My retail business is really struggling. What should I do?

Hi Aunty B,

I just read one of your articles on SmartCompany where you were giving sound advice to a person wanting to own her own bridal boutique. I thought that you may be interested to see what the Australian retail industry that I am a part of is actually dealing with right now.

It has been reported that within three years, there will be 88,000 retailers closing their doors in Australia and this, as you must know from the news, has already commenced.

Unless our government follows the UK example of taxing the personal goods that are being imported without having to pay import tax and customs fees etc, Australia is going to go through the biggest and longest Depression this country will ever see. We will literally be going back to the 1950’s whereby only one member of each family will have a job. One would think that the Government would benefit from taxing imported personal goods.

As an importer of an exclusive brand of shoes and gowns, I have now become a destination for women to come to my salon so that they can try on these items so that they can be sure of their sizing prior to buying them online from overseas. I pay such high taxes, freighting costs and GST to import goods and the general public don’t, so how do I compete and keep my business open?

Even the local pharmacy opposite my store is losing customers who are able to buy cheaper vitamins and toiletries online, and even Australia Post is being affected as they have to pay more people to deliver these small parcels.

My option to exercise my new lease is fast approaching and if nothing is done by our government about this issue immediately I will be closing down my business between now and November. I don’t know if this email is going help give us retailers a level playing field with the goods being imported, but hopefully you can make these changes though your government contacts.

Putting it out there for retailers.

Dear Putting it out there,

I did have a conversation recently with one of my contacts very high up in government. Truly! And this is how it went.

Me: “So what are you going to do about the poor retailers that are really feeling the pinch from online overseas competitors?”

Him: “Nothing.”

Me: “But they are really suffering.”

Him: “No they aren’t. The shops in my area are doing fine.”

Me: “But overall retailers are really struggling.”

Him: “That’s because they don’t provide the services the customers want. Look at the figures. Even if we bring in an import tax it will make only a small difference.”

Me: “But even that small difference might make a well… difference.”

Him: “No it won’t. Retail is going through structural change. We can’t change the way people buy. It’s called globalisation.”

Me: “You help other industries going through huge structural change that have little hope of long-term survival. Look at the car manufacturing industry. You tip buckets of cash into that.”

Him: “That’s not me. That’s Kim Carr who likes cars and unions.”

Me: “So you are never going to help the poor old retailers?”

Him: “We are never going to inflict an import tax on the Australian consumer. Ever.”

So there you have it. Straight from the horse’s mouth, I am afraid. There is no use whatsoever waiting for this government to act. I promise you. They never will. And neither will the Coalition. And even if it did I am not sure it would help your business long-term. I feel for you because I know the hard work, passion, time and money you have put into your business.

But what you have to realise is this:

The Government is not going to come to your rescue and the tax would not solve your problems anyway.

You have to quickly change the way you do business. You have created a try on store for passers by and you are carrying the cost of your suppliers by stocking I suspect, locally made gowns.

Instead you need to create a loyal business. Do you have a detailed list of people who purchase from you? Can you immediately contact them and offer them great prices to reduce your stock? Can you then restock with clothes that people will buy from you and that you can import competitively? Can you also approach your landlord and say to him that you are vacating his shop and it will stand empty for the next six months unless he does a short-term deal with you for lower rents? Take your accountant along and try to get him or her to agree to better terms.

What you should not be doing is exactly what you are doing: waiting for a miracle. Miracles are few and far between in business.

Be smart,
Your Aunty B

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