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How to start a retail business


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.


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

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