2006-08-29 05:16:45 · 13 answers · asked by RA 2 in Business & Finance ➔ Small Business
They buy in millions of units of cheap items in one go rather than just a couple of hundred so some of the items you spend a pound on they have maybe spent 3p on and other items you buy may cost them as much as 50p a time, whatever, they buy in such bulk that they wouldn't pay over 50p per unit.
Thats how they work, because they know people will always go in for a bargain.
Still being ripped off, just like every other retailer, just more softly!
2006-08-29 05:26:32 · answer #1 · answered by jennijan 4 · 1⤊ 0⤋
A "Pound Shop" works by selling goods which are mostly worth less than a pound.
To be less cynical, "Pound shops" often sell things like mops and dusters which are quite useful but which the mainstream supermarkets wrap up and sell in multiple so that it is worth their while. A pound shop can economise on things like packing, and also on accounting because it need not record in such detail what it has sold. Such shops also buy selective bargains in bulk and then get people to buy them, rather than ensure they have a comprehensive stock with all the stocktaking this involves. They can make less profit per item, but remain competitive by turning over stock quickly in bulk.
These days the actual production cost of the goods represents only a small proportion of the prices charged by shops (as any farmer will tell you bitterly). Most of what you pay goes on things like transport, advertising, rental of the shop (notional if the firm owns the freehold), property taxes, the wages of shop assistants and not least profits (the major supermarkets make huge profits). Pound shops are a way of marketing that gets round some of these other costs.
2006-08-29 05:39:22 · answer #2 · answered by Philosophical Fred 4 · 2⤊ 0⤋
They buy stuff for less than £1, and sell it for £1. They may occasionally sell stuff at a loss to attract custom, but generally they will be making a profit.
Some things are "cheap" simply because other sources make a substantial mark-up. For example, paper tissues are ridiculously expensive in most retail outlets compared to their factory price.
Other things are bought at a substantial discount from their normal price, due to one or more of the following:
Bulk discount
Seconds (ie don't meet quality standards of normal retailer)
Bought direct from a manufacturer
Remaindered stock (someone else bought too much and sold it off at a loss to clear their warehouse)
Bankrupt stock (sold off by liquidators after a business went bust)
Damaged/salvaged stock (sometimes after a fire or flood some portion of the stock is still in a sellable condition but the entire stock has been "written off" by insurer)
Inferior quality copy of something which normally costs more.
2006-08-29 05:31:28 · answer #3 · answered by Graham I 6 · 1⤊ 0⤋
Having run a business retailing items at £1 for more than 10 years I feel qualified to answer.
Can't speak for all retailers but I have never bought anything for 3p or anywhere near and sold it for £1 as suggested here by a few.....my experience with job lot or redundant stock is that it won't sell at any price !
I prefer to use suppliers that can supply regular repeatable lines on a weekly basis if necessary...the lines we sell are the same as you would get in any supermarket and we have to stick to the same rules as everyone else....and we pay vat , taxes ,adhere to health and safety rules the same as Harrods have to.
The only easy part is that I can concentrate only on lines that cost me less than £1....and we work on slim margins...on regular toiletry lines we can make just 15p -20p profit per unit , its only the volume of goods that we sell that makes the profit.
2006-08-30 20:10:55 · answer #4 · answered by DAVID W 2 · 1⤊ 0⤋
I think you just rent a shop, buy a load of tat for about 10p a ton and sell it for a pound a shot?
2006-08-29 05:24:10 · answer #5 · answered by jayktee96 7 · 1⤊ 1⤋
everything in the shop sells for a pound hence the name
2006-08-29 05:24:13 · answer #6 · answered by Edward B 4 · 1⤊ 1⤋
The pound captures or adopts dogs from the street or families that don’t want them, and at the pound shop you can buy dogs like that. My mom got me a Labrador from the pound shop. Her name in Betty.
2006-08-29 05:23:51 · answer #7 · answered by Asker Wilde 1 · 1⤊ 2⤋
Nestlé, Kraft and United Biscuits, now negotiate directly with Poundland, making special value packs of their products for the discount sector (as of 2012).
2015-06-05 06:25:42 · answer #8 · answered by Charles 2 · 1⤊ 0⤋
Buy stock for about 2p per item and then sell it for £1 per item.
I'm waiting for the day one of them has a two-for-one sale before I buy as I reckon all their stock is overpriced.
2006-08-29 13:00:31 · answer #9 · answered by CeeVee 3 · 1⤊ 0⤋
They sell everything for £1 but it's all actually worth a lot less!
2006-08-29 05:26:50 · answer #10 · answered by Rachel_03 2 · 1⤊ 0⤋