Setting up Watch Business
Setting up a watch business or for that matter any business is not easy and a lot of thought has to go into it. The primary decision that needs to be taken is whether you want to go into wholesale trade or retail. The variables for each are completely different though some parameters like financing option do overlap one another. Hence, it is imperative that each be studied separately in some detail.
Wholesale business in watches –
The first thing that needs to be taken up is deciding the specific brands that you would want to stock. If a dealer already exists in the area of operations that you have in mind, you might have problems getting the dealership unless the company wants to change the existing one. Further, it is always advisable not to aim initially for a number of brands at a time. Each needs substantial investments and unless you are financially very strong, it is preferable to focus on a few selected brands to get started.
Secondly, the advantage of being a wholesaler is that you don’t have to spend a lot on setting up infrastructure like a plush showroom or sales people. Rent a part of a warehouse with limited helpers. Contact a company for labour hire in Melbourne and they will send over sales people with experience in this line of activity. Further, watches being very small items, even a mid-sized room can hold large quantities of stocks.
Financially, wholesale trade requires extensive investments as you have to stock all models of the brand that you have selected. In fact, to gain a foothold in the industry, the variety you have will add to your reputation. Talk to lenders, have business consultants draw up a plan and start off systematically.
Retail business in watches –
Retail business in watches is altogether a different ball game when compared to wholesale trade in watches. You can either choose to be a dedicated showroom for one specific brand or you can opt to display a number of them.
What are the pros and cons for each?
By going with a specific brand, you have to adapt to company’s policies of that brand. This will include specifications on the area of the showroom, the ambience, number of minimum sales people to be hired and a guarantee of meeting sales targets. All these can cost you heavily especially if you open your shop in an upmarket locale where space comes at a premium.
Again, if it is a luxury brand, investment levels will be still higher. You have to keep sizeable deposits with the company, amounts that would get you larger quantum of stocks of lesser known brands. But then, your margins too would be higher as one luxury brand of watch will have a price tag many times higher than an ordinary watch. If the profit percentage of both is equal, you earn much more from the sale of one luxury watch.
The other option is to stock a number of brands under one roof. Your investment here will be lower as you will not be transacting with the company but a wholesaler of watches locally where the quantum of deposits will be lower and you will be offered a line of credit on the watches taken from him. Also, the type of interior decoration of your shop will not be dictated by the maker of a brand. You can start on a small scale and expand shop space in tune with increase in business.
The options are here in front of you. Weigh them carefully before taking the plunge.