Opening a shop
A shop (clothes, food, phones, gifts…) has a problem a barbershop doesn’t: stock. You buy goods before selling them, and what you don’t sell is money tied up or lost.
The real margin
You buy a T-shirt for €10 and sell it for €25 including VAT.
Without VAT: 25 ÷ 1.21 = €20.66
You keep: 20.66 − 10 = €10.66 per T-shirt (52%).
But if 1 in 5 T-shirts ends up in the sales or unsold, your real margin drops a lot.
Without VAT: 25 ÷ 1.21 = €20.66
You keep: 20.66 − 10 = €10.66 per T-shirt (52%).
But if 1 in 5 T-shirts ends up in the sales or unsold, your real margin drops a lot.
What weighs most
- Starting stock: depending on the type of shop, from a few thousand to tens of thousands of euros.
- Shop window and premises: in a shop, being seen from the street is key.
- Online competition: customers will check the price on their phone inside your shop. You have to offer something the internet doesn’t: service, advice, trying it on, taking it home now.
Tips
- Start with little stock and lots of variety of what sells most. Restock quickly what works.
- Sell on Instagram, WhatsApp or a website from the start too.
- Food shops or shops with products from a particular country can do very well if there is a big community in the area and nobody else sells them.
- Keep track of stock from day one (even with a spreadsheet).
In the calculator, put the percentage the goods cost you in “product cost”. In clothing it is usually high (50% or more of the price without VAT).