If you’re considering starting a shoe store business and were doubtful about the profitability of such a business, the following figures and stats might change your mind. The global footwear market was estimated at $384.2 billion in 2020 and is expected to reach a revised size of $440 billion by 2026.
Moreover, the US shoe store industry includes about 25,000 stores with a combined annual revenue of about $36 billion. And at last, the footwear market is expected to grow at a volume rate of 16.2% in 2022. These figures prove that starting a shoe business is a good idea, but two questions remain essential: How to start a shoe business? But more importantly, how to make it profitable. These are the questions this blog will walk you through.
What are the steps to follow before you open a shoe store business?
Opening a shoe retail store is a process that requires enough preparation and an effective buying strategy so that you don’t run out of stock because shoe sales are very seasonal. To open successfully your retail shoe store and make it profitable, there are certain steps that you absolutely have to follow. Check out our guide now to learn the 5 proven tips on how to start and keep a footwear business humming.
Step 1: Find out your target market for your footwear store
Before opening a shoe store, the first thing to do is to determine if there is a demand and target audience for the type of shoe store in your area.
First, check out the competition. Find out how many stores already sell shoes in your area and what kinds of shoes these competitors sell. Your competitors may not just be chain stores; they could also be sports stores, independent shoe stores, ready-to-wear stores, as well as general merchandise retailers that also sell shoes. All these searches will allow you to find out the types of shoes sold and those not yet available in your market.
Step 2: Choose a good spot for your shoe retail store
The type of shoe store you will open depends on the nature of the area where you want to set up your store. It is vital to have as much foot traffic for any retail outlet, including shoe stores.
If there is an elementary school nearby, it might be worth considering selling children’s shoes. On the other hand, if your retail location is next to a high school, selling sneakers and athletic shoes might be a better idea. If the population of your area is primarily older, you should take this into account when choosing the type of shoes to sell, such as comfort ranges or rugged outdoor shoes.
Wherever you are, you will also need to consider the competition of online shoe retailers, as this sales channel is becoming more and more popular.
Step 3: Select what you want to sell
There are several ranges of shoes to sell. For example, you can choose to sell high-end designer shoes, hip streetwear, work boots, or more traditional everyday wear. You can offer your customers sizes, colors, shapes, and brands that are rare to find on the market. This uniqueness could attract more customers to your store.
Among many other options, below are some of the most common niche products that shoe stores offer:
- Sports shoes: running shoes, soccer shoes, cycling shoes, basketball shoes
- Dance or ballet shoes
- Shoes and boots for children
- Men’s work shoes, and city boots
- Women’s dress, work, casual and comfort shoes and boots
- Sheep’s wool and faux fur boots
- Protective and safety footwear
- Slippers and indoor shoes
- Sandals and other light casual or summer footwear
- Specialized footwear, including remedial footwear
Whatever product line that you decide on, make sure you have the resources, vendors, and suppliers established beforehand. This will help you determine pricing, optimize ordering, and establish efficient inventory management from the very beginning. Plus, you need to be confident in your vendor relations – be sure that any products you order early on can still be ordered down the road.
Step 4: Determine your customer profiles for your shoe store
The market study you’ll have done beforehand will allow you to identify market gaps and the type of customer you want to target. This will help you set yourself apart from your competitors and allow you to highlight any brand specialization that you offer.
The majority of the customers that come to shoe stores generally already have an idea of what they’d like to purchase. It’s important that you market your products accurately and have the right inventory in place to satisfy these shoppers’ needs.
Still, you’ll also have some shoppers who simply happen to pass by your store. Make your store stand out with an excellent storefront to attract as many passersby as possible. This also applies to your website, if you have one. Make it easy for potential customers to find your eCommerce shop, search for specific products, and finalize a purchase.
Step 5: Create a website business for your shoe store
Getting a website for your store is an excellent way to get new customers and increase your sales. Alternatively, or better, additionally, you can leverage social retail using TikTok, Instagram, Facebook, and other social media. You can also trade on eBay or Amazon to get started on learning about online sales.
How Much Money Do You Need to Start Your Shoe Store Business?
Before opening a shoe store, you must prepare funds for a variety of specific requirements. Here are some of the key points you’ll have to consider:
1. Acquisition of the initial inventory
One of the most significant expenses when opening a shoe store is the buying of initial inventory. According to estimates, initial inventory can cost as much as $50,000, even for a smaller shop.
On top of the initial inventory costs, you need to plan how much future orders will make sure that you have the cash flow to stay well-stocked for the first 6 months to a 1 year.
2. Physical location cost
The cost of your shoe store location depends not only on the city but also on the neighborhood you wish to locate. For example, the owner of a shoe store based in Manhattan will pay a higher rent than the one whose store is located in rural Louisiana.
However, the more upscale the area in which your store is located, the more likely you are to have customers who would not hesitate to spend money on luxury shoes. The amount of square footage you get and whether you rent or buy will also influence your location costs.
3. Your license and registration cost
Typically, shoe stores require a certificate of occupancy, a business license, and the appropriate zoning permits. The cost of these vary widely by city and state, but for shoe stores, won’t normally cost an arm and leg. The important thing is to get started early and make sure you have all permits in place with plenty of time prior to your grand opening.
4. POS machines and other security tools
You can’t run your retail shore store without a POS system. A retail POS system will help you manage your inventory, track retail employee time, make your transactions faster and more secure.
Make sure you go for robust cloud-based POS system that allows you to control all the activities in your store without having to be there yourself.
In addition to the POS system, you need surveillance cameras in the event of robberies or assaults of any kind.
5. Marketing and promoting a shoe store
Marketing and promotion of your store are essential if you want to make your store more popular. Advertising your store will depend on how much money you have. If you consider advertising on television or radio, you will have to spend thousands of dollars.
However, with the advent of social media, you can promote your products on platforms like Facebook, Twitter, Instagram, TikTok, etc. You can also run paid traffic with Google to specifically target people living around your store who would be likely to buy your products.
It’s also important to make the outside of your store as attractive as possible.
Make sure the signs are professionally done. Use colors, letters, and designs that convey the appearance of your products. Your storefront should always be clean and well lighted. All of these aspects contribute to the promotion of your products.
6. Operating expenses and indirect costs
The first weeks after opening your shoe store can be a little complicated because it will take some time to build a customer base that will sustain your business over the long term and make it profitable.
Therefore, you should plan to have enough funds to cover expenses for about three to six months after you open your store. The most common expenses will be payroll, advertising, taxes, additional inventory, and other operating costs. So be financially prepared to meet these expenses in the time it takes to get your business up and to run.
How To Start a Shoe Store: Takeaway
Opening a shoe store requires enough funds and time to prepare your business and make it stand out from the crowd. With the advent of social media and other advertising platforms, you can promote your store yourself.
For more advanced marketing strategies for your business, you can use your customer analytics and sales reporting insight from your POS system. That’s why we recommend that you try KORONA POS for free now to have better control over all your store operations and make better decisions for your business. Click on the button below to get started.
