The Deal With Dollarama

Debt Free Deals, Debt-Free Finances

During my short stint as a business student at Nova Scotia Community College (NSCC) I had an instructor who was obsessed with Dollarama. He was well paid as a  faculty member at the college who also contracted with other major businesses and yet he would frequently start off class with an enthusiastic recap of a great item or deal offered at the local dollar store.

Here’s why Dollarama deals are worth the hype (as he explained it):

Dollarama Buys Surplus. 

Dollarama is a treasure trove of great deals that buys up surplus stock, especially when products are re-branded or companies (both producers and distributors) go under.

Surplus can be caused by changes in demand …

For example, if a chain store that usually sells a mascara, let’s call it Mascara L, decides to sell the competing Mascara B instead, or if the chain store suddenly reduces its order or even closes, it could leave the company that manufactures Mascara L with a whole bunch of mascara in its warehouse. Since the shelf-life of unopened mascara is only about a year the Mascara L that is left over will either have to be sold really quickly or thrown out. As you can probably guess, less money is way better than no money, so Mascara L will be sold to a store like Dollarama.

mascara-444164_960_720

Or seasonal trends …

This could also happen if, say, baby blue mascara is a seasonal trend that Mascara L caters to. By winter the fad may have died out causing an overstock in baby blue Mascara L, so maybe only this shade of the name-brand product will appear in Dollarama for a reduced price of $2, while other shades of the product will continue to be sold in drugstores and big box stores for a retail price of $8.

Or expiring promotions…

It might also happen that a product like a soda pop, let’s call it Gulp, decides to run a short promotional campaign for a new movie release and brands the can with a character from the movie, including free movie tickets in 6 random cases of pop. Although Gulp might have a shelf life of three years, the promotional might only happen two months before the movie. Big brand stores usually won’t sell a product with an outdated marketing campaign or expired promotional tickets unless they already have it in stock, so distributors like Dollarama might buy the product from the distributor directly for cheap if they have a whole bunch of it left over in the warehouse.

can-984851_960_720

Or re-branding…

Similar to the expiring promotion deal many companies will re-brand their products. They may decide, for instance, that their brand of mascara should cater to a higher class market and decide to make their product and its casing look sleeker and come in the colour black to appeal to this market. Although the formula may stay the same the producer will try to get rid of all overstock with the older product design so that consumers do not see both packaging options and become confused about the nature of the product or their perception of the brand. This sort of re-branding will often result in a mass clear out of overstock which can mean a whole bunch of the (perfectly usable) product ending up in Dollarama.

Or by a company going under or struggling with competition…

In the age of the international economy competition is fierce. Frequently companies from around the world fall prey to low market prices and trade agreements. Although Dollarama products may get a bad rap for being cheap knockoffs with questionable origins, many of the products that you will find in Dollarama are from countries that struggle with international competition because of their strict production standards. I’ve heard from many people that they will not trust food from Dollarama and yet I’ve found several food products that are actually made in Canada by companies that don’t fare well enough internationally to thrive in big box stores like Walmart, along side imported competitors.

Dollarama Also Saves Big on Advertising.

Essentially  you not only get things for a dollar, but you also get more for your dollar since Dollarama also saves big on advertising costs (seriously think about it, when was the last time you saw a Dollarama ad or received a Dollarama flyer?). Sometimes a single store will advertise on the radio if it really needs to but the whole franchise itself does not advertise regularly, resulting in mass savings for Dollarama and better deals for you.

signs-1638668_960_720.jpg

Basically there are a whole bunch of reasons why a perfectly good product will be on sale for really cheap at Dollarama. As long as you check expiration dates, ingredients lists and country origins you can rest easy knowing you’re getting great products for way less!

Advertisements

2 thoughts on “The Deal With Dollarama

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s