In today’s economy, many people see the benefit in learning how to start a dollar store. That’s because this industry is thriving right now. Whereas it used to be that only lower income families shopped at dollar stores, now it is mainstream and acceptable for everyone.
When thinking about how to start a dollar store, keep in mind that you have two primary options: You can purchase a franchise, or go it alone. The franchise route is fairly expensive, and you will likely have to give up a portion of your profits for as long as you are associated with the franchise company. On the other hand, there are some significant advantages to franchises, including:
- A nationally recognized name (usually)
- Startup assistance and training
- A proven operating model
- A steady supply of merchandise
- Advertising support
The most difficult thing about starting a dollar store on your own might be finding a reliable supply of merchandise for your store. Locating reliable suppliers for the kind of merchandise you will carry can be a challenge.
The concept behind a dollar store is, of course, that every item in the store is priced at one dollar or less. This does not allow for a lot of profit margin on many items, but on some merchandise, you might be surprised how high the margins are.
What You’ll Need to Succeed
Your location is one of the most important factors when learning how to start a dollar store. You want your store to be easy to find, have a lot of available parking and have excellent drive by visibility. But you also need to make sure your dollar store is located close to where your primary customer base is. While many in the middle class now use dollar stores regularly, you will typically find them in lower to lower middle class areas of town.
When running the numbers on your dollar store concept, be sure to account for shrinkage in the form of theft as well as broken merchandise. The items you are selling are priced so low that when something breaks, even during shipment, it is often not worth the time and expense to get it replaced by the manufacturer – and most have a no-warrantee, no-exchange, no-refund policy anyway.
Some of the common merchandise you will often find in dollar stores include:
- Food items
- Health and beauty products
- Household and kitchen items
- Gadgets and automotive items
Keeping a constant flow of product coming to your store will be a big part of finding success in starting a dollar store. The good news is that your merchandise doesn’t cost nearly as much as most retail operations, so you will be able to afford to stock your dollar store floor to ceiling!
Employees at dollar stores are not typically paid very high wages, so you won’t spend a lot on labor, but it might be worth paying a little more for a staff that will treat your customers well. There is competition in the dollar store industry, and if you can become known as the friendly dollar store, you will have an edge. In any case, learning how to start a dollar store can lead to a prosperous entrepreneurial venture.