Opening a Dollar Store

Who could have ever imagined all of the seemingly trivial questions facing those who are running a dollar store? Answers are needed for everything from how much cash to keep in reserve for daily cash register set-up and change to what products to place on end cap displays throughout the store. One area of concern that raises many questions is around increasing total sales and profits. That is where questions about adding vending machines, ATMs and the like arise.

In fact when you specifically look at the small amount of space required to install a small gumball machine, toy bouncing balls vending, and machines offering mystery prizes of all types, you must ask if this might be a very good addition to the mix in your store. In this article I we examine vending machines in more detail.

* Small space requirement

The amount of floor space required by most vending machines is very small indeed. Even some ATM machines can take less than 10 square feet of floor space. With the small space requirement the question really comes down to the amount of demand there will be. After all, a small area with zero sales does you no good at all.

* Low overhead required for cleaning and management

While it may takes many hours to keep all of the aisles and displays in the sales area of your store clean, straightened and stocked, there is very little overhead required to maintain the area occupied by vending machines. You will need to sweep, dust, clean glass and periodically refill most machines. Beyond that little is required.

* Small investment possible by sharing profits

If you feel adding a small number of vending machines to a high-traffic area in the front of your store might be a good opportunity you should consider sharing the profits with someone else to begin. They own the machine, machine maintenance, inventory and refilling. You receive a percentage of sales for providing the floor space. Once the idea proves itself you can then consider buying your own machines.

* One more way to make a last minute sale to departing shoppers

As mentioned previously, those running a dollar store should try to place machines in high traffic areas close to the front of their store. Then look to the vending machines as a means of collecting one last sale as shoppers are exiting the store.

To your success when running a dollar store!

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Cost reduction is a challenge faced by every person starting a dollar store. In fact it starts even before the store opens for business the first time. It starts as you work to shave cost from the store fixtures, equipment and merchandise you purchase to set-up your new store. But that is just the beginning. Every day is a challenge as you look for waste and cost reduction opportunities. One of the biggest and highest leverage cost reduction opportunities is associated with the products you carry in your store. In this article I present 4 merchandise strategy actions when starting a dollar store.

1) You must know what sells quickly, what sells slowly and what doesn’t sell at all. The time of allowing slow selling or non-selling products to sit on the display shelves of your store are long gone. In today’s marketplace there simply isn’t enough time, money or room to allow this type of merchandise strategy to exist when you start a dollar store.

2) Eliminate non-selling items as quickly as possible. There is no value to shelves and shelves of merchandise that simply will not sell. While it may be painful to watch as the price goes ever-downward, the losses associated with leaving the merchandise to sit are even higher. Not only are you losing money, but over time there is a negative environment created by leaving the dusty, unwanted merchandise sitting. Take your losses and move on.

3) Once the non-selling items have been trimmed from your inventory, start working on the slow sellers next. While the non-selling items are a priority, do not think the job is done. Once non-sellers are eliminate from your store’s inventory focus on selling the slower-selling items. A creative strategy may be all that is required. Start with prominent displays and great signage. If that doesn’t do the trick try small price drops. Consider featuring the slow-sellers as a part of a sidewalk sale, or inventory reduction sale. Try trading some of your slow selling products for slow sellers from a competitor.

4) When opening a dollar store be cautious about experimenting with new items. Clearly define your merchandise strategy for all new product additions. Complete your research. Start with small test orders. Watch the sales levels of new products to make sure they are worthy of being carried as regular inventory in your store.

To your success when starting a dollar store!

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Starting a dollar store comes with thrills, excitement and certainly a great number of concerns. One of the biggest concerns for most who decide running a dollar store is for them is finding the perfect location. There is anxiety about what is needed to have the perfect location. Then of course comes the fear about what happens if the wrong location is selected. The list of concerns just keeps getting longer and longer. In this article we cover 5 important criteria to remember when starting a dollar store. Make sure your store meets all of these and you are one step closer to finding the perfect location.

#1) Your store must be very visible to passersby. A storefront that is tucked away out of sight will be much more difficult to operate. In fact one of the important considerations for those starting a dollar store is just how visible your store will be to all (vehicles and pedestrians) who pass by. The more easily seen, the less extra work and money that will be required to attract attention and to let prospective buyers know your business even exists.

#2) Vehicle and pedestrian traffic count matters. High traffic count numbers are an indicator that you will have a large potential pool of shoppers for your new business. This ready pool is close-by and will be passing most days of the week. The challenge for those running a dollar store will be to turn those passers-by into shoppers. You must develop strategies to attract attention of those passers-by and then to motivate them to actually come to your store.

#3) Close-by business make-up and conditions are important to examine. Ideally there will be very few, if any empty retail spaces close-by your chosen location. It is also important to examine the types of businesses operating in the vicinity of your location. The better their shopper mix aligns with your targeted customers the more help being surrounded by busy businesses will be to your success.

#4) Close convenient parking is important. As those already running a dollar store know, many of your shoppers want to quickly pull into a parking spot close to the entrance of your store, run inside and quickly make a couple of purchases. These in and out shoppers are an important part of your clientele makeup. Others who shop in your store want the luxury of not walking for blocks to arrive at your store. For example, a mother with two or three small children needs close by parking.

#5) Easy parking lot entrance and egress are a must. If you are running a dollar store always remember the key is convenience. This holds true when it comes to coming into and leaving the parking lot by your store. Barricades, one-way streets, requirements to travel a block or two, make a u-turn and then come back are all a big turnoff for many prospective shoppers. They are looking for ease at every step.

If you are thinking of running a dollar store put yourself into the shoes of your customer when you examine potential storefronts. Look for convenience and ease at every step. Locations that take extra time, effort or travel should be carefully examined before making a decision to move forward. In today’s business world it is just too easy to drive down the street a short distance to a competitor store when things are too difficult.

To your success when starting a dollar store!

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Long-term success with dollar stores requires continual increases in sales while costs are coming down. As the challenge of increasing sales is scrutinized there are three clear options. Those running a dollar store can generate more new prospective shopper traffic, current shoppers can return more frequently, or all shoppers can on average spend more money on each purchase. In this article I will focus on generating more first-time shoppers. Read on for 4 great ways to locate potential new shoppers.

#1) Help others within your community. Many local organizations are in need of donations and participation. There is no better way to gain new customer traffic than to help others? Provide small price reductions or donate needed products to area charities. Your store will receive considerable attention as a result. And do not forget the local schools. A surefire way to gain attention is by helping local schools – and you are doing a good thing for your community as well.

#2) Current customers are the best source for new customers. What better way to achieve success than to have your existing customers telling everyone they know all about the great dollar store that just opened down the block? Establish that as your primary goal. Make every shopper feel special by providing great customer service, carrying the products they need, and making every trip to your store a special experience. The word will get out.

#3) Others in the community. Success with dollar stores requires that those who live in your neighborhood know about your store and then come in to see more. Homeowners and renters within your local area need to find out about your store. A well-written flyer mailed to those within your shopping area can mean more new traffic for your business. It does not need to be an expensive flyer, just one that attracts attention when it arrives. Consider adding an incentive such as a free item, a purchase discount, or entrance form for a drawing to bring shoppers in for their first visit.

#4) Other businesses within your shopping area. Success with dollar stores requires that you get out and meet the surrounding businesses in your local area. Schedule a little time every week to stop by and introduce yourself to every business in the area. Make sure to include your competitors; they too can often refer shoppers for items they don’t have currently in-stock.

To your success when starting a dollar store!

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Many who are now running a dollar store find out just how much it takes to keep things operating on an even keel. They start with no idea how much hard work and good planning goes into achieving success. On the planning side is the need to carefully develop and stick to a calendar of key events for not only their business, but also for themselves. In this article I will focus on the owner or operator who is actually running a dollar store. We will focus on key activities that must be added to their calendar as ‘must do’ actions.

* Dollar store merchandise scheduled arrival dates.

Running this type of business requires excellent management of replenishment orders. Not only is it important to carefully create and submit orders to your merchandise suppliers. It is also important to have the right resources in-place to handle the dollar store merchandise as it arrives at your store. Always schedule the arrival of merchandise requiring assistance for offloading, receiving and stocking. Smaller orders might be noted, but can generally be handled without extra labor or planning.

* Industry trade shows and events.

Success will be achieved by maintaining close contact with changes in the industry. It is important to schedule and take the time to attend at least one or two industry trade shows, seminars or events to maintain that contact each year. Always schedule yourself into a special lecture or two while attending. Check out the latest dollar store merchandise as well. These events may well lead to introductions to your next new supplier.

* Buying trips.

Nothing beats face-to-face meetings to strengthen relationship with vendors. Make sure you schedule and take at least one buying trip each year. Large vendors may invite you to a special event they are hosting. If not, schedule some time with an existing merchandise supplier or two and take a little extra time to visit with new prospective suppliers during the same trip.

* Local business and community organization meetings.

Those running a dollar store must be involved in the local community. Select one or two business organizations to join. Be an active member by attending meetings and offer time or donating product in support of a sponsored event. Make sure to meet others and invite them to see you business. Their word of mouth advertising can do a great deal to building your customer base.

* Vacation schedules.

Those running a dollar store need time away. Take that time. Just make sure to not only list your vacations, but to also list those of employees as well. Add a prompter prior to the actual vacation date as a reminder to schedule appropriate coverage during the absence.

* Planned store promotions and events.

Success on this type of business dictates that you never leave store promotions and other store events to chance. Plan ahead. Schedule them onto your calendar to avoid conflicts later. Add prompters for pre-ordering the right dollar store merchandise, signage, and other required supplies.

To your success with dollar stores!

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There are very small self owned businesses that manage to prosper in today’s economy. As times are tough, it takes focus, commitment and good management if your business is to make it through. That includes those running a dollar store. Some shops will succeed and even prosper in spite of the challenges. Those business owners are able to see the wide picture. They are able to take advantage of today’s economic situation where people are more practical and try to spend less so they conserve money whenever they can. In fact, in these tough times, better run dollar stores are able to do a good business. How do they do it?

The appeal of this type of store lies in the cheap cost of their products as well as the accessibility of the shops. In many locales there are bound to be three or four dollar stores found around town. Busy shoppers can opt to buy the things they need and quickly go on with their normal daily routine.

Running this type of business may seem easy with these factors. But just like every other business trade out there, it still is a tricky business and there are risks. In this article I present some of the requirements to achieve success in today’s market.

* Attracting customers is one of the keys to success with dollar stores. Work to improve everything about your shop. Measure how your customers take those changes. Make products more accessible. Add more brand names whenever possible. Ask your shoppers about what they would like to see in your shop. Giving shoppers exactly what they want is one of the best ways to have your shoppers become patrons to your shop and in-fact come by regularly.

* Be hands on. The next key to achieving success with dollar stores is to always be involved in the shop. Participate in the happenings whenever you can as this is your business after all. Watch carefully what happens inside the shop, what comes in and what goes out. Always participate actively.

* Be open to change and willing to make course corrections. And of course, be open to change. Always remember the only constant thing in the world of dollar stores is change. You should always be ready to go with the flow and change things as necessary to successfully navigate the challenges of tough economic times.

To your success with dollar stores!

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Are you about to start a dollar store? If so you are probably counting all of the responsibilities you will face as a business owner. Among the most important will be handling payment of all the bills associated with your new business. And, there will be many. While it is nice to focus your attention on all the sales being generated, the reality is running this type of business demands careful budget management.

Budget management starts with knowing all the costs associated with your business. Even more important is to know the heavy hitters; those items that will make the biggest impact on your bank account. In this article I present 3 of the biggest costs most store owners face. Plan for these costs and you are one step closer to success with your business.

#1) Costs associated with the items you sell. Those running a dollar store must face the fact; dollar stores are high-volume businesses. And for most the number one cost is associated with replenishment dollar store merchandise. As you are calculating this one, be sure to include the actual cost of the merchandise AND the transportation costs to bring it to your store.

#2) Monthly rent/lease payments. For those who have no previous experience starting and then running a dollar store the amount spent on rent or lease every month can be pretty overwhelming. Be sure you have negotiated a deal that is in the best interest of your business. Consult with a commercial real estate expert if you need help negotiating. Be sure your attorney reviews all documents and proposed agreements prior to signing anything.

#3) Employee payroll expenses. If you are about to start a dollar store the importance of careful planning and scheduling of labor is about to hit you. With the tight profit margins and the huge number of costs, you cannot afford to spend even one extra dime on unneeded labor. You must know when employee coverage is required, and schedule accordingly. They must also know when having an extra employee serves no purpose.

Success with dollar stores requires knowledge of the costs and expenses associated with your business. Focus on minimizing and even eliminating waste. Don’t allow yourself to spend even one extra cent. After all, every extra penny needlessly spent is one less penny in your pocket. Make cost control your focus from the very first day you open for business and onward. While building sales is important, control cost is every bit as important as well.

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Are you thinking about starting a dollar store? If so there are many considerations ahead. Where is the best location? How big will your new store be? Where do you find the best merchandise to resell? Will you be able to find dependable employees to work with you? And that is just the beginning. On top of all the questions come some of the important truths. For example, in virtually all cases the smaller the store, the more important maximizing sales per square foot becomes to achieving success. In this article I will present 3 ways for those with small, modest sized stores to maximize sales per square foot.

#1 – Tighten up the rows – tighten up the displays in your store. Don’t allow even one extra inch of width to exist in your store. The bottom line is if you are starting a dollar store that has little sales floor area, there is no room for wasted space. Carefully measure and consider shrinking the base shelf size by an inch or two. Do everything possible to add a row of fixtures, or even an extra grouping of displays.

#2 – Raise the height of your gondola shelving. That’s right, those starting a dollar store can add valuable dollar store sales display space by adding extra shelves. Move all your back stock merchandise to the sales floor to fill this new-found extra shelf space. Also make sure your employees have a safe ladder to climb up and remove items for shopper inspect if it is required. Be safe while you build dollar store sales by displaying a significant added quantity of merchandise.

#3 – Stack products clear to the ceiling. Once you have raised your gondola fixtures higher, consider making the top shelves your extra storage area. However don’t store filled cartons and containers way up there! Instead actually display the merchandise found inside. Take the same approach with bulk displays of all kinds. Stack a little higher. Just be safe.

When done properly those starting a dollar store can create a very positive impression on shoppers as they enter the store. It will seem as if you have many more products. And while you do, the impression makes it seem like even more! Two cautions; first make sure there is adequate lighting as this strategy can result in a darker store. Second, don’t cut back on sales floor space if you have other options. In today’s marketplace there is a point of no return when you cut down too much. Done right however, this can generate extra dollar store sales for your business.

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If you are getting ready to start a dollar store there is one product avenue beyond your typical wholesale dollar store merchandise suppliers to consider. When properly managed this avenue can open the door to brand names and products you never believed you would offer in your store. It is closeout and liquidation companies. This process does take patience, investigation and experience to yield the best results. It is not a market to dive in without learning the basics and making a few test purchases. Yet when done properly this is a real win/win for both you and your shoppers when you start a dollar store.

Purchase merchandise you would never be able to offer if you buy through regular wholesale dollar store merchandise channels. Just make sure you know the actual types of merchandise you are purchasing. For example, is it part of an insurance claim for a flood and thus all of the items were submerged in water for weeks? Or is it salvage from a major fire and thus shows major fire and smoke damage as well as water damage? Fortunately there are volumes of great merchandise that is in good as new shape. Here are two examples of the types of items you might consider.

1. Brand new overstock and shelf pull merchandise.

As the name implies these are new, never used items that either never made it to the sales floor or were on display and were ultimately pulled and are being sold. Make sure they have/are in original packaging. Make sure there are no recalls, or other problems with the merchandise.

2. Spend even less and purchase customer returns.

This isn’t your typical run of the mill dollar store merchandise. Shrewd buying can result in name brand products – often brands you would never be able to offer otherwise. Shrewd buying can also lead to products that originally wholesaled for many times your top retail pricing. It is the best of both worlds; name brand and outstanding products! However, with customer returns you must take the time to carefully sort and inspect to make sure everything is as good as original. Make sure to inform your shoppers as well.

When you start a dollar store it is important to shop for this type of merchandise with great care. Make sure you are dealing with a trustworthy merchant. Check into the items you are considering to make sure they are really saleable. It is also important that your new found merchandise appeal to your shoppers. No matter how great the deal and the pricing, if you can’t sell the items once they arrive at your store, you have wasted time and money. However when the products are right they provide a great compliment to your regular dollar store merchandise.

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It has been said that the success for those running a dollar store can be found in the buying of products to resell. While the cost associated with purchasing and then shipping dollar store merchandise to your store location may be a major challenge, there are creative options to help relieve the pain. One such option is to locate and purchase products from liquidation and closeout companies. These companies make a great alternative product source. Here are 3 reasons to seriously consider liquidation and closeout suppliers for your business.

1. Liquidation and closeout companies supply an outstanding source of latest, shelf-pull or overstock items those running a dollar store would never have been able to offer. If you spot the correct deal, then do not waste time. Make your purchase before the items are no longer available. These can include mainstream dollar store products as well as products not normally seem in a dollar store.

2. Spend pennies on the dollar for shelf-pull or overstock dollar store merchandise which sells like hotcakes. It is only a matter of searching for items that are appealing to your regular shoppers. You will gain revenue and the customers will be surprised of the items that they will find.

3. Avail yourself of seasonal goods off-season to have great savings. If storage is available, go to liquidation and closeout companies for their seasonal goods 6 months prior. For instance, shop for Easter goods during summer and fall, while you can get Christmas and Thanksgiving materials during spring and summer. Again, you will find incredible costing on products you regularly will not be able to make available in your shop.

These are only a few of the potential benefits offered when using liquidation and closeout companies as your resource for merchandise.

Do not jump into a deal until you thoroughly understand the products, terms and conditions. Make sure you know the company is reputable and they will actually deliver the products represented. Consider a test order or two before making major purchases. As you gain confidence and knowledge you can search for great transactions from these sources and shell out much less for the merchandise you would not have previously even been able to offer in your store.

Your shoppers will be excited about the super finds they will make whenever they shop in your store. At the same time you have greater profit potential and are offering more than just regular dollar store merchandise. Through following these ideas, you are on your way to success.

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