Winks Convenience Store: Pros and cons
Compared to malls, book stores and fashion markets, most customers at convenience stores don’t come here just to leisurely browse. People come to convenience stores because it is the most convenient place to purchase items for daily use.
Convenience stores provide customers with a fast and easy method for purchasing items throughout the day. You may not realize it, but convenience stores play a huge role in helping the economy grow. Interested to know more? Learn more about it here at Winks Convenience Store!
One of the benefits of convenience stores is their accessibility for local customers. They are located near a neighbourhood or any establishments with many people. If you do not have the time to go to a supermarket, then convenience stores are the perfect place to go. Even if their prices tend to be higher compared to large stores, customers spend less to get there thus creating a pricing balance.
Economic boost to the community.
Due to the nature of this business, convenience stores often have a stable revenue stream, which is great for the community. The main reason why many people go to these stores is because of its fast and efficient method of serving customers. Aside from that, they are also one of the factors that contribute to the increase in employment and business ownership opportunities.
Not bound by local pricing needs.
From an ownership perspective, items are priced depending on the terms of the convenience store. Customers are usually willing to pay a little more due to its easy-to-access location. Moreover, it provides an outpost for travellers to purchase what they need easily. Even if there are multiple stores within a 5-mile radius, a convenience store will generate a loyal following, which provides great income to the owner.
Always open to franchises
Convenience stores are one of the most popular establishments around the world and are often a go-to place for many customers. In Canada, about 40% of the convenience stores are connected to a franchise opportunity which equates to almost 60,000 convenience store locations. The cost might be similar to purchasing an established store, but the actual costs are lower than if you were creating your own brand.
Long operational hours
Convenience stores are open to serve customers 24/7. Due to their long operational hours, managing the store can be tiring and can burn you out quickly. We recommend hiring several workers in this type of business because this can be a stressful process when doing alone.
Targeted by the local criminal element.
Due to the store’s retail location, theft is a common occurrence. Shoplifters come into the store to steal certain items, while some target ATMs and cause damage to the building. Some people even use the location to illicit drug transactions and other criminal activities. Whether you have security systems at your store, you should have the proper insurance to cover losses that may occur.
Cleaning and maintenance
People come in and out of the store every day, and as a result, many pollutants also come into the store. A lot of time goes into preventative maintenance when operating a convenience store, which can eat into the tight profit margins that some stores have.
In this type of business, products in your inventory will sometimes reach their expiration date even if they are well-preserved. This is the natural state of things and it cannot be avoided, however, we recommend stocking snacks and drinks that have extended sell-by dates for a better outcome. Even when your customers are purchasing popular products regularly, all it takes is one lull in the action to have an entire inventory purchase go bad on you.
These stores sell what people want more than what they need.
While most products that people need are offered at convenience stores, some promote bad habits such as beer, cigarettes and other unnecessary items. When someone is trying to break a bad habit, advice to avoid the local convenience store is not unusual. Aside from the gas oil available at these stores, they commonly offer wants instead of needs for the consumers.
Due to the accessible location of a convenience store, almost everything is priced higher which is not always favorable for consumers on a tight budget. Some items may be priced triple of what they are at the local store. Moreover, many food items are also filled with strong preservatives and the shopping experience may not be healthy for some individuals.
There are charges for debit or credit cards.
In most convenience stores, they charge a few dollars when using a debit or credit card. Many of the fees may seem small, but if you visit every week, you’ll end up spending a huge amount of money.
Franchising includes long-term fees.
When franchising a company, it requires more than an initial investment to use the branding. There are also ongoing fees that must be paid to the franchise as well. Moreover, it is necessary to adjust to their established practices since you are tied to the franchise.
Things to know when opening a store
Opening up a convenience store can cost up to 65,000 Canadian dollars. Aside from that, you will also need to purchase additional equipment based on any additional conveniences you wish to offer customers, from payphones to fax machines and photocopiers. However, getting the products you need for your inventory is the one that will cost you the most.
When managing a convenience store, one of the primary expenses includes the monthly lease and the cost of the utilities. Aside from this, the bigger chunk of your fees goes into the inventory (which some research estimates may be up to 70 percent of your monthly spending) and labour. However, the costs may still vary depending on your location, store size, exact inventory, and how much you choose to pay your employees. Take note that paying them more than your local minimum wage will likely result in better loyalty and performance, which translates to greater profit for you.
Convenience store customers fall into one of four groups:
- Regulars are the ones who rely on the store for everyday purposes. They are notably brand loyal.
- Neighbours are the ones who want recognition as well as convenience store items. These are the people who come to the store to build a connection with you.
- Last-minute shoppers who want a specific item and are an uncommon type of customer.
- Thrill-seekers look for items that demonstrate their uniqueness that provide some excitement.
All of these customer classifications provide opportunities for owners to grow and develop as a store.
How to make a profit
Convenience stores gain profit by buying and selling goods for customers. Generally, the most common items that stores sell are snacks, soft drinks, car accessories, lottery tickets, tobacco, sometimes alcohol. The money you earned represents the amount of money you have taken in after you have subtracted how much you paid for these goods as well as any operational expenses accrued throughout the month.
Compared to grocery stores and supermarkets, convenience stores can successfully mark many items up by a higher percentage. This is because customers are paying for the convenience of not having to spend the extra time and effort to visit a larger store. You may charge customers eleven percent more than a typical grocery store and about 20 per cent more than a mass store like Wal-Mart.
The profit you can make
Managing a convenience store may have its hardships, but you can gain an average gross profit of over 600,000 Canadian dollars. This may result in an opportunity to open other locations within a city or area and increase your potential profits.
Ways to have better income
One of the ways for a convenience store to make an income is by reducing the amount of staff necessary. To provide a unique and clever way to serve the customers, you can also offer some kind of drive-through to sell food and coffee.
For more information, don’t hesitate to visit our website at winksconvenience.ca!