If you are running a dollar store it is easy to automatically assume the best decision for your business is to look for the biggest gross profit per item when deciding whether to buy wholesale items for your store. Yet a deeper analysis would instantly demonstrate that while gross profit per item is indeed a key indicator, there are other factors which must be included in the equation. For example, the number of inventory turns is certainly important in a high-volume, tight margin business.
Those running a dollar store must carefully examine exactly what they are getting for the price. Add extra quantity, quality, better packaging, or a well-known name, and the extra money you pay when you buy wholesale items can equate to more sales. The extra sales are not just a one-time deal when you are purchasing the everyday products your shoppers buy time and again.
Always select and buy wholesale items which provide the best possible value to your shoppers. Focus first on the core consumables your shoppers are going to be buying time and again. Then focus on maximizing the number of inventory turns you can achieve with these products. If you locate the best suppliers you will be able to minimize your safety stock levels and have a continuous inflow of replenishment stocking coming to your store in-time to insure there is always product waiting for buyers.
The higher inventory turns can mean more profit for those running a dollar store. While more time will be spent managing inventory and buying, the bottom line for your store will reflect good news as your reward for the extra effort. After all, if you can achieve 10 inventory turns per year, or even more on those tight margin products which sell so well, all of a sudden they can become key profit contributors for your dollar store business.
It should be noted that whenever comparable products can be located for less money, go ahead and buy wholesale items with the higher gross profit margin. Just make sure those products have the same or even more value from a customer perspective. Don't sacrifice a move to 5 inventory turns per year just to save 1¢ or 2¢ on the wholesale price you pay. Do the math; you will likely find sticking with your current product at 10 inventory turns is a better (more profitable) decision for your business. Repeat this process across your store. By focusing on inventory turns as a part of your overall business strategy you often end up truly maximizing results for your business.
Those running a dollar store must carefully examine exactly what they are getting for the price. Add extra quantity, quality, better packaging, or a well-known name, and the extra money you pay when you buy wholesale items can equate to more sales. The extra sales are not just a one-time deal when you are purchasing the everyday products your shoppers buy time and again.
Always select and buy wholesale items which provide the best possible value to your shoppers. Focus first on the core consumables your shoppers are going to be buying time and again. Then focus on maximizing the number of inventory turns you can achieve with these products. If you locate the best suppliers you will be able to minimize your safety stock levels and have a continuous inflow of replenishment stocking coming to your store in-time to insure there is always product waiting for buyers.
The higher inventory turns can mean more profit for those running a dollar store. While more time will be spent managing inventory and buying, the bottom line for your store will reflect good news as your reward for the extra effort. After all, if you can achieve 10 inventory turns per year, or even more on those tight margin products which sell so well, all of a sudden they can become key profit contributors for your dollar store business.
It should be noted that whenever comparable products can be located for less money, go ahead and buy wholesale items with the higher gross profit margin. Just make sure those products have the same or even more value from a customer perspective. Don't sacrifice a move to 5 inventory turns per year just to save 1¢ or 2¢ on the wholesale price you pay. Do the math; you will likely find sticking with your current product at 10 inventory turns is a better (more profitable) decision for your business. Repeat this process across your store. By focusing on inventory turns as a part of your overall business strategy you often end up truly maximizing results for your business.
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