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How Dollar Stores Make Money

Tony Talks Business

176,522 views

A carton of Goldfish crackers at Dollar Tree works out to more per ounce than the same box at Target, and the CEO of the biggest chain has admitted it out loud. There are now more dollar stores in America than Walmart, Target, McDonald's and Starbucks combined, over 37,000 of them, making billions a year selling to the people with the least money to spend.

This is how dollar stores make money.

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0:00 Intro
0:58 The Goldfish that cost more than Target's
2:01 It wasn't an accident, it was engineered
3:48 Why "unit price" is a luxury metric
4:58 Go where nobody else will (the Dollar General origin story)
7:56 What's actually making the money (it's not the snacks)
8:51 Dollar Tree breaks the dollar
10:18 The billion-dollar shrink problem
11:35 The Family Dollar disaster ($8.5B bought, $1B sold)
13:01 The towns fighting back
14:00 The customers nobody saw coming
15:18 So that's how dollar stores make money

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20 Comments

@tony99.studios Creator 2 months ago Pinned

What is the most common thing you buy at the Dollar Store? Batteries? Snacks? Let Tony know!

@MrSonomaGTS 2 months ago

"There are now more Dollars stores in America than Walmart, Target, McDonalds and Starbucks combined." While showing a graphic where somehow 37K is 8 times larger than the 40K for walmart.

@gogomountain 2 months ago

If the huge box of goldfish goes stale before you eat more than a quarter of it, you would have been better off buying the smaller package.

@GoldenApple564 2 months ago

Dollar tree is just super convenient when you only have a few dollars to spend

@MoneyBlueprint_231 2 months ago

Dollar Tree has saved me more times than I can count.

@TexBond-cz9pd 2 months ago

The key to shopping at the dollar tree (where everything is now $1.25 to $1.50) is to shop selectively. Sometimes they have bread for sale that is half the cost of the supermarket. Sometimes they have canned goods and cookies that are less than the price of grocery store goods. I once found cans of fruit for pies (pie filling) that was less than half the cost of the grocery store, so I bought 6 cans and then used them at the next holiday for pies/cakes. One of the best things about the dollar tree is that sometimes they get items that you cannot find anywhere else, like foreign cookies or chips. That is usually worth investing a $1.25 to try something new.

@otakubullfrog1665 2 months ago

As somebody who lives alone, there are certain items where the dollar store size is just more convenient than the Walmart size (let alone the Costco size). I could save money on paper towels by filling my little closet with them, but a single roll lasts me long enough and can fit right on the counter next to the sink. Sometimes I just want a little bit of a certain snack (like Goldfish) and don't know if I'll be in the mood for it again any time soon. If I was opening a dollar store, the proportion of single people in the area is definitely something that I'd consider.

@RavenclawTruly 2 months ago

I laughed when I saw him driving the truck backwards 😂

@jessmcafee2557 2 months ago

Dollar stores don't care either. They know their clientele will shop there no matter what. They can leave them cluttered and unkempt.

@jacobbyrd8737 2 months ago

Everyone knows this. It’s either a very low quality product or you get basically a sample size. It’s great if you need a small amount though. They also have good generic kids toys. Chalk, bubbles, etc.

@04fys513 6 days ago

I have learned to budget, regardless of my income. Because of this, I don’t shop at the dollar stores. I went in once comparing unit prices. I left empty handed, and haven’t been back since.

@Prepress-Inc 2 months ago

I always get what i go in there for because I am aware of the price per ounce etc.

@DaToxicJay 1 month ago

I’m in Montreal where we have Dollaramas which is basically dollar stores. The snacks and drinks are way cheaper there than anywhere else. Chocolate and candies are 1$. Soft drinks are 1-1,50$ Like the same chocolate at another store hovers at 1,50-2$ they have it at 1$ Also soft drinks like ex: mtn dew Code red is only 1,50$ compared to other stores that have it for 3$+ so it really depends on what you buy there. But chocolate, candies & soft drinks are almost always cheaper than every other store and it’s the same product and same size.

@ilikebobies 2 months ago

If you know your products theres a few items around the store that are better priced but fairly rare and you need to be at a dollar tree that has a lot of products (big store)

@steveo12391 2 months ago

The graph at 35 seconds says 37000 and McDonald's at 40000. So how is that more stores. Dammit ai lmao

@KnockOffCheddar 2 months ago

For a short period of time, my town had a Walmart Supercenter, a Dollar Tree, a Dollar General, a Family Dollar, and a large local grocery store, all at the same time, with a population under 10,000.