Test Before You Invest In Closeout Merchandise When Opening A Dollar Store
There are many risks associated with starting any kind of business. There are risks associated with the selection of the perfect location, staffing with quality employees, finding suppliers and much more. This criterion certainly holds true when opening a dollar store. Since inventory will likely be your highest initial investment, selecting the right suppliers can literally make or break your business. In this article I present test before you invest in closeout merchandise when opening a dollar store.
Merchandise quality can vary greatly from load to load with closeout and liquidation merchandise. As a result it's wise to always order a smaller sample load to inspect. This helps assure what you can expect in terms of quality and salability from a larger order. Since suppliers typically have limited quantities of products, be sure to follow up quickly with a full-sized order. Failing to do so risks missing out on the merchandise altogether.
Expect extra labor to be required when purchasing closeout merchandise. When opening a dollar using closeout and liquidation merchandise you'll find prices will be significantly lower, yet labor and handling costs will be significantly higher than just buying case lots of new merchandise. Yet done correctly, you'll come out way ahead both in final cost and the sales generated.
Most closeout and liquidation loads will require sorting. It's highly likely that some of the merchandise will not be salable without additional work. Often the best course of action is to donate unusable merchandise. Some items will also likely need to be destroyed.
Be sure to count the pieces of good merchandise you received. That final tally of good items is really your only way to know the real cost-of-goods-sold for the order. When opening a dollar store it's important to remember to include freight for the entire shipment spread across only the good, salable items in your calculation.
Take the time to develop a donation and disposal strategy. As volume builds, there will be a large quantity of items requiring quick disposition. By knowing exactly what you will do, it becomes much easier for employees to make the right decisions and to initiate moving the product out of your warehouse or sorting area.
Purchasing closeout and liquidation merchandise can be a very effective strategy when opening a dollar store. Be sure you go into this process with your eyes wide open. For those who take the right steps, this can be a very profitable decision.
To your dollar store business success!
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.
