cases, protect you from personal liability.
What Makes You Different
Once you have all of the legal aspects of your business squared away, perhaps the most important factor to consider is your competitive advantage. What do you have to offer that your competitors are lacking? Every company has strengths and weaknesses, as well as different advantages that appeal to different customers.
Large general retail stores, such as Walmart and Target, have an electronics section in their stores and offer the advantage of competitive pricing on many of their electronic products while also providing a one-stop shop where customers can buy other products they need, such a groceries, toiletries, and pharmaceuticals.
Large electronics retail stores, such as Best Buy, have the advantage of offering a much larger selection of electronic devices and accessories from a greater variety of brands than Walmart and Target while still having the ability to compete on price. What gives you an advantage over larger companies like these, as well as smaller companies that might be more similar in scale to your business during its early years?
What Your Niche
Another important factor to consider is whether or not there is a specific category or niche of electronics you would are more interested in or want to emphasize. While companies like Best Buy offer a wide variety of electronics for a multitude of purposes, other retailers focus on a specific aspect of the electronics market.
GameStop focuses on video games, offering video game consoles and usually a wider selection of video games than Best Buy. Williams-Sonoma focuses on kitchen appliances and also usually offers a wider selection of these items.
Batteries Plus Bulbs usually offer a wider selection of… you guessed it, batteries and bulbs. Is there a specific niche of electronics that you can emphasize so you can enter the market without spreading your efforts too thin?
What Kind of Store You’re Going to Run
Do you plan to open a brick-and-mortar store, or will you operate online exclusively? While e-commerce has consistently grown in popularity for years, it has become an even more important part of the economy during the COVID-19 pandemic since many people have minimized their trips away from home out of safety concerns, as well as some states and local jurisdictions placing varying degrees of restrictions on “non-essential” brick-and-mortar stores from opening at all.
While it can be hard to predict the demand for in-store retail shopping once COVID-19 is past us, whether or not you need a brick-and-mortar store may depend on whether or not you have any competitive advantages that are service-oriented.
Offer Any Service
Since it can be difficult to compete on product pricing or selection in the electronics market, you might consider whether or not you have any services that can give you a competitive advantage. Are you a prodigy when it comes to electronics repairs?
If you can offer these services at a cheaper rate or quicker turnaround time than Best Buy’s Geek Squad, then offering repair services may be a way to get customers to patron your business. You might research whether or not you need any certifications to perform these services without voiding any customers’ warranties, though.
Are you able and willing to offer something for free to your patrons that is of minimal cost to you? Wall Drug in South Dakota became a famous stop for tourists on their way to Mount Rushmore by offering free ice water and still does so today while offering a variety of merchandise for tourists to buy while they are visiting.
Some hardware stores, such as Ace Hardware, offer free popcorn to people to get them into their stores, whether or not they purchase anything. Do you have something you can offer for free to get people in your store?
These are just a few factors to consider when you want to start an electronics business. Feel free to contact us at Wise Business Plans if you want us to help create your business plan for your electronics retail business.
Raise capital and get into this vital and growing market today with an electronics retail store business plan. Check out an online electronic store business plan sample to help you write your own business plan.
Get started on your consumer electronic retail store business plan or electronic repair service business plan today!