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One of the biggest decisions faced by those who own and operate a dollar price point store is associated with what to do regarding the ever-tightening profit margins they face. This is a problem faced by dollar retailers whether they operate a single store, or a large chain of stores. For many small operators with only one or two stores much of the easy cost cutting and sales growth has been done. They can continue to dig deeper and deeper to find one more cost to reduce, or one more way to not only hold onto the shoppers they currently have while trying to pry one more shopper away from the competition. Or they can look for other avenues to leverage their knowledge of the dollar discount industry while opening the door to higher profits. In many cases the thought is the time is right to examine other potential store formats for their business. One that comes to mind for some is to convert to a deep discounter or closeout store format. After all, with today’s bargain hunter set of customers, doesn’t it make sense that a closeout store would be an exact fit for where the market has moved? Deciding on the right format for your business cannot be left up to chance. Before considering a radical format change there are certain considerations you must address. • Size of space – More is better in today’s marketplace. The competition is doing a very effective job of training shoppers they will receive many more choices when shopping in a larger store. Don’t assume a format change will resolve the challenges associated with operating a tiny store. • Investment – Do not assume changing format is going to be the cure-all if you have cash issues. It costs money to successfully make a format change. You must be able to purchase the wholesale merchandise needed. There will be other upfront costs as well. • New suppliers – If you are moving into a new marketplace, you will need to locate new suppliers for the wholesale merchandise you will be offering. While your current suppliers may be capable of proving some of the wholesale merchandise items you require, you need to look for suppliers specializing in the wholesale merchandise specifically needed for your new store format. • Sell, sell, sell – market, market, market. Making a more radical change, such as moving from a dollar store to a closeout store, is doable. However it will in many ways be like opening a new store. Be prepared to promote the new format. You must make the local shoppers aware of the products you carry, and the great prices you offer. • Grand re-opening – If the change is radical enough, or the sales were low enough before the changeover, consider conducting a grand reopening event. This is one way to re-energize shoppers and employees about your new business venture. Are you interested in starting a dollar store? Visit http://www.openingadollarstore.com and be ready to have your whole view of dollar stores changed forever.
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