subject: 3 Powerful Cost Cutting Actions for those Running a Dollar Store [print this page] 3 Powerful Cost Cutting Actions for those Running a Dollar Store
As those running a dollar store know all too well, not only must sales climb ever-higher, but costs must be driven ever-lower at the same time. It is this combination that best serves the goal of achieving dollar store profits. While many of the steps to building higher sales are somewhat obvious, those focused on eliminating costs are not. In this article I present 3 powerful cost cutting actions for those running a dollar store. These actions will aid in reducing one of the highest leverage cost areas in your business; costs associated with dollar store merchandise.
1. You must know your store sales patterns.
Some stores will have a high demand for snack items while the competitor right down the street sells few snacks, but can't keep up with the demand for gift wrap. By knowing the sales patterns and the strongest selling merchandise in your store you can save money. Always be looking for sales, specials and closeouts on those hot selling items. Try to negotiate better pricing from your merchandise suppliers on the best sellers. Buy whenever you have the chance to save on popular items even if there is a need to add a small amount to back stock.
2. Reduce overall inventory in your store.
Let's face it; every dollar you have tied up in inventory costs you money. Each dollar not tied up in inventory could be invested and earn a return. If you borrow the money for inventory the cost is real. Reduce the amount of money you have tied up in merchandise inventory while maintaining adequate inventory to always have the best-selling items in-stock. Some simple examples of methods to reduce your inventory include buying inner cartons rather and full cases of merchandise and reduce the number of product options you offer shoppers on slower selling dollar store merchandise.
3. Eliminate items that are not selling.
There is no room to have dollar store merchandise sitting on shelves that does not sell. Get rid of it as quickly as possible. Replace it with the hot-selling items that are in demand and will sell immediately. If you have made a buying mistake it means you will likely need to discount the items to make them go away. Use those discounts as a way to create excitement with your shoppers. If items still will not sell - donate them to a charity that can use them.
