Merchandising Franchise UK – Should You Buy UK Merchandising Franchises?

April 3, 2019

Merchandising Franchise UK – the TOP 10 MUST KNOWS about finding and running successful UK Merchandising Franchises.

Merchandising is an important sub-section of the retail sector. Does buying a merchandising franchise UK give your investments a fair chance of returning profits?

While discussing UK retail franchises, we made a point that franchising – as a business model – has had the biggest impact on the retail sector on the whole.

The reasons for this impact are many and varied. The most obvious, however, is the fact that the retail sector – on account of its enormous size – is always a prime target for innovations and disruptions. If a minor tweak in the overall supply chain of a huge retail business can yield millions of pounds in operational savings, businesses have no choice but to pay attention to these innovations.

Franchising, as an innovation, has stood the test of time so firmly that it now has become a norm in the retail industry. Merchandising franchises UK provide a great example of this change.

By investing in a merchandising franchise UK, you essentially enter the retail sector – a cutthroat space that has little room for individuals. All the goods and bads of the retail industry come into full force here, meaning that a well-run merchandising franchise UK can provide a decent return on your money.

There are, of course, many caveats to this. We will discuss what UK merchandising franchises are, how they work and what downsides you – as a franchisee – need to be aware of before investing in one.

What Is Merchandising?

Merchandising is a term that has a special place in the world of retail. On a broader level, merchandising refers to anything and everything a business does to put products in front of their customers with the sole intention of making sales. This broad definition, however, fails to capture the true meaning of merchandising – something you’ll need to have a tight grasp on if you were to buy and run a merchandising franchise UK.

The Definition Of Merchandising From The Franchising Point Of View

Merchandising essentially refers to procuring products – from the manufacturer, supplier or vendor – and sell them to the end-user for a profit. This is, again, the very same principle on which most retail businesses run.

There’s a slight difference, though.

UK merchandising franchises bring the benefits of scale and supply (usually reserved for large businesses) on board the franchising vehicle. So, in simpler words, a merchandising franchise UK procures their products from a wide array of suppliers, with the help of the franchisor. This, in turn, reduces the role of the franchisor to that of a distributor (unless they also happen to be the manufacturer).

For franchisees, as we just mentioned, the advantage lies in wider profit margins, access to better products and the convenience of a reliable supply chain.

For the franchisor, the major advantage comes in the form of reduced risk. Since most franchisors prefer to ‘sell’ the inventory to their franchisees, they don’t really have to worry about slow-moving products, unsold inventory or shortfall of cash (a common retail problem, otherwise).

B2B Merchandising Franchises UK

The meaning of merchandising has largely come down to ‘promotional’ items. We all have seen businesses distribute, sell and even donate promotional merchandises (casually labelled as ‘fan merch’) – from free accessories like caps, hats, keychains and wrist bands to expensive hoodies, shoes, bags and even cars.

The B2B segment of UK merchandising franchises helps businesses produce these merch items at a reasonably low cost so that the savings can be added to the bottom line.

Recommended: Should You Invest In A UK B2B Franchise?

A Review Of The Merchandising Industry In The UK

Before you shortlist merchandising franchises UK, it’s important to understand what the industry landscape is really like. The merchandising industry in the UK, as a sub-sector of the larger retail industry, demonstrates predictable patterns when it comes to growth, bottlenecks to growth and profitability.

Here are some important numbers in this connection:

  • The UK merchandising industry can be divided into two major sections – the retail merchandising segment and the brand-specific, promotional merchandising segment.
  • The promotional merchandising sector in the UK alone accounts for an annual turnover of close to £1 bn.
  • The total number of distributors in this segment – an important metric to assess the viability of every merchandising franchise UK – touches 2,000. The top 1% among these distributors account for nearly 50% of the total turnover.
  • Sports, entertainment and pop culture are the biggest demand influencers in the promotional merchandising industry.
  • A typical merchandising franchise UK has to compete against retail SMEs to either win shelf space or create new niches.

Sources: PWC, Product Media

While there isn’t much to draw from these numbers, it’s always a good sign for franchisees to know that the industry they want to entre is stable, thriving and provides enough room for new entrants. Despite the enormous competition that all retail segments are notorious for, it’s definitely possible for franchisees to buy a merchandising franchise UK, make smart marketing investments and generate consistent profits.

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How Much Does A Merchandising Franchise UK Cost?

The initial investment and the working capital required to buy and run a UK merchandising franchise are more or less in line with other retail franchises.

“On average, a small to mid-sized UK merchandising franchise will require you to invest £10,000 to £35,000 in initial investment.”

Once you have purchased the franchise unit and started trading, you’ll need regular infusions of capital (usually in the form of reinvestment). Efficiently run and well-managed merchandising franchises UK are reported to break even within 12-18 months of trading.

Recommended: How To Choose The Right Business Structure For Your Franchise Business?

As is the case with any franchise business out there, franchise market research is enormously important for merchandising franchises UK. You just can’t hope to put your money into a venture that you aren’t sure has what it takes to ‘fly’. Many franchisees make the very mistake – only to see their investments go sour.

If you are new to franchising, our series of free franchising guides is something you should go through. Once you have understood and realised what is required of you an independent business and how to work with the franchisor, things will get progressively easier as you go along.

Recommended: The Only Franchising Checklist You’ll Ever Need – Free Download!

The Importance Of Distributors In The Supply Chain Of Merchandising Franchises UK

All that a merchandising business does is buy ready-to-go products from distributors and sell them for a profit. So, it shouldn’t be too difficult to understand how distributors can (and do) impact the supply chain.

A young, independent business just doesn’t have enough industry connections to procure items at reasonable prices. This becomes even more apparent for imported products.

In a retail age defined and dictated by ecommerce, many distributors already have or have been trying to enter the merchandising segment. It takes less than a day to get a website up and running – and it costs next to nothing to do so. So, as a merchandising franchise UK, you’ll need to find reliable, experienced and affordable distributors who won’t try to undercut your profits – and this is where the expertise of your franchisor comes to the fore.

It’s important to work with franchisors who can provide you access to their distributors, allowing you to focus on marketing and sales.

Top Merchandising Franchises UK

Here is our shortlist of some of the most popular merchandising franchises UK.

1. Card Connection

  • Minimum Initial Investment: £40,000 (plus VAT)
  • USP: Popular greeting card business
  • 12,000+ operational franchise units in the UK and Ireland
  • Get inventory from the franchisor
  • Ideal high-street retail business
  • Over 15 years in business
  • Well-established corporate partnerships
  • Full BFA Member

2. Recognition Express

  • Minimum Initial Investment: £35,000 (plus VAT)
  • USP: B2B merchandising solutions
  • In operation for 4 decades
  • Business management training
  • Launch assistance
  • Marketing support
  • Ongoing customer service
  • Full BFA Member

3. Clarks Shoes

  • Minimum Initial Investment: £150,000 (plus VAT)
  • USP: Popular high-street retail brand of shoes and other footwear
  • A globally recognised brand name
  • A billion-dollar company to back up your business plan
  • A chance to generate substantial revenue
  • Can be run part time
  • Franchise finance may be available
  • Ongoing customer service
  • Full BFA Member

4. Vape And Juice

  • Minimum Initial Investment: £25,000 (plus VAT)
  • USP: Leading provider of vaping products and accessories
  • Work within a brand-new industry
  • An opportunity to enter early and establish your franchise unit
  • Business training provided
  • Social media and digital marketing support
  • Dedicated franchise manager

5. Rohan

  • Minimum Initial Investment: £75,000 (plus VAT)
  • USP: A leading retailer of outdoor clothing and activewear
  • A good opportunity for franchisees with sales background
  • Finance assistance may be available
  • Ongoing support and mentoring

UK Merchandising Franchises – The Takeaways

  • The retail sector is rife with competition. Make sure you get your numbers right before you invest.
  • Running a merchandising franchise UK is well-suited for franchisees who can bring on board prior experience in marketing, sales and management.
  • Develop a relationship with your franchisor and make sure you don’t lose out on distributors who can help you widen your profit margins.
  • Talk to franchisees that have already worked with the franchisors you have on your shortlist.
  • Factor in the resale value of the franchise unit in your calculations.

Related: Merchandising Franchises – Search Franchise Reviews Directory

Do you run a merchandising franchise UK?

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