How to start a pound shop

Our step-by-step business guide to help you launch a discount store that will have you coining it in on the profits

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What to stock in your pound shop

Choosing the right products to sell in your shop is one of the trickiest skills any shopowner has to master but for a pound shop owner it’s made somewhat simpler by the fact you only have to focus on goods which you can afford to sell for a £1.

It all comes down to experience, and you can only learn by your mistakes, but after a while you should start to get a feel for what will sell by keeping a close eye on what’s flying off the shelves and what is collecting dust.

One of the best things about running your pound shop will be when you’ve got the process perfected, and items you ordered start falling into the hands of customers who are grateful to you for providing them at such knock down prices.

“If you think it’s a good line you might order, say, four dozen a piece, and if it sells out in a day you go back and order 40 dozen!” says David Wilson, poundshop owner. “But knowing when to stop ordering a good line is as much a skill as knowing when to start so that you aren’t left reducing stock in a saturated market”

One decision you will have to make is whether to stock ‘branded’ products, those produced by companies known to the customer, or not. By choosing not to, you are likely to get a better mark-up on the goods, but you’re going to be taking more of a gamble as to whether you can shift them. It may be that customers are willing to try a new product once, but if it’s low quality they will be unlikely to return to your store.

“These days I’m afraid the public want more and more for their money and they generally get it,” says Wilson. “The lines we sell now are much better value than when we started five years ago, but the price has obviously stayed the same.”

For example, toiletries such as soap products, deodorants and lotions tend to sell well if branded, largely because customers feel more comfortable about slapping something on that’s not going to bring them out in a rash. On the other hand, household cleaning products, such as floor wipes and bleach, don’t necessarily need to be recognised names to sell. The key with this particular sector of goods is the larger the amount for a pound, the better.


Choosing your stock is an ongoing process and another major factor to bear in mind when picking products for your store is seasonal variations, the most obvious being Christmas. As any retailer will tell you, the festive period provides much of a store’s profit for the rest of the year, and pound shops are no different. This means you will need to start thinking about bringing in discount products such as decorations, Christmas card packs and other stocking fillers well in advance to maximise the rise in spending over the period. But it also means you will need to decrease other stock levels to accommodate this, again planning ahead in plenty of time. The same process will be repeated across the year from Valentine’s Day to Bonfire Night via Easter and the summer holidays.

“The big retailers will always be carrying out massive advertising campaigns on the latest products or seasonal gifts, like Easter eggs, and small outlets can take advantage of that,” says Len Griffin of the Association of Independent Retailers. “When shoppers come into town looking for a particular product, they usually won’t just go to the place that’s been on TV as they’ll want to shop around for the best price, which is where discount stores can really excel.”

And it’s not just seasonal variations a pound shop owner needs to forecast. A good discount retailer will be one who notices trends on the high street that he or she can take advantage of. This is particularly true of the toy market, as items like yo-yos, water-pistols and so on fall in and out of fashion – so if a retailer can offer a discount version of the latest must-have, they’re likely to have a lot of happy parents on their hands.