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I'm interested in opening a small shop to sell directly to consumers. This type of business is extremely common in Peru. Most people do not shop at supermarkets for several reasons. First of all, supermarkets are generally more expensive than local shops. Second, people don't have cars and so getting the goods from the supermarket to their doorstep is challenging. Finally, Peruvians generally don't plan ahead well and several trips to "la bodega" (the small store) per day are common.
On my street alone there are already three bodegas, and my wife and I buy from all three of them. In my opinion, they are very unprofessionally run. It is not uncommon to go to the bodega to find the gate closed and the store unmanned. The proprietor has simply gone in the back to do something else (kitchen, television, toilet, whatever) and if repeated pounding on the gate doesn't bring him back, you wander off to one of the other bodegas in the area. Additionally many times when buying products you will find that the stores are completely out of stock - and not on uncommon items. The same yogurt I bought there yesterday and the day before has run out because they didn't realize they were running low and didn't reorder.
The prices you pay for the product varies based on who's minding the store. If it's mom, the yogurt is S/ 4.20 but with dad it's S/ 4.00 and if it's daughter she stares at the yogurt blankly and bellows out "How much is the yogurt again?!" If no one answers her, you can tell her any price you want and she'll sell you the product at that price. The bodegas have no set opening or closing time. If you figure out that you need something urgently at 10:00 at night, you have no idea which bodega will be open. They might all be closed or all open.
I figure there is opportunity there if someone chooses to be professional, organized, and follow good business practices. I used to work for Burbank Aircraft Supply in Los Angeles County in the JIT inventory management area, so I know how to calculate average weekly consumption, lead times, and economic reorder quantities as well as how to divide inventory into A, B, C, D, and X based on their economic viability. My plan is to start a bodega on a 7-11 concept (open at 7, close at 11).
In my opinion, the best time to start is in the summer. This is the slower part of the year and it's the time when many shopkeepers throw in the towel and surrender their leases or just sell the business. People do not generally buy as much during this season due to the heat and are more focused on buying beverages and a type of fruitcake called "Panetón" that is in big demand around Christmas (which is in the middle of summer, here). The advantage is that you can start with a smaller product line and still keep customers happy. I figure the two most popular beers (Cristal and Pilsen), the two most popular soft drinks (Coca-Cola and Inca Kola), and the two most popular fruitcakes (a name-brand one like D'Onofrio plus a no-name one that can be bought from one of the local bakeries) and play it by ear from there to expand into the Pepsi or Backus line of drinks and/or start stocking things that our family buys (the type of noodles we buy, yogurt, diapers, etc.).
There are three main challenges that I face in starting this business. The main challenge is my wife: She's very opposed to the idea. She considers running a store to be a very low-class activity and doubts that anyone could be successful at it. The second challenge is the paperwork and bureaucracy involved in getting municipal authorization to run a store. That could easily be overcome by simply buying a store that already has its paperwork in order (I have one in mind in a neighborhood close to my house). The final challenge is capital. If I buy an existing business, it will be expensive and will probably come with inventory I don't want or need. If I don't buy an existing business, I'll still have to pay three months' worth of rent, whatever else may be necessary to get the paperwork in order (let's call it expediting fees, as "bribes" sounds so 3rd world), and then paying local distributors to fill the store with inventory.
Any advice or insight would be greatly appreciated.
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