The truth is that cost reduction is the name of the game for those running a dollar store. And while growing sales ever-higher certainly cannot be ignored, cost pressure is a daily reality. In fact those who are about to start a dollar store should always be watchful for opportunities to drive extra expense from every aspect of their business. One area which must always be tended is associated with the dollar store items you purchase.
Given the high sales levels, management of outlays for replenishment dollar store items becomes of even more importance. In fact this is really a dual sided sword. Ignore those small increases and they soon balloon into major charges much to the detriment of your business. Likewise, cutting expenditures associated with dollar store items even a little offers significant leverage. Read on for actions associated with dollar store items cost reduction.
* Drive cost out of product transportation expenses.
Freight is an often overlooked cost reduction opportunity.
o Always ship full pallets – If you allow a pallet of product to be loaded that doesn’t come close to touching the roof of the truck, then you are in essence paying for the shipment air in that unfilled space. Always instruct that all pallets be entirely filled before they are loaded for shipment.
o Get competitive bids – Bigger companies doesn’t necessarily mean better companies when it comes to freight pricing. Take the time to obtain multiple bids before making your decision about a carrier. Always ask your merchandise vendor about pricing and discounts on freight as well; look for freight-paid suppliers.
* Focus on sales and specials for replenishment purchasing.
Reduce product prices by taking advantage of sales and special prices on the products you need. Focus first on the core consumable items shoppers need and buy routinely. You know these items will sell, and saving even a few pennies on each can really help the bottom line.
* Invest time to uncover less costly product providers.
Those running a dollar store must allocate time to explore for new product providers. In fact this important task should become a weekly event. While at times you will be frustrated, the reward is in the discovery of a new, low-cost, yet high-quality vendor. Be sure to check into closeout and liquidation companies as a part of your investigation. The great pricing they offer make them a natural addition to your vendor list.
If you are running a dollar store always make it known you buy merchandise. Let others know you are willing to make offers to purchase the inventory of closing stores. Consider adding a small finder’s fee such as a dinner for two at a local restaurant for those who find deals you end up making.