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The economics of dollar stores

thehustle.co

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Re: The economics of dollar stores

#61

Post by chrbarrol »

justinjlynn wrote: post #4

Ah, I see, so they make quite a bit of their profit by selling smaller quantities of lower quality goods at higher per unit prices through framing the value proposition carefully and managing expectations to their benefit. Makes sense, given the markets they target, that they're exploiting the effects of the 'Boots' theory of socioeconomic unfairness and quite successfully too.

They also "bulk up" food products, for example introducing filler into meat products such as water and salt [1] such that they can sell a smaller amount of meat for the same price without the consumer noticing.

[1] https://www.youtube.com/watch?v=ONOoKtAH53E

Re: The economics of dollar stores

#62

Post by amcoastal »

kcorbitt wrote: post #17
justinjlynn wrote: post #4

Ah, I see, so they make quite a bit of their profit by selling smaller quantities of lower quality goods at higher per unit prices through framing the value proposition carefully and managing expectations to their benefit. Makes sense, given the markets they target, that they're exploiting the effects of the 'Boots' theory of socioeconomic unfairness and quite successfully too.

I realize the article mentions that sometimes happens, with their example being a 0.8oz deodorant. But as a frequent shopper it isn't my general experience. I often compare prices and on a unit cost basis (so controlling for the sometimes smaller dollar store quantities) you can almost always buy the same brand from a dollar store for a steep discount compared to a traditional supermarket or Target. In general I feel…

Definitely! Dollar tree is the place to get things like dishes and cleaning supplies. You get the same bottle for $1 that is 1.88 at Walmart or whatever. I'll only buy things that the dollar store I KNOW are cheaper though, sometimes you'll think you're getting a deal and then the same product at Walmart is 90 cents.

Re: The economics of dollar stores

#63

Post by II2II »

melling wrote: post #5
kcorbitt wrote: post #2

I absolutely love dollar stores. I recently needed to buy a set of crayons for my son and the options were $5 on Amazon, $4 at Target or $1 at the local Dollar Tree (and the pack had 36 crayons, vs 24 from the other sources!). They're not the right place for everything, but for kids' art supplies, cleaning products, party paraphernalia, seasonal decor, etc, they can't be beat. They seem to have a pretty strong stigma…

The article claims that Dollar Stores are more expensive. They often sell smaller amounts to meet the price, but unit cost is more

I agree with the claim that dollar stores are sometimes more expensive, but asserting the unit cost is higher is an over generalization.

One of the nice things about dollar stores, in my part of the world, is they don't play games with sale prices. Sale prices make it easy to cherry pick prices seen at other retail chains once or twice a year then claim they are cheaper. In many of those cases, the product is only cheaper per unit because they force you to buy the product in larger quantities (e.g. by taping or shrink wrapping multiple units together). That may be fine if it is a product where you can plan ahead, has a long shelf life, or is something you use in quantity. It is not so great when it increases waste since it is a "just in case" product or you won't be able to use it before it expires. If your aim is to reduce waste (or resources or money), you may be better off buying the product when or as it is needed. At any particular moment in time, the unit price at a dollar store may very well be lower than that of other retailers.

Re: The economics of dollar stores

#64

Post by mkr-hn »

A dollar store owner explained it to me more or less as: they're the last stop before the dump. It's like how bill collectors will buy up debt a company has given up collecting themselves for pennies on the dollar.

Re: The economics of dollar stores

#65

Post by mnahkies »

PaulHoule wrote: post #43
41209 wrote: post #33

Earlier quoted context omitted.

The worse alternative is sleeping on the streets when you can't pay your rent. While I do think payday loans are evil, I recognize why they exist. I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. For example let's say you have abusive parents, if affordable housing exist the moment you turn 18 you can up and…

Depends. I got a car loan for a modest car with 0.7% APR, I don’t see a problem with that. My mother-in-law leases a new Toyota Corolla every few years; she gets trouble-free motoring at a reasonable rate. Myself I have no idea how many miles I am going to drive next year (do I work from home? take the bus? do I drive to Montreal or North Carolina a lot?) so I buy a similar car and drive it into the ground. Many of t…

I've never paid more than about 3.5k USD for a car. Not sure what the second hand market is like in America but in NZ and UK you can get great cars for a fraction of the cost of buying new.

In terms of maintenance, I've had some that were troublesome, and some that needed nothing, it's a bit of a lottery in that regard. Most common problems are solvable with a few hours on your back in the garage though.

Possibly most interesting is that the value decay has already taken place at this point. Eg: buy a car for 2k, sell it 5 years later for 1.5k, as opposed to buying it for 80k and selling it two years later for 40k

Re: The economics of dollar stores

#66

Post by tkgally »

Clewza313 wrote: post #32

100 yen (approx $1) have long been huge in Japan too, and their business model is even simpler: most of what they sell is plastic and made to order in China in huge volumes. They have grocery selections too, but nothing that would require refrigeration or otherwise spoil quickly. And while hardly luxury, they're also not down-market in the way that Dollar X's in the US are, many are located in central business distri…

Daiso, the largest chain in Japan, designs a lot of their own products, and the shear variety of some product lines is one of the stores’ attractions. Twenty years ago, before going back to the U.S. from Japan for a family reunion, I bought fifty folding fans, each with a different Japanesey design, at Daiso as gifts. The relatives I handed them out to seemed delighted, and they cost me only a buck apiece.

Until I started working from home last year, I wore a suit and tie to my job in Tokyo. I have a collection of more than two hundred ties, each one different, all looking reasonably decent, bought for a hundred yen apiece at Daiso ten or twelve years ago.

Re: The economics of dollar stores

#67

Post by s5300 »

mkr-hn wrote: post #64

A dollar store owner explained it to me more or less as: they're the last stop before the dump. It's like how bill collectors will buy up debt a company has given up collecting themselves for pennies on the dollar.

Ahh. Does this mean that the meat that can be found in some dollar stores finds its way there as it's last stop before becoming animal meal?

Does not surprise me one bit.

Re: The economics of dollar stores

#69

Post by mkr-hn »

s5300 wrote: post #67
mkr-hn wrote: post #64

A dollar store owner explained it to me more or less as: they're the last stop before the dump. It's like how bill collectors will buy up debt a company has given up collecting themselves for pennies on the dollar.

Ahh. Does this mean that the meat that can be found in some dollar stores finds its way there as it's last stop before becoming animal meal? Does not surprise me one bit.

I think grocery store throw-aways are on a different supply chain. There are stores that sell the old bread from grocery stores. I assume there are stores for meat that's still good but past what the grocery stores stock.

Re: The economics of dollar stores

#70

Post by gumby »

The article itself is quite interesting: short, simple sentences and many colorful graphics. It looks like it could be from a middle school textbook. But the content itself is not simplistic.

Is it intended for a segment in which this is common?

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