The Reality of Retail - Shopping Around Chilliwack

Let’s take a moment to talk about what it takes to run a retail store in a small community.

Running a retail store is not easy. There are great times where you can’t keep a certain product on the shelf as it sells out so fast, or that a sale seems to hit people just right where they come buy from you, but in reality, retail is hard.

We wanted to take a few moments to share a few things about retail that you might not know and may help you see things a little differently the next time you stop into a local business.

The Price of Markups
People often get caught up on what the markup on items are. They will see a product marked up by 100% or 50% and will focus on trying to get the retailer to sell the product at a cheaper rate, but there is a lot that isn’t seen.

People don’t see the cost of freight and shipping. For anything that’s brought in from out of country, there’s the cost of bringing it across the border, plus the cost of the company to ship it from the supplier. Those costs need to be recovered in the cost of the product which leads to the markup.

What you might not see as well, is that the markup needs to include the cost of inventory. You can mark up an item 50%, but part of that markup is to cover the cost of the inventory that stays in stock and doesn’t sell. If a product is in stock and not selling, money isn’t coming in. The markups need to cover that loss. The reality is that the store will not sell every piece of product, and markups are created to reflect that.

Most retailers don’t own their own building either. The cost of their lease, plus turning lights on, air conditioning, free WiFi for their guests, and a plethora of other costs are factored into that markup. It’s not a markup to gouge you, but a markup to run their business and hopefully, at the end of the day, have some kind of profit to say they’ve made at least a little money.

If you were to take a local business owners total time spent working and the amount of money they make in a year and average it out, we can almost guarantee that you’d be shocked at how little it works out to be. Local business owners run their business because they have a passion for what they do, employees to care for, and ultimately, the customers that they serve.

Fundraisers, Donations and Handouts

Local businesses are often looked at for donations to various fundraisers in the community. From Girl Guides, sports teams, community organizations and more, local retailers are looked to for help from cash and prize donations. Get to know a local business owner and you’ll quickly find out how often people come into their establishment asking for handouts.

These businesses don’t have those items simply sitting around at no cost to them. Those donations are given out from the small profits they’ve made on the mark-ups mentioned above. Retailers aren’t given big pay checks or unlimited items from suppliers to give away to fundraisers. Retailers, our local businesses, are giving out of their own pockets because they care about the community they live in. They believe in the causes that make this community great.

The Unknown Costs

Beyond markups, supply costs and everything else, what people never see is the amount of time, knowledge, research, failures and successes a local retailer has put into their store. You don’t get to see the late nights a retailer has put into problem solving or perfecting the product they put on the shelf the next morning, or the hours, days or years that they’ve put into learning everything about a certain product field and discovering which product is the best to put on their shelf and in your hands, and why and how it works for their store. They don’t show the little things, like making private deliveries for a customer that needs some extra help, or a quiet donation to a cause that’s having difficulty covering basic costs.

Local retailers are in business for more than profit. Yes, they are making a living, but they are also providing employment and economic growth in our community. The money they make and the employees they pay in turn buy/rent homes in town, they shop at local stores, play local sports, visit local restaurants and more. The money they bring into their store is to keep this community healthy and strong. It’s the backbone of this community.

The cost of running a retail store in a small community is high but the reward is so much greater. Next time you’re in a local retail business, try to see things through their lens and maybe say thanks for the hard work they’ve done to be here. We need them a lot more than we know.