Business Plans

How to Start a Factory Outlet Store In India?

Start a Factory Outlet Store

Do you hope to Start a Factory Outlet Store? As a lot of customers visit factory outlets in India, these outlets generate double profit. Most factory outlets are large warehouses where surplus, second-hand, and out-of-date products are sold.  Manufacturers discount their products at factory outlets. Today, many retailers use the concept of factory outlets via franchises. It is a good business opportunity for entrepreneurs to start a factory outlet franchise since this field has a good growth potential for expansion.

At the end of every season, retail stores remove the old merchandise in favor of new merchandise. Retailers rely more and more on factory outlets to offload out-dated merchandise, making room for new merchandise. By franchising these factory outlets, retailers are able to sell old merchandise at a discount price, which is an excellent business opportunity for discount clothing franchises. Further, franchising these outlets helps the company generate high profits. For any entrepreneur who is interested in franchises and wants to invest in a factory outlet franchise, opening a discount clothing store franchise is a great idea.

Pros and Cons of Starting a Factory Outlet Store

Launching a factory outlet store has both pros and cons. When developing a strategic plan, would-be factory outlet store owners should consider both the advantages and disadvantages of factory outlet ownership.

The PROS of Factory Outlet Startups

  • Benefits of a brand. In addition to the benefits of brand recognition and nationwide marketing, factory outlet stores also offer other advantages not available in unbranded outlets.
  • Models of operations. Many manufacturers provide proven operational models and processes for their factory outlets. You will have to adhere to brand protocols, processes, and workflows.

The cons of opening factory outlets

  • Control is less. Independent businesses have more control than factory outlet store owners, there’s no way around that. A factory outlet startup may not be a good fit for you if you chafe under external controls.
  • Inventory sourced from a single source. Factory outlets represent the same brand. Period. You will not be able to sell multiple brands in each product category — making it even more imperative that you exercise caution when selecting a brand partner.

Factory Outlet Business Plans: Best Practices

Your startup factory outlet store needs a strong business plan to succeed.

A business plan covers a range of topics, including startup finances. Investors and lenders heavily rely on the financial forecasts in your business plan, so fraudulent figures and vague forecasting can sabotage your funding efforts.

It is therefore essential to understand business plan financial basics in order to write an effective business plan for factory outlet stores.

Analyzing the local market

In light of the fact that your factory outlet store will primarily serve local customers, one of the first planning steps is to determine the size of the local market. We often hear stories about factory outlet stores that struggle because the owner didn’t know how to target and sell to a localized audience. By researching the local market thoroughly before you open your shop, you can avoid this common mistake.

You Can’t Ignore the Competition

Find out how many competitors there are in your area before opening a factory outlet store. Are the existing competitors doing well? Knowing your competitors’ strengths and weaknesses is essential to effectively competing against them.

Take a look at what others are doing in this space

Talking to somebody who is already running a factory outlet store is imperative if you want to start one. Your local competitors are unlikely to talk to you. What do they gain?

Having a factory outlet store owner outside of your community, however, can be a great learning resource for you, provided that you are not directly competing with them. New entrepreneurs will often offer advice to other business owners. To find someone who is willing to share his wisdom with you, you may have to contact several business owners.

What’s the scoop on how to contact an owner of a factory outlet store in another city?

Factors to consider when acquiring factory outlets

In planning your startup, you have invested a great deal of time and energy. You probably don’t know this, but startup factory outlet stores consistently don’t perform as well as acquired factory outlet stores.

You must at least consider the possibility of putting your startup plans on hold in order to explore acquisition opportunities for financial risk management. Your company’s financial standing will be shaped by establishing factory outlet stores with reliable revenue streams and loyal customer bases.

Also, with an acquired business, lenders and investors are able to see its assets and earnings.

Perhaps franchising is the best option

When you purchase a franchise, you can benefit from the ideas and systems of other franchisees and receive strong support from the home office.

It would be wise to determine whether there are any franchise opportunities that could help you in your entrepreneurial journey before opening a factory outlet store.

Here is a link to our franchise directory, so you can see if there is a franchise opportunity that suits your needs. Maybe you’ll find a franchise opportunity that you didn’t even know existed.

Also Read: A step by step guide to open a school in India

CEO & Editor
I'm Ved Prakash, Founder & Editor @Newsblare Media, specialised in Business and Finance niches who writes content for reputed publication such as,, Motley Fool Singapore, etc. I'm the contributor of different... news sites that have widened my views on the current happenings in the world.

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