As a convenience store operator, you’re part of an industry made up of more than 150,000 stores generating more than $690 million in revenue. Your revenue stems from providing a diverse array of services and products to your customer base, and often, your income stream includes the sale of fuel. As with any retail operation, sales can be inconsistent and you’re constantly having to adjust your product offerings in order to meet the ever-changing needs of clientele. There are a number of services convenience stores have begun to provide in order to bolster income streams, such as wire transfers or money order services. Providing lottery sales is an excellent way to increase revenue for your convenience store. If you want to learn how to become a lottery retailer, we’ve got the answers.
The Benefits of Becoming a Lottery Retailer
One revenue stream many convenience stores have embraced, and one that could be a profitable option for your business if managed correctly is the sale of lottery tickets. Let’s explore the benefits of embracing lottery ticket sales managed by a lottery management software package, which is generally folded into a comprehensive convenience store management software solution.
Indirect Sales Driver
According to the National Association of Convenience Stores, of the customers coming to your store in order to buy tickets, 95% of them will purchase at least one other item. The average purchase of a lottery ticket buyer is about 65% more than non-lottery customers, and are largely regulars who will come to your store for other services such as fuel and sundry items. With low-profit margins on many products, the steady volume of sales on lottery tickets is invaluable. They play an especially important role given the industry experiencing minimal growth in 2018 driven by reduced in-store sales in 2018 and only positive net growth due to abnormally high fuel prices.
Primary Source of Lottery Sales
Convenience stores benefit from lottery sales just on the sheer volume of tickets sold alone. The NACS reports that roughly half of all lottery ticket sales in the United States originate in convenience stores. On average, convenience stores serve 1,100 customers daily, with 800 of those customers coming into the store to make purchases.
Perks of the Trade
Lottery sales come with a number of benefits to your retail operation. While profit margins can vary widely from product to product throughout the store, with fuel being a major offender – if you sell fuel, you know that your profit margin per gallon is roughly a nickel. However, on a $2 lottery ticket, states will pay a commission to the retailer upwards of 5%-6%, meaning this high volume item is generating roughly $0.10 per ticket. Additionally, winning tickets will net the retailer a jackpot commission, the amount of which varies according to state regulations but can be as much as 1% of the total payout.
Become a Lottery Retailer With Effective Software
As with any commodity in a retail space, the sales of lottery tickets can be a highly lucrative undertaking, as long as the process is highly regulated and properly managed. In order to accomplish this, Success Systems offers clients lottery management software, which can be folded into an overall convenience store management software solution. These systems will provide the proper retail analytics to effectively control lottery sales, and be able to effectively manage labor, inventory management, and other business activities around the income generated by lottery sales. If you want to take your store to the next level, contact Success Systems today to request a demo!