Do you want to start an electronics store as an authorized dealer? If YES, here is a 20-step guide on how to start an electronics shop with no money or experience. An authorized electronics dealer is an independent person or business authorized to offer and sell electronics for an electronics manufacturing company. In other words, you represent an already established brand.
Some brands require exclusivity, meaning you can only sell their product. Please note that if you intend to start this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you. The bottom line is that you need to pay a visit to the regulatory bodies in your country to get all the information on what you need to do before you can legally open your own electronics and home appliances store in your city.
You can start your electronics and home appliances business from a small town in the United States and if you always equip your store with the latest electronics and home appliances, it won’t be too long before your brand becomes a nationally recognized brand.
20 Steps on How to Start an Electronics Store as an Authorized Dealer
Understand the Industry
Authorized electronics dealer is part of the consumer electronics stores industry and this industry consists of businesses that are into the sale of a wide range of new appliances, electrical goods. Many stores also offer repair services and some stores sell used goods. Please note that this industry does not include stores that primarily sell computers and related accessories.
Consumer electronics and appliances are staples in US households and include a wide range of items, from DVD players to refrigerators. The Consumer Electronics Stores industry, which largely relies on discretionary purchases, has been plagued by increasing external competition over the last five years.
Statistics has it that in the United States of America alone, there are about 51,615 registered and licensed consumer electronics retail stores responsible for employing about 329,256 people and the industry rakes in a whooping sum of $86 billion annually.
The industry was projected to grow at -2.2 percent annual growth within 2014 and 2019. Please note that the companies holding the largest market share in the Consumer Electronics Stores in the US industry include Best Buy Co. Inc. and GameStop Corp.
A recent report published by IBISWORLD shows that consumer confidence and spending grew over the past five years, but not enough to lift the industry out of its mild decline due to fierce competition from online retailers, discount retailers and department stores.
Considering these difficult conditions, IBISWorld expects industry revenue to fall an annualized 2.2 percent to $85.7 billion over the five years to 2019; this includes a projected decline of 0.2 percent in 2019 alone, driven primarily by improvement in the overall economy of the United States of America.
If you are contemplating opening a consumer electronics retail store in the United States, you should ensure that you carry out a thorough market survey and feasibility studies so you that you will be able to get the ideal location to launch your consumer electronics retail store. The truth is that, if you get some key factors wrong before starting your own consumer electronics retail store, then you are likely going to struggle to stay afloat.
Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who purchase electronics and home appliances cut across all genders; male and female, corporate and religious organizations, small, medium and big businesses et al, hence the demographic composition for electronics and home appliances store is all encompassing.
So, if you are thinking of starting your own electronics and home appliances store as an authorized dealer, then you should look beyond marketing your products to just people in your city, but also people across other cities in the United States of America.
Decide Which Niche to Concentrate On
There is no niche area of specialization in the electronics and home appliances store business but an authorized electronics and home appliances dealer may decide to settle for one or more electronic product or brand as the sole distributor.
The Level of Competition in the Industry
The competition that exist in the consumer electronics and appliances industry goes beyond competitions in your city; it is both national and international. This is so because, any qualified person can become an authorized electronics dealer and also, online consumer electronics and appliances stores can be contacted from any part of the United States or abroad especially if they have the kind of consumer electronics and appliances that the customer is looking for.
So, it will be right to say the competition in the consumer electronics and appliances store industry is tough. The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry.
Just ensure you have what it takes to stock your store with trendy and fast moving consumer electronics and appliances, and you know how to reach out to your target market. But over and above, there are several players in the consumer electronics and appliances industry. So, if you choose to open your own consumer electronics and appliances store as an authorized dealer in the United States, you will definitely meet stiff competition in the United States.
Know Your Major Competitors in the Industry
Here are some of the most popular authorized consumer electronics and appliances dealers in the United States of America and around the globe;
- Arrow Electronics, Inc.
- WPG Holdings LTD
- Future Electronics Inc.
- Digi-Key Electronics
- Edge Electronics, Inc.
- Electrocomponents plc/Allied Electronics & Automation
- Crestwood Technology Group
- Mouser Electronics
- Premier Farnell/Newark
- Fusion Worldwide
- Sager Electronics
- Master Electronics
- America II Electronics
- Advanced MP Technology
- Bisco Industries Inc.
- The Powell Electronics Group
- Richardson Electronics, Ltd.
- Electro Enterprises Inc.
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Being an authorized electronics dealer or operating a consumer electronics and home appliance business is no longer a green business, as a matter of fact, you will come across several consumer electronics stores if you drive through your city.
So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required working capital for renting a store, purchasing distribution trucks, securing the needed license, working capital, branding and other running cost needed to successfully run the business.
Over and above, if you are considering starting a consumer electronics store, then your concern should not be limited to the cost of setting up the business and securing your dealership authorization license, but also on branding and on how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are sure going to maximize profits in the business.
Decide Whether to Buy a Franchise or Start from Scratch
Unfortunately, you can’t buy a franchise as a consumer electronics and home appliances authorized dealer. This is because you are just an independent person or business authorized to offer and sell electronics for an electronics manufacturing company.
Know the Possible Threats and Challenges You Will Face
If you decide to start your own a consumer electronics and home appliances store as an authorized dealer today, one of the major challenges you are likely going to face is the presence of well – established consumer electronics and home appliances stores and other authorized electronics dealers whose products are retailed in their physical stores and also listed on ecommerce stores.
The only way to avoid this challenge is to create your own market perhaps concentrate on your immediate locality. So also, just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing power.
Another threat that may likely confront us is the arrival of a new consumer electronics and home appliances store and even online consumer electronics and home appliances stores in same location where our target market exist who may want to adopt same business model like us.
Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a consumer electronics and home appliances store as an authorized dealer, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you have the option of choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for your consumer electronics store as an authorized dealer. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale consumer electronics store especially if you are just starting out with a moderate startup capital.
But if your intention is to grow the business and distribute a wide range of consumer electronics and home appliances all across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
For example, setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your consumer electronics and home appliances store; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to critically study the various legal entity to use for your consumer electronics and home appliances store, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your consumer electronics and home appliances store shop so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
Choose a Catchy Business Name from the ideas Below
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own consumer electronics and home appliances store as an authorized dealer, here are some catchy names that you can choose from;
- All Well® Electronics Distribution Company, Inc.
- Daniel Ed® Electronics Store, Inc.
- Mike Powel® Electronics Distribution Company, Inc.
- Joy Johnson™ Electronics and Home Appliances Store, LLC.
- The Collectors® Electronics Distribution Company, Inc.
- Tech Net® Electronics Distribution Company, Inc.
- Larry Ben® Electronics Distribution Company, LLC
- Big Sammie® Electronics and Home Appliances Store, LLC
- The Point® Electronics and Home Appliances Store, Inc.
- Dona Mack® Electronics and Home Appliances Store, Inc.
Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own Consumer electronics and appliances store as an authorized dealer in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Building/Property insurance (for your warehouse)
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your Consumer electronics and appliances store;
- Allstate Insurance Group
- Liberty Mutual
- Progressive Insurance Group (PGR)
- Health Care Service Corporation (HCSC)
- New York Life Insurance Company
- Lincoln National Life Insurance Company
- MassMutual (Massachusetts Mutual Life Insurance Company)
- Northwestern Mutual Life Insurance Company
Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own consumer electronics and appliances store as an authorized dealer, usually you may not have any need to file for intellectual property protection / trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to leverage on this business opportunities within the industry and also to protect your company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Get the Necessary Professional Certification
When it comes to operating a consumer electronics store as an authorized dealer, you do not need to have any formal training or special certification. All you need is informal training that will expose you to the in and out of managing consumer electronics and appliances store.
On the other hand, if you come across any form of certification that can aid you to manage your consumer electronics and appliances store as an authorized dealer pretty well, then by all mean try and pursue such certification.
Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit (Retailers Permit)
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
Raise the Needed Startup Capital
On the average, starting an online consumer electronics and appliances store as an authorized dealer can be cost effective especially if you choose to start on a small scale with a small warehouse. Securing a standard and well – positioned warehouse facility and stocking your warehouse with a wide range of consumer electronics and appliances are part of what will consume a large chunk of your startup capital.
So, if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale consumer electronics and appliances store as an authorized dealer.
When it comes to financing a business, one of the first thing you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your consumer electronics and appliances store as an authorized dealer;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Source for soft loans from your family members and your friends.
Choose a Suitable Location for your Business
When it comes to choosing a location for your consumer electronics and appliances store, the rule of thumb is that you should be guided by the demand for such products. Of course, if you are able to secure a central location for your consumer electronics and appliances store, it will give people easy access to locate your store.
It cannot be overemphasized that the location you choose to open your consumer electronics and appliances store business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consist of people with the require purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your consumer electronics and appliances store.
Most importantly, before choosing a location for your consumer electronics and appliances store, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
Having said that, these are some of the cities in the United States of America where you can locate your consumer electronics and appliances store as an authorized dealer;
- Los Angeles, California
- New York City, New York
- Nevada, Las Vegas
- Tallahassee, Florida
- Chicago, Illinois
- Houston, Texas
- Washington, District of Columbia
- Boston, Massachusetts
Hire Employees for your Technical and Manpower Needs
On the average, there are no special technology or equipment needed to run this type of business except for Point of Sales (POS) Machines, shelves, and software applications. So also, you will definitely need computers / laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a store and warehouse facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location / facility for such business.
When it comes to hiring employees for a standard consumer electronics and appliances store business with more than one outlet, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Store and Warehouse Manager, Sales Girls and Sales Boys, Accounting Clerk, and Truck Drivers. On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard consumer electronics and appliances store business.
The Service Delivery Process of the Business
When it comes to buying and selling stuffs, there are no hard and fast rule about it. Basically, it is the duty of the merchandize manager to help the store stock goods (varieties of consumer electronics and appliances from different manufacturers and brand name).
In the case of consumer electronics and appliances authorized dealers, they go out there to source for good dealership deals from consumer electronics and appliances manufacturers and they also ensure that they do not only distribute at the right prices that will guarantee them good profits, but also, they ensure that they distribute consumer electronics and appliances that are trendy and that are in demand in their business location.
Once the consumer electronics and appliances are supplied to them, they are properly arranged in the store for customers to see and purchase. On the other hand, they are also expected to deliver orders made by clients if such services are available in the store.
It is important to state that a consumer electronics and appliances store may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated consumer electronics and appliances store business process is not cast on stone.
Write a Marketing Plan Packed with ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a consumer electronics and appliances store as an authorized dealer, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the industry.
Your marketing strategy should center on quality and pricing, and above all excellent customer service and prompt delivery. The truth is that, if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market.
Here are some of the platforms you can utilize to market your consumer electronics and appliances store as an authorized dealer;
- Introduce your liquor store by sending introductory letters alongside your brochure to corporate organizations, households, churches, hotels and restaurants, schools, and other key stake holders throughout the city where your consumer electronics store is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need to purchase consumer electronics and appliances within your location
- Create a basic website for your business
- Directly market your products.
- Join local consumer electronics and appliances store associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your consumer electronics and appliances at rock bottom prices is to negotiate good deals from manufacturers and to purchase large quantities. The truth is the higher the quantities of items that you purchase directly from manufactures, the cheaper you tend to get them.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
Develop Iron-clad Competitive Strategies to Help You Win
The consumer electronics and appliances business is a competitive industry, hence you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to ensure that your consumer electronics and appliances fits with the trends and affordability must also be your guiding principle.
In other to stay competitive in this industry, you must ensure that your clients can trust your delivery process and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the quality of your products, customers can choose to shift allegiance and settle for other options available.
Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
Here are the platforms you can leverage on to boost your brand and create a corporate identity for your consumer electronics and appliances store as an authorized dealer;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your consumer electronics and appliances store
- Install your billboards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your consumer electronics and appliances store in local directories / yellow pages
- Advertise your consumer electronics and appliances store in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your consumer electronics and appliances store is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.