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Mom and Pop Shops vs. The Major Corporations of the World

If there is one thing that has become clear about the United States economy in the last two decades, it is that the small mom and pop shops are either disappearing, under pressure from larger corporations, or radically restructuring their business models to keep themselves afloat. In the extremely price-competitive digital economy small businesses has a tough time competing. For one, big businesses can negotiate with vendors, and shippers for pricing privileges because of the sheer volume of transactions they produce.

The overhead for operating a storefront business is much higher for the little guy as well. However, there are a few strategies that have been successful for mom and pop businesses that not only keep them alive, but keep them thriving. The following is a quick overview of how it is being done.

Selling Custom and Specialized Items Locally

What may not be profitable for a national corporation to sell may be something a small business can provide to local customers at a profit. Certain niche products may be in demand, but large corporations usually sell in large volumes to generate their profits. When the quantities drop too low, the total profit generated from selling a particular item may not be worth it, and in some cases, it may not be profitable for a large corporation to sell it at all. Many of the products that can be profitable for the mom and pop store include hard-to-find items not found at large national brand stores.

Hometown USA is Really a Niche Market

Local manufacturers can offer custom made or modified versions of off the shelf items. The automotive market offers a great deal of examples for custom modifications of cars and motorcycles. Restaurants offer a great deal of opportunity too. It is common to see a local restaurant offering food that is much different than the national chains. This includes fast food restaurants that offer food tailored to local tastes.

Adapt or Die Isn’t As Bad As it Sounds

In many respects, all the opportunities large businesses enjoy with the digital economy, are just as available to small business as well. You don’t have to be Amazon, Walmart, or Ebay to benefit from the new economic model. Instead of limiting the niche product or custom manufacturing to the local community, the product can be offered to people throughout the country and even the world. Retail space can be expensive, but warehouse space is often cheaper. Retail business can use a warehouse to store inventory and process orders, and utilize modern shipping systems while still maintaining a small retail operation for local walk-in sales.

Warehouse Solutions Offer a Great Advantage

Perhaps the greatest advantage for a small business over the large corporation is the ability to subcontract the warehouse operation completely. There are companies that will store inventory for you and process your orders, including both packing and shipping. This enables a retail company to keep only a small local shop to sell from. Many of these warehousing contractors also have the leverage to negotiate similar pricing privileges to those shippers like UPS and FedEX offer to big businesses. And with the idea of operating a small internet business in mind, then maybe storefront shops aren’t really necessary at all. It is perfectly feasible for someone to operate a retail business out of their home. There is no, or very little, inventory being stored. It is only necessary to promote and sell a product. The orders can then be sent to a warehouse that stores the inventory. They will pull the merchandise out of inventory, pack it and send it to your customer. In this situation, with the right product and the proper sales effort, a large company is at a disadvantage versus the small business owner.

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