The consumer electronics industry is worth hundreds of billions of dollars. With increasing demand, more entrepreneurs are considering making forays into electronics to try and make their fortunes.
If you’re a budding business person and a lover of technology, you might be one of those people.
Unfortunately, starting an electronics business takes a lot more than passion and run-of-the-mill business acumen. Before you set off down the path of leasing a space or buying a domain for your electronics store, take to heart these eight considerations.
1. Many Have Tried and Failed in This Business
We shouldn’t have to tell you the cut-throat nature of the electronics business. Today, the vast majority of consumer electronics is dominated by a small number of big brands like Best Buy.
And guess what? Even Best Buy almost went bankrupt about a decade ago before making key changes to their business plan to flourish once again.
Companies like Circuit City were not so lucky.
Electronics is a difficult landscape for a small brand to make a splash in. Be prepared for that challenge before jumping into this venture headfirst.
2. Successful Companies Work With, Not Against the Internet
eCommerce is making up a growing number of retail sales. If you open an electronics business that ignores that trend, you’re going to be setting yourself up for failure.
All successful companies that sell retail goods are better off embracing the internet than they are ignoring it. Therefore, we recommend that you make building out your web presence a central part of your business plan.
You may even find that your website outperforms your brick-and-mortar store which could give you license to go fully digital.
3. The More Relevant Products/Services That You Can Offer, the Better
Have you walked into a Game Stop store lately? If you have, what did you see?
Chances are, it wasn’t just video games.
To stay profitable, stores like Game Stop have started to dip their toes into several markets that go well beyond their core identity. You should do the same thing.
As an example, in addition to selling popular electronics, consider offering repair services, buying and selling used electronics and selling other items related to tech-culture.
4. Location Matters… A Lot
A small electronics business might make sense in a small community that’s under served by big box stores. Opening up an electronics business across the street from Best buy in a big market like Los Angeles though, wouldn’t make as much sense.
Consider your business’s location, what your customer’s other options are and why they would pick you over those options. If your only answer is that customers can’t get the personalized attention at Best Buy that they’ll get from you, do not open your business.
Personalized service can be found even in big box stores and won’t be enough for you to attract a substantial amount of business.
5. Developing Relationships With Bigger Companies Is a Must
Small electronics stores make a lot of their money by developing partnerships with other businesses. There are a couple of ways that you can do this:
Commercial contracts make it so your business is the company on call when an external organization has an electronics issue. You’ll usually provide the local businesses that you’re contracted with discounted services and priority support in exchange for their commitment to exclusively use you for their needs.
Manufacturer Repair Partnerships
If somebody buys a Dell laptop that’s still under warranty and they don’t want to send it out to Dell HQ for repairs, they can typically take the laptop into an authorized repair specialist for local service.
Buy becoming an authorized repair specialist for several electronics brands, you can have big companies send a steady flow of customers your way.
6. Marketing Can Be a Challenge for the Uninitiated
As a lover of electronics, you probably know a lot about all of the latest gadgets, cell phone parts and other accessories on the market. What you may not know a lot about is marketing.
That’s a problem.
Small businesses live and die by how well they can market themselves. Unless you’re going to be working with an agency, get educated on marketing basics like signage and search engine optimization.
7. Raising Funds Can Be a Challenge
In order to stock your electronics store, you’ll need to buy inventory from manufacturers. Those manufacturers tend to only sell their products in bulk which can be an issue if you don’t have the funds to bulk buy.
Consequently, you’ll need some financial backing to get your electronics store off the ground.
Taking out a business loan from the bank, from family or third-party investors are all viable options to get over your money hurdles.
8. Expansion Should Be Your Goal
Having long-term goals is important when you’re running a business. One of the top goals that we think you should have on your electronics business’s horizon is expansion.
Expansion can be as simple as rolling out new services each year or as complex as opening additional retail locations.
Whatever your expansion goals are, commit them to memory and ensure that every decision you make moves you closer to that growth.
If You’re Passionate and Smart, an Electronics Business Can Flourish in Today’s Market
Starting an electronics business on a whim is a recipe for disaster. If you arm yourself with the right information though, love the industry and make sound moves, you can build something special.
We hope that this write-up moves you closer to that end and we welcome you to browse more of our content if you find yourself in need of additional inspiration!