Retail Supplement Stores
- 06-04-2007, 09:26 PM
Retail Supplement Stores
Okay fellas, my dad has been thinking about opening a retail supplement shop but I have very little knowledge on this. He's been trying to convince me to get in with him but I don't know if quitting grad school and possibly my day job is worth the risk. Here are some of my questions. Any info is appreciated.
1. Is this actually profitable enough after all the costs are taken into account ?
2. Is the retail supplement industry able to sustain economic difficulties ?
3. How tough would it be to compete with giants like Costco, GNC, Vitamin World, and Vitamin Shoppe ?
4. What is the actual success rate of independent retail supplement stores ?
5. How much would it actually cost to open a modest retail store ?
- 06-04-2007, 11:32 PM
I've thought about this many a time. Just opening up my own store. I saw a supplement giant by my house right next door to a GNC and it ran better than the GNC due to it's sales in pro-hormones and other products that GNC doesn't have.
Plus it had a better selection than GNC.
06-05-2007, 11:04 AM
From what my friends have told me that run their own businesses, it is extremely stressful even though you do not have management above you breathing down your next. The responsibilities really weigh on you. I weigh profit as more than just monetary but profit over stress, so you may be making some money but if it means working saturday and sunday and coming home to paperwork and taxes it may not be worth it. As for competing with the biggies, you can do it but with the huge increase in the cost of whey and egg products currently, the startup cost would be enormous and the cut in prices you would have to initiate to draw new business would make it a tough first year. I would recommend if you did want to go through with it I would suggest waiting until the market recovers first.
06-07-2007, 10:55 PM
06-08-2007, 11:26 AM
no problem man, hope the info didnt sound discouraging, i just always looks at how huge decisions will affect my personal well being before I take into account the possible profits, good luck either way!
06-08-2007, 11:36 AM
Would the store be online as well? It seems everything is cheaper online these days for obvious reasons.
06-09-2007, 01:19 AM
06-09-2007, 02:36 AM
IMO, it will not be profitable to run a "mom and pop" supplement shop unless you incorporate clever (and cheap) advertising with prices that beat competitors. in recent months, increases in gas prices with serious inflation increases has lessened consumer confidence (this variable will continue to fluctuate). however, i believe you live in cali, and im certain the demand for dietary supplements is much greater in that area than most parts of the country. more than likely, you will have very little bargaining power with your suppliers, but it is important to develop some kind of competitive advantage over the competition. also many important decisions must be considered for profit potential such as store location, procurement, financing, inventory, product line, strategic management, among many others.
my advice is to obtain price quotes from suppliers then factor in your fixed costs (rent, labor, holding costs, utilities, etc) and calculate a break even point to establish waht type of revenues will make this venture profitable. from what i see, local retail supp stores perform poorly where i live but any business can be profitable if run smartly. youre young, so its better to do the high risk thing now than later but giving up grad school and your current job may prove to be a poor decision.
06-10-2007, 01:08 AM
Thanks Hulk, that was very informative. I definitely don't think quitting grad school would be wise since I've gotten so far into the program. I would probably be helping my pops run it during my free time but I would hate to see him take so much equity out of the house to have it backfire on him. I live in Cali (South Bay to be exact) and families have more disposable income here then in other parts of the nation so that's always a plus. The tough thing I see with this is that it would take years to get established.
06-11-2007, 07:42 AM
Good luck in whatever your old man decides to do.
06-13-2007, 04:02 PM
the website idea may complicate things too much and might actually give you a negative return on your investment. a small-time, local supp shop cannot compete with huge e-retailers on the internet.
i think it would be a great idea to set up shop near a college or university. you can advertise in their school newspaper and be the unofficial supplement shop for the students. advertsising in schools newspapers is dirt cheap and who doesnt read the school paper? gotta pass the time in class somehow also, this will provide awareness for the majority of your target market.
06-13-2007, 11:20 PM
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