Do you want to start a sneaker store? If YES, here is a complete guide to starting a sneaker store business with NO money and no experience.
Sneakers came into fashion a couple of decades ago, and they are still not making any move to leave the fashion scene. An entrepreneur can start and make good profit from a sneaker retail store if he stocks a variety of sneakers and other footwear from different designers all across the globe.
The truth is that the demand for sneakers is not going to abate soon but rather it will be on the increase. If you intend opening a sneaker store, then you must make out time to learn the art of buying and selling alongside other soft skills – such as customer service, accounting and bargaining skills amongst others.
Starting a sneaker store business also means that you have some plan in place; plans like how you intend to compete in the market, how you intend to make your business known to the people, as well as other important factors that must not be overlooked.
Before launching this type of business, it will pay you carry out market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your sneaker store business, it will not take you long before you break even and start smiling to the bank.
So, if you have the desire to start your own sneaker store business, all you need to do is read this article and you will be well equipped.
Steps to Starting a Sneaker Store Business
1. Understand the Industry
Any person you find in any street in the united states of America, as well as other countries, both developed and undeveloped, would put on one form of footwear or the other. Shoes cum footwear could be of pure leather, synthetic leader, fabric or rubber.
This goes to show that there is indeed a very large market for shoes in our world; hence loads of investors cum aspiring entrepreneurs are pitching their tent in the shoe and footwear industry and sneakers business is one of the booming business opportunities in this industry.
Businesses in the shoe and footwear industry that the sneaker line of business is a part of, retails footwear for men, women and children. They are involved in the sale of shoes and footwear in different forms such as rubber and plastic footwear, sneakers, protective footwear (Safety boots), house slippers and slipper socks. Companies in this line of business also retail footwear specifically designed for casual, formal and work environments.
Research conducted by IBISWORLD shows that the Shoe and Footwear industry in the United States has a low to moderate level of concentration.
The US shoe and footwear stores industry is concentrated: the top 50 companies account for more than 95 percent of sales. New Balance and Allen Edmonds who are considered to be the two dominant players in the industry are estimated to account for an estimated 35.3 percent of the revenue generated in industry.
This low-to-moderate concentration reflects a fragmented market that has a mix of a few large companies and many small industry operators specializing in higher valued-added footwear.
The largest global footwear companies, such as Nike and Adidas, manufacture nearly all of their products outside of the country. This practice has increased over the past few years as large manufacturers discontinue production in the United States, instead focusing domestic activities on design and wholesale of footwear.
The Shoe and Footwear Stores industry is indeed a major sector of the economy of most countries in the world (United States of America, Italy, France, united kingdom, China, India et al).
Statistics has it that in the United States of America alone, the Shoe and Footwear manufacturing industry generates well over billion annually from more than 876 registered and licensed big scale shoes and footwear stores scattered all around the United States of America.
The industry is responsible for the employment of well over 10,416 people. Experts project the shoe and footwear stores industry to grow at a -2.7 percent annual rate.
In the United States, men’s footwear accounts for about 50 percent of sales, women’s for about 20 percent, and athletic and other footwear for about 30 percent. The establishments in this industry that have dominant market share in the United States of America are New Balance and Allen Edmonds.
The sneaker store line of business will continue to blossom because people will not relent in purchasing and wearing sneakers. Despite the fact that the industry seems saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own sneaker stores.
Over and above, the sneaker store line of business is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale in a street corner like the average mom and pop business or you can choose to start on a large scale with several outlets in key cities all across the United States of America.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who wear sneakers cut across all genders and age groups; male and female, adults and children all wear sneakers hence the demographic composition for the sneaker line manufacturing business is all encompassing.
The truth is that when it comes to selling sneakers, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people, but to all those that reside around your sneaker store and who have purchasing power.
So, if you are thinking of opening your own sneaker store business, then you should make your target demographics all encompassing. It should include corporate executives, business people, celebrities, military men and women, sports men and women, tourists and every adult in the neighborhood where your sneaker store will be located.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to the sneaker store business. Every player in this line of business usually sells sneakers in different sizes and for different genders and from different brands both locally and internationally to meet the trend in the industry.
It is important to state that some sneaker stores may decide to only operate a brick and mortar store (physical sneaker store), while others may decide to operate an online sneaker store with delivery options for their customers. We are not ruling out the fact that in recent time in the United States, most sneaker stores and similar businesses are leveraging on the internet to also run both physical sneaker stores and online stores. This will enable them reach out to a large clientele base within and outside their business/store location.
The Level of Competition in the Industry
The competition that exist in the sneaker stores industry goes beyond competition between sneaker stores in your location; you will be expected to compete with shoes/footwear stores, boutiques, supermarkets/malls et al that also retail sneakers. So, it will be right to say that the competition in the sneaker store business is tough.
The truth is that no matter the level of competition in an industry, if you promote your products or business properly, you will always make headway in the industry. Just ensure you stock your store with varieties of sneakers from different brands/designers and sneakers that are in demand in your business location and you know how to attract your target market.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for the quality of their products.
These are some of the leading sneaker stores/brands in the United States of America and in the globe;
- Adidas Sports Performance
- Nike Factory Store
- ECCO Outlet
- The Foot Store
- Finish Line
- Flight Club Shoe Store
- Eastbay Performance Zone
- KicksUSA Footwear Store
- Packers Shoes
- Extrabutter Shoe Store
- Champs Sports Shoe Store
- Aerosoles Shoe Store
- Nice Kicks Shop
- Sneaker Union USA
- Sneakermania USA
- House of Hoops Harlem
- Dover Street Market
- KITH Empire
- Flight Club
- ATMOS New York City
The sneaker retail store business is not a Green business, as a matter of fact; you will come across several sneaker stores when you go shopping for sneakers. So, if you are mapping out your economic analysis, you should carry out thorough market survey on what it costs to rent a store and the amount needed to stock your store with varieties of sneakers from different brands/designers, and also the cost to successfully run the business.
Over and above, if you are considering starting a sneaker store business, then your concern should not be limited to the cost of renting a store and stocking your store with varieties of sneakers from different brands/designers, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a sneaker store business, you would have to start from the very scratch simply because you can hardly get a franchise of a sneaker store business to buy.
Besides, starting a sneaker store business from the scratch is less stressful when compared to other small scale businesses which usually require detailed groundwork before launching the business. With sneaker store business, you should just try as much as possible to secure a shop that is close to a major road or inside a residential estate and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your sneakers.
Please note that most of the big and successful sneaker stores around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own sneaker store business brand to become a successful brand with corporate and individual customers in your city and from all across the length and breadth of the United States of America.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own sneaker store business today, one of the major challenges you are likely to face is the presence of well-established sneaker stores, shoes/footwear stores, boutiques, malls et al that also retail sneakers. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, history has it that business such as sneaker stores and the likes usually struggle to maintain their old customers or even attract new customers. So also, unfavorable government policies can also hamper the growth of your sneaker store. There is nothing you can do as regards these threats and challenges other than to stay positive.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a sneaker store business, the legal entity you choose will go a long way to determine how big the business can grow; some sneaker stores design their business for the neighborhood market, some for city wide market, while others for national market via franchising.
Generally, you have the option of either choosing a general partnership, Limited Liability Company which is commonly called an LLC, or a sole proprietorship for a business such as sneaker store. Ordinarily, sole proprietorship should have been the ideal business structure for a small scale sneaker store especially if you are just starting out with a moderate startup capital in a small neighborhood and with just one outlet.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and have chains of sneaker stores across the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
8. Choose a Catchy Business Name
If you are considering starting your own sneaker store business, here are some catchy names that you can choose from;
- All Genders Sneaker Store, Inc.
- Monique Chains of Sneaker Stores, LLC
- Classic People Sneaker Store, Inc.
- Garry Beckham Sneaker Store
- Holmes Kings Footwear Store, Inc.
- Mike Harry & Sons Sneaker Store, Inc.
- The Prime Sneaker Stores, Inc.
- George Morgan Sneaker Store, LLC
- XYZ Chains of Sneaker Stores, Inc.
- Cast In Gold Sneaker Store, Inc.
9. 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 policy covers that are required by the industry you want to operate from. So, it is important 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 sneaker store business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own sneaker store business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own sneaker store business, usually you may not have any need to file for intellectual property protection/trademark. This is so 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.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production 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.
11. Get the Necessary Professional Certification
When it comes to operating a sneaker store business, you do not need to have any formal training or special certification before you can be allowed to open and operate a sneaker store business. All you need is informal training that will expose you to the in and out of sneaker buying and selling business.
On the other hand, if you come across any form of certification that can aid you to conduct your sneaker store business, then by all mean try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own sneaker store business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a sneaker store business can be cost effective if you choose to start on a small scale by running a small store in a street corner. Securing a standard and well positioned store facility and stocking your store with varieties of sneakers from different brands are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale, you would need to go source for funds to finance the business because it is expensive to start a standard large scale sneaker store business.
Here are some of the options you can explore when sourcing for startup capital for your sneaker store business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your sneaker store, the rule of thumb is that you should be guided by the demand for such products and easy access to the manufacturers or wholesale distributors. Of course, if you are able to secure a central location for your sneaker store, it will help people to locate your store.
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 a business such as a sneaker store, 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 sneaker store.
Most importantly, before choosing a location for your sneaker 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. This is why it is very important to gather a lot of facts and figures before choosing a location to set up your own sneaker store.
These are some of the key factors that you should consider before choosing a location for your sneaker store;
- The demography of the location
- The demand for sneakers in the location
- The purchasing power of the residence of the location
- Accessibility of the location
- The number of sneaker stores, shoes/footwear stores, boutiques, and supermarkets/malls et al that also retail sneakers in the location
- The local laws and regulations in the community/state
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
On the average, there is no special technology or equipment needed to run this type of business except for Point of Sales (POS) Machines, shelves, and software applications. But you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst other and all these can be gotten as fairly used.
As regard leasing or outright purchase of a store facility, the choice is dependent on your financial standing, 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.
When it comes to hiring employees for a standard sneaker 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, Merchandise Manager, Store Manager, Sales and Marketing Officer/Sales and Sales Boys, Accounting Clerk, and Cleaners. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small scale but standard sneaker store business.
The Service Delivery Process of the Business
When it comes to buying and selling stuffs, there are no hard and fast rules about it. Basically, it is the duty of the merchandise manager to help the organization/store stock goods (varieties of sneakers from different manufacturers and brand name).
They go out to source for good purchasing deals and they also ensure that they do not only purchase at the right prices that will guarantee them good profit, but they ensure that they purchase sneakers that are trendy and that are in demand in their business location.
Once the sneakers are bought, 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 their store. Stocks are taken at the close of business every day and accounts are balanced. This will enable them place demand for more sneakers or bring more sneakers from the warehouse to the store
It is important to state that a sneaker store may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. 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 sneaker store business, then you must go all out to employ strategies that will help you attract customers or else you will struggle with the business because there are well known brands determining the market direction for the sneaker stores industry.
These are some of the marketing ideas and strategies that you can adopt for your sneaker store business;
- Introduce your sneaker store business by sending introductory letters alongside your brochure to corporate organizations, households, sports organizations, gyms, schools, socialites, celebrities and other key stakeholders throughout the city where your sneaker 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
- Create a basic website for your business, so as to give your business an online presence
- Directly market your products.
- Engage in road show in targeted communities from time to time to sell your products
- Join local sneaker 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)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your sneakers at rock bottom prices is to purchase your products directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your sneakers at the right price is to ensure that you cut operational cost to the barest minimum, channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a sneaker store business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of sneaker stores and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable.
Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your sneaker store;
- Place adverts on both print (newspapers and health magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your store
- Install your Billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your sneaker store.
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, households, sports organizations, gyms, schools, socialites, celebrities and other key stake holders throughout the city where your sneaker store is located informing them about your business and the products you retail
- List your sneaker store in local directories/yellow pages
- Advertise your sneaker store in your official website and employ strategies that will help you pull traffic to the site.
- Position our Flexi Banners at strategic positions in the location where your sneaker retail store is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo.