Top Types of Retail Ownership

Will you be independent, or a franchisee? Here's what to know.

So you're starting a business, and you've got a great idea for how to sell your product. It can be a little overwhelming when you first dip your toe in the retail water, so take your time if you can, and get familiar with the different kinds of retail structures. 

There are many forms of retail business ownership available to budding entrepreneurs. Each business model has its own list of pros and cons. Choosing a type of retail business to start will depend on why you want to own a business, as well as your lifestyle, family, personality and what you're selling. Will you have staff, or is it going to just be you? 

Here are a few of the main types of retail ownership and the advantages, disadvantages, and support system of each.

1
Independent Retailer

Brick Wall and reatil window
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In independent retailer is one who builds his/her business from the ground up. From the business planning stage to opening day, the independent retail owner does it all. He/she may hire consultants, staff and others to assist in the business endeavor. The opportunities are endless. But prepare to wear many hats in this kind of business, until you have some income. It may be a while before you can afford to pay anyone else.  More

2
Existing Retail Business

Someone who inherits or buys an existing business is taking ownership and responsibility of someone else's hard work. The foundation has already been set, and the baton is being passed to you. This is often the scenario in a family business, where one generation takes over from their retiring parents. There's great responsibility in carrying on the tradition, especially if your parents built the company themselves.  More

3
Franchise

Purchasing a franchise is buying the right to use a name, product, concept and business plan. The franchisee will receive a proven business model from an established business. Be sure you are on board with all the company's practices and what they stand for, because you'll be expected to represent those values in your store. And know what costs you'll be expected to absorb, and when the parent company will be footing the bills.  More

4
Dealership

Retailers may find the business model of a licensed dealership as a mix of franchise and independent retailer. The licensee has the right (sometimes this is exclusive) to sell a brand of products. Unlike a franchise, the dealer can sell a variety of brands and there generally no fees to the licensor. Dealerships may or may not be identified as an authorized seller or by the company's trademark. Think of cars and trucks as the most common example of a dealership.  More

5
Network Marketing

Multi-level marketing (MLM) or network marketing is a business model where the selling of products depends on the people in the network. Not only is a product being sold, but other salespeople are being recruited to sell that same product or product line. It's probably not a type of business one would initially consider when discussing retail businesses, but Amway used this model quite successfully for many years. More

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