A cash and carry store is a shop that usually sells items in bulk or in multiple quantities. There is a huge market in lower income areas for cash and carry stores, not only to supply entrepreneurs (shop owners, caterers), but to help large families shop for cheaper without travelling far.
The majority of cash and carry stores in SA, follow the Makro model (minus the store card), large warehouse type shop, cheap shelving systems but unlike Makro which sells mainly premium items, a lot of cash and carry stores sell cheaper products such as Casa Mia biscuits instead of Baumann’s or Bakers biscuits as well as staples such as flour, mielie meal and sugar in large quantities.
Now unlike a lot of other businesses we cover, this requires much more money to get started both in stock and premises. People often start convenience stores and grow it into larger cash and carry operations. But unlike convenience stores this is a whole other beast, you have to get your product mix right and be able to buy in bulk to negotiable better prices from suppliers. Cash flow management is very important, and so is cash management – this type of business generates a lot of cash and you need systems in place to get that money safely to the bank.
This is a simple retail business: buy products in bulk and resell it wholesale. So instead of buying products by the dozen you will buy it by the pallet or a crate, in other words a dozen packs of a dozen. And you will then sell it by the dozen.
You need to keep your costs as low as possible in this business as despite moving a lot of product your margins will be thin as you are technically a wholesaler and need to keep prices low enough so there is still money to be made by your buyers.