Many of those who start a dollar store are looking for strategies to set their store apart from the rest of the crowd while increasing their profits. They’re looking at adding shelf recalls, clearances, and even customer-returned merchandise to their mix of merchandise in their store. The plan is to pay much less for these items and then resell them as items that are simply not found at the typical dollar store. His vision includes gigantic profits in return for his efforts. While there are some real positives associated with this strategy, there are also some downsides to consider. In this article, I’ll introduce 6 of the cons of buying, sorting, and reselling store-returned merchandise when starting a dollar store.

1) Customer returns are not the new merchandise you received when you first opened a dollar store. This is likely to be a big change from their normal business model, where all merchandise on display is brand new and never used before. Really consider whether moving in this direction will work successfully for your store. Make sure this is something your buyers will accept as a means of receiving added value for their shopping dollar. Make sure the added costs associated with this merchandise don’t erode your profits.

2) All merchandise must be carefully classified before being offered for sale. Customer-returned merchandise is often packaged in bulk with tens or even hundreds of different items mixed together. As a result, you will first need to sort items to locate matching or similar items, and then group items from the same department for further inspection.

3) All merchandise must be thoroughly inspected before being offered for sale. This is very different from your experience when you first start a dollar store. Where a quick check for torn or damaged packaging is appropriate for new items, these items will need to be examined individually, one by one. Often the examination will reveal a defect of some kind.

4) There will be ‘waste’ in the merchandise you receive. It’s almost a guarantee that there will be items with faults, heavy use, or other issues that make them unsaleable at almost any price. Orders with too many of these rejected items can wreak havoc on your profits.

5) Most closeout and clearance sellers offer these items for sale ‘as is, where is’ so there are typically no warranties of any kind. You own the merchandise you receive. While many merchandise vendors make it difficult to return or receive credit for merchandise, this is absolute for these items.

6) In most cases, these items will only be available for a limited time. In other cases, there may be a limited amount available. In all cases, while these items are generally well priced and the amount of time available to order is short. It’s important to remember that because these items may not be available in the future, they are not a means of attracting buyers for future purchases.

To your success in starting a dollar store!