How To Start A Retail Business

Retail business is the purchasing of finished goods from manufacturers and selling them to retail customers. Retails and wholesale trade is the largest industry in India contributing nearly 23% of the total Indian GDP. The Indian retail market is estimated to be US$ 500 billion and one of the top-five retail markets in the world by economic value. India is one of the fastest-growing retail markets in the world, with 1.2 billion people.

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Retail Image Retail and Wholesale Trade Industry

Ideas for Retails Business

Retails business includes the whole gamut of selling finished goods to retail customers. Some of the most popular types of retail business include:

Grocery Stores

Grocery stores are the most popular type of retail business in India. Grocery retailing involves the selling of a variety of food and non-food products, such as meat, produce, cereal, dairy products, health and beauty aids and cleaning products. A grocery store can be set up in a physical location or it could be an online grocery store.

General Merchandise Stores

General merchandise stores are large-format grocery stores that also sell a variety of products. General merchandise stores typically sell clothing, furniture, sporting goods, kitchenware, etc., An example of a general merchandise store includes Biz Bazaar, TATA Croma, etc.,

Speciality Stores

Speciality stores are retail businesses that specialize in a specific product. A large number of retail businesses fall under the category of speciality stores. A speciality store could be an auto parts store, electrical accessories store, cell phone shop, computer store, clothing store, home furnishing store, etc.,

Business Entity Registration

Retail businesses typically tend to have higher annual sales turnover than a service business. Therefore, it is recommended that retail businesses be started as a Private Limited Company or a Limited Liability Partnership firm. Private Limited Company or LLP form of business entity will allow the retail business promoter to scale-up establish multiple locations or transfer the business, easily - if required. In addition to scalability and transferability, a Private Limited Company or LLP will also provide the business with easier access to credit facilities and limited liability protection. To know more about Private Limited Company Registration or LLP Registration, visit IndiaFilings.com.

Tax Registration

Retail businesses involve the sale of goods and products. Therefore, retail businesses need to obtain GST Registration from the State Sales Tax Department with the help of IndiaFilings.

Shop & Establishment Act License

In addition to business entity registration and GST Registration, a retail business may have to have a shop and establishment act license. The authority for providing shop & establishment act license is under the purview of the Department of Labor or the respective State Government. So, based on the state in which the retail business has a physical store, shop and establishment act license can be obtained from the local Department of Labor officer. To know more, please refer to the article on the Shop & Establishment Act License in India.

Starting an Online Retail Business

The success of websites like Flipkart, Snapdeal and FirstCry has made online retailing very prominent with growing adoption among the young Indian population. More and more people are now shopping online due to the cheap prices and ease of online shopping. Starting an online retail business also involves getting business registration and tax registration as outlined above.

Online retailing can, however, is divided into two parts, becoming a retailer on an eCommerce platform or setting up a new eCommerce website. It is better for most retailers to become a retailer on an established eCommerce platform like Flipkart or Snapdeal or Amazon than start a new eCommerce website. Established eCommerce platforms take care of marketing, logistics and technology development, making it easier for the average user to get started with eCommerce. You can read the following articles to know more about online retailing:

To start a retail business in India, talk to an IndiaFilings Advisor or visit Business Registration Services

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Frequently Asked Questions

Common questions about Start Your Retail Business in India.

The most popular types of retail businesses in India include grocery stores, general merchandise stores, and specialty stores. Grocery stores sell food and non-food items like produce, dairy, cleaning products, etc. General merchandise stores are large-format stores that sell a variety of products like clothing, furniture, and kitchenware. Specialty stores focus on a specific product category like auto parts, electronics, or home furnishings.

It is recommended to start a retail business as a Private Limited Company or a Limited Liability Partnership (LLP) firm. These business structures provide benefits like easy scalability, transferability, limited liability protection, and better access to credit facilities, which are important for retail businesses with higher sales turnover.

Retail businesses involve the sale of goods and products, so they need to obtain GST (Goods and Services Tax) Registration from the State Sales Tax Department. This can be done with the help of services like IndiaFilings.

Yes, in addition to business registration and GST registration, a retail business with a physical store may need to obtain a shop and establishment act license from the Department of Labor or the respective state government's authority.

There are two main options for starting an online retail business: becoming a seller on an established e-commerce platform like Flipkart, Snapdeal, or Amazon, or setting up a new e-commerce website. For most retailers, joining an existing platform is recommended as it takes care of marketing, logistics, and technology development.

By becoming a seller on an established e-commerce platform like Flipkart, Snapdeal, or Amazon, retailers can leverage the platform's existing customer base, marketing efforts, logistics network, and technological infrastructure. This makes it easier for new retailers to get started with online selling without having to build everything from scratch.

Yes, even for an online retail business, obtaining business registration, GST registration, and any necessary licenses or permits is required, similar to a physical retail store. The process and requirements may vary slightly for online businesses, but proper registration and compliance are still necessary.

To start the registration process for a retail business in India, you can consult with an IndiaFilings advisor or visit the IndiaFilings.com website. They can guide you through the steps for obtaining the necessary registrations, licenses, and permissions based on your specific business requirements and location.

When selecting a location for a physical retail store, some key factors to consider include foot traffic, accessibility, visibility, competition in the area, demographics of the local population, rental or purchase costs, and compliance with zoning regulations and local laws.

Effective marketing strategies for a retail business can include social media promotion, email marketing campaigns, loyalty programs, in-store events or promotions, collaborations with influencers or bloggers, and leveraging data and analytics to understand customer behavior and preferences.