4 Steps to Reduce Costs for Your Dollar Store Business

Those who own a dollar store business are faced with ever-increasing merchandise costs. Yet, for most dollar stores there is a cap on the retail selling price. For these retailers rising costs can’t simply be passed on to their shoppers. Yet to remain successful these retails cannot stand by and assume the role of the victim.

Their choices are to accept lower profit margins, change the entire format of their store, or to somehow hold, or even reduce the cost of good sold in their store. Successful retailers will face the merchandise cost challenge head-on and develop a strategy that works for their situation. In this article I present 4 merchandise cost reduction tactics for your dollar store business.

1. Make merchandise cost negotiations a part of every merchandise order. As the economy slows, it isn’t just retailers who are challenged. Many wholesalers are feeling the pinch as sales slow as well. Some of these wholesalers may be willing to sacrifice a little margin to gain the sale. You may also find that there are some specific slow-selling products, or targeted purchase amounts that will gain you a price discount on the order for your dollar store business.

You will never know the exact opportunities available unless you ask. That means you must invest more time contacting suppliers. You must ask about your options. You must make offers that benefit you. Invest the time in managing your purchasing. Make cost negotiations a part of the purchasing process to minimize the prices you pay.

2. Make freight cost negotiations a part of purchasing. Just as merchandise cost needs to become a part of every purchase transaction, freight costs are no different. Make freight expenses a part of discussion when you are purchasing merchandise for your store. Request that your order come with a freight cap. Also discuss the possibility of freight credits against merchandise cost.

There are many companies that offer pre-paid freight when certain criteria are met. Locate those companies and compare pricing; you just might save some money. Invest a little time each week speaking with new supplier prospects and freight haulers to locate the very best deals for your dollar store business.

3. Buy when there are sales or discounts available. Start focusing on wholesalers and distributors that offer weekly or monthly specials and closeouts. Often these sales will include high-volume products in your store. This is your chance to stock-up on merchandise that you know will sell. Start shopping those special and closeouts with all vendors before you place your replenishment merchandise orders with your regular vendors.

4. Use reduced sales by other retailers as your buying opportunity. Now is the time to get creative. Start examining the non-traditional merchandise sources. With the overall retail market slumping there are some real deals in the shelf-pull, overstock, and closeout marketplace. While you will need to buy with care, the prices are deeply discounted, and many times the merchandise will thrill your customers. It will take some time to properly learn this marketplace and the reputable companies in the marketplace. However, when done right, the prices paid can be a real positive influence on your dollar store business bottom line.

To your dollar store business success!

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