When opening a dollar store there are many indicators of success. They range from bottom line profit to undesired employee turnover. However one of the most important is inventory turns.
What are inventory turns anyway? This is simply a measure of the number of times that the full cost of the stores inventory is sold. It is measured on an annual basis. For example, if after opening a dollar store the inventory for your store is maintained at $1,000,000, and annual sales are $8,000,000, then there are eight inventory turns per year for that store ($8,000,000 sales divided by $1,000,000 store inventory.).
When opening a dollar store, the goal is to maximize the number of inventory turns per year. The more inventory turns, the harder the money that is invested in inventory is working for you. A reasonable goal for a family owned store is to achieve six-to-eight inventory turns per year.
There are two strategies that work well for increasing the inventory turns for those who are opening a dollar store. Both need to be considered when looking at ways of achieving desired inventory turns levels. The first is inventory reduction and the second is increasing sales.
Increase inventory turns by reducing the inventory that is being maintained in the store. By carefully eliminating or at least reducing the inventory of items that sell slowly, the inventory turns number will increase. Care needs to be taken that inventory reductions arent so great as to impact total sales however. When you are opening a dollar store the worst thing that could happen would be to sharply reduce inventory without fully understanding the impact to sales.
When opening a dollar store inventory turns can be increased by increasing total store sales. The higher the sales level while maintaining the same inventory levels, the higher the inventory turns for the store. Care must be taken to ensure that inventory levels of core products be maintained at appropriate levels. As sales go up, expect core products sales to go up as well. Without consistently maintaining core products such as household cleaners, paper good, and health and beauty items sales will drop.
To Your Dollar Store Success!
Are you interested in Opening your own Dollar Store? Visit http://www.openingadollarstore.com to find out more!
Opening A Dollar Store - Some Big Store Disadvantages
If you are opening a dollar store carefully consider the advantages and the disadvantages associated with the actual size of the store that you will open. While there are many advantages to opening a store that is larger in size, there are also many ...
Opening A Dollar Store - Location Cannot be Ignored
We have all heard that location is critical to success in the retail trade. If you are considering opening a dollar store know that those who make that claim are correct. A poor location can create so many problems that it may be impossible to succes...
Opening A Dollar Store - You Need A Plan!
One of the biggest mistakes that entrepreneurs who are opening a dollar store make is to not take the time to develop a plan for their business. This can be a very big mistake that will cost you money. Without a business plan the business is not set ...
Opening a Dollar Store - Cut Start-up Costs
Are you opening a dollar store? Start thinking of creative ways to help reduce the costs associated with getting started and open for business. Remember that cost reduction will be one of the continuing areas of focus for you in the future. Why not g...
Opening a Dollar Store - Get Others Excited by Being Excited!
Do you want to know one of the secrets to success after opening a dollar store? It is to get everyone excited about you and your business. But that is easier said than done for some entrepreneurs. They dont realize that excitement actually begins wit...
Opening A Dollar Store - First Steps to Take
There are so many things to do as a part of moving toward opening a dollar store. Without taking the right steps, your successful start-up will be much more challenging. If you have made the decision to open a dollar store be sure that you dont forge...
Opening A Dollar Store - What Is Dollar Cost Averaging?
Are you considering opening a dollar store? If so, one of the areas of focus for you as you work to keep costs under control will be the cost of the goods sold. Merchandise costs are often the single largest expense for a dollar store. Knowing what d...
Opening A Dollar Store - Location Traffic and Access Matters
Are you opening a dollar store? If so location is the single most important decision that you will make prior to opening that store. Invest the time, energy and money to really examine all of the location options before making a final decision. Part ...
Opening A Dollar Store - Growing Your Business
One of the challenges that every retailer faces is continually growing sales. Opening a dollar store is no different. It is important to know the current level of sales. It is also important to have established future sales goals.Along with those fut...
Opening Your Dollar Store - Watch Out for Business Changes!
It is quite easy for those who are very close to a business to lose sight of changes that are occurring in that business. This can happen to the best of owners and managers. Yet there are steps that can be taken after opening your dollar store that w...
