Some Ideas to Reduce Cost of Goods Sold for your Business

Feb 9
10:19

2012

Bob B. Hamilton

Bob B. Hamilton

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The cost of goods sold of the dollar merchandise you buy to resell will have a significant impact on your profit margin. Therefore, you will want to reduce it as much as possible. If you are having trouble coming up with ways on your own, then here are a few ideas you should think about using.

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The cost of goods sold of the dollar merchandise you buy to resell will have a significant impact on your profit margin.  Therefore,Some Ideas to Reduce Cost of Goods Sold for your Business Articles you will want to reduce it as much as possible.  If you are having trouble coming up with ways on your own, then here are a few ideas you should think about using.

One of the first things you need to do is look at the size of your average order.  You do not want to make minimally-sizeddollar merchandise orders because then you would have to make replenishment orders more often.  The more shipments you have coming to your store, the more you will end up paying in freight costs.

Conversely though, you cannot place orders which are too big.  You would then have too much merchandise to keep in your stock room.  Whatever you do, never wait too long to place orders for vital merchandise like core consumables because you never want to run out of them.

One way to reduce you cost of goods sold is to do business with great suppliers that offer lower prices.  Take the time to look for suppliers who frequently offer sales on their inventory.  Buying during these sales can save you even more money.

Some suppliers offer dollar merchandise sales whenever they are trying to make room for more inventory.  Others have sales on a monthly or even weekly basis.  If possible, you should wait for these sales to place the majority of your orders.  Make sure you do not run out of inventory in the meantime though.

If you run a dollar store, then it is a good idea to attend trade shows around the country once or twice a year.  You can often find new merchandise or even merchandise you are already selling at significantly lower prices at these trade shows.

Not every dollar store will operate indefinitely.  If some of your competitor's stores are closing down, they may have leftover merchandise you could sell in your store.  The owner will likely try to get rid of the merchandise for cheap so you could save a lot of money.

One final way to reduce the cost of goods sold for your business is to look for closeout and liquidation suppliers.  They sometimes offer dollar merchandise at deeply discounted prices.  They also offer great prices on items you do not traditionally find in dollar stores.  Just make sure you buy merchandise which is still in good condition.  Your customers likely will not be interested in buying anything which is ripped, torn, or otherwise damaged.