Hi,
Ever wonder when you come to our store and see some of the amazing sales that we have, how that’s possible? We wonder too!
The simple answer to this is: supplier and manufacturer discounts.
Our INFRA coop negotiates special deals and discounts with suppliers and manufacturers, organizes these discounts into monthly sales, puts together the fliers you see at our store, and then ensures that we have access to these discounted prices via our suppliers.
Our job then is to identify the items we carry at the store that will be placed on sale each month, input that information into our POS system, print and place tags on shelves and most importantly make sure we get to order these items at the discounted prices… and this is not that easy to accomplish.
While our sales always works out in your favor by giving you the opportunity to save big on healthy food, they don’t necessarily always work out in ours. How so?
Timing and cash flow!
Say we have 12 cans of tomatoes which we purchased at regular price. INFRA places them on sale and we pass those savings to you. That means that the margin for those cans while on sale drops significantly to the point where we are actually losing money…
Margin is the markup of each product. This difference between the actual cost of products vs what we sell them for is what pays for all the overhead such as employee wages, utilities, maintenance and repairs, office suppliers, plastic bags and food containers, disposable coffee cups, cleaning supplies, insurance, and so on.
In the scenario described above, the sale of these tomato cans do not generate enough margin to pay for their share of overhead and this leaves us short. And if we only sell a few cans during the sale then we lost money.
However, if community support is strong and these cans sell fast, that gives us the cash flow needed to purchase extra inventory at the discounted price. Then, when the sale is over, we get to sell any “leftover” discounted cans at regular price and this increases our margin above normal. When this happens and the stars and planets align right then we can actually make up for the initial loss and end up a little ahead.
As you can see, there is a very fine line at B Street Market between making some extra money, breaking even, and losing money and this keeps us up many a night trying to figure out how to make it all work out. Every local store owner in Mountainair (or any other small rural town) can relate to this.
In the end, it is community support that makes all the difference for locally owned stores.