Sure It Is Only a Penny – Just see what it can mean to Your Dollar Store Business
If you decide to open a dollar store business, your frame of reference needs to change. Where many business owners will ignore the impact a single penny can have on their business, looking instead for the dime-sized impact, you cannot. You simply don’t have the luxury of looking away whenever a change to reduce costs presents itself. With the sales volume, and the continually increasing dollar store costs, you must continually be on the lookout for those extra pennies in savings. Read on to discover how a single penny can grow into hundreds and then many thousands of dollars in extra savings when you are focused on dollar store merchandise.
Start by determining the cost of goods sold for your dollar store merchandise. This is easy for those selling at the dollar price point. Simply take your total dollar store costs for the merchandise purchased in an order, during a week, or for an entire month. Be sure to include freight and shipping-related costs to transport the merchandise to your dollar store business. Then just divide that number by the total units purchased, less returns, and unsalable items. This will provide you average landed-cost per item. For example, if your landed cost of 100 items is $50 after all unsalable items are removed, then by dividing $50 by 100 you determine your wholesale cost per item is 50-cents.
For those who want to open a dollar store with dollar plus format, there is a little extra work, but easy. Start by collecting the total costs of all dollar store merchandise purchased for resale, including shipping costs. Next, collect the total quantity of items purchased. Don’t forget to deduct returns and other unsalable items from the total. Then determine the average sale price for all items. Start by dividing the total dollar store costs of the merchandise by the total number of items. Take that number and divide it by the average sales price for the items. This will provide the average cost per dollar of sales. For example, if you have spent $100 for 12 total items, but 2 of them were not salable, you would divide $100 cost/10 items available for sale. In this case, your average wholesale cost per item is $10 ($100/10). If your average retail sale price for the salable items is $20, then divide your average wholesale cost of $10/$20 (average sale retail price) for 50-cent average per dollar of sales.
Now you know the average cost of goods sold for this particular order of 100 items, it is time to repeat this for the entire month. Just add everything purchased for resale during the month together to determine the monthly average. Then set goals for the new, lower cost of dollar store merchandise you purchase for your dollar store business for the next month. When you open a dollar store, do not make this a one-time activity where you set aggressive goals, fail, and then give up. Be reasonable. Reduce the dollar store costs per replenishment item purchased by one-cent may be a good goal to start. Now let us examine the impact of that one-cent on cost reduction for the month. If you see your dollar-price point store has monthly sales of $30,000 per month, it means you’ve sold 30,000 items. Saving one-cent per items totals $300 in reduced costs for the month, or $3,600 reduced dollar store costs for dollar store merchandise over the year.
When you open a dollar store, you don’t stop there. Once you achieve 49-cents, implement a new goal of 48-cents. Go to work with existing suppliers, new, lower costs suppliers and other new sources to reduce your dollar store merchandise costs once again. Never stop. Keep focused on reducing dollar store costs and the numbers will add up quickly for your dollar store business.
To your success when you open a dollar store!
About the Author
Find out how you can open your own dollar store business.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.
2 tricks of a 20 Dollar Bill$$$
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MCMVII USA LIBERTY TWENTY DOLLAR PAPER WEIGHT $2.25 |
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Twenty Dollar $20 Australian Paper Note $41.00 |
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$20 NOTE R403 1968 PHILLIPS/RANDALL TWENTY DOLLARS COA COMMONWEALTH OF AUSTRALIA $19.99 |
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1993 Twenty Dollars Fraser/Evens Last Prefix $20 paper note $21.50 |
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Twenty Dollar Bill – Elmore Hammes – NEW BOOK $25.49 |
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BANK OF CANADA 2.1.1937 TWENTY DOLLARS VF/EF BC-25a $388.92 |
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1934 Twenty Dollar Bill Federal Reserve Note A Series $38.89 |
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1934 Twenty Dollar Bill Federal Reserve Note A Series $38.89 |
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1934 Twenty Dollar Bill Federal Reserve Note A Series $34.03 |
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1934 Twenty Dollar Bill Federal Reserve Note A Series $38.89 |
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New Zealand P-167b Twenty Dollars Wilks (1968) Star Note aVF-VF $200.00 |
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New Zealand P-167d Twenty Dollars Hardie (1977) Star Note aUNC $200.00 |
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$20 -15 1929 E Twenty Dollar Bill – Brown Seal Richmond $72.87 |
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1980′s One,Two,Five,Ten,Twenty,Fifty,Hundred dollar Australian bank notes $203.50 |
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$20 Twenty Dollar Star Replacement Bill Note Low Serial $32.04 |
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1990-TWENTY FIVE DOLLAR-GOLD 1.27gm-14mm x1mm-COOK ISLANDS-PERTH MINT-NO RESERVE $0.99 |
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Mega Big Bucks R402 1967 Coombs Randall Twenty Dollar Note Beautiful EFcat$2400 $1,750.00 |
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Man on the Twenty Dollar Note – Charles Kingsford-Smith $13.45 |
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2008-W BUFFALO $25 TWENTY FIVE DOLLAR GOLD 1/2oz COIN PCGS MS70 $3,111.28 |
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1861 Twenty Dollars $20 Note Confederate States Of America Currency $243.07 |
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1950B Twenty ($20.00) Dollar Federal Reserve Note $38.89 |
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1950 Twenty($20.00)Dollar Federal Reserve Note B Series $38.89 |
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1963A Twenty($20.00)Dollar Federal Reserve NoteB Series $38.89 |
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ROLL of 20 2000 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $56.88 |
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ROLL of 20 2001 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $361.69 |
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ROLL of 20 2002 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $243.07 |
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ROLL of 20 2003 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $58.29 |
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ROLL of 20 2004 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $58.29 |
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ROLL of 20 2005 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $48.57 |
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ROLL of 20 2006 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $111.81 |
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ROLL of 20 2007 S PROOF SACAGAWEA DOLLARS Twenty Native American Coins Roll $87.46 |
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REPLICA TWENTY DOLLAR GOLD PIECE 1861 COINS $19.44 |
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1981 S Washington Quarter Dollar Gem Proof Twenty Five Cent Uncirculated Coin $6.76 |
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1942 Washington Silver Quarter Dollar World War Two Era Twenty Five Cent Coin $9.67 |
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1891 Liberty Seated Silver Quarter Dollar Old Twenty Five Cent Coin $27.18 |
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1904 UNITED STATES LIBERTY TWENTY DOLLARS $20 GOLD PIECE DOUBLE EAGLE RARE WATCH $5,342.73 |
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Beautiful 1877 Seated Liberty Silver Quarter Dollar Old Twenty Five Cent Coin $33.98 |
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Very Nice Old 1876 Seated Liberty Silver Quarter Dollar Twenty Five Cent Coin $29.12 |
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Twenty Dollars. 1974 Phillips/Wheeler. aUNC, cat $320 $140.00 |
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1985 BRITISH VIRGIN ISLANDS SILVER PROOF $20 TWENTY DOLLAR COIN $44.51 |
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Sir Charles Kingford Smith Man on the Twenty Dollar $5.10 |
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1922, $20 TWENTY DOLLAR, LARGE SIZE, GOLD CERTIFICATE $193.49 |
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1994 Twenty Dollar First Note Folder $60.00 |
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1994 Twenty Dollar First And Last Note Folder $220.00 |
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R404 Twenty Dollar Phillips Wheeler Commonwealth Unc $240.00 |
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THE MAN ON THE TWENTY DOLLAR NOTE : SIR CHARLES KINGSFORD SMITH – MCNALLY cw $22.00 |
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McNALLY, Ward. The Man on the Twenty Dollar Note: #6173 $7.00 |
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2006 SOLOMON ISLANDS GOLD SILVER PROOF $25 TWENTY FIVE DOLLAR COIN $87.68 |
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PANAMA Silver Liberty Twenty Dollar 2007 One OZ norfed $85.56 |
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The Man On The Twenty Dollar Note – McNally Ward $8.10 |