Advantages & Disadvantages of Having a Clothes & Shoes Store

Opening a clothing and shoe store is an exciting event for the shop owner who has a sense of fashion. The gross margins for retail are about 50 percent, so there's room for a reasonable profit margin. The downside is that the store must be fully stocked with inventory right from the store's opening, and that costs money. If you're considering opening a clothing and shoe store, use the advantages and take steps to avoid the disadvantages.

Selling both clothing and shoes means your customers don't have to go to another store to complete their outfits. You have the opportunity to upsell the customer by suggesting a pair of sandals to go with a beach outfit or heels with a business dress. Train sales staff to always suggest an accessory, shoes or jewelry to complete an outfit when customers purchase clothing. Customers will appreciate the fashion advice and become loyal to the store.

Clothing retailers depend on the Christmas shopping season to make or break their year. That's a distinct disadvantage if shoppers don't have enough confidence in the economy to buy gifts as they usually do when economic conditions are favorable. Emphasizing other holidays such as Valentine's Day, Mother's Day, Easter and Fourth of July with sales and specials increases revenues in those months. For example, showcase red shoes with a red and white blouse and white skirt for Valentine's Day. Change to pastel colors for Easter. Present matching shoes and handbags among plush bunnies and Easter eggs as part of your Easter display.

A nicer term for theft by employees and customers is to call it shrinkage. Employees steal from the cash register, take clothing items from the store without paying and can give their friends clothing or an unwarranted discount. Customers sometimes feel that shoplifting isn't really hurting anyone because they're stealing from a business not a person. The customer may bring in five or six items to the dressing room, put one item under their clothing and pay for another. Point of sale computer systems do help in reducing pilferage. In-store cameras, special clothing tags that can only be removed by the sales staff and employees being alert for signs of shoplifting customers help reduce shrinkage as well.

The clothing and shoe business is a fashion forward business. Fashions change from season to season and year to year. That's both an advantage and disadvantage. Customers need to replace items in their wardrobe and keep up with the latest colors and trends. That's an advantage if you know what's hot and what's not. The disadvantage is if you miss the trend or catch it too late, you'll have missed the opportunity for revenues or may be stuck with merchandise that's passé. Most wholesalers and manufacturers don't accept returns. Your best option is to mark the items down to move them. That could be even at a loss.

Sizes outside the average, such as 1 through 4 or 14 through 22 for dresses attract fashion conscious women who have trouble finding stylish clothing in their sizes. This gives you a distinct competitive advantage.