’It’s $5’bargain store opens in Sioux City
SIOUX CITY, Iowa (AP) — A new store opening at Southern Hills Mall has a unique pricing structure.
At “It’s $5,” prices drop as the week goes on, the Sioux City Journal reported.
Co-owners Zach Dahlgren and Ryan Wager say the store sells merchandise purchased in bulk from online retailers or brick-and-mortar stores — either overstock or returned items or the merchandise left over after liquidation. The store gets a lot of merchandise — some of it quite a bit more costly than $5 — stuff the items in bins and lets the public peruse. Prices start at $5 and go down throughout the week. For example, two items for $5 on Monday, and 10 items for $5 by Friday.
There are bargains to be had. Wager noted a customer recently paid $1.25 for a video game accessory worth $400 from one of their stores.
The across-the-board low cost makes sense because of what he called a “multiplier effect.”
“That person is going to promote that, he’s going to tell all his friends, we get a whole bunch of new people that are excited to come in to the treasure hunt. That person’s going to come a whole bunch of times,” Wagner said. “It’s all about volume — literally every part of the model is about volume.”
It’s $5 was formed in 2017 in Claycomo, Missouri. There are four existing locations (a fifth is in the works) in the Kansas City area, plus one in Council Bluffs. Dahlgren and Wager plan to make Sioux City “the hub for the region.” In time, they’d like to open up smaller locations in the towns around Sioux City and potentially expand into Sioux Falls and Des Moines.
The Southern Hills Mall store, located in the lower floor of the former Younkers, recently had a soft open at the indoor shopping center.
Dahlgren, who lives in the Omaha area, said the store is like “Black Friday every week.” The stores can draw several hundred people, when new items are put on display. Some bargain hunters show up a few hours before the store even opens.
It’s $5 currently has a one-year agreement to lease the former Younkers space, with an open-ended extension. The store will occupy the entire ground floor, Dahlgren said, with both sales floor space and warehousing.
Younkers, a department store titan dating to the 1940s, closed in August 2018, after the failure and liquidation of its parent company, Bon-Ton Inc. The upper floor of the former Younkers space has been occupied by the Hop-A-Lot children’s amusement attraction since November.
Sioux City currently has a few large, vacant retail spaces, including the former Sears at the mall and the soon-to-be-closed Shopko on Hamilton Boulevard.
“What I love is, we’re able to go into these different spaces, and we’re able to generate 10,000 people in foot traffic every single week,” Dahlgren said.
Besides occupying the storefronts left behind when other retailers leave town, Wager said some of the employees left behind can join It’s $5: “It’s great to be able to come in, hire up these people that are well trained already in this area, and give them someplace else to go.”
Starting out, the mall store expects to have 20 to 25 employees, but once the location becomes a hub, that number could hit 40 to 50 with warehouse staff.
The store is, by its very nature, quite mobile.
“If there’s another mall that needs an anchor store that generates traffic, we can pick up and be there and expand elastically and rather rapidly,” Wager said. “Our entire model, really is, we are able to fit into whatever situation, as long as they’ve got 20,000 square feet, we can have a store up and running in a week.”
Returns are key, since many retailers, offering free returns, are up to their ears in merchandise customers sent back for one reason or another.
Both Dahlgren and Wager are cautious not to name any retailers — the origin of their merchandise is a sort of trade secret.
“We can’t say any of those names,” said Wager, who lives in Kansas City. “I know it’s an interesting part of the business, but I really would like to steer away from how it works. It’s really important to us, even just for protection of our intellectual property, that — to the general public, it’s a black box. We get a whole bunch of stuff, don’t worry about how we got it, it’s all legal, and it’s going to be new every time you come in.”
Somehow or other, It’s $5 has more than enough merchandise to stock even more locations.
“We always have multiple stores’ worth of backstock, so we’re always able to turn over an entire store every week with tons of products,” Wager said. “But kind of the treasure hunt aspect of it is, we might have a lot of electronics one week and a lot of toys the next week and a lot of food one week. Right now the problem is actually, we have to turn down a lot of product every week because we can’t go through it and sell it fast enough.”
Information from: Sioux City Journal, http://www.siouxcityjournal.com