Financial Resource

For most who are opening a dollar store there won’t be a true understanding regarding the powerful impact consumable products will have on their business. Many will see the wholesale prices and instantly turn away feeling they simply cannot afford to pay that much and still be profitable. And there are certainly some very clear challenges associated with carrying consumables. But the potent impacts consumables can have on traffic generation mean you must serious examine how to carry these products. It’s important for you to understand both the pros and the cons. You must leverage the pros, while minimizing the impacts associated with the cons. In this article I present consumable goods are the key to success when opening a dollar store. Make your final decisions regarding product mix before you create even a single order to begin stocking your store.

Consumable products include everything from household cleaners to health and beauty items such as hand soap, shampoo and cosmetics. Paper products, plastic wrap and foil also fall into this category. These are the products routinely used by your shoppers. There are some very compelling reasons to carry a wide assortment in your store.

1) High volume sales. Since these items are used by virtually all shoppers, sales levels will be significant. Adding the right consumables can significantly contribute to total store sales. Even when other discretionary products are overlooked, you’ll find shoppers purchasing consumables.

2) Bring shoppers back time and again. Since consumables are used and the replaced, shoppers will return to your store as they need replacement items. As a result your existing shoppers return to your store more frequently. Those opening a dollar store know increasing the frequency of shoppers coming back to their store is one of the best tactics for increasing total sales in their store.

3) Add to overall sales volumes across the store. While there, shoppers will frequently see other items to add to their purchase. What started as a trip to pick up laundry detergent ends up being a half-loaded cart sitting at the check stand ready for the cashier.

There are certainly some very valid concerns associated with carrying consumable products. The first is they must be ordered and stocked frequently to keep up with sales volume. As more and more customers understand the consumable products you carry, the greater the amount of product you’ll need to bring into your store. With increased volume of sales comes extra labor for ordering, receiving, stocking and cashiering. However, when opening a dollar store that is generally a good problem to have.

The real issue with consumables as a category is the very tight profit margins. You’ll find it challenging to make a profit after purchasing the product, paying freight, and then covering all of the expenses associated with carrying the consumable products in your store.

If you are opening a dollar store this is a challenging decision to make. If you decide to carry consumables you are setting yourself up for significantly higher total sales. Yet you are also investing your hard earned money in products that are very close to breakeven profit.

To your dollar store business success!

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