Top 10 Sari-Sari Store Business Tips in the Philippines

top-10-sari-sari-store-business-tips-in-the-philippines

If there is a retail unit that is highly identified with the Philippines, it would be the sari-sari store. They are found almost everywhere in the Philippines—neighborhood, street corners, and even in a few gated subdivisions. The sari-sari store is the personification of the Philippines’ small business industry; it is the original Filipino convenience store.

There are several reasons why Filipinos get into the sari-sari store business:

  1. Low start-up capital. 93% of sari-sari store owners set up shop outside their homes. They spend on doing minor renovation work to create access to storage facilities inside the house. The initial inventory for a week’s worth of goods may start for as low as Php 10,000.
  1. Cash business. The sari-sari store is a straight cash payment business. There are no credit or debit card payments, and checks are not accepted. It generates cash sales every day.
  1. Convenient. This business is perfect for a “lola” or for stay-at-home parents who watch over their children.
  1. Low-risk approach to retail. People who plan to get into the retail business can use the sari-sari store as a low-risk approach to gain experience.
  1. Accepted retail concept. It does not need to be heavily marketed and promoted because this type of store is an accepted concept in the Philippines.

A sari-sari store can be a good source of income if managed properly. On average, a sari-sari store can average a net profit margin of 20%. We’ve heard stories of families who were able to send their children to college with the earnings from a sari-sari store business.

Unfortunately, many sari-sari stores close because of poor management. When your business is located in a community where familiar names and faces make up the majority of your market, the sari-sari store becomes victim to use and abuse.

Here are top 10 valuable tips that you should use to manage a successful sari-sari store business in the Philippines.

Top 10 Sari-Sari Store Business Tips in the Philippines

1. Register the store as a legit business

Many sari-sari stores are informal businesses. They are not registered as a formal organization, and they do not pay taxes. Thus, economists have long regarded sari-sari stores as benchmarks of the informal sector.

However, registering a sari-sari store as a formal organization is a good idea because being a legitimate business has benefits.

  • Suppliers can give you low pricing.
  • Suppliers can extend your credit.
  • Diversifying your business can be easy because many suppliers would prefer to deal with legit businesses.
  • Service providers can give you low pricing.
  • Government agencies can provide support in funding, marketing, and promoting their services.

You can register your sari-sari store business with the Department of Trade and Industry or DTI.

Related: How to Start a Small Business at Home in the Philippines

2. Respect the store as a source of income

One of the biggest problems that affect the profitability of a sari-sari store business lies to the fact that the store is established close to home.

Store owners may even actually live in the house where the sari- sari store business is located!

For instance, many family members and friends often view the sari-sari store as a refrigerator or personal stock room where they can help themselves to what they want. The poor sari-sari store proprietor, who is held back by the traditional beliefs on close family ties, allows himself to be victimized and abused over and over again.

Over time, his inventory has diminished because of pilferage and not because of sales. He has to draw from savings to keep the business going. Unmitigated, the vicious cycle continues until the store shutters for good.

The store owner should make it clear to everyone in the community that the sari-sari store is a business in which he has invested. It is a source of livelihood that should be respected.
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