Starting Your Own Discount Store: 5 Easy Steps!

In today's world, shoppers are increasingly on the hunt for better deals, driven by rising prices, inflation, and economic uncertainty. With household budgets tightening, consumers are seeking value without compromising on quality. This shift in shopping behavior presents a unique opportunity for aspiring entrepreneurs. Discount stores have emerged as beacons of affordability, offering a diverse range of products at competitive prices.

Take Big Lots, for example. This retail giant began as a small, regional closeout retailer and has since transformed into a well-known chain that attracts millions of shoppers seeking bargains. Similarly, Bargain Hunt started with a simple idea: to provide customers with discounted merchandise from liquidations and overstocks. Today, both of these companies are thriving in an ever-competitive market.

According to recent studies, nearly 60% of consumers now prioritize discounts when making purchasing decisions. This growing trend suggests that the demand for discount retailing is only going to increase. By tapping into this lucrative market, you have the potential to build a successful discount store that not only meets consumer needs but also thrives amidst economic challenges. Let's explore how you can embark on this exciting journey!
Launching a discount store can be an exciting and rewarding venture. With the right strategies and sourcing methods, you can create a profitable business that offers value to your customers. In this blog post, we'll cover everything you need to know, from finding the perfect location to sourcing inventory and attracting customers.

Step 1: Finding a Location and Signing a Lease

The first step in starting your discount store is to find a suitable location. Look for areas with high foot traffic and visibility, such as near shopping centers, busy streets, or residential neighborhoods.
To kickstart your discount store venture, the first crucial step is finding the right commercial property. Locations with high foot traffic and visibility are essential for attracting customers. Websites like LoopNet can help you explore various commercial real estate listings tailored to your needs, whether you're looking for a small storefront or a larger space to accommodate a diverse inventory. With the right location, you’ll be one step closer to launching your successful discount store!
Consider the demographics of the area—are there families, students, or retirees nearby? This will help you tailor your product selection.
Once you've identified a potential location, negotiate a lease. Aim for a minimum square footage of around 1,500 to 2,500 square feet. This size allows you to display a variety of products without overwhelming customers. Make sure to review the lease terms carefully, including rent, duration, and renewal options.

Step 2: Sourcing Your Products

Most successful discount stores, like Big Lots, thrive on liquidation merchandise. Liquidation involves buying surplus, returned, or discontinued products from retailers and wholesalers at a fraction of their original cost. The companies have contracts with Amazon, Target, Walmart and purchase their liquidated merchandise by the truckload. You can source products from various liquidators, such as Select Liquidation and other reputable companies.

Liquidation Merchandise Categories to Consider

When sourcing inventory, think broadly about the different categories of products you want to carry. Here are some common categories found in discount stores:

Home Goods: This can include kitchenware, bedding, and decor items. Sourcing truckloads of Kohl’s housewares can provide a fresh stock of high-quality items.
Discount Furniture: Consider sourcing items from stores like Home Depot or Target. Discounted furniture can attract customers looking for value.
Seasonal Items: Stock up on seasonal decorations and supplies, especially during holidays.
Grocery: Depending on your space and local regulations, offering a small selection of grocery items can increase foot traffic.
Electronics and Accessories: Items like phone chargers, headphones, and small gadgets can sell quickly.

Step 3: What do I need to start a Discount Store?

After securing your location and inventory, it’s time to set up your store. Here are some essential accessories you'll need:

Shelving Units: These help organize products and maximize space.

Display Racks: Great for showcasing special deals or featured items.

Cash Register and POS System: An efficient checkout process is crucial for customer satisfaction.

Signage: Clear, attractive signs will help customers navigate your store.

Shopping Carts/Baskets: Make it easy for customers to browse and buy.

Step 4: Pricing Merchandise

Pricing your merchandise correctly is essential for profitability. Start by researching the market value of similar items. Aim to price your products at 30-50% lower than competitors. Consider running promotions for clearance items to attract more customers.
Also, consider bundle pricing—offering discounts on multiple items can encourage larger purchases.

Step 5: How to Bring Customers to your Discount Store

Once your store is set up and stocked, it’s time to draw in customers. Here are effective marketing strategies:

Google and Facebook Ads: Utilize targeted ads to reach potential customers in your area. Highlight special promotions or new arrivals. Read this article to learn how to use Facebook ads to gain customers.
Local Posters and Banners: Display vibrant, eye-catching posters and banners around your neighborhood to spread the word.
Online Marketplaces: List select items on platforms like Facebook Marketplace, OfferUp, or eBay. This not only generates sales but also drives traffic to your store as customers come to pick up their purchases.
Upselling Techniques: Once customers are in your store, encourage them to explore additional items. Train your staff to recommend complementary products, which can significantly increase average transaction value.

Conclusion

Starting a discount store involves careful planning, strategic sourcing, and effective marketing. By following these steps, you can create a thriving business that meets the needs of your community while providing excellent value. Remember, the key to success lies in your ability to adapt and find the best products that your customers want. Happy selling!