We will sell general merchandise products priced at $1 or less. We need to purchase our stock at a discount of around 20%-25%, compared to the wholesale dealers in order to be competitive.

The following are some of the key source of suppliers

1. Contract manufacturers - try to find the suppliers who directly sell goods, so that the costs of intermediaries get eliminated.
2. Buying goods from auction market
3. Closeout goods from the manufacturers or retailers

Location of the business would always be our key priority. We will rent a 1200-1500 square foot space in a city’s centralized area having 1000-1200 square foot of selling space and would also like to have a good parking space for better marketability. Our ability to get space in a reasonably populated area would ensure a good customer base.

Our proposed hours of operations would be from 9.30 A.M. to 7.30 P.M. from Monday through Saturday, and 12:00 P.M. to 6:00 P.M. on Sunday. We would operate for extra hours during special seasons like Christmas.

Our target customers would fall between the age group 18 - 50.

We will provide different FMCG products at a price of $1 or less. There are numerous types of goods available in a dollar store. They must be categorized properly on the shelves for ease of buying. Following are the some of the common categories of goods for a dollar store:-
• Hardware
• Toys
• Gift Items
• Office Supplies
• Schools Supplies
• Baby Products
• Bath Products
• Cleaning Products
• Pet Supplies
• Safety & Security Items
• Kitchen Items

Apart from the above we also need to reshuffle our product portfolio according to seasons and trends.
Some popular products:

1. Candy 2. Paper products 3. Detergents 4. Stationary 5. Wrapping materials and bags 6. Household cleaners 7. Snacks 8. Laundry supplies 9. Batteries

The United States is a $13 trillion economy with a customer base of more than 300 million. Store based retail sales are poised to grow to a whopping $2.58 trillion industry by 2011. The dollar store is a form of small format value retailing. Since 2001, dollar stores and chains have added close to 6000 new outlets. According to the Retail Forward, 8000 stores are going to be set up in the next five years. The sales growth rate for such stores has been in the range of 5-6% and is set to continue in the range of 7-8%.

The top five dollar store chains garnered total revenue of $22.4 billion in 2006, which represents about two-thirds of the revenue of all dollar stores’.

In the last few years, it has been seen that consumers are becoming more value conscious than ever before. Their shopping interests are shifting more towards discounters and mass merchandisers and away from the regular department stores, as they can find the same items at a substantially lower price.

Dollar General, Family Dollar, Dollar Tree, Fred’s, 99 Cents Only, Kole Imports, My Dollar Stores, Allied Dollar stores, etc. are few of the big names that might create difficulty for a new entrant.

The key factor to success would be to identify a reasonably populated locality where no such dollar stores exist.

In a low margin business like that of a dollar store, we cannot afford to allocate a huge budget for advertisement.

We can use the following promotional activities:
. Printing and distributing pamphlets.
. Magazine advertisements, local newspapers and classifieds.
. Online advertisement and mailing

Our sales strategy would include:

• Providing quality customer services
• Achieving a greater customer base.
• We would need to implement “no cash refunds” and “exchange only within a pre-specified time” policies.
• Take customer feedback to improve service.
• Accept payment modes like credit and debit cards apart from cash.
• List the merchandise online, for e-commerce selling.
• Focus on stocking seasonal dollar items.

Our key operational strategy would be:

• To build sales volume by stocking a variety of products at very competitive prices.

• To offer additional benefits like special discounts on special occasions, scratch cards, free gifts, bumper prizes, etc.

• Our key strategy would also include focusing on choosing the suppliers from whom we can get lesser lead period, so that we need not carry a large inventory level.

The average sales, per square foot for the industry is around $240-$250. Given 20% discount to the industry average for a startup, if we rent 1000 square foot of selling space, our revenue projections for the first year will work out to be $1, 92,000. Given a conservative growth rate of 15% for the 2^nd year and 12% for the 3^rd year our revenue projection would be:

Following are the risks and challenges:

• In order to run a Dollar store one needs to stock a wide variety of goods. This means that the owner has to block significant capital in inventory.

•  Dollar stores are rising in number, creating more competition with time.

• Like any other retail store, a dollar store must also cater to the ever-changing demands of the customers.

• Inflation in the economy can put pressure on margins.

A dollar store is a low margin business and it will take some time before yielding profits. Once a store like this begins selling in volume, it will start yielding significant returns. We see good opportunities for the dollar store industry and if we can capture a good customer base, we do not see any reason to exit the business.

•    Maintain
  an inventory of a variety of goods (especially the popular ones)
• Good
  promotional campaigns (like discount offers, etc.)
• Controlling
  overhead costs is essential to survive in this low margin industry.