Need info on starting a Pound Store

[m6njy]

hi im looking into starting opening a pound store where every item is £1. would like any information on suppliers, store layout, and general ideas....

 

[FaerieB]

I have a feeling that Poundland has cornered that particular market but others may feel differently x

 

[kulture]

I think it is a diminishing market. With inflation and VAT eating into poundlands margins I expect to see twopoundland soon.

There are two main sources of supply for such a store. Either end of lines/discontinued lines that a manufacturer/wholesaler/distributer just wants to dump in one sale (so you need deep pockets and a big warehouse), or cheap stuff made to a price point imported by the container load (so again you need deep pockets and a large warehouse).

 

[poundcoin]

hi im looking into starting opening a pound store where every item is £1. would like any information on suppliers, store layout, and general ideas....

Within the last 2 months have just closed a pound store that previously was extremely very busy in a small town-centre location .

At one time we had an exclusive offer but now every store now seems to specialise in pound lines and became competition .

In our town towards the end we were competing with Iceland , QS Stores , Poundstretcher selling most of our items at 99p .Tesco , Morrisons , Wilkinsons and had 2 Poundlands in adjacent towns .
Not here but elsewhere are 99p Stores , B&M , QD and lots of others and apparently the store with the biggest range is ASDA who boasted some 4000 pound lines .

So if you have any of those against you you will find it really tough as the margins are just not there .
During the recent recession the only items that really sold were low margin toiletries/household cleaning products ,the higher margin stuff just slowed down completely .
Maybe if you can manage on your own i.e no staff and have reasonable/cheap rent you may survive...but if you do well , no doubt someone will soon open up in competition .

If you do risk it , I would advise against buying from clearance houses as my worst buying nightmares were from such places and I have over 40 years in retail . There are some lines that just don't sell at any price !

To be honest I wouldn't advise anyone to try and set up a retail business at present .

Overheads are generally high, the minimum wage is always on the up and sales are depressed with the general gloom .

It is very difficult to make a profit at the moment and bear in mind that the VAT increase in the New Year lessened profit margins even more , making it even more difficult !
If you are in full-time employment I would stick at it !

However here is my standard reply to such enquiries if you are determined .

Reoundshop Supplies.

I will give you a rough idea of where you could find
some suppliers , they are not necessarily ones I use but
I am in remote part of the country ! You really have to
cultivate your own suppliers to find ones that you can
work with.

You should find some here:

http://www.the-trader.co.uk

JUST CLICK ON "TOILETRIES" or "£1 lines" IN THE DROPDOWN PRODUCT
MENU. Also try other categories i.e. stationery, toys, jewellery , hosiery etc.

I really would suggest you go to the NEC spring show
in BIRMINGHAM at the beginning of FEBRUARY each year
where many suppliers will be exhibiting.

Details here:

http://www.springfair.com/spring11/website/ExhibitorList.aspx?prid=ctId4&varname=pn

check out the suppliers in the "volume" hall . The majority of these suppliers are used to dealing with pound shops .

Look at Exhibitors or Suppliers and phone and ask them
for a catalogue or rep. Some
specialise in say toys or stationery...ask them their
speciality.

You will need more than a day to look round this
show!
Many will expect you to pay for the goods before
they send them if you have no trading history.

You can also visit the smaller Autumn Show at the beginning of September in the nearby NEC.

I started out by going to cash and carries with a
hired Transit and this could be another way for you.

As for cost prices there is no set rule but be
prepared to work on as little as 18p per item profit
esp. on toiletries ! Volume is the key.

 

[KateCB]

Wow, what a great answer, just the type of thing we all aspire to - relevant, current and helpful!

 

[Jeff FV]

Wow, what a great answer, just the type of thing we all aspire to - relevant, current and helpful!

Can I just second that - I'm not looking to go into the pound store market, but for anyone who is that's some priceless (well, worth at least more than £1!) advice.

Its high quality posts like that from poundcoin that make this forum a real gem.

Jeff

 

[GeorgeStrait]

Just an idea, why limit yourself to the £1, it's a market that has no way to go but shrink with declining margins.

So, and this may be stupid, why not call yourself something like "Around-a-pound", it says pretty much the same as a pound shop but gives you so much more room for manoeuvre and longevity.

 

[billie1]

How about '£5 land', where you can sell good quality products for that price. To be honest 'Poundlands' products are now of very bad quality, that I prefer to pay more for a better quality product.

 

[KeithGreen]

Or FiverLand sounds a bit more punchy.

 

[silvermusic]

Just an idea, why limit yourself to the £1, it's a market that has no way to go but shrink with declining margins.

So, and this may be stupid, why not call yourself something like "Around-a-pound", it says pretty much the same as a pound shop but gives you so much more room for manoeuvre and longevity.

One thing people seem to miss with the pound lines is thinking the product lines will shrink as prices rise. What they forget is the number of products which are now under a pound but as prices rise towards the £1 price point they become new lines for the pound shops.

 

[FaerieB]

They even make special mini jars of stuff to sell at £1 .... and 3 for a pound on paracetamol or any other painkiller that you can get at the major stores for 19p per pack x

 

[silvermusic]

My better half being something of a chocholic knows the pack size of various sweets/chocolates and can spot the special size packs made for poundland, etc. One example is packs of three Crunchie bars, you can't get that size anywhere else apparently, the supermarkets only sell them in packs of four.

It's nothing new, years ago the packs of cigarettes in pub vending machines often only had less than 20 in a pack. Vending machines weren't the smart clever types they have nowadays that give change.

 

[FaerieB]

My own personal vices are peanut butter and Nutella ... I've never seen such tiny jars :| ... the rest of it you have to be a regular for when they get a job load of something decent from a company that's either stuggling or gone t1ts up. The moisteriser I use (due to dry skin and eczema) is normally aroung the £4 mark ... they had it for £1 ...

Surely they must buy liquiedated stock for pennies as well as producing their own brands of absolute rubbish like hack saws that would struggle to cut through butter ... x

 

[GeorgeStrait]

My better half being something of a chocholic knows the pack size of various sweets/chocolates and can spot the special size packs made for poundland, etc. One example is packs of three Crunchie bars, you can't get that size anywhere else apparently, the supermarkets only sell them in packs of four.

These products are not for the UK market, hence the differences. Very little of what they sell is intended for us lot.

Did you know that the cans of Coke (coca cola product not cheaper versions) you buy in these places, and many independent stores, is not made in the UK and does have a slightly different taste from the genuine UK product?

 

[FaerieB]

Interesting Mr George ... does the chocolate taste the same?

I once heard that big brands have to reduce the sugar content of chocolate products for the european markets as their tastes are different to ours.

If I'm going to treat myself to chocolate I buy the £1 blocks from Liddel ... as it's European it actually tastes of chocolate and not sugar x

Plain chocolate hazelnut is my fave x

 

[GeorgeStrait]

Interesting Mr George ... does the chocolate taste the same?

No, did you know chocolate has to be made different for warm climates. That is why in the USA they don't make real chocolate but the candy type of stuff. Reason - I'll keep this brief - the first major chocolate maker in the states was Ethel M's (Mars - you may have hear of them!), based just outside Vegas - Henderson I think. Due to the heat "normal" chocolate would melt very quickly, hence why the Yanks don't make what we would call real chocolate, simply down to the climate.

Saying that, these days you would be hard pushed to tell the difference between a UK mars bar and foreigner.