The Dollar Store

Lately, I’ve seen many blogs on the Internet touting the benefits of shopping at the dollar store. Indeed, it used to make me wonder; I would ask questions like, “I don’t know how they can stay in business selling things only for a dollar,” “What can you buy for a dollar,” and “I like to shop at dollar stores because I can afford everything in the store.” There are dollar store opponents who proclaim that the safety and quality of the products are questionable at best. I’ve realized that the truth of the matter doesn’t exist anywhere in between, but rather surprisingly out of sight of these two schools of thought.

The Great Illusion

My friendly neighbourhood dollar store

The entire business model of the dollar store is based on an illusion. That illusion is created from the perception that a single dollar isn’t worth much. As a culture, we have become conditioned to consider a dollar to be mere pocket change; something helped along with the transformation of our dollar bill to a “Looney” dollar coin. If we go out for a fast food meal, we feel as though we get a bargain if it’s only $5. The price of a liter of gas soared past a dollar years ago. When we shop at Costco, we’re lucky to get out of there spending less than $100. DVD and videogame “Bargain bins” are stuffed with mediocre to bad movies and games priced at a “Mere” $10. The poor dollar seems to have vanished from our consciousness, creating an excellent opportunity for the creation of this marketing illusion. We so rarely see anything for a dollar, we are intrigued when it shows up in our field of vision.

Four for $2 < $1.00 each

The truth of the matter is, we still buy things for a dollar. We just don’t see those individual dollars because of how products are packaged. Let’s suppose, for example, that you need to buy some glass juice tumblers for your kitchen cupboards. There’s a shelf in every dollar store lined with these glass tumblers priced at a dollar each. Are they losing money on selling these glasses so cheap, or are they manufactured with lead and other bad products that will harm your health should you drink from them? Neither, I should think, as I will now pull the curtain aside to expose this illusion with the picture at right.

These juice tumblers are packaged together and are sold for $2 at Wal-Mart. At the dollar store, one might find glass tumblers exactly these being sold individually for a dollar. The profit margin for these glasses is doubled for the dollar store, answering my questions I once had. Indeed, shopping at the dollar store might not be the frugal thing to do, unless you need only one juice tumbler. Here is a case where a frugal student looking to stock their cupboards with kitchenware would find their dollars stretched further by not shopping at the dollar store.

What I do buy at the dollar store

There are exceptions to every rule, and I don’t think a dollar store is necessarily a bad place to buy certain things. I assume that they make significant profit on every item they sell; they would have to in order to sustain their business with such small volumes. Therefore, I contend that 90% of the stuff sold at most dollar stores generally falls into two categories; those being overpriced garbage or just simply overpriced.

Dollar store batteries

Out of the 10% that’s left, what might I buy at a dollar store? Button cell batteries. These are the batteries that are used in devices like garage door openers, watches, and car remotes. My first PDA, the Sharp ZR-4000, ran on three CR2032 batteries. At the local Wal-Mart, these sell for around $7 for two. The dollar store sells three of them for $1.25. How can they be so cheap? To start, they’re not a brand name like Energizer or Duracell. This doesn’t necessarily make them inferior, it’s just that the big brand names have CEO’s and advertisers to pay, which is very expensive. At $1.25, these off-brands are still a tad more expensive when considering I could buy 5 off-brand lithium CR2032’s for 99 cents from amazon.ca. That said, I still consider them to be a fair price for what they are, and I’ve had good results in using these in various electronic gadgets.

Patch Cord, $1.25

I might also buy simple electronic patch cords. For example, the stereo in my car has a 3.5mm stereo plug, to which I can connect an MP3 player. Once again, here’s an example of a product that’s generally overpriced at electronics stores and the local Wal-Mart, and while I might be able to find it a little cheaper online, it’s not that much cheaper and generally not worth the hassle. This kind of item works just as well as the more expensive brands.

When my son has a project to do for school that involves some sort of arts and crafts, I might give him a few dollars and send him to the dollar store to buy the things he needs. When it comes to materials for arts and crafts, the dollar store is hard to beat. They may lack the variety of a place like Michael’s, but the prices are significantly cheaper and I’ve noticed no difference in quality.

Conclusion

With the mystique of the dollar store removed, I’ve found it to be good for some things, but certainly not all. It is, as I’ve discovered, an example of why it pays to shop around, and plays a surprisingly small role in my frugal lifestyle. It's the first place I go to on those rare occasions I need a button cell battery, patch cord, or arts and craft supplies; but more often than not, I skip on past.

What do you think?