Sari-Sari Store Business

Posted by Kirhat | Tuesday, June 19, 2007 | | 4 comments »

Sari-Sari Store

It cannot be denied that the neighborhood sari-sari (variety or general) store is part and parcel of the average Filipino’s daily life. Anything you might have missed in your regular trip to the Department Stores – from basic food items to other necessities like deodorant, matches, powder and even mobile phone load – is most conveniently purchased from the sari-sari store nearby at affordably portioned quantities, sometimes even on credit.

Commodities are displayed in a large screen-covered or metal barred window in front of the shop. Candies, canned goods and cigarettes are often displayed while cooking oil, salt and sugar are often stored in sacks or cans. A small window is also present where the customer's requested commodity is given. A cigarette lighter tied to the window can also be found. Benches and sometimes tables are also provided in front of the sari-sari store. A shade is placed above it which is also used to cover the large window when the store closes.

Most affluent communities may have mini-grocery stores in their areas, but sari-sari store is a constant feature of residential neighborhoods in the Philippines both in rural and urban areas, proliferating even in the poorest squatter communities. It was estimated by a study of Bonnin in 2004 that about 93 percent of all sari-sari stores nationwide are located in residential areas and are typically operated from a portion of the owner’s house.

Sari-Sari StoreThe main reason behind the ease in managing a home-based sari-sari store, which can also be attributed to it popularity, is its low operating cost. It is usually either only you who will manage the store or you will try to utilize children, elderly and the physically-challenged as unpaid family workers. The savings realized by employing these workers further increases the viability and attractiveness of sari-sari stores.

Let us examine further the other components that can be considered as critical aspects in operating a sari-sari store:

Capital
I talked to some sari-sari store owners and they told me that you need to set aside about PhP 10,000.00 to PhP 15,000.00 to purchase your initial inventory of items. Aside from this, you need to consider cost of permits and other legal requirements. Usually barangays charged fees, but there are some cases where the fees were waived. Since you will start your business at home, renovation cost should be factored in. You can definitely save a lot more by renovating your home for this purpose rather than put up a new place.

Sari-Sari StoreWorkforce
As mentioned above, it’s either only you or you ask a family member to assist you at no cost at all. However, if demand grows, you may want to hire one more store worker and pay minimum wage rates.

Process
Many sari-sari store owners believed that price markup of at least 20 percent is a good average. Assuming you can turn-over your inventory at least twice in one month, then you can have a gross profit of anywhere from PhP 2,000 to PhP 10,000 per month. You can add to your inventory as you become more successful. Establishing good relationship with your community and neighbors, your most likely clients, is also key to fostering a loyal clientele.

Marketing
You can start promoting your store in your areas through attractive signage and distribute flyers. You can also ask your family and friends to help you spread the word about your business.

Known Problems and Risks
Having a sari-sari store is a risky business especially since there is so much competition. Some store owners will try to minimize the risk by investing more and try to force their competitors out of the market. A sari-sari store with an initial investment of PhP 50,000.00 will have more leverage to attract clients compared to a competitor with only PhP 5,000.00 investment by pricing their product lower and by offering more items and services.

4 comments

  1. JERRY // March 14, 2009 at 4:24 PM  

    I'm trying to set up a Sari sari store in Danao City, and was told I need have grave installed to increase the height of the store, and have it built. They estimate the cost to be Php 35,000.00, is that reasonable or too much.

  2. JERRY // March 14, 2009 at 4:29 PM  

    Thats "gravel", installed.

    Thankyou for anyone who knows the response.

  3. Kirhat // March 19, 2009 at 1:52 PM  

    According to some of the local officials here in MM, the provision to expand or build the store depends more on the local ordinance than in the national building code. Hence, I suggest you check with your local council and find out if such a requirement was really officially endorsed and approved by the body.

  4. sim // May 1, 2012 at 10:55 AM  

    i think kirhat said right I also suggest you check with your local council and find out if such a requirement was really officially endorsed and approved by the body.

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