Interested in knowing how to start your own electronic shop business in India? We bring you a detailed and easy guide that will help you understand the process.
From fans to AC, oven to the fridge, lights to vents, phones to television and laptops and wristwatches, we are surrounded by electronics. Gadgets have made our life super easy as it simplifies the work and delivers instant outputs.
With the increase in demand for electronics, it has become one of the best business ideas in India. So let’s straight jump into the steps for starting an electronic shop business.
How to Start Electronic Shop Business in India
Starting an industry in electronics can be very challenging as this industry is volatile and can be difficult for startups if they lack a good blueprint to compete with many other established names in the business.
Hence starting an electronic shop business is a safe option and a profitable one. If everything is planned well in advance and one understands the business thoroughly then you can have a successful business. So here’s how to go about starting a business and opening an electronic shop business of your own.
Here are the steps to start an electronics store:
Investigate The Competitors
The first rule of all businesses is to investigate the competitors. Know all about them, what they are doing, their products, services, growths, success rate, failures, and marketing strategy.
There is a great deal that you can learn from it, things you should do and things that you should not. Knowing your competitor’s business module well will help you bring originality and uniqueness to your store that will set you apart.
Location plays a key role in the success of your store. The location needs to have proper accessibility which will also improve the survival of the business.
The location should convince the franchise to tie up with you which will give a lot of visibility to your store and eventually help in the growth of your business.
Set Up An Office Space
Set up a nice office space that will attract your customers and mainly the franchise companies when starting your electronic shop business. Having a nice base would show the seriousness of your business.
This gives psychological satisfaction to the customers of the displayed products and also gives a nice plush experience to them. This would also give the real feel of the product and make them realize what they really feel about it.
Doing Research About Franchise
Do deep research on the franchise electronics companies and the know-how they function this way you would be able to determine which of these franchises fits your budget, personal interest, and goals.
Know all the parameters and check beforehand if you qualify for the requirements. Once done, get an appointment with them to discuss everything related to the franchise.
All business heavily relies on the investment and the capital it raises. The capital needed in the initial days is a lot hence it is important that you start raising funds from early on. As per a survey, 57% of small businesses depend on personal savings initially.
You need funds for things like store inventory, location, products, lease amount, store fixtures, employee wages, marketing, etc.
Register Your Business
Registering your business is mandatory and there is no other way around it. Registering your business gives it a legal existence and also registers the name in the particular industry.
The government will identify your business only after you register it through the official agencies. This would also help you with a simplified taxation process as well as help in running your business smoothly.
Hiring Employees In An Electronics Store
You must hire employees to run a smooth electronic shop business. The people you need to hire are for the following positions:
- Floor Manager
- Promotional Head
- Stock Manager
- Sales Representatives
Other departmental duties include-
Business Insurance For An Electronics Store In India
Nothing in life is predictable. Accidents can happen to anyone whether big or small hence insurance is important that can cover all the damages. The insurances are an altogether separate wing with different types. Some common insurance policies that are offered for an electronic shop business are-
- Electronics store Crime insurance
- Electronics store Cyber liability insurance
- Electronics store Worker’s compensation
- Electronics store commercial auto insurance
- Electronics store business property insurance
- Electronics store general liability insurance
You can get them from private companies or government agencies.
Business License & Application Requirements For An Electronic Shop Business
A license gives a legal authorization on every product you sell, the exceptions being:
- If your store’s display space is less than 20% of the total display space, a license won’t be required.
- If you’ve less than 30 electronics for display or sale, a license is not needed.
Mandatory requirements for the application include-
- Sales Tax Identification Number
- For only electronics services- Electronic and Home Appliance Service Dealer License (2 years validity)
- License Number
- For selling second-hand electronics- Second Hand Dealer General License (2 years validity)
Since the electronics business falls in the category of retail businesses, you would have to obtain a state license for the same. So why do we need a license? Licenses act as a legal document or authorization that all businesses and the products you sell. Not all business requires licenses but you definitely need the following conditions:
- If you have less than 30 electronic goods for sale or display, then you do not need a license.
- Measuring in linear feet, if the display space of the store is less than 20% of the total display space, there is no requirement for a license.
Requirements for the application
To get an electronics store license, the following documents or legal identities will be required.
- License application
- Sales Tax Identification Number
Again, there are two more subdivisions in the licensing part. If your plan is to offer service for the electronic good, you would need an electronic and home appliance service dealer license.
If you are selling second-hand electronics goods, you would need a second-hand dealer general license. These licenses have a validity period of 2 years post which you would need to renew them to continue the business operations.
Online Application Process
Three things that are required for the final stage of getting an EIN (Employer Identification Number)-
- Online Application
- Eligibility check
Make sure all the necessary documents are with you before you apply and this is a very important step as it might cause rejection during the process if you pause or take too long to fill in the form.
The check covers TIN, the location of the business, and other conditions pertaining to ownership and limitations of EIN applications. It is a single-session application process where resuming back to the webpage is impossible.
Once you submit, the verification process is initiated. Verification is done with the TIN you provide and the advantage of an online application is that you get the work done immediately. You get your EIN after verification and all you have to do is print it with the downloaded copy.
Also Read: Top 10 Business Ideas in Mumbai
How Can Lio Help In Starting An Electronic Shop Business?
Lio is a data organization app that not only arranges your data as per your preferences but also makes them available over the phone and to various users.
When an entrepreneur would first start their electronic shop business, they will just have a few workers, which means everyone will be working beyond their potential.
The business owner may keep track of time using Lio’s timesheets. Utilizing an app like Lio that can record employee timesheets would benefit not only employees but also management staff.
Lio also enables members and workers of a company to access a variety of data, services, systems, and other resources without having to look for them on a storage device or in multiple cloud storage places.
They have real-time access to and can analyze the data being collected. Any employee may immediately review the data they are keeping in the centralized repository.
Step 1: Select the Language you want to work on. Lio on Android
Step 2: Create your account using your Phone Number or Email Id.
Verify the OTP and you are good to go.
Step 3: Select a template in which you want to add your data.
Add your Data with our Free Cloud Storage.
Step 4: All Done? Share and Collaborate with your contacts.
Frequently Asked Questions (FAQs)
How much does it cost to open an electronics store in India?
It all depends on the location. In a big city, it can cost anywhere around INR 10 Lakh and above. In a small town, it can cost around INR 1 lakh.
Can the electronic shop business be profitable?
Yes, they are pretty profitable as there is an advancement in the technological upgrades and electronics sector.
How do I start a small electronic business?
The basic steps to be taken are:
Analyse your Existing electronic businesses
Raise funds, find proper investors or get a loan
Curate a solid & competitive business plan
Know all requirements of electronics suppliers
How much is the margin in electronics?
Depending upon the type of products, for example on an average mobile phone you can earn up to 5-7% of margins.
How can I get an electronics dealership in India?
These are the ways through which you can get a dealership in India:
Before signing the wholesalers, do a quality check.
Buy a bulk wholesale list.
Enrol on local trade shows.
Use powerful engines like Google
Obtain Bulk Orders from companies exiting the industry.
Utilise Yellow Pages.
Buy from Big International Companies.
What is the importance of a franchise disclosure document?
This document is important as it contains important details all related to the franchise and how it functions. It is important that the store owner reads and gets aligned with all the details.
Yes, the competition in this field is a lot but if you decide on opening a franchise electronics shop, it is going to be a much better decision that would ultimately lead to good growth and a lot of success.
Studies have already revealed that the success rate of franchise businesses is 95% compared to the success rate of startups, which is 15%.
Hence starting your own electronic shop business would be a much better idea if done properly and if you follow all the above-mentioned instructions.