I tried to get into the business of the best looking free running shoes when my friend stopped me, letting me know the problems with this business.
I got to know that the popularity of running shoes and its pricing keeps the profit margin of these shoes only in around the 20 percent range, especially since I was planning to operate a retail store and stock these shoes in my store. Also, there was a lot of thinking and research that had to be done since the profits and the demand from this business is dependent a lot on the owner understanding the marketplace where the store serves. It was also important to allow the collectability of the shoes and know what the trend appeal of these shoes are.
Not into this niche myself, I decided to stay out.
However, for those of you who are interested in starting a business of running shoes, it is important to know the basic model of the business.
The athletic shoes are the major portion of the business and it has a lot of demand and thus it is these shoes that will help you be profitable. It is also important that you know the in and out of the size of the local market and their characteristics because that impacts your profit margin a lot. In case you want to set up your shoe store in an area where there are high- income groups residing, then stock branded shoes. If it is a low-income area then the price is the basic factor for them and the running shoes that you stock should be affordable.
Shoe stores are also affected by the economy. When the economy is not good, then purchasing shoes is not on the top priority list which in turn will affect your business. Thus include the cost of selling the shoes at a discount when you plan out your expenses.