Opening a household chemicals store is an interesting, but rather difficult option for realizing the dream of owning your own business. When starting this business idea, aspiring entrepreneurs are often guided by simplified ideas about the constant and high demand for household chemicals among the population. In the presence of such a demand, they are certainly not mistaken. Each family spends a certain part of its budget on household chemicals every month, and, as a rule, it is rarely possible to greatly reduce its share.
Soap, various detergents, fragrant shampoos, etc. are indispensable in everyday life. When establishing your business, you need to focus not only on demand, but also on the level of competition.
The competition among sellers of household chemicals is very high.
A fairly large number of manufacturers and wide distribution networks successfully saturate the market with a wide variety of products, almost completely satisfying demand. Household chemicals are traded in large volumes in specialized stores, supermarkets, and numerous departments of shopping centers.
Finding your own niche in such a market is not an easy task, so only market research can provide reliable information needed to open a store.
The high level of competition has another unpleasant consequence:
- the average markup level in the segment of household chemicals is quite low.
At best, it does not exceed 30%, and for individual products the limit is only 10-15%. In order to make a business profitable at such margins on goods, it is necessary to ensure large sales volumes and very tightly control all costs. This is not an easy task, especially for inexperienced entrepreneurs, so a clear business plan drawn up by professionals should become an assistant in it.
When opening any household chemicals store, you need to slowly carefully choose a place for its location.
Since such products are mainly used in everyday life, the store should be located in residential areas or at public transport intersections. These items are usually purchased close to home or on the way home from work.
The dimensions of the premises are usually not too large, because the most popular assortment can be placed on an area of 40 — 50 sq.m.
Large stores, on the other hand, are usually part of a chain, since it is possible to recoup the costs of maintaining a large store only if high turnover and bonus customer incentive systems are typical for retail chains. A small store should not try to chase the networks in expanding the range. For such stores, it is just worth limiting your assortment to a small set of products that are in the greatest demand. This will allow you to avoid an excess of slow-moving goods and increase purchase lots of the right goods, receiving discounts from suppliers.
The cost of opening a small household chemicals store is not too high.
Approximately 500-700 thousand dollars will be spent on preparing the premises of a small store, another 200-300 thousand — on commercial equipment. One and a half to two million for the purchase of goods, the purchase of a cash register, 1C reporting software and registration of an enterprise. That is, it is realistic to meet the initial investment of 2.5-3 million dollars.
But to bring the store to profitability, it will take a lot of effort and a good business plan , the order form for which is available on our website.