Running a brick-and-mortar business can be challenging in today’s economy. In addition to competition from online retailers, there are also high overhead costs associated with maintaining a physical store.
For example, businesses have to pay for rent, utilities, and staff salaries. They also need to invest in inventory, which can be expensive if the business is selling products that are in high demand. Furthermore, businesses need to attract customers to their store, which requires marketing and advertising expenses.
Finally, businesses need to deal with returns and refunds, which can eat into profits.
Here are the challenges of running a brick-and-mortar business:
Competition With Online Retail
Since brick-and-mortar retailers have been progressively losing revenue to internet retailers for years, this challenge is likely the one that has received the most attention.
Storefronts now serve a variety of functions in addition to serving as venues where people go to make purchases, such as information gathering, connecting with brands or businesses, comparative shopping, and leisure activities.
Customers who are actively looking to buy something may or may not complete their transaction in a physical store. In this new environment, stores that can position themselves as experiences rather than retailers will be able to complete the best.
Product & Service Exchanges In A Free Market
Laws governing marketplace facilitators must pay any sales tax owed on transactions involving third parties. But they don’t necessarily free marketplace sellers from all sales tax responsibility. Even though the marketplace facilitator is responsible for collecting and remitting the tax, some states still require sellers to register and file returns.
In addition, nexus can be established in another state if a seller has inventory stored at a marketplace warehouse or fulfillment center. Therefore, traditional stores selling online must understand the nuances of laws governing marketplace facilitators.
Hard To Measure Success
Another challenge of running a brick-and-mortar business is that it’s hard to measure the success of your business. You can’t just look at how many people visit your store, but you also have to look at how many people purchase something from you.
According to Derek from Skills Training Group, “Online businesses have an advantage because they can track all the metrics related to their success, such as the number of visitors, conversion rates, and sales numbers”
Inflations and Geo-political issues
The price of items is influenced by geopolitical and international economic factors. Inflation or trade conflicts may increase the cost of Chinese electronics or component parts.
Due to climatic changes, produce may cost more. Mechanization or changes in the labor market might lower the cost of other raw materials. To keep up with the ongoing price variations, retailers must be agile.
Retailers must deal with employee market inflation when base wages are increased globally due to shifting economic conditions. Retailers may find it challenging to afford rising labor costs, which can also change abruptly and leave businesses scrambling.
Managing stock levels when selling in-store caCn be tedious and time-consuming by hand. Many stores avoid the hassle by selling a different selection of drop-ship goods online than they do in their physical locations.
This is essentially a separate company using the same brand name, and it could be detrimental as the practice of “reverse showrooming” (searching for inventory online and then completing the purchase in-store) becomes more popular. Sometimes it’s better to adapt to the competition’s business model & adopt new measures.
Tiffany From RentalPropertyCalculator said, “The most effective method of dealing with stock management is to connect an eCommerce platform with your point-of-sale system in-store, so that stock levels on both platforms are automatically updated in response to sales made through either channel.”
Getting People Through The Door
In today’s world, consumers are increasingly turning to online shopping, and this trend shows no signs of slowing down. To compete, brick-and-mortar businesses need to find ways to drive traffic to their store. One way to do this is by using social media.
By creating a strong social media presence, businesses can reach a wider audience and encourage people to visit their store. However, social media can be a double-edged sword. If not used carefully, it can backfire and become a wasted investment of time and resources.
Despite all of these challenges, running a brick-and-mortar business can be a rewarding experience. It allows businesses to build relationships with their customers and create a unique shopping experience that cannot be replicated online.