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Wednesday, June 29, 2016

Department Stores Vs Independent Boutiques

Filed Under: Zannee's Tips, Inside Scoop

By Suzanne O'Connor

A lot of us shop big stores instead of smaller, independent stores just for convenience. But if you want to keep your money in the local economy or get better service, smaller boutiques are usually better. Here’s why.

Some general facts you should know about most Department stores:

- Big Department stores pay less per item since they buy in volume.
- Big Department stores don’t have the owners working the store.
- Big Department stores are on a long billing cycle of 120 days or more. So they may not have even paid for the item they are selling yet.
- Big Department stores often “charge a fee” back the manufacturer for items that didn’t sell on top of the actual return.
- Big Department stores mark up on average 150%-400%.
- Big Department stores buy large ads in newspapers at a volume discount.
- Big Department store profits go to large corporations & shareholders, usually out of the area.
 

On the other side of the coin, smaller indie boutiques usually do business a bit differently.
   
- Indie boutiques mark up 100%-200%.
- Indie boutiques buy in smaller quantities and pay more per item.
- Indie boutiques often have their owners, working in store.
- Indie boutiques usually do not return unsold product to the manufacturer unless defective.
- Indie boutiques with sales of 50%-75% off of their initial price, are losing money.
- Indie boutiques usually don’t have large budgets for advertising and rely on direct marketing to their established clients via emails and social media.
- Indie boutiques profits go back into the local community cause the owners live nearby and are involved in the local community.


Both tend to have the same retail pricing, but the profit margins are tighter for smaller, independently run boutiques. So smaller boutiques have to make themselves visible and be involved to their local community to compete with the massive advertising of the big guys. Just something to think about when you head out to shop.

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