How to open a lighting store
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Any idea is often compared to a light bulb. A business idea can be compared to a green light bulb – by analogy with the well-known American currency. And it’s quite possible to make money by selling these same light bulbs, only real ones (trading business ideas is a very special business). Lighting devices, without exaggeration, are needed in every room, in every room, and depending on the purpose, the range of lighting products can be huge. Ordinary incandescent lamps generally belong to consumer goods, because they often burn out and leave the resident without light. Humanity can no longer do without artificial light, and one can make quite good money from this need.
Today’s lighting market is, of course, filled with entrepreneurs, but you can take your place here too, the main thing is to offer the buyer those products that no one else has. It is unlikely that you will be able to find anything new directly in terms of technology, but purchasing interesting lighting fixtures that will attract the attention of the consumer is quite possible. A light store, as ambiguous as it may sound, can be a good idea for your endeavor if you approach this matter correctly.
Lighting devices can be of completely different directions. Residential premises have their own products, and the purpose of the room also determines what type of device can be installed. Industrial buildings are particularly demanding not only in terms of lighting intensity and quality, but also must be resistant to the production environment. The advertising industry is especially in need of lighting devices, because a bright, shimmering sign attracts people’s attention. People of different professions need their own light source, and the device must be designed in a special way (the simplest example is a flashlight on a miner’s helmet). A car cannot do without light bulbs, which through the headlight lenses produce a beam of light, so necessary for safe driving. Electricity has given people the opportunity to engage in almost any activity around the clock, and almost everyone needs one or another lighting device. That is, in this business there is no limited contingent of consumers; absolutely everyone needs the product.
There are plenty of specialized stores, especially in large cities, but not all stores can provide all kinds of assortments, so there are still specific niches that can be filled. However, easy competition is not expected in this endeavor, and you will have to continuously monitor the market, look for new ideas and, most importantly, constantly conduct marketing research and campaigns. Success depends on the entrepreneur’s ability to resist the efforts of competitors, who are unlikely to calmly give up part of their clientele.
To start, you need to register a business entity; any form will do, be it an individual entrepreneur or a legal entity. The entire registration procedure will require about 20 thousand rubles, upon completion of which the entrepreneur will receive a code (OKPD 2) 47.59 Services for retail trade of furniture, lighting fixtures and other household products in specialized stores.
You need to immediately decide which customers the store will be designed for, in order to organize the supply of relevant products in accordance with this. The most conventional division into lighting devices for residential and industrial buildings. There is also a separate segment – auto lighting. At their core, these products are sold in specialized stores, the client comes there to buy light bulbs for his car, and this group includes not only standard products, but also all kinds of additional running lights, lighting systems, headlights, and so on in the same spirit . Yes, and during registration you will need to indicate that you are supposed to work with automotive products (despite the fact that these are still the same light bulbs and lighting fixtures). However, the largest lighting store can offer a similar list of specific items and earn additional good income from this. Whether it is worth doing this and creating complications for yourself, whether it is advisable, the entrepreneur himself decides, but at first there is probably no need to allocate an entire department for automobile accessories. You can limit yourself to purchasing standardized light bulbs that fit almost all models. There is such an idea, and you can forget about it, but you can make money from it.
But what needs to be dealt with in this matter, of course, is household lighting fixtures. This is the target direction; people will come for these goods first. With all the variety of manufactured lighting fixtures, the client will be looking for something unusual, going through options for a long time and having doubts. Of course, there will be those who need an ordinary chandelier for their kitchen, regardless of what it looks like, the main thing is that it is cheap, and all these factors make it necessary to have a large assortment of different products of different price segments and for various purposes.
Of course, opening a luxury lighting salon can be considered as an idea, but a critical number of clients will be missed. A person needs a choice, but offered within the same price category. The larger the range of items supplied, the more attractive the store is to the consumer. Here, in addition to quality and price, it is focused on variety, and a significant assortment will be a good competitive advantage.
In such a business, sometimes even slightly inflated prices compared to competitors play a lesser role than a good selection and many solutions for every client’s taste. Depending on this, the size of the room is selected, which starts from 50 m 2
. Of course, you can open a small shop with a meager selection, but the best-selling product at such a retail outlet will be ordinary light bulbs. That is, the goods will lie, withdrawing funds from circulation, revenue will be minimal, and the only savings (and that insignificant) will only be in renting the premises. A successful lighting store must not only stock, but also display a large amount of product, and therefore the outlet cannot be very small.
The location should be chosen based on high traffic, optimally the city center. It would be nice to be located in a shopping center, and here even a cramped small room will justify itself. If this is a free-standing store, then it should be located on busy streets with a lot of people passing by. Advertising will attract customers who are going to buy a lighting fixture purposefully, but random visitors will also become a good source of income. The rental cost in this case may be slightly higher than in the city as a whole, but these investments will more than pay off (only if there is no competitor’s store across the road or nearby). It is difficult to name the monthly expenses for paying for the premises, but about 50 thousand rubles will most likely be required. It is also possible to be located in residential or residential areas, and business can flourish, but then you will have to focus primarily not on all residents of the city, but only on the inhabitants of the area in which the point is open. In some cases, this is even the most profitable solution, especially when the central and busy streets are occupied by competing stores. But opening in industrial areas can only be justified if the store has a department of industrial lighting equipment. Offices, as a rule, install the simplest products intended for residential use, but some enterprises need products with increased resistance to moisture, aggressive environments, and even explosion-proof. Having such products in your assortment means attracting a significant number of additional consumers, represented mainly by legal entities. And they will make purchases for larger amounts and in larger sizes.
In general, we can say that any client will appreciate it if the store offers lighting fixtures for absolutely all needs. Today the buyer buys a simple chandelier, and tomorrow he returns for something else, because “here is everything.” Pleasantly surprised by the choice, he will also recommend the store to all his friends.
The consumer, of course, wants to receive the product here and now, but sometimes the retail outlet does not have what he needs. Some customers will definitely leave without finding the product they need. In an attempt to satisfy customer requests, you can set up work via the Internet. Your own website will become a good information and advertising platform and will provide an opportunity to sell particularly unusual, and therefore rarely purchased, products by ordering.
Operating a lighting store initially involves either cooperation with one very large supplier with a large product range, or with many small ones – this is how assortment diversity is formed. The concluded agreements will allow, if necessary, to additionally order unique devices in batches, including by special order. The client should be able to leave a request directly on the website and then pick it up later in the store, which will act as an outpost. For various reasons, unredeemed goods will simply replenish the store’s assortment, that is, funds, of course, are frozen, but this does not make the situation critical. As in any business where there is a huge list of products sold, here you will need to conduct an ABC analysis in order to know after the first month of work what is in demand by the client and what is just “for show.”
Separately, it is worth mentioning the sale of large external lighting devices, as a rule, these are neon signs and other luminous advertising products. They are often made to order, which imposes an obligation on the seller to find a manufacturer, but in this case the seller becomes an intermediary who risks virtually nothing. As an option for developing your own business, you can offer advertising companies or private entrepreneurs not only the creation of signs, but even their subsequent installation. Here again, you can either play the role of an agent who finds installers and receives a commission for this, or hire your own staff of workers performing similar services. This is, in a way, a separate type of business, but related and, most importantly, quite expedient, because clients come to the lighting salon in the expectation that even a non-standard order will be fulfilled. All this greatly increases the competitiveness of your business, provides coverage to a large part of the market and improves your reputation.
Working with industrial enterprises that need a special device with non-standard properties also involves completing an individual order to assemble the required product, although in this area there are many standard products that will satisfy the vast majority of companies.
The retail outlet itself is divided into departments for the convenience of visitors. A person should not wander around the entire room, looking for goods of the category he needs. Departments can be formed according to different principles: the type of light source used, purpose, type of lighting, installation method. You can structure the list as follows:
Location (installation method)
Exhibition and decorative
Night or for dark rooms
Lamp light source
Diffuse and reflex
Based on inert gases (xenon and neon)
For underground work
For outdoor lighting
For living spaces
Devices for the work of filmmakers and photographers.
In addition to this, there may be car lights, ordinary light bulbs, flashlights and other small items, as well as related electronic products such as adapters, tees, extension cords, switches and the like. It is better to hire a consultant to advise visitors if the store is spacious enough. Although the salon can be serviced by one person who plays the role of cashier, consultant and administrator, the entrepreneur himself can become this person. But it’s optimal when there are two people in the store – a cashier and a consultant, and both can perform both functions. They should also be able to pack the item if it is taken from the display. No special qualifications are required here; employees must simply be polite and trainable people, so you can find workers willing to work for an average of 20 thousand rubles per month. The amount of starting capital for this project will be:
Registration – 20 thousand rubles.
Rent of premises – 50 thousand rubles.
Advertising campaign – 50 thousand rubles.
Outsourcing, utility bills – 10 thousand rubles.
Salary – 40 thousand rubles.
Purchase of goods – 300 thousand rubles.
Accounting and cleaning services are outsourced. The purchase of the initial batch of goods can be made for a different amount, it all depends on the expected range of work and the amount of funds available. Thus, the required funds for opening are 470 thousand rubles, monthly expenses are 100 thousand rubles. The markup on different goods can be completely different; on household items it reaches 100%, and on unique and expensive goods no more than 10%. If the average markup is 50%, then the sale of a starting purchase in one month will bring 150 thousand rubles, the operating profit will be 50 thousand, and the net profit will be 42 thousand 500 rubles (simplified taxation system, calculation is made according to the “income minus expenses” scheme). It is unlikely that it will be possible to reach this level of sales in the first months; advertising, discounts and promotions will be needed. However, there are prospects in this type of business, especially if you engage in related services.
A particularly good source of income can be the creation of designer lamps, that is, fulfilling an individual buyer’s order to create a unique item. At the same time, such a service can be applied for by a simple person who is planning to implement a design project, or by the design studios themselves, who select products for their client. To create designer lighting fixtures, you can hire your own craftsman who will do the work. Accordingly, the cost of such a service will be very significant, but the demand for piece goods is unlikely to decrease as a result. In general, all non-standard solutions in such a business can be developed if they are taught correctly and executed well.
Features of selling lighting fixtures
In recent years, the range of lamps and chandeliers has expanded significantly: thanks to technical innovations and a variety of design ideas, buyers have the opportunity to choose from a huge variety of models on offer.
When starting a business selling chandeliers and lamps, it is important to take into account existing modern trends in this area.
First of all, a new entrepreneur needs to study the current market and determine what qualities his company will need to have in order to become competitive. To do this, you will need to offer customers something interesting and unique, as well as establish a competent pricing policy.
When opening a store selling lamps and chandeliers, it is important to immediately identify potential buyers. Thus, the main assortment may be lighting fixtures for home and office. In the future, you can expand the offer by including lighting systems for industrial premises, cars, etc.
Having decided what assortment will be offered to customers, it is necessary to draw up a business plan for the enterprise. The following features are calculated in the business plan:
- initial investments in opening a store, including renting or purchasing premises, purchasing goods, paying salaries to employees;
- expected profit from the sale of lamps;
- features of the pricing policy of the future enterprise. Setting prices for products is a very important stage, requiring a thorough study of the existing market and analysis of the products presented. Thus, for small inexpensive lamps the markup can be higher and range from 50 to 100 percent, while expensive chandeliers allow a maximum markup of 15%.
When deciding the price issue, it is important for an entrepreneur to determine which category of potential customers the enterprise will target: if a store of chandeliers and lighting fixtures is declared as elite, accordingly, the goods sold will be of high cost, but for a large number of buyers in In this case there is no need to count. Moreover, a luxury chandelier store assumes the high quality of the goods on sale.
Having drawn up a business plan and thought through all the expected costs, in accordance with the calculations made, pay attention to the following aspects:
- searching for suitable premises to open a store;
- purchase of goods;
- selection of employees;
- registration with the tax authority;
- work with advertising.
It is important to write down the costs for each of these aspects in the business plan; as the enterprise develops, the costs incurred must be adjusted.
A more economical option would be to open an online store of lamps and chandeliers; at least you can significantly reduce the cost of renting premises and paying for utilities, paying employees and some other types of costs. At the same time, other nuances come to the fore.
In particular, it is important to create an online store website that will be convenient and functional for users. The staff must have website maintenance specialists and online consultants. Considerable attention should also be paid to the advertising campaign of an online store: if in the format of a regular store its main advertisement will be a bright display window with chandeliers turned on, then when you start selling online, you should start promoting your business online.