This Is What Makes Dollar Tree So Successful

When you think of successful companies, there are probably a few that come to mind before any others. Amazon, Tesla, and Walmart, for example. But it's not just those with lots of media coverage and super high-profile CEOs that are doing very well right now. In fact, there are some on the list you definitely wouldn't expect ... like Dollar Tree, for instance. The budget store company said in 2018 it would open 650 stores, despite huge store closures and bankruptcies at other retail stores spreading across the nation like a wildfire.

It's not just a coincidence that Dollar Tree is doing so well, though. It's cousin, Dollar General, as well as a variety of other dollar stores across the country, are doing quite well, according to Business Insider (which also mentioned that Dollar General was unmistakably better than Dollar Tree — yikes).

This may have you wondering: Just how is such a lowbrow establishment managing so well in the age of $25 avocado toast and widely accepted price markups on everything with a Whole Foods label? Let's take a look at what makes Dollar Tree so successful.

It shouldn't come as a big surprise that a company the size of Dollar Tree is doing well. After all, at some point, it's just a game of numbers. At this point, Dollar Tree boasts over 15,000 stores across the U.S. and Canada. It's actually the biggest dollar store chain in the U.S. if you're just looking at its number of stores. This massive number of stores requires 193,000 associates working in stores across 48 states and several Canadian provinces.

With so much going on, there's no wondering Dollar Tree is raking in the big bucks. Not only do these huge numbers show how much success the company has had in the past few years, but it also portends well for the chain's future.

With so many Dollar Trees around, you're likely not far from one at this very second. Since it's a nationally recognized brand, it just makes sense that you'd go there for basic necessities when you're in a hurry — there's certainly a sense of convenience, after all. This sense of ubiquity, as well as shoppers' knowledge that they're going to be able to find what they need there, is just part of what has made Dollar Tree such a successful business so far.

Most people go to a Dollar Store because they're looking for a good deal. And for the most part, that's just what they're going to find. There's some stuff that just makes sense to buy at the dollar store. But don't be fooled: You won't find everything at the very best price at Dollar Tree.

According to HowStuffWorks, dollar stores make money largely by selling products in smaller packaging. This way, they can charge more per volume while still making you think you're getting a great deal. Plus, since so much there is a good deal, it's challenging to know what's a rip off unless you're keeping track of prices everywhere else.

By using this tactic, dollar stores like Dollar Tree are pretty great at convincing you that you're getting a good deal. That roll of aluminum foil was just $1, right? Little do you know that you probably could've gotten four times that amount of aluminum foil for $2.50 at your local grocery store.

This one can't be too surprising. If you've never been in a Dollar Tree before, you know everything there is cheap — even surprisingly cheap at times. At Dollar Tree, all items cost $1 or less ... or they did until 2019, when the store started testing its Dollar Tree Plus! merchandise. Even with some slight price increases, that means you can leave the store with a massive haul without even spending $20. These kinds of price points have widespread appeal. From broke college students to busy moms to people who literally can't afford to shop anywhere else, lots of consumers out there are looking for an incredibly good deal.

And let's face it. If you're looking for some specific items, it just makes sense to buy them at a dollar store when you consider how much you're going to save. Greeting cards, storage containers, party supplies: You can get all of these items and more for a steal at your local dollar store. People like saving money, so it just makes sense that any company situated in this corner of the market would do quite well when it comes to raking in the cash.

You may think of Amazon as the ultimate internet age empire — and you may think that no brick-and-mortar retailer is going to be able to keep up. But amazingly, Dollar Tree is somewhat immune from the global Amazon takeover. Why? Well, because of shipping costs, it's hard for e-commerce retailers to compete with other stores on low-cost items, which is basically everything in any dollar store you've ever been to.

While it's more cost-effective to buy a lot of products online, that's not necessarily true when it comes to the very inexpensive items coming out of Dollar Tree and other dollar stores. It just doesn't make sense to buy canned beans or a two-pack of paper towels at Amazon, and some days, that's exactly what shoppers need.

There are other factors that contribute to Dollar Tree's success in the time of Amazon. You won't get the same thrill of the hunt on Amazon as you do at your neighborhood Dollar Tree, and Dollar Tree can also be more convenient if you need your stuff right now. Two-day delivery may not sound like a long time, but Dollar Tree is only a short drive (or even a walk) away.

Sure, it may seem like Dollar Tree has just managed to finagle its way into being a successful business while only offering its customers bad canned and frozen food and cheap holiday cards, but that's not the case. The chain actually has some good products that people understandably come back for on a somewhat regular basis. After all, if you can't find these items any cheaper somewhere else, why wouldn't you go where you find the best deal — especially if those products meet your standards?

For example, lots of customers swear by the ovulation predictors and pregnancy tests sold at Dollar Tree. These tests work pretty well, and they usually cost a lot less at Dollar Tree than you may expect to find anywhere else. You can't forget about the $1 all purpose cleaner that gets high marks nearly across the board. No need to spend a fortune just to scrub your shower down.

Oh, and you can't forget about the $1 steaks. Are they the best steaks you've ever had? Probably not, unless you've been eating really bad steak. But for $1, you'd better bet we're going to bathe them in a luxurious chimichurri and hope they turn out for the best. Because even if they're just average, we'd definitely buy them at this amazing price point.

There are other great budget stores out there that offer a much larger variety of items — and often higher-quality ones, at that. Just think about Walmart, with its sprawling aisles filled with just about anything a nice suburban family could ever need. But this is just this reason that convinces many people to take a trip to their local Dollar Tree instead.

When you walk through those automatic sliding doors at Walmart, you're greeted by an endless array of stuff, most of which you don't want or need. Quickly walking into the store to pick up a bottle of shampoo or a case of bottled water suddenly seems like a task that will take at least 30 minutes. You're distracted by five display cases, you have to dart past people to find what you need, and you actually think you might've gotten lost for a minute there.

But, blessedly, you don't have that same kind of problem when you shop at Dollar Tree. Since these stores are so much smaller than places like Walmart (on average, there are ten times more items in a Walmart than a dollar store), shoppers feel like they can get in and out more easily without feeling completely overwhelmed.

Have you ever gone into a dollar store looking for something specific, but by the time you leave, you're carrying a whole basket full of stuff you didn't technically need? Yeah, you're not alone. Part of the appeal of shopping at Dollar Tree is the fact that it offers a treasure hunt-like experience for shoppers.

When there's so much on stuff on display (which is often the case at Dollar Tree, despite reports from Zandlslant that some stores are a chaotic, disorganized, and ugly mess), it's easy for people to find themselves attracted to a wide array of objects. Combine that with the fact that everything is so cheap, and it really does feel like you're going on a treasure hunt.

For some more well-to-do shoppers, spending an extra buck here or there may seem somewhat negligible, which could exacerbate this treasure hunt effect even more. One thing is for sure: It's hard to leave Dollar Tree without multiple flimsy plastic bags of cheap stuff.

Most of the stuff in your local Dollar Tree is pretty cheap and unexciting — how excited can you get over canned goods, really? It's cool when you walk into the store and see something new you want to check out, but just imagine if you saw all the same stuff at Dollar Tree every time you went. You probably wouldn't pop in just to see what the store offered anymore.

Well, Dollar Tree knows that, which is why there's something new coming in all the time. The dollar store chain offers a ton of seasonal products, from decor to wrapping paper to party favors to just about anything else you could ever want for a holiday or celebration. In fact, this stuff accounts for about half of Dollar Tree's revenues. And because these products are seasonal, they're always changing. Therefore, there's always something new for the customer to shop.

If you find something new and interesting at each trip you take to your local Dollar Tree, you're likely to go back more often, which helps Dollar Tree rake in the bucks, one dollar at a time.

One reason that Dollar Tree is doing so well is because the company's business model involves exploiting the poorest neighborhoods. Often, Dollar Trees and other dollar stores pop up in food deserts, or places where it's difficult to access healthy and affordable food. These are generally in low-income areas that grocery stores don't usually view as very profitable. When a Dollar Tree swoops into one of these areas, it's often the only convenient place for many to buy their food for the week.

Even if there are other grocery stores around, customers with lower incomes may not be able to afford the higher prices there. So, a lot of the most vulnerable become trapped into shopping at Dollar Tree. And since the prices at dollar stores aren't always the most affordable option per unit, companies like Dollar Tree are exploiting — and exacerbating — poverty.

Not only does this kind of business plan lead to those low-income customers losing in an economic sense, it can also lead to issues with health and nutrition in these communities, considering you generally won't find a ton of fresh fruits and veggies at your local dollar store. This is why many activists are trying to push dollar stores and their exploitative tactics out of low-income areas. For the time-being though, the dependence on their locations in food desserts is a big part of their secret to success. 

Unfortunately, when it comes to just about any company that's doing really well, you have to ask yourself: How does this company treat its employees? When it comes to Dollar Tree, turns out, its usually not that well. According to reports from HuffPost, dollar stores often operate on a skeleton staff, meaning there are barely enough workers in the store to complete all the tasks that need to get done.

When the staff members at a store can't complete their work on time (and since they're generally making close to minimum wage, they don't have much incentive to work their hardest), that extra work often falls on managers, who are then required to pick up the slack. So, not only do managers have to manage, but they also have to do a ton of extraneous tasks that undoubtedly make running the store more difficult. These low payroll budgets are likely part of the reason Dollar Tree is so successful. 

Back in 2013, 6,000 workers filed a lawsuit against Dollar Tree because they were forced to clock out at breaks despite having to continue to work (unpaid) anyway. So, just remember any time you visit a Dollar Tree, the people who work there could be totally overworked and underpaid. Just one more reason to be kind.

The main way Dollar Tree attracts more customers is with all its affordable items. Of course, a lot of these items are from name brands, but there's a significant amount of stuff that's actually from Dollar Tree's private label. Private label products are cheaper for dollar stores to sell because they give them wider margins — since the company controls the means of production, it gets more cash when customers buy these products.

It's not just Dollar Tree that utilizes this tactic, though. Other dollar stores, like Dollar General, also do the same thing. And don't think this phenomenon stops at your favorite budget retailer. Stores like Trader Joe's and Whole Foods employ the same tactic to get shoppers to buy more — and the products are usually of a pretty high quality.

Cleverly, these products are also designed to look like the name-brand options at Dollar Tree. This encourages recognition in the shopper, even if they're aware that they're not buying the name brand they might be used to.

Granted, the off-brand products you'll find at Dollar Tree may not develop the same cult followings you can expect when Trader Joe's unveils a new highly anticipated product, but they still allow the store to sell more and increase that bottom line, and that tactic seems to be successful for Dollar Tree so far.

When you're making most purchases, you're probably relatively careful about where they come from and what kind of quality they provide. After all, if you're going to spend your hard-earned money on something, you want to make sure it's really worth it.

But when you go to your local Dollar Tree, you know you're not going to get the best of the best when it comes to the quality of some items. In fact, your expectations are likely a lot lower than they would be if you were taking a trip to Walmart. That could lead some shoppers to buy low-quality products that they may not pick up anywhere else.

For example, The Washington Post says that you shouldn't buy toys for your kids from a dollar store, as you're almost guaranteed to get a low-quality product. But obviously, people but these items anyway. And chances are good that when those items break, they come back and buy another one.

Therefore, Dollar Tree doesn't have to go above and beyond to sell better products because it knows that shoppers will put them into their carts regardless — and that certainly saves the company money.