Dollar Shop Economic Theory

I’ve had this one baking on the back burner for quite some time. And since I have nothing else in my head but brewing brony tales, I figured I’d best get this out of my head to make some room.

The Dollar Shop is a phenomenon out my way, where you can walk into a shop and get an item [or a number of items] for a dollar a piece. Some cost more than a dollar. Many cost up to five. You can get a rare few for more than that, but not normally. Dollar shops sell cheap gimcrackery, gadgets and gewgaws. Some, but definitely not all, are useful. Some only catch dust. Almost every last item in a dollar shop is made to last less than a week. A month if you treat it carefully.

They also sell gadgets and gizmos amazingly like the ones you see on TV for five easy instalments of $99.95… for a hell of a load less than damn near $500.

It is so very, very easy to walk into a dollar shop and blow $100. Even if you go in with the intent to purchase just one item, you are guaranteed to find five more that are both tempting and affordable.

And since the cleverer ones stock food and house maintenance necessities, they make money hand over fist.

That’s not the theory. That’s the exposition.

You know these shops. You probably have one or two in your area. Unless you’re in a super-rich gated community, in which anything that’s not worth at least twenty is not worth handing over Daddy’s credit card for.

The theory is this: You can instantly read the state of a community’s economy by counting the dollar shops in a particular area.

At the depths of our own economic pit, four or five years ago, there were seven in my immediate shopping zone. There’s still four surviving, but they’re comfortably apart. It’s when they *cluster* that you know things have gone far up that famous creek. In a barbed-wire boat. Minus the paddle.

When you have competing dollar shops clustering in a shopping zone, you know the folks who live there are populous poor. Or at the very least, populous impoverished. They barely have enough to make ends meet, so they go to the dollar shops to skimp a few cents here and there. The populous comes from the fact that three or more dollar shops can exist in the same zone without driving one another out of business.

When too many people can’t make ends meet, the dollar shops thrive. People can no longer afford to go to the advertised and branded big box mart, and only go there when they can’t find what they need in the dollar shops.

Worse news for box marts, Dollar shops train shoppers to only look for what they need. Seriously, if you want to save your money in a dollar shop, go in with one objective and a definite allowance: “I will only buy X and if I am tempted, I will only spend Y”. That way, shoppers walk out of there without a shitton of useless crap. Or quasi-useful crap.

Dollar shops train shoppers to avoid the trolley-snagging “hot spots” of crap you just can’t sell, Boxmart. It’s in your personal best interest to make sure your shoppers can afford your overpriced crap and not go to somewhere cheaper.

“How?” I hear you cry. “The economy’s about to crash! We have to hang on to our money!”

Well… you have to spend money to make money. No, not on executive bonuses. No, not on clever marketing campaigns. On jobs. Spend money on wages for people who live in the area. Generous wages. Give them a small employee discount. It will generate loyalty and most of their wages will come straight back to you.

Yes, you lose a little on the deal, but it’s got to be better than the money going straight to Mexico (or wherever) by hiring illegal immigrants for less.

The thing is, people who have more money spend it on more expensive things. People with less, take what little they have and use it for their own “selfish” advantage. Which means that Boxmart winds up with nothing.

And that’s the Dollar Shop Theory. See if you can use it in your area.