Giving customers the most for their money has helped this 35-store chain stay a step ahead in the dollar store industry. New York-based dollar store chain Just-A-Buck rose to prominence in a busy industry by offering its customers products that are inexpensive, but not cheap. “When we opened our first close-out store in 1988, we decided that we would sell at the dollar price point, and customers couldn’t believe the value they were getting,” said Steve Bakst, president and CEO.
In 1992, Bakst began franchising Just-A-Buck, and today, 35 stores are either open or under development. “The one thing that we have kept on giving to the customer is value for a dollar,” he said.
One of the main reasons the company is able to offer quality goods at low prices is because of its vendor relationships. Before opening his first store, Bakst worked in the closeout business selling merchandise to retailers and deep discounters. To this day, he maintains close relationships with many of the vendors he has known for decades, and these vendors often provide merchandise that is unavailable to other retailers.
“Rather than looking at our vendors or our landlords as enemies, we look at them as our partners,” Bakst said. “We want them to do well, and we want to do well. When you have that kind of mindset, you’re always able to make a deal.”
Having great relationships with vendors and landlords wouldn’t amount to much if the company didn’t have much to offer its customers. “Everything from the width of the aisles to the lighting is geared to make it a happy shopping experience for the customers,” Bakst said. “We have many customers who come in once or twice per week to see what we have in that’s new. They don’t want to miss a deal, whether it’s on Ty Beanie Babies or rose bushes.”
A greater need for bargains
It makes sense that people are more likely to look for bargains during tough economic times, and Bakst said his chain’s numbers over the past year bear that out. “Our customer base has expanded as well as the average spent per customer,” he said. “People who may not have shopped in our stores a few years ago because they were afraid it might have a negative connotation are now excited about shopping at them. They’ll show off their finds to their friends; it’s almost like it’s the nature of the hunt.”
Much of the chain’s success is the result of word-of-mouth advertising. “We aren’t looking to have the biggest dollar store out there, we just want to have good stores and well-run franchises,” Bakst said. “People come in as a result of word of mouth or just walking by and seeing how busy the stores are.”
What the stores offer their customers is the ability to consistently offer new products with a perceived value of well over a dollar. “What sets us apart from our competition is that in addition to the staples, such as cleaning and health aids or stationery that customers know we have in stock every day, we also have a lot of closeout items that are constantly changing,” Bakst said.
A successful model
One of the franchise’s biggest success stories is a store that opened last spring in Parma, Ohio, owned and operated by S.A.W., Inc., the nonprofit partner of the Cuyahoga County Board of Mental Retardation & Developmental Disabilities. It employs 15 workers who have mental retardation and other developmental disabilities, a store manager, and two assistant managers. The workers with mental retardation and developmental disabilities handle stocking and receiving, cleaning, checkout, and bagging.
“Initially, we were a little skeptical about the store, but it was replaced very quickly by enthusiasm,” Bakst said. “We found that customers started shopping the store more often because they wanted to support this type of organization. Within our company, there have been a number of district managers who look forward to going to the store because they have developed relationships with some of the developmentally disabled employees.”
At all the stores, there is a premium placed on meeting challenges and overcoming obstacles. “Whenever there is a challenge, we brainstorm to come up with ways to not only overcome the challenge, but to improve the overall business,” Bakst said. “We are constantly looking for ways to improve, and one way we do that is to empower our employees to work with the customers. Whether it’s a cashier or someone on the sales floor, we want to get their feedback and have them tell us what the customers are saying.”
One inexpensive and innovative way the company has fostered interstore competition and boosted the bottom line is through the use of cell phones by store managers. “If a manager in one store discovers there is a great item that is flying out of the store, or if there is a great display in the store, the manager will take a picture of it with a cell phone and send it to the other store managers,” Bakst said. “This way, information can be disseminated in a matter of seconds. It becomes a bit of a competitive attitude where each store tries to beat the next one in terms of sales and displays.”
Many of those employees who are now managers or buyers started at entry-level positions in the company years ago. “We have employees who started with us as cashiers as teenagers who now are buyers and have families of their own,” said Bakst. “We’re always looking for those shining stars who want to make a career out of working for us.”