Dollar stores acquire their merchandise directly from manufacturers, lesser-known companies, foreign markets and other retailers’ liquidation sales. Dollar stores exercise a variety of purchasing and operating tactics to offer the lowest possible prices to consumers.
One of the main ways that dollar stores save on costs is by acquiring merchandise directly from manufacturers. These stores often purchase products in bulk, allowing them to save significantly on costs. Dollar stores may also cut down on shipping costs by having products delivered only at certain times during the week, rather than every day.
Many of the products sold at dollar stores are manufactured by less prominent companies with no advertising budget. These companies can’t compete against major manufacturing corporations, but they can still turn a profit by selling merchandise to dollar stores and other discount retail outlets. Dollar store shoppers are concerned about low prices, not brand status, and purchase products even if they are unfamiliar with the company that makes them. Many of the generic brands sold at dollar stores are imported from foreign countries. These lower-quality products are often imported by distributors and then sold cheaply to dollar stores.
Some merchandise at dollar stores also comes from the liquidation of other stores’ inventories. If a store goes out of business or needs to get rid of stock quickly, dollar stores may buy the products at greatly reduced prices.