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By the very nature of business, what makes a company successful may soon become its biggest threat. The success of the dollar store also created some tough competition that can put a dent in the bottom line. Even though imitation is the highest form of flattery, when it comes to business it also is the highest form of competition. The dollar store format of handling a multitude of items, with few or none over the cost of a dollar became so popular; it made large chains reconsider their marketing strategy. One particularly large chain added “Express” stores to their marketing strategy. They did this after noting the rising profits of dollar stores compared to their declining profits. However, due to their size, they can also offer a lot more services than the typical dollar store. Some of these express stores will offer a pharmacy and a gas station at the location. Because of the size of their parent company, they’ll have the ability to offer a check cashing service and accept food stamps. While the stores won’t offer everything for a dollar, they’re using the smaller express stores to glean customers in rural areas too sparsely populated for a super store or in large cities where space is at a premium. These areas are also markets where dollar stores flourish. Other threats to dollar stores are online stores. More and more people are shopping online for their items and buying them at wholesale prices. That’s because online stores have limited overhead and can reduce their profit margin, while still making a comfortable amount. These online sellers often get the items for the same price as the dollar storeowner and sometimes even less, if they have a high turnover rate and high volume purchases. Their low overhead and even lower prices make them stiff competition. Higher operating costs can reduce your profits or even force you to reduce inventory, accept lower quality inventory or increase your prices, in order to make a profit. These steps can become fatal for dollar storeowners if not handled properly. Luckily, there will always be shoppers who love to browse through a store, need an item immediately or simply enjoy shopping who will continue to frequent not only dollar stores but also other brick and mortar shopping areas. In order to capture these shoppers, the dollar storeowner needs to be vigilant in marketing techniques to bring in customers and floor displays, product selection and merchandising to gain sales. Are you interested in learning more about dollar store success? Visit www.openingadollarstore.com for more information.
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