Solid Markup Percentage --- Advantage
Clothing and shoes are two products that often have a fairly high markup percentage (the amount charged over cost) compared with other types of retail items. The markup for retail clothing is particularly high for well-known or designer brands.
Little To No Licensing Requirements --- Advantage
To run certain types of businesses, the owner must jump through hoops to get the proper certification and licensing. For instance, food restaurants must apply for food permits and submit to regular health code checks from the city or county. An owner of a clothing store does not have to worry about these types of regulatory issues.
Shrinkage --- Disadvantage
A clothing and shoe store is at a high risk for theft. Theft, or shrinkage, occurs both on the retail floor and in the stocking room at some stores. Shrinkage is expensive to the business and difficult to track down. Shop owners must invest in security personnel, surveillance equipment and loss prevention systems to manage the problem.
Dealing With Leftovers --- Disadvantage
It is difficult to predict the demand for shoes and clothes. It is also difficult to return them for a credit to distributors. The styles, trends and seasons change so often in a clothing or shoe store that managing large amounts of unsold inventory is common.
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