$1/$2/$5/$10 Store

How can I describe what was my reaction after seeing this business topic? I was extremely in shock... Well, maybe not. But this is very fimiliar for me because I used to have this store in the town at where I used to live!

What's all in this kind of store? Let's take Poundland for an example. If you've ever walked into the store or even have looked at the website, you would be amazed by the unbelievable price, everthing is £1 !! How cool is that? The business wont have income elasticity from the customers because everthing would be cheap as ever for everybody to afford. Although the price is low but it therefore can increased demand for more profit, they wouldnt need to worry about their revenue.

Nevertheless, we do still have to think more about this business. Does it have any disadvantages/weaknesses? Yes, of course. If everything in the store is only £1, dont the consumers care about the quality at all? Despite the low pricing, have suppliers consider about how long will it take for having break even? Poundland has represented their concept as a range of more than 3000 items, each offered for sale at only £1 each. Will this lead to a concern of economic problem?

With all these questions, we must find out what is really going on here and what is it actually behind the scene. For instance, I had an experience of buying a cheap product which is only £1, it came out with really bad effect for sure. The most funniest thing is that I bought it because I thought it was the brand I wanted, but by merely copied the colour and with a similar name, it actually WASN'T. This is what I wanted to accentuate that NEVER buy a product without consideration, there are too many low price product with poor quality...!

Making break even in a business? Chris asked us today in business lesson, he said if the price is low, would it take longer or less time to make break even? I hesitated for a long time... Then it came out a following answers as LESS, which Chris would state this as an Asch effect. But why does the lower price takes longer for making break even? The reason is because if lower the price is, you'll have to sell more products and it takes more time! Wouldnt it?

This kind of business can strongly shows its strengths and also its weaknesses, thus we must be aware of it as a consumer ourselves.