What is it and who is it suited to?
Beyond the stall - what's next?
What is it?
Becoming a market trader is a great way to start your own business, as it’s a fairly low-cost and straightforward industry. What’s more there has never been a better time to set up your own stall and start trading. According to a 2009 report by the Retail Markets Alliance, markets in major cities largely outperformed high street shops during the recession, as people increasingly sought original and inexpensive bargains. The findings of this research revealed that the UK’s retail and wholesale markets sector has an annual turnover of £7.6bn, generated by 47,000 small to medium businesses. And in addition, the UK’s 1,400 markets employ around 95,000 people, which is good news for the turbulent job market.
As a self-employed trader you can enjoy working in a friendly environment and amongst like-minded people, while selling products you're passionate about, or perhaps that you have made yourself. If you’re not planning on selling your own goods, deciding what to sell and then finding the right products are often the hardest parts about opening a stall. It’s worth investing time and effort into sourcing your merchandise, because if it doesn’t sell, your business won’t survive for long.
Before setting up your own stall, it’s important to be aware of what the job entails. While running a market stall can be flexible, traders tend to work long hours, and depending on the type of stall, the working day may start extremely early in the morning, especially if the trader needs to attend wholesale markets first thing. Setting up the stall in an eye-catching and presentable manner is crucial, and may take an hour or two, so factor this in when evaluating your working hours. Some markets are outdoors, and some are covered, while some run everyday, others once a week or just at weekends, and others may only be on a monthly or seasonal basis. It’s not uncommon for traders to work at a number of different markets during a given week, so you may decide it’s more lucrative to spread yourself over a number of markets, depending on where you’re based and how feasible it is to do this.
Who is it suited to?
To become a market trader you don’t need any specific qualifications, although good numeracy skills and a strong grasp of English are important. It’s hugely beneficial to have a personable attitude and a flair for sales, because ultimately this is what will determine your success. Darren Lovatt, senior market officer at Newgate Market in York explains that solid retail expertise and knowing what sells are crucial attributes of a successful trader. As well as strong communication and negotiating abilities, excellent customer service skills and heaps of enthusiasm will go a long way to help you achieve your goals.
It’s important to bear in mind that market traders must legally be 16 years or over. Most training will be informal and will involve practical experience by learning on the job and observing others at work. However, there are a few courses available via local authorities, which you may find useful. You may also benefit from lessons in bookkeeping or short business courses, although these are not obligatory to set up your own stall. It is possible to learn basic business skills without signing up for a course, however make sure you know how to work out profit margins and calculate your costs and that you’re comfortable with the financial aspects of running a stall before launching.
Above all, before you commit to setting up a stall, make sure you’re aware of what the job entails. Days can be long, with many hours spent standing on your feet in the open air, although this is what tends to appeal to people desperate to escape the nine-to-five office job stuck behind a computer. Matthew Crawford, who set up his own Caribbean takeaway stall, Easy ‘Nuh, and won the Make Your Mark in the Markets competition in 2009, explains: “Running a business on a market is rewarding, but also extremely challenging – before you invest too much time and finances to your potential project/career change, you need to know it’s suited to you.”
What is it and who is it suited to?
Beyond the stall - what's next?
Planning and preparation
Once you have made the decision to set up a market stall, the first thing to decide is what you’re going to sell. Your success as a trader will be determined by the product line you choose, so it’s worthwhile carrying out extensive research into what’s already on sale at the markets in your area, and what competition you’ll face from established stalls. You may have to start off as a casual trader, which might require standing in queues early in the morning waiting for a stall to become available. Permanent stalls can be hugely in demand, but being a casual trader also allows the market manager to assess your ability to draw in customers and generate sales. Try to find a product line that has not been over exposed at that particular market, because this will stand you in good stead to extend your slot on a more permanent basis. Most market managers look for a diverse range of stalls selling individual products, so originality is key. As a casual trader, selling fruit and vegetables, or other food produce may not be a viable option, not only because they require a large vehicle for transportation, but also a high turnover to continue purchasing fresh items daily.
There are many wholesale markets around the UK that are great places to explore and source products. These often open early in the morning, so check your local authority’s website for more details. Another worthwhile portal for buying goods is The Trader magazine, which offers a huge range of products from clothing and furniture, to jewellery and toys.
Once you’ve decided on what you’re going to sell and you’ve sourced the products, you need to get your hands on a market stall. The majority of markets do actually supply stalls, however some don’t, especially if they’re non-permanent markets, so if this is the case, check the weekly trade press and annual publications for advertisements from stall manufacturers. The type of stall you’ll require will depend on what you’re planning on selling. For example, if you’re going to sell clothing, you’ll probably want a walk-in stall so you can put up dress rails. It is sometimes cheaper to buy a second hand stall, however be sure that whatever you buy is durable and won’t fall apart as soon as you put it up.
The final hurdle in the preparation of your new market stall venture is picking a market you want to trade at, and then securing a place at that market. As mentioned previously, most traders start off on a casual basis, and those who show enthusiasm and create interest from customers will hopefully be allocated more slots, and eventually a regular stall. There are a variety of different markets, such as council operated or privately operated, indoor and outdoor with or without permanent units, weekdays and weekend-only markets. What you’re selling will also have a part to play; does it come under produce sold at farmers’ markets or country markets, or is it better suited to a town-centre retail market? There are a number of other factors to consider when choosing a market, such as pitch costs, parking and rush hour travel times, all of which can affect how many people visit you each day. Think about all these things before deciding what market to go for and then make every effort to convey your commitment to the market manager to give yourself the greatest chance of securing a permanent stall. Matthew Crawford, who set up Caribbean takeaway stall, Easy ‘Nuh, says: “Before committing to a specific market I would strongly advise asking a trader if you can spend a day or two with them so you can see what it’s like first hand. Hands-on experience beats any amount of theory or planning, no matter how certain or organised you think you are.”
According to Darren Lovatt, senior market officer at Newgate Market in York, January is a great time of year to secure a stall because many traders tend to go away on annual leave during this period, when business is typically slow. Markets tend to pick up again around March, so it may well be easier to get a slot on a market early in the year, which is known as the kipper season.
What is it and who is it suited to?
Beyond the stall - what's next?
Rules and regulations
When setting up a market stall there are a number of regulations that you must comply with and it’s vital that you’re aware of any statutory legislation applicable to you. First and foremost you must obtain a licence from your local council to set up your stall. Whether you’re joining an established market, or merely wanting to set up a stall alone on the street, you must have permission to do so from the local authority in your area. Each region is different, so contact your local council to find out how to gain permission. It’s likely that you’ll be asked to fill out an application form, which may entail paying a small administration fee.
As a self-employed person, you must register for self-assessment within three months of starting trading; failure to do so may result in a hefty fine. The easiest way to register is online at HM Revenue & Customs, whereupon you will then have to complete self-assessment tax returns to HMRC at the end of each tax year, in which you must provide details of your income and capital gains. As a self-employed person a market trader is also required to pay National Insurance contributions - check the HMRC website for further details on rates and thresholds.
As with all businesses, VAT is another taxation you must be aware of as a trader. If your turnover reaches the threshold (£70,000 as of 2010) in any 12 month period or less, it will be necessary to register for VAT with HMRC. As of January 2011 VAT stands at 20%, which means that if your goods are standard rated, 20% of your sales will be paid to HMRC. You will however be able to claim back the VAT you have already paid on your purchases. It’s important that you retain good, clear account books right from the start and remember that after the first year of trading you’ll be required to submit your accounts to HMRC.
Obtaining public liability insurance is a legal requirement for anyone setting up a market stall - this will cover you in case of any accidents or injuries to the public during trading. Most markets won’t allow you to trade unless you can prove you’ve taken out this insurance and traders normally need to obtain cover of up to £5m. It’s worth mentioning that if you register with the National Market Traders Federation, you will be offered a free market trader insurance package consisting of public liability and also employers’ liability insurance – which is a statutory requirement if you employ anybody on your stall, even if only on a casual or unpaid basis. There are a number of other providers of public and product liability insurance and employers’ liability insurance for market traders, so shop around to find the best deal for your business.
As a market trader selling goods to the public, be sure to adhere to the Trade Descriptions Act. It’s very simple: don’t sell counterfeit goods and don’t describe your products incorrectly. For example, if you’re selling apples from New Zealand, don’t describe them as British apples. If you do, sooner or later you’ll fall foul of the Trading Standards and will be fined, as well as having your reputation tarnished.
The Sale of Goods Act is another piece of consumer legislation that you must comply with, which is there to help buyers retain redress when their purchases ‘go wrong’. It is in the interest of anyone selling goods or services to understand the implications of the Act and their responsibilities under it. Essentially, what you sell must be fit for its purpose and must also be of satisfactory quality – if it is not, you are obliged to rectify the matter by either exchanging the goods, giving a credit note or a full cash refund. There is no legal obligation to exchange or refund products that are brought back simply because the customer decided they were not right, however it’s worth considering that keeping clients satisfied is the best way to boost your reputation and retain customer loyalty. Ultimately, however, it’s up to you what policy you decide to take.
Food traders, particularly those who sell perishable goods, must also be aware of food hygiene legislation, such as statutory temperature controls in selling and transporting food. You will need to register your stall’s address with the Food Standards Agency and then expect to be inspected by the local council at least once, and maybe twice a year.
What is it and who is it suited to?
Beyond the stall - what's next?
Costs
The cost of setting up a market stall depends largely on what you’re selling and how often you plan on trading. Stalls can be set up with relatively low funds, as was the case for Sebastian Vince, who started a bread stall on the Portobello Road market in London 12 years ago and now runs a larger more permanent stall on the Northcote Road in Clapham. He recalls: “I started my stall initially with £200, which I spent on buying ciabatta. Once I sold them, I bought more with the revenue the following week – it is possible to set up without much money.” However, it’s important to realise that a daily stall will require a larger amount of produce because it’s important to maintain good stock levels at all times. Darren Lovatt, senior market officer at Newgate Market in York emphasises the importance of offering a wide range of products in order to attract customers and to widen your audience. Your initial outlay costs will depend on what merchandise you plan on selling, however it’s worth investing in enough goods to keep you trading for a while. Once you start making a profit, you may well decide to invest much of your income back into obtaining more stock, thus building up your stock supply as you go.
Other costs may include purchasing a vehicle to transport your goods to market each day and your insurance cover – both product liability insurance and employers’ liability insurance if you plan on hiring staff. Most permanent markets provide stalls for traders, however you may have to buy your own stall, especially if you’re a casual trader to begin with. This is another cost to factor in when starting up, although it is possible to get your hands on second hand stalls at reduced prices - weekly trade press and annual publications usually contain advertisements from stall manufacturers.
Depending on the size of your stall, you might decide to bring on staff to help with trading, or even just to lend a hand while you set up in the mornings. You will need to pay them the minimum wage at least, so if you take on staff, be sure to factor in the cost of their wages when working out your finances.
While many traders only accept cash in hand for their merchandise, some, particularly those selling more expensive items, think it’s worthwhile to obtain a chip and pin machine. While this may seem another unnecessary expense at the outset, according to Darren Lovatt, those traders who offer this service tend to sell more goods. Although it takes a small percentage from your sales, these machines may well encourage more customers to buy your produce, particularly if they don’t carry cash. The National Market Traders Federation offers a discounted chip and pin service to its members.
What is it and who is it suited to?
Beyond the stall - what's next?
Beyond the stall – what’s next?
Once your stall is up and running, and hopefully making lots of sales, what is next for your retail career? It may be that you’re perfectly happy with your one stall and have no desire to expand. However, for those who are hungry for further growth, there are a number of options at your fingertips. Typical routes for successful traders include: setting up similar stalls in other markets under the same name and consequently expanding your existing business, or even moving towards a more permanent retail space, such as opening your own shop. You may not realise it, but a market stall is one of the most popular ways into the permanent retail sector. Both Tesco and Morrisons supermarket chains began their lives as individual market stalls, Tesco as a grocery stall at Well Street Market in Hackney and Morrisons as an egg and butter stall in Rawson Market, Bradford. These two retail giants are prime examples of the possibilities that lie before you.
However, moving into a permanent retail space may not be on your agenda at all. Sebastian Vince runs Breadstall on the Northcote Road in Clapham, London. His popular business began as a small table on the Portobello Road 12 years ago, however his Clapham stall is much larger and open every day, all year round, selling a huge range of bakery goods. Occasionally he sets up a stall at farmers’ markets across the capital, however he has no desire to open his own permanent shop. “I believe that with certain products such as ours, it’s better to have a market stall than a permanent shop,” he affirms.
Retail Merchandising Units
Another type of stall worth mentioning is a kiosk in a shopping centre, otherwise known as a retail merchandising unit, or RMU. These are temporary selling stations that are designed to place your products before the most shoppers possible and can easily be set up and taken down and adapted to suit the surroundings of each particular shopping mall. The reason these stations are popular with traders is that they allow you to test new products or services in a low-risk environment with low initial investment. What’s more, you don’t have to commit yourself to a lengthy lease, as contracts can range from two weeks to six months.
You may decide that this kind of stall is more suited to you and your merchandise than a traditional market stall. Above anything else, RMUs tend to benefit from high footfall numbers, which is what every trader hopes for. Shopping malls around the country are usually privately operated so you’ll have to contact the management team from each centre to find out how they operate and what the process is for securing a stall on their premises. Most shopping centres use separate RMU providers to manage their allocation of temporary units: Brand Space and Retail Profile being two of the main providers of such services in malls across the country. The cost of renting these units varies from case to case, and evaluation will be based on a number of factors, including: your chosen shopping centre and its footfall, the time of year, cost of goods, labour, insurance and weekly rents. For further information, contact the management department of your chosen mall.
What is it and who is it suited to?
Beyond the stall - what's next?
Useful contacts
The Trader magazine
http://www.thetrader.co.uk/
Trading Standards Institute
http://www.tradingstandards.gov.uk/
Food Standards Agency
http://www.food.gov.uk/
Retail Markets Alliance
http://www.retailmarketsalliance.org/index.html
Association of Town Centre Management
http://www.atcm.org/
National Association of British Market Authorities
www.nabma.com
National Market Traders Federation
http://www.nmtf.co.uk/
National Farmers’ Retail and Markets Association
www.farma.org.uk
Combined Market Traders Insurance Association
http://www.cmtia.co.uk/
Brand Space
http://www.brandspace.com/
Retail Profile
http://www.retailprofile.com/index.html