- GetThatWholesale: Could you give a brief sketch of your background and wholesale industry experience?
Brian Winkelman: Kole Imports is celebrating its 25th anniversary in 2010, which means we have a quarter century of experience sourcing, directly importing, and wholesaling our own merchandise, and buying and selling closeouts from other manufacturers. We have been in the dollar store merchandise business since its beginning, so we are experts at sourcing and supplying wholesale dollar merchandise that sells. We also do a lot of closeout business, buying items from manufacturers at a deep discount and passing the savings on to our customers. We sell merchandise at various price points, supplying all different types of stores, not just dollar stores.
- GTW: It is obvious that dollar stores are becoming more and more popular. Could you give us an idea about the kind of growth the dollar store niche has seen over the last five years?
BW: From our perspective, the last 5 years have been great. At the beginning of 2009, there were fewer new stores opening, but the second half of the year has been really strong, with a lot of new customers opening dollar stores. The dollar store industry has been referred to as recession-proof, and there is definitely truth to that. In good times and bad, people are looking for bargains.
- GTW: Kole Imports offers a great deal of assistance to dropshippers. Would you give us a quick run down on how this works?
BW: We offer drop-shippers an XML feed of our product info and access to our item pictures. The drop-shipper will have to import it into their own e-commerce website and handle the sales themselves. Also, they should talk to one of our sales reps about pricing and terms. More info can be found at http://developers.koleimports.com/
- GTW: If a merchant was looking to add some dollar items to an existing retail business is there a particular niche of products that does especially well?
BW: This depends on what type of merchandise the store specializes in, and also on the location of the store. Impulse items are always good sellers, so items that fit near the cash register are great. If they’re looking to add an entire section, tools, housewares, and toys are great sellers. We also have a lot of different closeouts, which would be great values even if they were more than a dollar.
- GTW: If a business person was interested in starting a dollar store what would a rough estimate of their start up expenses be?
BW: This depends on the size of the store and the location. For a 5,000-square-foot store, the budget for merchandise would be about $68,000. The store would also need fixtures, a POS cash register system, and signage. Prices of these things vary. Rent, insurance, and utility bills would vary depending on the location of the store.
- GTW: On a similar note, location is always a big factor when considering a new retail business. What should a start up look for in a retail location?
BW: This may be the most important factor in the success of a store. You are selling bargain merchandise, but you don’t necessarily want to find the best bargain in terms of location. If you try to save a few dollars on the rent by choosing an unpopular location, you won’t get enough customers to pay your bills. Make sure your store is in a location with a lot of foot traffic, near other stores, so there is an existing base of shoppers who will visit your store when it opens. Make sure your store is easily visible to people driving by. Good signage is very important. You want everyone who drives by to know that there’s a dollar store there. They might see the sign 100 times before they come to see you, but when they’re ready to go dollar shopping they’ll know where to go.
- GTW: The recent economic conditions have been rough on everybody. How specifically has it affected the dollar store? Are more shoppers looking for bargains and given an uptick to dollar stores or has it been as bad for them as everyone else?
BW: Dollar stores are doing well in the current economy, as people with the urge to shop are still shopping, but spending less and shopping in lower-priced stores, like the dollar store. 2009 has been a good year for us. We’ve been able to buy closeouts from higher-priced-merchandise manufacturers who are in trouble and sell them to our customers as dollar store items. This is a real win-win-win situation for us, our customers, and the people who visit their stores.