£1 stores - Just how do they make their money?

psd99

psd99

psd99

Soldato
Joined
7 Sep 2008
Posts
5,589
so I was in a £1 or 99p store yesterday.

they had lots of stuff there such as deodorant, shower gels to sweets, crisps to garden stuff - the actual range they have is striking but how do these places actually make their money if all items are priced at £1?

Also for instance a bottle of shower gel say lynx shower gel is £1 in there but in boots it is £2.99. I notice that the packaging is much more shiny in boot etc
but surely the product is the same on the inside?

so what do you all think?
 
People buy things in there that they don't need "just because it's a pound". Some items in the shop may well be loss leaders (once you factor in floorspace used and other overheads) but other items they make a very good profit on, they're banking on you grabbing a few of those items when you pop in too.
 
Probably the same reason why Sports Direct makes money selling football shirts for £25 when the official stores sell them for £40.

Bulk Purchase, particularly end of line items or approaching their sell by date and make money by selling a higher volume of goods with a lower profit margin than Boots is willing to accept.

Boots focuses more on luxury items and medical care, pound stores are all about operating efficiency and lean profit margins.
 
No no, but if you look at the cans of pop and things like that if you look at the dates on the bottom of them you will usually find that they have about a week or so before it's up.

It's perfectly fine for best before, its use by that you have to be very careful about.
 
interesting ......

so the actual products themselves like say cans of lynx, toothpaste or shower gell
it is really the same stuff you can get in boots or superdrug?

Is there really any difference in quality?
 
And the rest of the rubbish stuff they sell is bought from the likes of China for about 10p per item so has a very good mark up.

There is a massive multi million pound industry in China and other countries based round making products for the magic $1/£1 market. Most of this stuff can be bought in bulk for 10 to 20p.
 
the cost-price for many many goods is far far less than the retail price.

Things like consumables usually have the highest margins, of up to 375% in my experience.
 
Because so much of the stuff is actually more expensive than you would get in the supermarket. Especially sweets and chocolate. People pick up a bag of haribo for £1 or humbugs and it's cheaper in a main supermarket.

If your carefull what you buy you can save a fair bit but people just seem to think everything is a bargain.
 
I find some of the items in pound shops are imported so they may have a slighly different make-up depending on the country they've come from and that nations personal tastes/factory differences, but all in all if you can wade through the dross and only buy what you actually need then you can grab some bargains.

As noted earlier whenever I go in the damn things I always come out with piles of sweets/superglue and an odd looking mug with an upside down defected handle :/
 
psd99 said:
so is everything in that store a reject?

25% profit margin... they buy it for 75p and sell on for 100p?
Click to expand...
Much less than 75p, you need to consider that's their profit, so take off salaries, electricity, ground rent, rent itself, etc..... It probably costs them <30p for something they charge £1 on an average item. Some maybe 1p, some maybe £1.10.
 
they also make more money buy getting you to buy something else that you didnt go in there for.

example...pop into the £1 store yo get some batteries and see something else that you think "thats cheap i think ill have a few of them while im in here".

ive done this many times and always spend roughly £10 every time i go in there.
 
You must log in or register to reply here.
Back
Top Bottom