When you walk past a ValuDollar store in Singapore, you will definitely see the many bright yellow signs screaming "Fire Sale!". and "Everything has to go !!!".
Authorities like the Consumers Association of Singapore (CASE) and the Singapore Competition and Consumer Commission (CCCS) have described these endless sales as misleading marketing tactics and are discussing stricter price transparency rules.
Such an act appears to be considered unfair practice, as companies claim to advertise items or services for a fixed period of time, but offer them for sale for much longer. As a result, consumers have doubts as to whether their purchases have even been offered for sale because prices remain low.
Regardless, we have to admit that this "tactic" works by them – Singaporeans are attracted to this popular chain because of their rock-bottom prices.
The budget business with a variety of branches across the island offers household items, from shampoo to toothbrushes to snacks and drinks of all kinds – all at greatly reduced prices.
This raises the question: How does ValuDollar manage to stay alive and even be profitable even though it offers amazingly low prices?
# 1: Achieve economies of scale
Photo credit: women making money
Economies of scale can be achieved if the production costs for goods are spread over a larger number of goods, which in turn leads to lower costs for the consumer.
ValuDollar is founded by DD Private Limited, which is owned by Radha Exports. The latter is a supplier of high-quality, fast-moving consumer goods at "affordable costs".
According to Radha Exports, the company has 69 retail stores across Singapore and its own warehouse covering 80,000 square meters.
The company probably managed to achieve economies of scale by purchasing a large number of consumer goods in large quantities, and passed the lower costs on to ValuDollar.
The company also carries products from all over the world, including countries such as India, Malaysia, China and Indonesia. By diversifying the sources, the company also has the upper hand in always choosing the cheapest options.
# 2: Selling "B-Stock" products
The budget prices offered by ValuDollar could also be due to the fact that many of their products may be labeled as "B-Stock" products.
"B-Stock" products include products that may have defects due to the packaging or labeling process. These defects can include scratches, dents, cracks or other minor defects. Despite these minor flaws, the products are still safe to use.
Other products that may be labeled as “B-Stock” may be products that are nearing their expiration date.
Photo credit: Discover Magazine
In addition to ValuDollar, many supermarkets, bakeries and grocery stores also practice lowering their prices at the end of the day so that their inventory can be cleared.
If you plan to consume the food before the expiration date, buying with such huge discounts is a win-win solution.
# 3: Selling branded products
ValuDollar and other discounters may import products from countries other than the one from which the products originate.
For example, the Lindt chocolate brand comes from Switzerland and is known as a relatively high-quality chocolate brand. So how is it sold at ValuDollar for just $ 2.95?
(For comparison, supermarkets like NTUC FairPrice, Cold Storage and Giant sell a bar of Lindt chocolate for around S $ 6.)
Photo credit: Money Smart
Instead of importing the Lindt chocolates from Switzerland, the store may have imported them from countries like the Philippines, Indonesia or Malaysia.
The ingredients could then be of a lower quality than that of the Swiss counterpart, so that they can also be valued at a great discount.
# 4: Entry to the Gray Market
Most of us have heard of the black market – but what about the gray market?
In contrast to the black market, gray market products are completely legal. It refers to goods that are sold outside of a brand's approved distribution channels.
A retailer who is allowed to sell his goods to a supermarket chain like NTUC FairPrice can contact discounters like ValuDollar, for example, if he has additional stocks.
These additional stocks may be sold at a high discount, but allow the trader to make money quickly.
Maximize your savings with ValuDollar
Sometimes the offers found at ValuDollar seem "too good to be true". Therefore, exercise discretion before buying.
Regardless, ValuDollar and other discounters are undoubtedly greeted by Singaporeans, which is evidenced by their rapid expansion into different neighborhoods and shopping centers across the island.
ValuDollar is always in a position to give consumers a bang for their money, be it when buying household items or buying branded chocolates in large quantities as a gift.
Selected image source: Vulcan Post