Author: Bob B Hamilton
Those opening a dollar store must quickly learn cost-of-goods-sold (COGS) is their number one opportunity to significantly reduce overall costs for their business. They realize the lower the cost of the dollar store merchandise in their store, the better positioned they are to achieve profitability. But it takes time and focused effort to reduce COGS. Yet the positive results are so important for dollar store business success that this same focus must remain for as long as the store is open for business. Put the 4 tips that follow to work for your dollar store business.
Tip #1) Always negotiate for lower dollar store merchandise prices. When opening a dollar store you will find it never hurts to ask for price reductions, caps on freight, or to inquire about closeout items. While you won’t always score the best deal of the year, periodically asking will yield some great prices on the very items you need for your store.
Tip #2) Shop the sales for your dollar store merchandise. Many dollar store wholesale suppliers offer their customers weekly and monthly sale prices. Some also offer closeout sales. Use these opportunities to replenish your inventory at a savings. Also consider stocking up on the hottest selling items to increase profits for a longer period of time.
Tip #3) Partner for savings. Reduce COGS for your dollar store business by working with other dollar/discount retailers when purchasing or shipping merchandise to your store. Simply connect with one or two other businesses and split discounted larger merchandise orders. Work with other local businesses to fill freight trucks, thus reducing per pallet shipping costs for all of you.
Tip #4) Transportation is included in COGS. Roll transportation costs into the cost of goods sold figures for your business. Taking this step forces you to examine all costs. You will begin to realize just how much money is required to bring merchandise to your store. Then you can start working to trim those costs, thus increasing your dollar store profits.
There are many other ways to reduce dollar store merchandise costs when opening a dollar store. For example, now is a great time to purchase core items for your store from closeout and liquidation companies. It is important to continually look for tactics that can reduce your COGS by even a fraction of a cent. After all one-cent reduction across all merchandise sales during a year can mean hundreds or even thousands of dollar in extra dollar store profits for your business.
To your dollar store business success!
About the Author:
Want the best ideas to earn from your dollar store business? Check out “Tactics to Add Streams of Income to Your Dollar Store Business” at www.OpeningADollarStore.com.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.
Article Source: ArticlesBase.com – Cut Cost of Goods Sold when Opening a Dollar Store
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