How do stores with very cheap prices maximize their profits??

im not talking about Wal Mart here!! im talking about dollar stores, for example. usually in those stores, everything costs a dollar (from what ive heard). its a given that the stores have a lot of business expenses such as that of renting the building it occupies, getting items shipped, etc., inventory and employee wages. do the revenues even match up to the business costs themselves?? it seems hard for that to happen considering the very low prices they charge.

does anybody have any idea how it works for them?? ive been so curious about it all lol.

13 Answers

  • 1 decade ago
    Favorite Answer

    hi prices dont automatically mean more proffit. If you have something that cost you £1.00 and you sell for £100 but only sell 1 or 2 per day then its only £198 proffit

    If you buy something for 10p and sell it for £1 and sell 1000 per day its more proffit.

    Its all about your margins and your volume of sale

  • Anonymous
    1 decade ago

    There is more than 1 type of $1.00 the everything dollar store type has everything $1.00 that means even items sold for a bit less elsewhere are $1.00 there while somethings that sell for a bit more else where would be a $1.00 there. These stores use less time in bookkeeping. If there's too much loss in under pricing an item they will likely discontinue that item!

    I saw spool of thread at $1.00 only store for $1.00 while the same brand else where was selling at $0.88 a spool in an Around A $1.00 store! So you can see how the dollar only stores make money! It balances out!

    Just for the heck of it I once bought the same things at the $1.00 only store and also at the other type of dollar store and the totals were almost Identical $13.00 at the Dollar only store.. and $13.28 at the other dollar store! I now do my own dollar store and I choose the Dollar Plus meaning most items are $1.00 plus some items are less and some plus $1.00 this type of store is more bookkeeping than the dollar only stores! Dollar only stores often get things in pallets(mixed lot sometimes called a flat) Other Dollar stores can special order items but they prefer to buy items in quantity rather than mixed lots!

    Some Dollar Only stores like to have the appearance of selling faster so they often make deals with places like Liquidation World often barter! There are more secrets to the trade can't spill the beans on all of them!

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  • Eddy T
    Lv 7
    1 decade ago

    Most of those cheap goods are from China.

    In order to do business for those chinese goods in the UK or in the US, the chinese businessmen will first appoint a UK agent or a contact, to apply for the business/import licences,visas for workers to be brought into the UK and also to rent a premise to use as stores to sell their goods.

    The shipping and the workers to do their business and all other necessary approvals from any other authorities will be done by them in order to get the goods into the UK to start their trading business there.

    In this way the chinese traders are able to import those goods into the UK plus cheap labour to do their business.

    Source(s): own
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  • 1 decade ago

    not sure about usa, but in england we have pound stores, and they usually get there products for free as there end of the line stuff, over production items,...etc

    so if there not paying for there products but charging us for them then there making a profit...

    but this might not be the case in the us.i dunno.sorry

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  • Anonymous
    1 decade ago

    A lot of times they get their goods at a closeout price buy up all of that stock then sell it at their stores.

    Source(s): saw it on 60 minutes
  • 1 decade ago

    Volume, fast turnover and low overheads mainly.

  • 1 decade ago

    The cheaper the prices, the more people buy, easy!

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