Jack’s 99¢ Stores   - 99 cent store goes dollar store

Friday April 30, 2010

Jack’s 99¢ Stores  

How It Works: When manufacturers and retailers want to ditch a large stock or some duds, they call Jack’s. While half of Jack’s products inherently cost around $1 (frozen food, Hawaiian Punch), dollar stores are also quietly fed products manufacturers want to expose to a more down-market demographic. “Companies figure that customers aren’t going to overlap from department stores to dollar stores, so they sell the same product at both,” says one analyst. Of course, Jack’s vice-president, Ira Steinberg, can’t tell you who these manufacturers are. “Part of my agreement with national brands is that I don’t admit that I carry their brands.” The week we went, Jack’s had Black & Decker coffeemakers, Hormel salami, and Hamilton Beach blenders.

Employees: 270.

Annual Revenue: $30 million ($6.9 million is profit) for its three stores.

Best Way to Make Money: It’s all about turnover. The store can sell a tractor-trailer of Mrs. Fields cookie packs in four days (that’s 162,000 cookies). Any item moves at the right price. “Lipstick that was a horror show at 99 cents, put it at ten for a dollar and you’ve got a crowd,” says Steinberg.

New Yorkonomics: The dense city’s crowds of customers mean that goods can turn over faster than anyplace else in America. Those crowds have made the city a remarkably cheap place to sell, because goods sit for so little time on the shelf that they end up using little space. Along with furious competition among stores, this makes the city an excellent place to shop for cheap goods, despite the high cost of land.