Sari-Sari Stores Invasion

     Commodities, it is the term that describe the needs or the necessities of a particular thing or being, specially for humans. We may differ in some of our needs in life, but what is common to our needs is what we call the 'basic needs'. These basic needs are our primary needs to be able to survive. It comes in three substances, the shelter, the clothes and of course the foods. But not all of us can afford to have it all and to buy wholesale products, specially when it comes to foods, so we need to find retail ones. And in that, sari-sari stores enter the picture.

     Sari-sari store is a neighborhood variety store, which provides some of our commodities. It is a retailing business that gives its consumers cheaper products. Its products are displayed in a metal barred window or in a large screen-covered window in front of the house. Canned goods, instant noodles, cigarettes and candies in recycled jars are some of the often displayed products in sari-sari stores. It is present in almost all neighborhoods and sometimes even in some streets in the Philippines. Sari-sari stores invade us but help us to sustain our needs in life without spending so much money.

It Is All About Sari-Sari Store

Sari-sari store is the original Filipino convenience store. It is the personification of the Philippines' small-scale business industry. It is privately operated business or a family-run business, which is operating inside the house of the family. The word 'sari-sari' is a Tagalog word which means 'variety', because of the different products that it sells that's why it is called sari-sari store. In operating this kind of business you don't need to have big amount of money, because it works with a small revolving fund. It is commonly operated by a woman, though we've seen some men operating on it.

Sari-sari store owners go into a grocery or a supermarket to buy their supplies for their store, wherein they buy wholesale products and sell it in a retail way. And sometimes their suppliers come to their store and bring them homemade products that most likely candy products. They also sell soft drinks and beer, which are delivered by large trucks. Most of the products of sari-sari stores are packaged in small and single-use sachets, which are often sell for just a peso or two. But even though the prizes of the products of the sari-sari stores are cheap still some people, specifically the neighbors will have their debt to your store and sometimes it is inevitable. And there is a point that some of the customers of the store are not paying their debt, which can wipe out the sari-sari store's minimal profits for the day.

Most of the Filipinos want to have a business. We are a business-minded people. We easily see opportunities from things around us. The proof to it is the domination of sari-sari stores in the country. We can see it anywhere even in the most rural place in the Philippines. Now the questions are, why sari-sari stores' domination in the Philippines continues? Why several Filipinos get into sari-sari store business? Here are the reasons why Filipinos get into sari-sari store business.

1. Low start-up capital. 93% of sari-sari store owners set up shop outside their homes. They spend on doing minor renovation work to create access to storage facilities inside the house. The initial inventory for a week’s worth of goods may start for as low as Php 10,000.

2. Cash business. The sari-sari store is a straight cash payment business. There are no credit or debit card payments, and checks are not accepted. It generates cash sales every day.

3. Convenient. This business is perfect for a “lola” or for stay-at-home parents who watch over their children.

4. Low-risk approach to retail. People who plan to get into the retail business can use the sari-sari store as a low-risk approach to gain experience.

5. Accepted retail concept. It does not need to be heavily marketed and promoted because this type of store is an accepted concept in the Philippines.

Source: http://tycoon.ph/top-10-sari-sari-store-business-tips-philippines/

Sari-Sari Store's Rivals

Competitors are inevitable, specially when it comes to business. Sari-sari stores have also its rivals. It is either can cause positive things or negative things for the sari-sari stores. Its competitors are the groceries and convenience stores, and sometimes malls can be treat as well.

Groceries, convenience stores and malls are bigger establishments that are selling commodities just like what sari-sari stores doing. These establishments are also the suppliers of the sari-sari stores for its products. But in some ways those businesses are become rivals of the sari-sari stores, because some people thought that what these businesses selling are healthier and cleaner than what the sari-sari stores are selling. Which means that it can cause of bankruptcy to some of the sari-sari stores.

Sari-sari stores are also competing to each other. Because of the domination of the sari-sari stores in the Philippines which several Filipinos own a sari-sari store, we couldn't avoid that most of your neighbors have their sari-sari store business. The competition happens through the prices of their products. And sometimes it leads to the destruction of a relationship between you and your neighbor.

Even there are competitors, still you need to give more focus on your business rather that giving so much attention on how you will be on top. Healthy competition must exist between you and your rivals. Remember that the success of your business will not depend on them, it will depend on you.

Manage It Well!

A well managed business is a well success business. Being a business owner is not all about owning a business, because it is also about how you will manage it. Because in having a business, the plans, the strategies and the actions must be done properly or must be manage efficiently and effectively. Sari-sari store owners need to do it as well to make their business a successful one. So I will give you some tips to manage your business properly.

Top 10 Sari-Sari Store Business Tips in the Philippines

1. Register the store as a legit business

Many sari-sari stores are informal businesses. They are not registered as a formal organization, and they do not pay taxes. Thus, economists have long regarded sari-sari stores as benchmarks of the informal sector.

However, registering a sari-sari store as a formal organization is a good idea because being a legitimate business has benefits.

• Suppliers can give you low pricing.
• Suppliers can extend your credit.
• Diversifying your business can be easy because many suppliers would prefer to deal with legit businesses.
• Service providers can give you low pricing.
• Government agencies can provide support in funding, marketing, and promoting their services.

You can register your sari-sari store business with the Department of Trade and Industry or DTI.

2. Respect the store as a source of income

One of the biggest problems that affect the profitability of a sari-sari store business lies to the fact that the store is established close to home.

Store owners may even actually live in the house where the sari- sari store business is located!

For instance, many family members and friends often view the sari-sari store as a refrigerator or personal stock room where they can help themselves to what they want. The poor sari-sari store proprietor, who is held back by the traditional beliefs on close family ties, allows himself to be victimized and abused over and over again.

Over time, his inventory has diminished because of pilferage and not because of sales. He has to draw from savings to keep the business going. Unmitigated, the vicious cycle continues until the store shutters for good.

The store owner should make it clear to everyone in the community that the sari-sari store is a business in which he has invested. It is a source of livelihood that should be respected.

3. No to credit!

Another problem that affects the profitability of sari-sari store business is credit. Filipinos are generous people by nature. We are not comfortable turning away family and friends who need basic commodities but cannot afford to pay at the moment.

The naïve store owner decides to compromise his cash flow by extending credit to customers, especially the regular ones. The store owner creates a “list” to note down the details of the item that was purchased on credit.

Unfortunately, stocks move fast in a sari-sari store business. If you don’t have a supplier arrangement, you have to pay cash for your stocks. By extending credit, the store owner has negated the cash-generating ability of the sari- sari store. Eventually, he draws from his pockets to pay for his stocks.

Secondly, customers with credit terms hardly pay on time. They simply patronize another sari-sari store until they have the money to pay back the owner of the first store. In some cases, credit ends up as unearned revenues.

Do not extend credit when you run a sari-sari store business! Doing so is not part of customer service! I’ve interviewed some store owners saying that a little amount is not a problem. However in business, a little can go a long way. When the information that you allow credit terms gets out, the flood gates will open.

Family and friends who expect credit because of close ties abuse the relationship. They don’t respect you any more than they respect your business. If they insist, go back to tip #2.

4. Increase added value

Offer your customers various cost-saving options. The first thing you need to do is to list down the items with the highest profit margins and use these to sell your slow moving items.

For example, if instant coffee has the highest profit margin and evaporated milk is the slowest moving item, package these items together every payday weekend.

You can also do a customer loyalty program. For example, for every Php 1,000 total purchase, a customer can get free cell phone load worth Php 30. This represents only a 3% discount, but for the customer it creates great value and encourages increased spending.

5. Maintain records

If you want to know if your business is making money, you should always maintain proper records. You don’t have to be an accountant to track your business expenses and income. Take time to update records daily.

Maintaining records also helps you organize and manage the business properly. If the city government and the tax collection agent pay you a visit, you should have your records available immediately.

6. Buy from wholesalers

Many sari-sari store owners buy their stocks from retailers. Thus, their profitability becomes limited because not only retailers add on their margins to the merchandise but you also end up paying for the packaging costs.

A good option is to buy from wholesalers who are authorized as distributors by the manufacturers. The markup is low, and you can use your own packaging.

If your volume of purchases is not enough to be accommodated by a wholesaler, opt for generic over branded items from the retailers and use your own packaging when selling in your store.

7. Offer variety

The standard inventory of items sold in a sari-sari store is as follows:

• Canned goods
• Instant coffee
• Rice
• Toiletries
• Powdered drinks
• Instant sauces
• Cooking oil
• Instant noodles
• Snacks
• Sugar

Experiment with various items that are not commonly found in a typical sari-sari store. Here are a few ideas:

• Mosquito repellant during summer
• School items by May
• Handy umbrellas during rainy season
• Diapers for infants and adults

Survey the competition located within 5 kilometers from your store. Do an inventory of what they have and offer in your store what they don’t have.

8. Be different

You don’t have to follow the traditional business model of a sari-sari store. Develop ideas that will make you different and stand out from the rest. Here are a few suggestions:

• Set up a small area for Internet use.
• Open up an eatery beside the store.
• Offer laundry services.
• Offer newspapers and magazines.

In accordance to tip #1, a registered business acquires many advantages. You can avail of a lease-to-own arrangement plan from a computer retailer for your PC in case you want to have a small area for Internet use. The payment can be generated internally from sales.

If you have the capital and if your space merits it, you may even put up a lotto station!

9. Observe quality control

If you want to maintain customer loyalty, always make sure that the products you sell are of good quality. Here are some tips:

• Never expose instant noodles and chips under direct sunlight to preserve crispiness.
• Keep rice stored in air-tight containers and elevated from the ground.
• Line the floor area bordering your shelving tiers with cockroach chalk.
• Check the quality of your vegetables and discard spoiled ones.
• Clean bottled drinks thoroughly before putting them inside the refrigerator.
• Avoid using thumb tacks or staplers to display items in sachet form.
• Practice first in first out or FIFO method.
• Keep the store clean at all times. Get rid of food debris and garbage from the vicinity of the store.

10. Never run out of stock!

One of the worst things that can happen in a retail business is to run out of stock. In retail, running out of stock is a mortal sin; it is unforgivable. Customers will remember you for it.

Therefore, performing a daily inventory of your store items is important. Keep track of fast-moving items and make sure that these are replenished when you are at 40% of your par stock levels.

Source: http://tycoon.ph/top-10-sari-sari-store-business-tips-philippines/

Nothing Is Impossible!

Every time we start a business our main goal is to earn from it. There is no businessman that wants his or her business to be in bankruptcy. Even in a sari-sari store business, owners want to make their business profitable and a successful one. They want to provide the needs for their family through their sari-sari store business. There are stories about parents who were able to send their children to college with the earnings from the sari-sari store business and brought bigger changes in their lives. An example for it is the success story of Merlyn Plan.

Merlyn Plan didn't have any business background. But her lacked in education about having a business gave her determination to start one. In a capital of 1,000 pesos, Merlin opened a small sari-sari store business. She wanted to earn money to help her husband and for her pregnancy as well. Several circumstances came in her life, but she never give-up. She continued her sari-sari store business. Wherein she implemented 20 percent markup on all the products that she was selling. It made growth to her business. Because of right pricing to her products, her sales increased and her business transformed from a small-home-based sari-sari store, Merlin now runs a three-storey grocery. And because of it she was featured in one of the programs of ABS-CBN, in My Puhunan.

Merlin Plan is a proof that the success in business is not about how big or small you started your business, because it us all about how you will manage your business and how you will conquer the circumstances that will come in your way.