There is an almost magical balance between the cost of the money that is invested in merchandise to create appropriate inventory levels on the sales floor and the required inventory levels to drive higher sales. The cost of the money invested in inventory when you open a dollar store often wins too early, thus driving sales lower. Sales immediately begin to rebound when higher, more appropriate inventory levels are established.
It is a perfectly valid argument to feel that all back-up merchandise inventory that is being kept in the back room, or the stock room is not earning money. When you open a dollar store it is valid to argue that back stock inventory is in fact is actually costing money.
However, when you open a dollar store, maintaining a fully stocked sales floor is smart business. The goal when you open a dollar store should be to have customers react with a surprised look followed by ‘WOW!’ as they enter your store. A fully stocked store is impressive to store visitors.
When you open a dollar store never allow it to look as if there is not inventory available to support sales. Customers will immediately feel that there is no need to wander the store, as there doesn’t appear to be stock on hand. Customers will also be less likely to take the time to look for the new merchandise that just arrived. Customers will even hesitate to come back as often when inventory levels are allowed to fall too low.