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Retail Business Guide

TABLE OF CONTENTS

  1. Basics to Getting Started
  2. Industry Overview
  3. Operating a Retail Business
  4. Regulations
  5. Financing
  6. Taxation
  7. Additional Resources

1. Basics to Getting Started

Starting a business can be a rewarding undertaking, but it comes with its challenges. Before starting a business in Ontario, it is wise to do your research. There are several issues to consider such as regulations, financing, and taxation, managing your business, advertising and much more.

For regulatory or legal questions, it may be useful to contact a lawyer that deals with business regulations through the Law Society of Upper Canada's Lawyer Referral Service.

For further information:
call 1-800-268-8326
visit the website: Law Society of Upper Canada's Lawyer Referral Service

2. Industry Overview

The retail sector is one of the most important sectors in the Canadian economy. It is defined as the retailing of merchandise in small quantities to the general public generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise.

Industry Canada reports that the portion of the gross domestic product (GDP) in the Retail Trade sector increased from $49.4 billion in 1999 to $74.6 billion in 2008. Between 2007 and 2008, the total value-added of the Retail Trade sector increased by 3%.

Source: Industry Canada - Canadian Industry Statistics: Retail Trade (NAICS 44-45), January 2010.

3. Operating a Retail Business

Store Location - "Little Things" Mean a Lot

This fact sheet takes up site selection criteria and offers questions the retailer must ask before making the choice of store location.

For further information:
see the document: Choosing and setting up a location

Selling Products on Consignment

Selling goods on consignment is described as a situation whereby goods are shipped to a dealer who pays the consignor only for the merchandise which sells. The dealer, referred to as the consignee, has the right to return the merchandise which does not sell and without obligation.

Market Research

This guide describes the basics of market research and marketing for your business.

For further information:
see the document: Market Research

Setting the Right Price

Setting the right price can influence the quantities of various items that consumers will buy, which in turn affects the total revenue and the profit in the store. In the end, the right price for the product is the price that the consumer is willing to pay for it. Hence, correct pricing decisions are a key to successful retail management.

For further information:
visit the website: Directory of Prices and Price Indexes

Counterfeit Currency Detection

It is very important that all staff working with cash should be trained to recognize counterfeit currency. The Bank of Canada offers free printed materials, tools, and information services to help retailers to quickly, easily, and reliably identify genuine bank notes.

Selecting Your Inventory

Keep ongoing, accurate inventory records in order to continually monitor the ratio between stock and actual sales. This helps to minimize lost sales and money tied up in inventory, as well as determine the demand for different products.

Selecting Your Supplier

This fact sheet lists points that should be noted before making contact with a potential supplier.

For further information:
visit the website: Finding and managing suppliers

4. Regulations

This document will assist you in navigating federal, provincial and municipal regulations that apply to a number of industries and businesses.

For further information:
see the document: Business Regulations Guide

Video/DVD Rental License

Businesses selling or renting videos directly to the public (including by vending machines) require a Film Exchange Retail Licence. Businesses distributing videos to other retailers require a Distributor's Licence. Application forms and information can be obtained through the Theatres Branch of the Ministry of Government Services (MGS).

For further information:
visit the website: Theatres, Film, Video and Video Games Licensing

Music Licence

Performances of music in public, i.e. offices, stores, etc., require a licence. This licence is necessary whether the music is performed by live or recorded means.

For further information:
please call 1-800-557-6226
visit the website: Society of Composers, Authors and Music Publishers of Canada (SOCAN)

Selling Tobacco products

The stocking or selling of cigarettes that do not bear an Ontario tax mark (yellow tear strip) is prohibited. Unauthorized possession of unmarked cigarettes may result in penalties, fines, imprisonment and forfeiture of the product.  The Tobacco Act prohibits the sale of tobacco products to young persons (18 years of age or less) and requires retailers to post signs that inform the public that furnishing tobacco products to young persons is prohibited by law.

For further information:
visit the websites:
Selling Tobacco - Tobacco (Access) Regulation
The Tobacco Act - Health Canada
Tobacco Tax

The Smoke-Free Ontario Act

As of May 31, 2006, the Ontario government is prohibiting smoking in all enclosed workplaces and enclosed public places. The legislation will also strengthen measures to ensure only those 19 years of age and older can buy cigarettes and will phase out the display of tobacco products, with a complete ban beginning May 31, 2008.

For further information:
please call your local Public Health Unit
visit the websites:
Public Health Unit Locations
Ministry of Health and Long-Term Care
Smoke-Free Ontario Act

Selling Ontario Lottery Gaming Corporation (OLGC) tickets

In order to become a lottery retailer, a request must be made directly to the OLGC by using one of the following methods:

  • by mail: OLGC Contact Centre, 70 Foster Drive, Suite 800, Sault Ste. Marie, ON P6A 6V2;
  • by e-mail: OLGCinfo@OLGC.ca; or
  • by fax: 705-946-6788;
  • by telephone: 1-800-387-0098.

For further information:
visit the website: Ontario Lottery Gaming Corporation (OLG)

Selling Break Open tickets - Alcohol and Gaming Commission of Ontario (AGCO)

A license is required from the Alcohol and Gaming Commission of Ontario in order to sell Break Open tickets.

For further information:
please call 416-326-8700 or 1-800-522-2876
visit the website: Alcohol and Gaming Commission of Ontario - Break Open Ticket

Employment Regulations Guide

The Employment Regulations Guide is designed to help you navigate through the federal and provincial government regulations on employment. Although many of your questions will be answered here, the list of regulations given in this document is not exhaustive.

For further information:
see the document: Employment Regulations Guide

Labelling

Most goods produced domestically or imported into Canada require some form of consumer package labelling. Retailers should become aware of these requirements before offering goods for sale in Canada. The Labelling act(s) are enforced and administered by the Competition Bureau.

For further information:
visit the website: Competition Bureau

Labelling of Textiles

Under federal legislation, most consumer textile articles offered for sale in Canada, including clothing, carpets and upholstered furniture must bear a label with information on fibre content and dealer identity. Fibre content information must be provided in English and French. Dealer identification may be provided in the form of a CA Number (for Canadian dealers only) or by listing the complete name and postal address of the responsible dealer.

For further information:
please call 819-997-4282 or 1-800-348-5358
visit the websites:  
Guide to the Textile Labelling and Advertising Regulations
CA Identification Number for Textiles

Labelling of Upholstered and Stuffed Articles

Upholstered and stuffed articles in Ontario must have labelling that indicates the type(s) of filling materials used in the article by a generic name.

For further information:
visit the website: Technical Standards & Safety Authority - Upholstered & Stuffed Articles

Labelling of Food

The Canadian Food Inspection Agency administers the federal labelling requirements for pre-packaged food under the Food and Drugs Act and the Consumer Packaging and Labelling Act and Regulations, including requirements for ingredient labelling, durable life dates, nutrient content claims, mandatory nutrients declarations and foods for special dietary needs.

For further information:
visit the website: Retail Food

Labelling of Consumer Products

Under the Consumer Packaging and Labelling Act, the Competition Bureau administers the packaging and labelling of pre-packaged non-food products at all levels of trade.

For further information:
visit the website: Guide to the Consumer Packaging and Labelling Act and Regulations

Bar Codes

The Universal Product Code system provides manufacturers, retailers and distributors with a management and information tool to uniquely identify products and logistical units throughout the supply chain.

Competition Act

The Competition Act governs misleading advertising and deceptive marketing practices for all businesses in Canada. The Act, which is administered by Industry Canada, defines which marketing practices are illegal and the process of complaint investigation.

For further information:
please call: 819-997-4282 or 1-800-348-5358
visit the websites: 
Competition Bureau
Misleading Advertising and Labelling

5. Financing

CBO has created documents, which provide an overview of some of the main financing options for individuals starting and operating a business in Ontario, including programs offered or supported by the government.

For further information:
please call 1-800-567-2345
see these documents:
Financing for Starting a Business Guide
Financing for Established Businesses Guide

6. Taxation

Dealing with Business Taxes

All businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply. For information specific to your organization you should consult an accountant or financial professional.

For further information:
See the Taxation Guide

Other Resources:
Ontario Ministry of Revenue: 1-866-668-8297
Small Business Tax Help (MOR)

Canada Revenue Agency: 1-800-959-5525
Canada Revenue Agency (CRA)

7. Additional Resources

Trade Data and Statistics

Statistics Canada maintains records related to sales, inventories and operating data for retail and wholesale businesses and the number and value of new motor vehicles sold in Canada. Statistics Canada also maintains detailed monthly trade data by commodity or industry and records related to exports and imports on a customs basis.

For further information:
please call 1-800-263-1136
visit these website: Statistics Canada - Retail trade, operating statistics, by province and territory

Online Training For Retailers (Privacy)

This site will help you develop procedures to protect the personal information you collect and to prepare your staff to respond to enquiries and complaints from the public.

For further information:
please call 1-800-282-1376
visit the website: Online Training for Retailers

Business Information by Sector

Business Information by Sector features a listing of links which provide information on various industry sectors.

For further information:
visit the website: Business Information by Industrial Sector

Retail Council of Canada

The Retail Council of Canada provides advocacy, research, education and services that enhance opportunities for retail success, and increase awareness of retail's contribution to the communities and customers it serves.

For further information:
please call 416-922-6678 or 1-888-373-8245
visit the website: Retail Council of Canada

Centre for the Study of Commercial Activity (CSCA)

The CSCA is a university-based research body established to study the commercial and retail sectors. The CSCA conducts research, publishes reports, hosts seminars and offers training.

For further information:
please call 416-979-5379
visit the website: Centre for Study Commercial Activity

Scanner Price Accuracy Voluntary Code

The Competition Bureau has endorsed the Scanner Price Accuracy Voluntary Code, which evolved from the collaborative efforts of the Retail Council of Canada, the Canadian Association of Chain Drug Stores, the Canadian Federation of Independent Grocers and the Canadian Council of Grocery Distributors.

The purpose of the Code is to:

  • Visibly demonstrate retailer commitment to scanner price accuracy;
  • Provide retailers with a consistent national framework for dealing with scanner price accuracy issues; and
  • Provide the retail industry with a mechanism for consumer redress in scanner price accuracy cases, to be managed by a Scanner Price Accuracy Committee.

For further information: 
visit the website: Scanner Price Accuracy Voluntary Code

Statistics

Associations

There are many associations that may be of use to retail store owners. Although it is not necessary to join a retail-related association, there can be advantages in becoming a member because they:

  • promote and exchange marketing and promotional ideas among members;
  • establish and encourage high standards of quality and professionalism; and
  • represent and advocate on behalf of members.

Examples of associations include, but are not limited to:

Retail Merchants' Association of Canada (Ontario) Inc.

The Retail Merchants' Association is run by retailers for retailers, and offers a broad range of programs designed to keep independent retailers strong and profitable and provides an online advertising initiative called Real-time Merchant Advertising.  Association members can also be eligible for lower credit card merchant discount rates.

For further information: 
please call 416-293-2100 
visit the website: Retail Merchants Association of Canada Inc.

Websites of Interest

 

Need more information?

Click: Canada Business
Call: The Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888
Visit: Find a Community Partner Location near you

DISCLAIMERS

Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.

Date Modified: 2012-04-26

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