A Dollar Store on the Go!

By November 3, 2016 R&D Tax Credits

Dollar stores are an extremely successful business model, they keep expanding to every strip mall in the US. The biggest dollar store companies had sales of approximately $40 billion in 2015. They are the “go-to” place to buy knick knacks and random items. Great news! Now you are be able to get your favorite dollar store deals straight from your phone or computer and avoid the packed parking lots and never-ending checkout lines.

Two former Honest Company executives have brought the dollar store experience to the internet. Hollar is a startup that sells a combination of name-brand goods and generic products at a dirt-cheap price, which can be purchased from the convenience of your phone or personal computer. Their inventory includes toys, clothes, household goods, party supplies, seasonal items, etc. Most of their items cost $2 and other special items cost approximately $5. With the holidays around the corner, they are expanding into the $10 market so they are able to sell higher quality toys and gifts.

Hollar’s business model has received mixed reviews. Critics state that shipping costs might outweigh the price of an individual item, thus scaring customers away. To keep shipping prices affordable, Hollar implemented a checkout minimum of $10, avoiding unprofitable transactions. Business experts state that Hollar won’t be able to maintain their competitive price for a long period of time. Yet, the founders aren’t flinching, they are armed with personal experience and industry experts.

The founders agreed that high quality production, photography, design and copyright were key to attract customers to their platform. Hollar’s website and cell phone application present its inventory through a personalized feed with exceptional visual presentation, similar to Pinterest’ product presentation. It is worth noting that the Pinterest business model has attracted double the amount users in the last two years to a 100 million customers.

Hollar’s e-commerce platform is the perfect candidate to claim the Research and Development (R&D) Tax Credit. For example, the activities incurred to design, develop and constantly improve the platform are considered qualified research activities. Additionally, Hollar’s technical employees and outside contractor’s wages qualify as research expenses for purposes of the tax incentive.  To learn more about these federal and state R&D Tax Credits email us at hello@indagotax.com