Getting in on the $400 billion convenience store market takes careful planning and budgeting to stock your shelves and open your doors for business. Since grocery products still represent the largest portion of a convenience store’s revenue, according to a report by the Pacific County Economic Development Council, knowing what specific food and beverage items your customers want is key to finding the right mix of products to sell.
Overall, the costs of opening your convenience store and stocking the shelves is in the range of $10,000 to $50,000, says "Entrepreneur." Your budget needs to include the cost of leasing store space and installing a point of sale system. Then you need to fill the shelves –– the PCEDC says that 70 percent of your cost structure comes from the products you offer. The cost also depends on how much space you need to fill with products. Besides groceries, you may also want to offer lottery tickets or fax and photocopying services, which require you to buy additional equipment.
Begin calculating what types of products you need in your store by looking at the potential customers in the area. For instance, if your store is located near a business complex, you may attract foot traffic from people who need coffee, drinks, sandwiches, hot deli items and snacks to take back to the office. But if your store is located near a busy residential neighborhood, you may want to stock the shelves with more grocery items, such as eggs, milk, bread, ice cream and fresh foods. By knowing what products shoppers are most likely to buy, you can determine your total cost to stock the shelves.
Knowing how much of each type of merchandise to buy helps you tally up a budget. According to the PCEDC, groceries make up 24 percent of the products on your shelves. Cigarettes and other types of tobacco make up 23 percent. Alcoholic drinks take up 13 percent of shelf space while dairy and bakery items typically fill seven percent of the shelves. Candy makes up just five percent of shelf space, but with the wide range of types available, you need to figure out your customer’s tastes to offer the right mix of sweets.
Finding full service general merchant wholesalers willing to sell you products at wholesale prices not only keeps the cost of stocking your dry and refrigerated shelves lower, it also means you make more money when you mark up prices. A general merchandise wholesaler delivers a range of products to you. Another option is to go to a cash and carry store, such as a price club, to select and buy products at wholesale. You are responsible for getting the goods back to your store where you mark them up to make a profit.