100% Sure Way To Profit From The 2009 Retail Collapse
North American retailers will be facing an apocalyptic plague of bankruptcies, store closures and takeovers starting right after the holiday season as the latest retail results for the critical end of year sales seem to be the worst in almost half a century. Some analysts are calling for anywhere between 12,000 and 20,000 large "big box" stores and a total of almost a quarter million other retailers to be closed in 2009, joining Linens ‘n Things Inc., Circuit City Stores Inc., Sharper Image Corp. and Steve & Barry’s LLC, which are already sought bankruptcy protection. Talbots Inc., AnnTaylor Stores Corp., and Sears Holdings Corp. are already in the process of closing down a vast number of underperforming locations.
February of 2009 will most likely become known as the Bloodbath Month as many chain retailers will file financial reports in that month, and this year they will be accompanied by bankruptcy protection filings as well. The retail pain will be spread across the spectrum of brick and mortar operations: department stores, specialty stores, grocery stores, drugstores, and all sorts of other major chains.
The effect this will have on shopping centers across North America will be devastating. Many of these malls will not be able to operate in the absence of their big box anchor stores and will be forced to close, eliminating some of the other individual and smaller chain retailers who might have otherwise been able to maintain their presence in the malls.
In the avalanche of all these lemons, how would it be humanly possible to make lemonade? By analyzing the retail data, it is evident that there is one aspect of retailing which has not been devastated by the collapse of the American economy, but is actually thriving: Discount stores! Wal-Mart shares gained 16 percent in 2008 while many other companies suffered drops of over 90%! So why not open your own discount store?
No, I have not gone insane and I am not suggesting that you start to get into competition with the juggernaut based in Bentonville, Arkansas. There are many minor niches which can be exceptionally profitable if you know what you're doing and you can act fast.
This is not a long range plan. In order to make a killing you should plan to have your own discount store open very quickly, no later than March 2009. There will be endless empty stores which can be leased for a fraction of what they would have fetched even a year ago, and the landlords will be very willing to provide all sorts of incentives to get you in there, including leasehold improvements to your specification, and several months of free rent!
The way you benefit from the huge upcoming retail bankruptcies is by buying their distressed stock. No, I'm not expecting you to march checkbook in hand to the headquarters of a national chain and offer to buy all their stock, but there are literally hundreds of liquidation retailers and etailers which do just that and then blow the stock out at pennies on the dollar. It's absolutely incredible how cheap you can buy this stuff for right now! You can buy a few cases, a few pallets, or a few truckloads, fill your store, and then watch the customers rush in! You won't need enormous financing, as you'll find that if you play your (credit) cards right you might be able to finance your entire startup on the available balance of a couple of Visa cards, and make enough profit to break even in the first month!
The key is price, price, price. You have to not just undersell your local competition, you have to blow them away. Keep your margins relatively thin and make the big money on volume. Price-challenged consumers in your region will make a U-turn away from the stores which charge twice as much as you do for the same item and will become your loyal shoppers. It's not at all unusual to be able to sell a product which is available in conventional retail stores for $9.95 in your retail outlet for $1.99 and still be doubling your money on it!
Don't forget groceries. Although people may not be able to afford all the toys and trinkets, they will still have to eat! Check out "banana box" liquidators who will sell you perfectly good (if maybe package-scrunched) food for 10% to 20% of their retail price. Imagine the volume you can do in those items!!!
So... what are you waiting for? This recession won't last forever, and you have to strike while the iron is hot. Get out there and get that discount store open now!
More by this Author
Genovese pasta sauce has been Naples' best kept secret for over 400 years. This incredible onion-beef sauce simmers all day long until it's poured over steaming hot pasta and covered in Parmigiano Reggiano. Irresistible!
This is the definitive guide to the fuel economy of the 250 top-selling motor scooters from 50cc to 800cc expressed in mpg and km/l.
The one and only real Braciola: a slice of prime, lean mega-pounded beef, filled with the most delectable mixture on Earth; rolled, browned and then simmered in sauce all day long! Yum!