Rein in Dollar Store Cost

There is really no denying the reality of cost management for those operating a dollar store business.  Whether it is dollar store merchandise, monthly lease payments, or payroll, a careful watch is required at all times.  These and other dollar store costs must not only remain in-check, but be the target for reduction.  In reality, given the tight margins associated with the discount industry, every opportunity to reduce cost must be successfully implemented to maximize the final bottom line results.  Read on for specific ideas to help you manage the costs for your business.

I)    Negotiate hard before ever agreeing to a lease contract

You must be realistic in projecting sales goals as well as all dollar store costs associated with starting and operating a dollar store at a potential store location.  Likewise you need to be well aware of the overhead you face.  Do not agree blindly agree to adding many extra costs just to land a site you feel is best.  Be well informed.  Consult with your attorney, accountant and other experts before making your final decision.  

II)    Set and manage to payroll goals

Set your payroll plans and goals as a percentage of total store sales.
Be sure to establish actions designed to ratchet down the established percentage over time.  Know what your employees do as they perform their assigned tasks.  It is also important to know exactly how long it takes for them to perform those tasks.  With this information you know exactly what operating your dollar store business takes.  You can then intelligently focus reduction efforts on eliminating unneeded actions, combining like actions, finding more efficient ways to run your business. 

III)    Keep dollar store merchandise costs in-check

Establish specific cost reduction goals for dollar store merchandise costs.
Next establish the best actions to achieve your targeted lower cost. Never lose sight of the freight costs to bring merchandise from a vendor to your store.  Examine strategies such as freight caps or freight paid by vendors.  Then move on to develop other creative actions such as always shipping only totally filled pallets.

If you are operating a dollar store business, you must continually focus on reduction of the dollar store costs required to keep your business running.  Whether it lease payments, payroll costs, the money required to purchase the dollar store merchandise you sell, or other expenses associated with owning and operating a dollar store, it is imperative to maintain your focus on reduction of those costs.  It will not be easy.  However it can be done.