Updated: December 26, 2019
One of the simplest and perhaps, the easiest business you can start today is the sari-sari store; and to put up one – all you really need is a space in front of your house, an inventory of goods to sell, a cash box and you’re ready to go.
Our family used to have a sari-sari store. I remember my parents starting with just a large table put out in the front yard of our house.
Initially, we just sold canned goods, noodles, candies, softdrinks and sachets of toothpaste and shampoo.
Eventually, after several months, my parents decided to renovate our house to make our sari-sari store into a mini grocery. The business thrived for almost 10 years.
Those years may now be in the distant past, but I realized that the entrepreneurial lessons I’ve learned from my parents in how to run a sari-sari store have now become an invaluable part of how I manage my own businesses today.
And to all those who are planning to put up or is already managing a sari-sari store, I hope these quick few tips will be a big help in your business.
Is it still feasible to put up a sari-sari store today? How profitable is it?
Yes! With its low overhead costs and a reasonable profit margin of 20%, a sari-sari store can still survive in today’s market. But of course, the location and your inventory of products plays a big role. So do your research first, observe your neighborhood and identify their needs.
The sari-sari store is the Pinoy version of the convenience store. Which means you’re not actually just selling canned goods or softdrinks, but rather selling a service – that is in exchange for money, you’re making it convenient for people to get the things they need closer to their homes.
How do I register a sari-sari store business?
You register it just like any other business. Here’s a guide on how to register a business in the Philippines.
However, depending on the amount of capitalization, there may be special considerations which can make the process easier and shorter. But remember that you need to apply for additional licenses if you’re planning to sell liquor and cigarettes.
In any case, for specific instructions on how to register your business, just go to the city hall and inquire. One tip when you do this, dress in very simple clothes, talk in Filipino and always use the term “sari-sari store”. I hope you understand what I mean. 😀
What are the best things to sell in a sari-sari store?
Again, whatever your market needs. That’s why you need to do your research. Ask your neighbors and find out what they’d be willing to buy from you if you put up a sari-sari store at home.
But from experience, these are the items that will be most in-demand: canned goods, instant noodles, softdrinks, rice (aka bigas), snacks (aka chichirya), sachet items (juices, shampoo, toothpaste, soap, detergents, etc), cigarettes, beer and cellphone electronic load.
Where do I get suppliers? Where do I buy the things I’m going to sell?
Initially, warehouse stores and wholesalers in public markets are your best bets. You can also try to research on your competition to see where they get their items.
As weeks pass, local distributors and other suppliers will begin coming to your store. Hopefully, a few of them will be able to give you good deals on bulk orders.
How much should I sell my goods?
That depends on your area but I believe a 20% profit margin is the norm for sari-sari stores. For some items, it can go as high as 30%, specially if you’re the only one in your neighborhood who sells them.
For more pricing strategies, specially if you’re planning to sell homemade items, then you can refer to this article: How Much Should You Charge For Your Product or Service.
How about the competition?
That’s inevitable and always a healthy way to challenge your business skills. To maintain your edge against other sari-sari stores, aside from offering competitive prices, be sure to apply proper inventory management so you don’t run out of stocks and maintain a good relationship with your customers.
And most importantly, follow the golden rule of running a home based business – and that is to separate the business from your home.
The sari-sari store is not an extension of your house and it has to be financially independent. This means you can’t just get a can of corned beef in the store for breakfast unless you pay for it.
What about credit or pautang?
It’s up to you. It can be hard to refuse sometimes, specially since some of your customers are also good friends in the neighborhood. I guess a few pesos is okay but don’t let it get bigger than P50 in my opinion.
But if possible, and I highly recommend that you do this instead – don’t extend credit at all (aka “Bawal ang utang“). If they’re your real friends, they will understand that you’re actually trying to build a successful business and not just doing something to keep you busy.
Are there seminars that teach how to manage a sari-sari store?
If you feel that you really need someone to “show you the ropes”, then check out Hapinoy. They’re a very dynamic corporation that lends out capital, supplies goods and provides support for sari-sari stores. Yes, you can now “franchise” sari-sari stores.
But, if you’re feeling bold and inspired, why not just write a business plan and dive into it. After all, experience is the best teacher.
And one last tip:
Unless you have the money for a cash register or you’re a math genius, do buy a simple calculator with large buttons and display. It’s the best way to calculate purchases and avoid giving out the wrong change, which actually happens more often than you think in sari-sari stores.