Maximizing Profits as a Retail Discounter

Entrepreneurs who are interested in serving the public as a discount retailer must understand the fundamentals of Economics 101.  Economics 101 covers the following areas:

1. Inflation 
2. Supply and Demand – Pricing Dynamics
3. Competition
4. Scarcity and Urgency
5. Opportunity Cost
6. Resource Allocation 

Starting off with inflation, the longer it plagues our economy, the more consumers will seek out discount retailers that sell high-quality products at fair prices (demand). Inflation, now in its fourth consecutive year, even though it is declining according to the Fed, has a cumulative effect that does not decline.  The only aspect of inflation that declines is its compounding increases.  Consumers need retail discounters to supply them with essential products that they need for good living.

If we learned anything from the financial crisis that raged from 2008 to 2012 is that consumers typically follow specific patterns.  When times are tough they want to get the best products at the lowest prices (resource allocation).  When times get better your customers often tend to save more to avoid the stress of another down turn or inflationary period.  

What ends of happening is customers who have experienced inflation become discount shoppers even after wages increase to compensate for the prior period of inflation.  By becoming a cost-efficient discount retailer (resource allocation), you will earn your customers’ loyalty for the entire time you are in business.  You will experience this loyalty through good times and bad because you were there for your customers when they need it most.  You helped them beat inflation by stretching their household dollars (resource allocation).

Successful discount retailers understand that the best way to make a profit is not by selling high, but by buying their goods at the right price point (resource allocation).  Once you define the demographic your store will serve, you will be able to define what your product mix and cost should be. 

If the community you are located in is like many throughout the United States the number of retail outlets is declining for a variety of reasons (inflation and opportunity cost).  However, there is desire by the shopping public to go to a store and shop for quality merchandise at low price points which creates demand.  In order to be successful as a discounter you need reliable supply.  This is why major discount retailers like TJ Maxx, Marshalls, Burlington Coat Factory, and Big Lots are increasing their market share year over as the public has recognized that they can obtain designer labels and great quality merchandise at bargain prices (supply and demand).  Now so can you and if you don’t someone else will (opportunity cost).

With Total Wholesale, LLC as your supplier, you will be able to compete with the likes of all of the major discount retailers on a head-to-head basis (resource allocation).  Buying from Total Wholesale, LLC provides you with a low purchase point for new merchandise (resource allocation) packed in their original cartons which locks in your profits on the buy side of the equation (resource allocation and opportunity cost).  

We supply many of the major discounters mentioned above – the only difference is they are buying multiple truckloads while you may be buying a couple of truckloads per month.  The result is the same on a different scale – profits.

Buying from Total Wholesale, LLC will also separate you from your competitors.  Your competitors are most likely buying returns from Wal-Mart, Amazon, Stein-Mart, etc. and have no idea what is in their shipment or what condition their goods might be in.  

When you purchase a pallet or truckload from Total Wholesale, LLC, however, you are buying first-cost goods still in their original packaging and cases.  This benefit allows you to curate your shop’s product offerings and creates an element of scarcity.  By curating your product offerings, your customers will know that they can count on you for apparel, home goods, etc. and will return on a regular basis to see what new items you have in stock.  

When customers recognize that the bargain they find today might not be available tomorrow, scarcity comes into play.  This scarcity influences price determination. Your sophisticated shoppers appreciate a good deal, and they will visit your store because they know you offer first-cost goods at fair or bargain prices. By doing so, you’re not only meeting their needs but also contributing value to your community by helping them stretch their money in the face of inflation. 

For your customers, as a local shop, you are providing a convenience that they may have lost because of other store closures in your market by the major retailers.  These store closures occur because they have not been able to control their overhead costs or cost of goods sold.  In addition to providing first-cost goods at bargain pricing (recourse allocation) you will become a valuable resource in your community.