Many dollar store starters look for strategies to differentiate their store from the rest of the crowd and increase their profits. They are examining the possibility of adding shelf pulls, closeouts, and even customer-returned merchandise to their merchandise product mix in their store. The plan is to pay much less for these items and then resell them as items not found in the typical dollar store. Your vision includes huge profits in return for your efforts. While there are some real positives associated with this strategy, there are certainly some downsides to consider as well. In this article, I’ll introduce 6 of the downsides to buying, sorting, and reselling store return merchandise when starting a dollar store.
1) Customer returns are not the new merchandise you received when you first opened a dollar store. This is likely to be a big change from their normal business model, in which all merchandise on display is new and has never been used before. He really examines whether moving in this direction will work successfully for his store. Make sure this is something your shoppers embrace as a means of receiving added value for their shopping dollar. Make sure the added costs associated with this merchandise don’t erode your profits.
2) All merchandise must be carefully classified before being put up for sale. Customer-returned merchandise is often packaged in bulk with tens or even hundreds of different items mixed together. As a result, you will first need to sort the items to locate matching or similar items, and then group the items from the similar department for further inspection.
3) All merchandise must be thoroughly inspected before being offered for sale. This is very different from your experience when you first start a dollar store. When a quick search for broken or damaged packaging is sufficient for new items, these items will need an individual examination, one at a time. Often times, the exam will reveal some kind of defect.
4) There will be ‘waste’ on the merchandise you receive. It is almost a guarantee that there will be items with failures, difficult use or other problems that make them impossible to sell at almost any price. Orders with too many of these rejected items can wreak havoc on your profits.
5) Most clearance and closing vendors offer these items for sale “as is, where is”, so there are usually no guarantees of any kind. You own the merchandise you receive. While many merchandise vendors make it difficult to return or receive credit for merchandise, this is an absolute for these items.
6) In most cases, these items will be available for a limited time only. In other cases, there may be a limited quantity available. In all cases, these items are generally well priced and the amount of time available to order is short. It is important to remember that since these items may not be available in the future, they are not a means for buyers to return to make follow-up purchases.
To your success when you start a dollar store!
