Cheap Used Cars

One of the biggest problems currently being faced by those who own a dollar store business is how to deal with ever increasing fuel prices. Those prices are driving double digit increases in freight costs for some store owners. The reaction is to feel that there is nothing left to do but become a victim of the situation. Well, that is not the way to handle this challenge. Rather, it must be faced head-on.

There are actions that can be taken to help successfully minimize the cost impacts. All of the potential solutions do come with a cost however. All of them require extra time and legwork. However they can help those with a dollar store business. Start by understanding how much of the cost of goods sold is associated with freight charges. Review costs prior to the recent fuel cost run-up. That previous level should become the first freight target for you to achieve.

Next start negotiating freight costs as part of all buying. Ask for freight caps or credits. Some merchandise vendors will be open to this if established spending levels are reached. Also spend the time that is required to investigate merchandise vendors that offer paid freight on orders. These vendors will also have spending target requirements to receive the paid freight on orders. While negotiating freight will not result in changes with most companies, make it your goal to locate new merchandise suppliers that are willing to make these freight concessions as part of you moving purchasing to them. It will take work, but your dollar store business will benefit each time you are successful.

Higher freight costs require that you make other changes in the way you buy merchandise for your dollar store business. Locate merchandise vendors that offer specials and sale pricing. Regularly shop the weekly and monthly specials that are offered. In fact make it a practice to focus as much buying as possible on the reduced pricing that will be available. While this may mean some extra back stock the savings can offset the extra inventory costs. Seriously examine adding shelf-pull, overstock, and closeout merchandise to your buying mix as well.

Don’t stop with just getting cost of goods sold back to previous levels. Continue to work to find freight-paid opportunities. Ask for freight caps on all purchases. Seek more lower-priced vendors. Shop the specials. All of these can combine to provide a powerful reduction in the cost of goods sold for those who own a dollar store business. Put these strategies to work for you too!

To your dollar store business success!

Are you interested in learning more about dollar stores? Check out Insider’s Guide to Opening a Dollar Store

Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer. http://www.marketingsuccesscenter.com