The market for disposable baby diapers is expected to reach more than $33 billion worldwide by 2017, according to an October 2011 report by Global Industry Analysts. Despite a return to cloth diapers for economic reasons, the low penetration of disposable baby diapers in developing countries shows a market gap that savvy business owners could exploit. Establishing a retail business selling disposable baby diapers is a way to capitalize on this opportunity.

A retailer buys products directly from the manufacturer or its representative, or a wholesaler, importer or agent. The retailer then resells them to customers for personal use. The retail market in disposable baby diapers is already highly competitive with multiple manufacturers supplying large retail chains with products in bulk. A potential business owner should determine whether a diaper retail business has the greatest potential operating as a store or home-based business, mail order, online store or specialty retail. The choice of business model affects the licensing and permit requirements for the company.

Choose whether to structure your retail diaper business as a sole proprietorship, partnership, limited liability corporation or corporation, then register the business and your trading or doing business as name through the office of your secretary of state. To retail diaper products, you will need to register with your state or local government authority for a sales tax permit for collection and payment of sales tax. Most states require a vendor or general dealer's license for a retail business and some states may require proof of the diaper manufacturer's compliance with specific standards.

To compile a business plan and budget, conduct research to identify your potential customer base as well as your suppliers. Comprehensive market intelligence is readily available that provides information on the sales of most consumer products in each region, including disposable baby diapers. Performing market and competitor analysis will help you understand how many people are buying disposable diapers in your area, the competitors from whom they are buying them, and the brands and price points of those diapers being sold.

Multiple diaper supply companies operate across the country. Finding and establishing supplier relationships, credit accounts and mutual trust requires effort. Approach several reputable disposable diaper manufacturers, present them with your business proposal and a request for quotation. The latter should include minimum diaper order quantities, delivery lead times and payment terms based on the sales you expect to achieve. This will enable you to budget accurately for the start up of your business.

Some manufacturers will supply goods on consignment. However, the majority of companies require a credit account based on a good credit score or a down payment against a large order. Approach lending institutions with your business plan and budget, showing projected income, expenses and budget based on your market research and confirmed supply quotations. Establish a source of finance to cover the costs of registration, rental or purchase of premises and fittings, and initial inventory purchases.

Tracey Sandilands has written professionally since 1990, covering business, home ownership and pets. She holds a professional business management qualification, a bachelor's degree in communications and a diploma in public relations and journalism. Sandilands is the former editor of an international property news portal and an experienced dog breeder and trainer.