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    1. ChrisGarcia is offline

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      #1

      Best Wholesale Dollar Store Suppliers - Dollar Items Wholesalers & Distributors

      Hi, planning to open an online retail store. Just wondering, how dollar stores get their stuff so cheap? Some of the items there are unbelievably discounted. Being interested in retail, when I run my calculations, there is no way anyone can make money on some of them. Can someone enlighten me, as to what this is all about?
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    2. SharonMoore22 is offline

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      #2
      Dollar stores have a wide variety of retail tactics and you just seem to have fallen prey to one of them. The key is to think like a consumer, but when you deal with competitors try and get into their shoes.

      This is a classic loss-leader strategy. This simply means selling an attractive and desirable product at a loss. It is well known that consumers rarely shop for different items at different places. Also apart from a few important items, they do not have enough information to compare prices.

      Some of them may never compare prices, in their entire lives but will move ahead with a perception that they got a bargain. Your calculations are not incorrect. Those items are indeed being sold at a loss, but the mark-ups have been increased on other products to compensate.
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    3. ChrisGarcia is offline

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      #3
      Whoa! This is a new paradigm altogether. I had always trained my mind to think of product by product profitability. It never struck me, that making loss could be a wise decision sometimes!

    4. Tcarter54 is offline

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      #4
      Well explained! But I think you are over-emphasizing loss leader. It is undoubtedly an important tool in anyone’s armor but Dollar stores still have an impeccable supply chain which enables them to be extremely efficient. In my opinion, getting best dollar store suppliers who can ship cheap wholesale goods at short notices are the decisive factor in dollar stores success.

    5. SharonMoore22 is offline

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      #5
      True, when a large number of people follow loss leader no seller benefits. The margins are headed downwards. You’ve used the correct words “Supply chain”. This has become like the mantra, which all industry pundits keep on emphasizing all the time. But to be very honest, it seems like a fancy word for a procurement network. The game is still the same. The dollar store with the best supplier backup wins.

    6. ChrisGarcia is offline

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      #6
      So, this means that our success depends on someone else’s whims and fancies. It doesn’t make sense to get into a business where you are too dependent on someone. This sounds a little too bad to be true. Is there nothing apart from best dollar store suppliers that can make procurement easy, simple and effective?

    7. margethill1981 is offline

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      #7
      Hi all, I just read through your posts and could not help but comment. This is the number one misconception when it comes to dollar stores or any business which becomes a price game.

      It is generally pre-supposed that suppliers are the only form of competitive advantage. This is the reason why sometimes suppliers not only enjoy disproportionate amounts of attention, but become the cause of your downfall. Overemphasis can be dangerous for at least two reasons. Suppliers may garner too much bargaining power; making terms difficult, squeezing margins and suppliers may inadvertently default because of over commitment as a result of too much pressure.

    8. SharonMoore22 is offline

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      #8
      So you are trying to say suppliers are not the most important link in getting the best priced purchases?

    9. margethill1981 is offline

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      #9
      Yes, absolutely! And you will be surprised to know, how simple and logical it is to reach this conclusion.

      The keyword here is information. Each time someone has made a fortune by selling cheap, all they have done is increase information efficiency. Consider any dollar store for example. Put yourselves in their positions. A simple cost exercise would show you that a large amount of your costs cover storing items, which have absolutely no value addition.

      So if you could stock goods as and when you require them, you could straight away cut your costs by 20% to 30%. It is better to be knowledgeable about customer demand. As far as dollar stress is concerned, “knowledge is power”. Anyone who knows their customers well is capable of dropping prices.

    10. SharonMoore22 is offline

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      #10
      Well, the surprise is that although most of us have known this for ages, the implementation seems so elusive! It is like knowing what needs to be done and still not being able to do it. A weird feeling I must say.

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