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It seems like the costs associated with owning and operating a retails business are becoming almost uncontrollable. Everywhere you turn there are increases in the amount paid. Everything from store utility expenses to the cost of freight continue to increase. Most retailers have the option to pass these increases on to their customers. This strategy frequently isn’t well received. However it is an option. For the owner of a dollar price point store, that option doesn’t exist without changing the entire format of the business or dropping the products entirely. This is article 2 of a 3-part series that review some of the options a dollar store business owner has available. In this article we will focus on changing the format of the store to a discount store as a means of accommodating ever-increasing costs.

Let’s start by acknowledging that this is a radical change. It will require you to stop your dollar business operation and start over. This time your store will be filled with merchandise that is being sold at a discount. While some of that merchandise may sell for one dollar, or even less, most will sell for significantly more than one dollar.

Rather than obtaining your merchandise from dollar price point suppliers, you will be focused on locating distressed product from a whole new set of suppliers. You are looking for shelf-pulls, overstocks, packaging changes, and other new merchandise that is being closed out as a first priority. Customer returns and other more distressed merchandise come next, if you choose to carry it. There are many suppliers that handle this type of merchandise. Internet searches and trade shows can provide a variety of supplier options. Just be sure to recognize that as always, every new supplier must be screened and approved before you hand over your trust and huge sums of money for merchandise.

This strategy can offer you much improved margins on the products you sell. It also offers even bigger average sales price per item which can add up to sales increases quickly. However, you will need to learn a new business and a new industry. In most cases you will no longer have the ability to buy in case-lots. Often there will be a need to purchase pallet sized loads, and frequently some or even all of the merchandise will be in damaged condition.

It is important that you consider maintaining some of the old staples you previously carried in your dollar store business at the dollar price-point just to keep customers coming back. You can expect to lose many of your existing customers when you make this format change. Once again, if you have a very good location and the right demographics, a strong advertising campaign can be of huge help in rebuilding your business.

To your dollar store business success!

Are you interested in opening you own dollar store? Check out “A Beginner’s Guide to Opening a Dollar Store at http://www.OpeningADollarStore.com

Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.

http://www.marketingsuccesscenter.com