One of the challenges faced by every retail business is maximizing the sales of their store. Opening a dollar store is no different. Every square foot on the retail sales floor must generate as much revenue and profit as possible. In fact this is so important that careful tracking and analysis should be done to ascertain exact sales and profits being generated everywhere in your store. In this article we will examine some of the more critical considerations as you are accessing your store’s situation.
There are some general rule of thumb considerations to know before you start. In a well managed store, per-square-foot, merchandise on end caps will out-sell aisle merchandise. The same holds true when comparing front-facing to rear-facing end cap displays. Merchandise on the front-facing end caps will outsell merchandise placed on rear facing end caps. Finally, well displayed merchandise in the lobby or close to checkout areas will outsell other locations in your store.
When opening a dollar store business there will be exceptions to these general rules. However use them as a starting place when establishing sales goals for your store. Adjust as you learn the unique sales traits of your store. As you learn the specific sales pattern for your store, manage inventory rotation and higher margins to capitalize on higher selling locations. Invest the extra time to boost sales levels in areas that typically underperform.
With the general sales levels known for your store you can then move on to more detailed analysis. For example, what types of display fixtures should you use in specific locations? This becomes important as merchandise costs increase and sales slow due to the economy.
Let’s take an example. When opening a dollar store you have a location in your lobby where merchandise sells well. However, the 4-sided display you are using takes a full 4 months to sell out completely. It holds 400 items per side and your cost is 75¢ per item. Using your current 4-sided display you have $1,200 invested in that little area of the store. What if you went to a three sided display? You still have a full 3 months of inventory and $900 invested. A 2-sided display would take 2 months and would tie up only $600. Depending on the supplier, you can likely refill this display with only a 2-week lead time, so maintaining 4-months of inventory doesn’t make sense. In fact if this is a solid item that you routinely carry, a 2-sided display would make a lot of sense.
Don’t forget to check signage, adding complementary items, and even changing out for a new product. The one thing that is certain is that you can reduce you investment in on-hand inventory of that product. This is a simple example, but it does provide an idea of the analysis that should be done for every location on your retail floor. This is time you will want to invest to maximize profits when opening a dollar store.
To your dollar store business success!