Overview of Costs and Profitability
It costs $10,000 to $1 million to start a corner store, with most money spent on inventory, rent, deposits, and equipment. Corner stores make $50,000 to $100,000 profit yearly. Convenience stores average $4 million yearly sales but have thin profit margins.
- 7-Eleven Franchise: The franchise costs $37,200 to $1,635,200 with potential earnings for owners being $50,000 to $75,000.
- Profitable Items: Prepared foods and vitamins are the most profitable grocery items.
The Economy of Convenience Stores
Convenience stores order small inventory quantities at high prices from wholesalers and charge higher prices due to this. Location impacts pricing.
- Profit Margins: Annual gross profit margins can surpass $450,000.
- Products Sold: These stores stock everyday items like coffee, snacks, drinks, tobacco, drugs, toiletries, newspapers, and magazines.
- Bodegas vs. Pandemic: Hundreds of bodegas closed by April 2020 due to the pandemic, with non-vice items delivering 20-30% profit margins.
The Business Plan
When starting a corner shop, research the location thoroughly to avoid disappointment and take the right steps like creating a business plan for success.
- Investment Range: Startup costs typically range from $50,000 to $100,000.
- Attracting Profit: Offer products and services that meet community needs and keep overhead costs low. Consider expanding services like check cashing or bill payment to increase profit.