Dealing with Tight Margins When you Own a Dollar Store by:Bob Hamilton
The cruel reality when your own a dollar store is the margins are extremely tight
. If you are to create dollar store profits you must be a good business person. You must understand how to manage inventory. You must know how to purchase wisely. You must know the drivers to increase dollar store profits. For example, it is a mistake to waste time and effort on actions that return a few dollars in cost reduction rather than actions that can yield thousands. In this article I address some of the key actions to deal with the tight margins that are a part of the business.#1) Inventory management is critical to success if you own a dollar store. Inventory management involves so many pieces. There is the management of order sizes. There is the management of existing inventory levels. There is the management of inventory down to the individual item stock number. Learn all about inventory turns, and then manage your business to maximize them.
#2) Drive out cost at every opportunity. Building dollar store profits takes a laser focused effort on cost reduction. Once you meet one set of cost goals, establish new, even more aggressive goals and a plan for achieving the latest reductions. Start with the biggest leverage items such as cost-of-goods-sold and payroll, then work your way through all of your business costs.
#3) Dont forget about building store traffic. While cost reduction is critical, you cannot allow traffic levels to remain flat. Build sales levels by increasing the number of sales made every day. Get the word out about your store using every possible option. Focus advertising on increasing the number of shoppers entering your store. Create a store where word-of-mouth advertising brings more and more new shoppers in for a first time visit.
#4) Fine tune your business so the average sale size is always growing. Leverage the impact that each customer has by continually focusing on the average sale size. Carry all the most in-demand items, hot impulse items, and other items to continually move the average sale size upward. Create a warm, inviting atmosphere to keep shoppers in your store longer. Provide outstanding customer service to every person entering your store.
#5) Your dollar store profits are often found in the results of your buying efforts. When you own a dollar store it is amazing how many great opportunities there are for purchasing great products at ridiculously low prices. The challenge is finding those great deals. Initially you will need to locate them. Industry trade shows are a great place to start. Long-term they will start coming to you.
To your dollar store success!
About the author
Learn how you can Start your own Dollar Store Business at http://www.openingadollarstore.com. Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer. You Dont Need to Go It Alone when Opening a Dollar Store by:Bob Hamilton 8 Mistakes to Avoid When Opening a Dollar Store by:Bob Hamilton The Benefits of Creating Your Own Commercial Cleaning Business by:Jeremy Gray Foolproof Method to Hit Your Goal Every Time! by:Nancy drager Due Diligence by:Patrick O Connor Leadership Principles - Kill Blame Culture! by:Terrie Anderson Three Easy Steps to Risk Management by:Simon Buehring Getting it in perspective with M_o_R by:Simon Buehring Stimulus Questions No One is Asking by:Butch Grimes E-currency Exchanger - How to Chose? by:Daniel da Silva Are safe investments possible? by:David Humeniuk Investment For Your Best Future by:Don Burnham Entity Layering- Layers on the Onion by:Don Burnham