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Hard economic times are slowing the attempts of many retailers to make a profit. On one hand costs associated with owning and operating a store are edging ever higher. That’s especially true for the costs associated with merchandise buying and freight. On the other hand, buyers are making fewer trips to their favorite stores to help offset higher gasoline prices. If you own a dollar store business that offers only dollar price-point merchandise, this combination is especially difficult to handle. This is article 3 of a 3-part series that reviews some of the options a dollar store business owner has available.

Many dollar price-point stores are finding that the actual amount of merchandise available to resell at the dollar price-point is diminishing. The bottom line is that in many cases merchandise that was sellable at extremely tight margins now costs the retailer more than one dollar landed at their store site. This dilemma means less merchandise available for resale. Less merchandise available for resale means lower sales. Lower sales mean less profit. You get the picture…

Unless you are major chain with lots of buying power other options must be considered. One of those options is to radically change the format of your dollar store business. This isn’t about changing the pricing to over one dollar. It is about examining the options available and then reformatting into an entirely different business format. It will require research and analysis before taking any steps toward the change. Start by examining your lease to make sure a format change can even be made. If you lease would allow changes, examine your sales by department. Look for steady sales and profit growth.

A hypothetical example might be a store that is located at a major public transportation passenger drop point. You have thousands of people in close proximity to your dollar store, but sales and profit margins are really dropping. After careful examination you find that health and beauty items continue to sell well. People are always dropping in to pick-up combs, brushes, hair spray, and headache remedies. While there people buy lots of soft drinks, candy and snacks. Many are asking for a better selection of cosmetics, and products to fight everyday ailments. Maybe you should consider becoming more of a convenience retailer to better accommodate these shoppers. There would be a great deal of research to do, but you have a viable place to start that research.

Don’t forget to examine the competition in your drawing area. If time allows attend a trade show or two that features companies that sell your proposed new products. Create a business plan for your new venture. Make sure you can finance the changeover and start-up of your new venture. Don’t forget to make sure your store location and size work for the new business. There are many other aspects to this plan that must be examined.

The bottom line is that in some cases, a struggling dollar store business may need to reformat itself to once again become a profitable venture.

To your dollar store business success!

Interesting in learning more about this topic? Download my free ebook on internet marketing.

Bob Hamilton is an entrepreneur, auth