Will an online dollar store work?
Some business ideas come along that seem as though they are either just plain crazy or crazy brilliant. Today, we submit for your evaluation hollar.com, a new site that approximates the experience of dollar stores online with goods offered at prices between $2 and $5.
Hollar is the creation of one current (CEO Brian Lee) and one former exec from The Honest Company (David Yeom) who questioned why dollar stores — one of the fastest growing channels in retail — had not migrated with success online.
Of course, had they asked many retail veterans, they would have been given plenty of reasons why hollar would never work. To start, there are the low margins and penny profits associated with the sale of typical dollar store goods. Dollar chains also count on frequent store visits from customers purchasing cheap consumables. Would this pattern repeat itself online? Dollar General has an e-commerce option, but the chain’s website is never talked about as a growth vehicle. Family Dollar uses its site to promote the sale of goods in its stores.
According to reports, hollar recently had its first month with more than $1 million in sales. The company claims to have reached a point where each order it ships is profitable. In total, it carries some 20,000 SKUs across 18 product categories and is in the process of developing private labels sourced from China to further boost margins.
- Fast-growing online dollar store Hollar launches its own private label goods – TechCrunch
- Hollar Wants To Be Your Online Dollar Store – BuzzFeed News
- Dollar stores are stealing Walmart’s customers. Now they’re going online – Quartz
DISCUSSION QUESTIONS: Do dollar stores, specifically hollar.com, have a viable future selling goods online? Will the development of private label increase hollar’s chances for success?