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Trader Joe's Essay

1001 Words5 Pages

Introduction Founded in 1958 by Joe Coulombe and now established with more than 365 stores in the United States, Trader Joe's has been serving customers with gourmet taste. Trader Joe's specializes in organic and natural food offering staples, milk, eggs, and other foods with below-average pricing. They encourage customers to buy the products at low price without having to be registered with the store. Trader Joe’s makes contacts with the manufacturer of the particular food product and establishes contracts with the producer for the supply of the food and allocates the space needed in their store for a time period (Trader Joe’s, 2016).
Analysis
Trader Joe's sells gourmet foods to its customers with a low cost business model, which may seem …show more content…

• The company should increase the price of their products so that they can make profit and cover their overhead costs, while remaining competitive with their competition.
• Trader Joe’s must obtain their products from manufacturers offering the lowest possible price with best quality to suit their customer base.
• Another way for Trader Joe’s to make a profit, is to enhance their supply chain management. Then the company can make purchases of the raw materials or product at a very low price and sell to the customer with a slight percentage of profit.
• The company should seek out other manufacturer options by giving opportunities for other producers offering the lowest prices.
Summary
Trader Joe's is a grocery store offering quality food at a very low price. To maintain this business model, the store obtains products from the manufacturers offering discounted pricing. Trader Joe’s keeps a slight profit margin but still makes significant profits due to the strategies of limited stock and a limited select choices of groceries. Despite the success of the business, Trader Joe's faces the challenge of rising costs in the international market and the increased cost of doing business in the United States. The company overcomes these challenges by reducing the products that are not making any profit or which have a high turn-over rate as compared to other fast moving food products. Trader Joe’s can resolve these challenges by searching for manufacturers offering the same quality food and groceries at a low price so that the company can sustain and compete in the giant grocery store

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