Want to understand? The reality is that the margin DT makes is averaged out at 60% per item if it is not food. It is about 35% for food. That means, you paid 1.00 for the item. They paid 35 to 40 cents each item. Look very very close at what you buy from DT. Is the product the same as in a regular store? No, not at all. The package may look the same, so read the fine print. Anything from seconds, to smaller packages, to made in places like Turkey instead of America. When the final true count is made, you will find that money you saved by shopping DT is more than you woulf have paid at a regular dept store. Bulk prices may apply with a few things, but not often. Often, they will have an item, full sized as a "money looser". But what that really is, is a draw. It will bring you in to spend money on all sorts of things. Loose 2 cents on one item, make 60 cents on 25 items. Do the math, you are the looser.
I have to say for some items, I would prefer to pay a $1 for because in Walmart some of the items could be listed at $5 for the same item. For example, the Dollar Tree in my town, had Air Wick Candles. They had the Lavender scent. I got two of them for $2, I wanted to get more, however, I didn't. I said I would come back. I went to Walmart that same week, saw the Candles at Walmart for $4.88 a piece. I felt so good that I got the Bargain deal. Went back to the Dollar Tree to get some more and they were all gone. Also as Benn said, they do order in Bulks, and if you order online from them, you have to do the same also. Everything is in Bulk. At least what I have seen on their website.
I've not looked into the one cent books on Amazon too much. But I do know that some merchants on there will occasionally offer their products at a dirt cheap price up front to get good ratings and gain popularity on their listings, then raise it up to normal price. They take a loss up front to gain some quick popularity in Amazon, which helps their listings rise above other merchants.
Dollar Tree (and similar stores) purchase things in huge quantities so that the cost per unit is very low. They purchase at a wholesale cost, plus get even greater discounts due to the volume they purchase. Anyone can do this, actually. I used to sell on ebay and would purchase As Seen On TV products at a wholesale cost and then sell them for a little less than you could find on TV or in the stores. All you have to do is go to your City Hall and get a DBA (Doing Business As). This simply establishes your business name. Then, you have to get a Sales Tax ID. For that, I had to go visit a court clerk. The whole process took about an hour, and cost less than $50. The reason you need to do this is because manufacturers and distributors require a Sales Tax ID before they will sell their items at the wholesale rate. The Sales Tax ID simply proves that you're a registered business. It's a great way to save money. Buy in small bulks, keep and gift what you want, then sell the overage to get your money back (with some room for a profit as well).
I would guess that most of the stuff sold at Dollar Tree costs $0.35 or less, otherwise it wouldn't be worth it to sell the items, even when purchased in bulk. I think that the people who sell books for a penny on Amazon are doing it a) to get rid of old books they no longer want/need or b) trying to generate more sales to enhance their seller reputation on Amazon.
I would say they definitely pay 10 to 15 cents for each item in bulk. It wouldn't be very profitable to buy for 50 cents each. i don't think it's a ripoff though, where else can you find something for a dollar.
I tend to think that most of the stuff found in dollar stores is bought in bulk from a distributor at a good cost to where the more bought the better the savings. I also know that the 99 Cent Only store that I go to frequently apparently has a deal with the Albertson's Supermarket chain in my state. The reason I say this is I have seen the name Albertson's on some of thier bakery items. Which leads me to think that there is deal that they will take the over stocked or items that are reaching an expiration date from this grocery chain and sell it for a dollar.
First off, I used to be a truck driver and distribute stuff for Dollar Tree stores. Sorry, but all these answers are speculations. I probably have the best answer on hear, and I don't even have the real answer. This does bring up a good question, how do they sell all that stuff for a dollar? Let me tell you the pathway that this stuff takes: 1. First they pay the workers to manufacture this stuff overseas 2. This stuff gets truck93rd by a paid truck driver to a port. 3. it gets shipped by boat that gets paid overseas. 4. A truck get paid, and picks it up from the American port and takes it to the Distribution Center that gets paidfor dollar tree. 5. Workers get paid at the Distribution Center to distribute stuff into trailers for the correct orders for each store. 6. paid truck drivers take the stuff from the Distribution Center and distribute it between one and four different stores, who also get paid. So, after all these people get paid, how do you explain that this stuff gets sold for a dollar?
I'm pretty sure they make a 90% profit based on what other companies have done. I read somewhere that back when a bag of Cheetos was .99 cents, they used to pay .11 cents per bag. That's about a 90% gain.
The problem with Dollar Tree, is that it dosen't control all of its supply chain,and some of the products are delivered by Mclane, a retail logistics company owned by Berkshire Hathaway(warren buffett). Also Frito Lay does a lot of the stocking there as well. The Dollar Tree merged with Family Dollar a while back, so I'm not sure if that helped with profits or not?
