Retailers, Liquidators & Buyers: Let’s Say the Quiet Part Out Loud

Speakers

Curtis Greve
Founder, Liquidata

Speaker 1 00:15
Hi guys. The next session we have is retailers, liquidators, and buyers. Let’s say the quiet part out loud.

Speaker 2 00:25
Hey guys, how you doing today? I’m Tom from Liquidation Motivation. Thank you for everybody coming out today. I hope you’re having a good time here at ASD. There are so many important people in this business. If you’re in the liquidation business, but nobody more important than the three that are on this stage today, so I’m gonna let these guys introduce themselves right off the bat. Here we got Ben Davis, number one. Ben, tell them, tell everybody about yourself.

Speaker 3 00:49
So I’m Ben Davis. I started Bin Mania back in 2018, and we’ve grown it to multiple different locations. Right now we have three, and we’re looking to open about two more within the next year.

Speaker 4 01:04
Hey, Ray Tautic, Excess4Less , we’ve been in the industry for about seven years now. We broker truckloads. We’re contract holders with most of the main retailers out there. We have three auction pickup locations and a bin store.

Speaker 4 01:22
I’m Curtis Grieve. I’m the co-founder of Liquidata. We provide a platform for wholesale liquidation buyers and sellers to make more money. Prior to this, just part of the reason why I’m up here is because I ran Walmart Reverse Logistics for a long time, way back in the ’90s, and have been in the business ever since.

Speaker 1 01:46
All right. So between the three guys here, we have decades and decades worth of experience up here, guys. But I think what our crowd wants to know is not what everybody talks about all the time. They want to talk about all the secrets, all the secrets of liquidation, the things people do not say out loud, guys. If you could say what is, and I know everybody’s a little apprehensive about saying the truth here, but you know what are the what are the true secrets of liquidation, Ben? What can you start off with? If somebody’s new in the liquidation and they don’t know this part, what do you think you should tell them? If you had a best friend that wanted to get in the industry, what advice would you give him?

Speaker 3 02:24
Research, research, research, research all day long. Research the product. Research how the company is going to pack that product, and research where it’s coming from. Right. The reason why you need to do that is because, like, if you buy home goods and they just throw it in a giant Gaylord, the product’s probably going to arrive broken Oaky, right? So if you know exactly how they handle that load, you can buy it in a much much better way.

Speaker 3 02:49
Yeah, the the thing I would talk about is the profit of a truck. I think everyone thinks they’re going to double their money, triple their money every time they buy a truckload, and they’re not honest about how much their profits are going to be, and also that the profits, the bottom 30% of that truckload. Everyone can sell an iPad, everyone can sell a game system, but can you sell a random wooden like dish rag or dish towel holder or something? That’s the problem. There’s a lot of that in these truckloads, and you have to learn how to move the bottom 30% at a profitable rate to make it worthwhile. So learning what an honest amount of profit that you can make on a truckload for your business model.

Speaker 4 03:33
Yeah, I I agree with all those, but I think everybody needs to realize that two things: 80% of liquidators that go in this business or out of business in five years, 80% and the reason is they don’t do the research. They don’t. They you know buying’s easy, but that’s where you’re going to make it or break it. You make a bad buy, you’ve already lost money because then you run out of space, you run out of cash, and then you run out of business. So you got to do your research, but you got to know how you’re going to sell it. Buying simple, you can write that check, and how are you going to sell it? And then how are you going to get rid of the tails, the 30% Because that’s that’s where your profits hit.

Speaker 1 04:10
Yeah, yeah. So what I want to talk about is home runs. I don’t know. I don’t know if you guys know what a home run is, but I you know I don’t know what is the most money anybody’s made off a truckload in this industry. Has anybody got any good home run stories? I made $75,000 off one truckload one time, just because I bought it at the right price and I had a buyer that wanted to buy it at a better price. And you can really make a lot of money in this industry, but new people think home runs are the norm, right? So what are the realities about home runs? How often do you hit a home run like that? I mean, and I’m not saying ripping anybody off. I’m saying you’re selling at market value. You just happen to buy it at a subpar value. How often do you find home runs? And and and what percent of the deals end up in in phenomenal deals like that?

Speaker 3 05:03
So when it comes to home runs, it’s far in few between. Let’s be honest, it really is. You’re not gonna find, you know, a truckload stack of PlayStation Fives or Nintendo Switches all the time. So I would say I probably get a home run like once every other month, and that’s only because I’m searching through hundreds of deals constantly, always searching, always price comping, always seeing what’s going on, and that’s how you get the home run, right? So I would say it’s like once every other month, if that.

Speaker 3 05:34
Yeah, I don’t, I don’t know if I’m doing it once every other month, and and I’m moving a ton of trucks, but the ones that I have hit are like like you said like I I made 30 or 40k off a truck. It’s great, and but I’m I’m not brokering it and getting that much money. It’s selling it by the piece, getting a lot of electronics or a lot of like high end jewelry, and and paying like sub 5% on it, and then there’s just a lot to be made. So,

Speaker 4 06:03
yeah, I think we work with a lot of wholesale liquidators. I think the biggest home runs are when people have a perspective on the inventory that other people don’t. For example, I worked with a guy like three weeks ago. He bought a lot of makeup and he overpaid for it, and he went through the analysis. He knew he was overpaying for it, but what he realized was that a third of the truckload, the the it was makeup. It was no longer being manufactured, but it was high demand. So instead of buying it and selling for 20% on the dollar, he doubled the price and sold it on eBay because there was still a big audience. They couldn’t buy it. So it’s being able to really, you know, it’s again, it’s getting back to doing your research and knowing more about knowing more about the market than the seller does. To be blunt about it, you know, because the seller, if they would have realized, well, I could sell that for double the amount of what I’m selling it, what I used to sell it for on Amazon three months ago, they would have increased it. But it’s really knowing what’s going on in the market, and you know, is there a blunt? Is there a shortage? What’s the season on it? You know, is there a new version coming out? You know, that sort of thing. That’s why the best liquidators, they’re patient. They’re patient. They will. I’m sure. I know you two guys are probably aces at this, where you’ll know that an item. You know, if I wait a month; that price is going to drop, and then you can really make your margin. So you know, don’t fall in love with the deals. You don’t fall in love with the deals. You just let it time take its own pace to to make the right deal at the right time at the right price.

Speaker 3 07:34
Yeah, just to add on to that a little bit is the seasonality of this industry and finding when it makes sense, and when it makes sense to store, and there’s a lot of this stuff that’s going to come out for a holiday that you can buy for literally pennies on the dollar. And if you have the space to sell it, like hold it and sell it later, you can make a huge markup on top of that product. So learning the seasonality of this industry, I think a lot of people don’t realize that come fourth quarter, the number of returns and overstock is so much larger that it can make some good buying decisions at that time.

Speaker 1 08:10
Yeah,

Speaker 2 08:11
seasonal can definitely turn into a home run if you buy it like USA. You buy it for 5% you sell it for 55 to 60% during the season all day long,

Speaker 2 08:21
yeah. How many people out there bought Christmas in January for 4% This guy did, right? Right. We put it in that warehouse. We get ready. We just hold it for the year and triple our money on that. You know, those are great exercises for liquidators. But I mean, one of my favorite home runs was I bought us a pallet of hair dryers, and on the pallet was some white boxes. I didn’t even know what they were, but I bought the hair dryers for $700. When I got it back to my warehouse, they were the cords you hooked your iPhone to your TV. This is like seven years ago. You know those cords, like the HDMI cords. They were retailing for like $79.99. I put them on eBay. People drop shipped me, and I sold 10,000 in one night, in one night, and made $50,000 off the one deal off the off a $700 pallet. So those deals are out there, guys. Those deals are out there. The problem is, new people think you can get that every day. Now people come to me every day and say, “Hey, where do I buy truckloads of Lululemon or On Clouds or Hokas? How do you guys handle the people that come in with the dreams that are here? But the reality is, every day we make a little bit of money, and every once in a while we hit those home runs. So, how do you deal with those people that come in and talk to you?

Speaker 3 08:28
Truth, 100% true. We just talk about what they want, where they’re going to sell it at, and what kind of inventory you can actually find right now in the market. You handle it with with truth. You just think, hey, you want Lululemon? Well, it’s going to be hard to get. Realistically, you should be looking to see if you can sell Amazon clothes or Sam’s Club clothes or some other source than just these high end. Well-known brands, truth. Truth is 100% what what we need in those conversations.

Speaker 3 10:07
Yeah, yeah, I I second that. Like truth and transparency, learning about their business and what other types of products or product lines or brand that I can help them with to to match what they’re looking for.

Speaker 5 10:21
Yeah, I think it’s accuracy in the data. If you if you know what, you know, first of all, the real good liquidators never sleep. I mean, I I got money that says every one of these guys they’re always on their phone. They’re not looking at Instagram. They’re looking to see what’s going on in the news, who’s going out of business, what the inventory is, what just got posted on on eBay? What’s got posted on BStock? So you’re always in the hunt. You’re always in the hunt, and you figure out ways to to source those things where you can identify it quickly. And it’s like kind of buying and selling stock in a way. You hear news that night, so you get on the phone personally. And let me tell you, this business, the early bird gets the worm. You got to move fast because there’s five other guys that will have a check in that that seller’s hands that morning. So you better know what you better know what you’re doing. You better know what you’re willing to pay because it it moves really quick. But you just got to be a student of the game and you just never turn off. That’s why you know. I mean, I’m sure all these guys, all y’all, you know, you’re on vacation. You’re sitting by the pool. You’re looking at loads or or lists or availability lists. You know, it’s constantly chopping, thinking about those opportunities.

Speaker 1 11:33
Yeah, yeah. So, so I got a buddy of mine, right? So he says to me all the time, like, Tom, you guys so goddamn lucky in what you do? You know, you know, you’re making money in this business, this all these other businesses. But he’s an engineer, right? He makes a lot of money. He does well for himself, but he never swings the bat. And liquidation is the same thing about swinging the bat, guys. We swing the bat every day and buy bad loads. I mean, I buy more bad loads. I probably have to buy 10 bad loads before I get one good load, right? You know. So when new people come in the business and they buy one load, they open a bin store, they fail, they complain about the business, they argue and say nobody should be in liquidation. The world sucks, but yet you got some of the most successful people in the country up here and in this room today, you know what? Why do these people fail in the liquidation business? What advice would you give to them?

Speaker 3 12:28
I would say the biggest reason why most people fail because they set their expectations way too high. They don’t research suppliers before they buy, and they just go after the first thing that they can get their hands on. They don’t take the time to actually see. Okay, should I be buying this load? Should I not? What’s the cost per unit on this load? Can we even get a similar breakdown? What should I expect from this load? Right? They just go in and they cut and dump in the bin store world. Right? And cutting and dumping isn’t always your best idea. Right? Because if you have $1,000 iPhone that you just found or something, you don’t need to throw it in your bins, guys. We can put it on eBay or whatever and get a little bit more money on it, or you can use it for bait to draw the people in the door. Right, get the excitement built for the bin store also. So I personally would say most people fail in this industry is again it’s research and education, and really figuring out what’s going to work, and figuring out what that load is, and how that load is going to look inside of your store.

Speaker 3 13:32
Yeah, I think part of that research is talking to current people running those businesses. Don’t just jump in to start a new business. Talk to others. Come to these trade shows, learn about the industry, learn about those truckloads, learn about a specific broker, seller’s specific load from someone else that actually like is is using it. But also being creative. I think there’s this being creative, having hustle, everything can be sold. How you do it. It might not be your perfect business model. You might have to pivot a little bit to figure out how to sell that seasonal item, how to sell that pallet of food. Like any of these things can be sold. It’s just a matter of how do you make your business model work with that.

Speaker 4 14:16
Yeah, I think it comes down to you know one clear fact: you’re in the business of selling bananas. You’re not selling wine, and like we used to say at Inmar and back at Genco and back at Walmart, this shit doesn’t get better with age. So if you’ve got something that’s a dog, get it out. Don’t save it. It won’t get better. Sell it. Get your money out of it because cash flow is what generally puts people out of business. You’ll run out of cash before you run out of profit because you won’t be able to collect from certain guys. You’ll have to pay this guy off, and now you got storage trailers you’re paying for. So take that first markdown’s the best markdown. Sell it, get it out of your way, put the money in your pocket, and start again.

Speaker 1 14:58
All right, let’s talk about. Sales stacks, sales stacks. Right. I think it’s important, and this is why a lot of people fail in liquidation. Right. They come in and they think, you know, I’m great at selling on eBay, or I’m great at marketplace, or I’m great at a yard sale. But you need to have a full stack in order to get rid of all the product because not all the products the same. Right. So in our business, we do auctions, live auctions, TikTok auctions, whatnot auctions. We do bin stores where we can liquidate all the merchandise, and then we do pallet sales to get rid of everything else. We have a way to liquidate all the product. How do you recommend sellers create their stack? You know, what advice would you give to somebody?

Speaker 4 15:44
I mean, start somewhere, right? Like it’s it’s really. I’m not saying that you have to go start and do all of it all at once. But that when I said being creative, use eBay to supplement your bin store or or to supplement maybe live auctions or online auctions. Try whatnot. Try TikTok. Try try any of these things. You don’t have to go full steam and invest all everything you have into doing it. It doesn’t have to be a whole nother business model, but it can supplement that in inventory or that income. Sell the product that’s hard to sell and continue your business forward.

Speaker 2 16:22
So, so to expand on that, right? The longer you’re in this business, the easier building that stack becomes, right? Because you’re going to know your product. You’re going to see, okay, I have an RV plugin. I don’t have a customer base for that. I don’t know who can walk through my brick and mortar for that, but eBay has the customer base on it, right? You just scan the UPC code, you see what it’s selling for, and you can see if that’s a good item for eBay or not, or if it’s just a dud, and you should just get rid of it really quick, right? There’s there’s ways to build it, but I believe it comes over time, right? You’re gonna jump on your eBay, you’re gonna jump on whatnot if you want to do it, you’re gonna jump on all these platforms, and then you’re going to see what’s selling, what’s not, how do I move it and all that kind of stuff? Just when you get these mixed retailer loads, right? You’re going to get these mixed retailer loads. Sorry. So you get these mixed retailer loads, right? That might be

Speaker 3 17:11
a truckload right there. Yeah.

Speaker 2 17:14
Like like you said, always on the phone, right? So you get these mixed retailer loads, right? That have all these assortments of different product, right? You just got to find where it goes to, and as you guys go more deeper into the industry, you’ll learn that very quickly of what can sell where and how, and what I should be looking for in these loads.

Speaker 4 17:33
Yeah, I think the number one thing is don’t price it to perfection. A lot of people will go out and buy a load, and then you get caught up into the hype, and particularly if you’re on online auction, or even worse, live auction. I’ll pay a little more because you love that deal. You love that deal. No, don’t price it to perfection. Remember the 80/20 rule. Do do your model. How much you know? What’s it selling for today? Regular retail. What can you sell it for? And how much profit do you want to make? The difference is your cost of goods plus transportation? Pretty simple. Do your model, stick to it, but don’t price it to perfection. Personally, I always like to where if I’m in the wholesale business, then I’m going to move it. I’m going to price it to where I can make all my money selling 80% of the product. If I can sell more, that’s just more profit. If I can’t make it at 80% I need to look at my pricing. Same thing if I was in a bin bin store. If I was selling on eBay, you know, it’s the tail that kills you. You know, it’s always that, and that’s true in any retail. It’s always that last little bit that’s left over. If you price that to to help make that make your number, when you throw that away, you’re throwing away your profit, so don’t price it to perfection. Do your model and stick to it. The best liquidators always have a really good disciplined process for buying. I know you do. I’ve seen your model. So I’ve seen you do your model. You won’t share me your model.

Speaker 1 18:54
I’m still learning. I’m telling you. No matter how long you’ve been in this business, I feel like you’re learning every day, and you still make the you make the same mistakes you made 10 years ago. You do. You just. I mean, I don’t know how many times I buy bad loads, but you know that’s part of the game. So, listen. If you want to meet these three guests tonight, they’re going to be at Ray’s meetup tonight. Ray all at Top Golf tonight. So Top Golf 7o’clock tonight. Ray is hosting a meetup there. You get to talk to all these guys personally. But right now we want to open up to any Q and A, any questions that anybody might have to ask our guests up here. Now these guys have decades of experience in the business, so who has a question out there? You got a question?

Speaker 6 19:34
Hey Tom, we are live on Liquidation Motivation, so say hello to your your fan base, and we have biscuit butter who says, “What’s up?

Speaker 3 19:46
What’s up, biscuit butter? How you doing?

Speaker 6 19:49
And then we have a question. Let me put on my glasses. Does that cut me nothing? From Elmer for 4786. Do you think that AI is going to kill the industry? But let me add to that, or help the industry.

Speaker 2 20:12
It’s definitely going to help the industry 100% right? Because like back, I don’t know, even like three years ago, we had to manually look up every single item online, and then we had to manually input it into our systems, and now we’re starting to see software that you can just scan and go, and it makes processes load so much faster. It makes it so much easier to actually see where your comps could be on this on this item, where you need to be at when you go to sell it. All these things, because the data is now in our hands. It’s in our hands so much better than what it used to be, and it makes finding the deals and finding and and processing these deals so much easier.

Speaker 3 20:49
I would say it’s going to both hurt and help the industry. So it’s going to help in ways that Ben just talked about, and how you are going to be able to sell that product. But when that AI goes to the brand and the retailers, they’re also trying to increase their recovery. Now they get to learn a lot more about that product and how they can move it for a higher price. So then it’s coming to us at a higher price. It makes it a lot harder to move. So I think AI is easier for us to move product, but it’s also easier for retailers to increase their margin.

Speaker 4 21:23
Yeah,

Speaker 1 21:24
I don’t know who Curtis. You might have a lot to say on this

Speaker 5 21:26
one. Yeah. So I work for Liquidata AI. Basically, we’ve got the whole platform, and it’s a platform so people can go out there and find out what’s the current retail selling price, what’s it selling for on the secondary market. Basically, add truth and clarity, so you can make better buying decisions . So I I think it’s going to help overall because you’ll have a better idea of exactly what you’re getting, what’s the current retail price, how you sell it for, and where you sell it, seasonality, is it on a recall? All these things that a lot of the more larger, sophisticated companies used to do because we had a lot of people, a lot of hourly people, and a lot of IT people. Well, now with the AI and the platforms you build, you don’t need that. Now I would warn you. That being said, I would warn you. A lot of people go, “Oh, well, I go put that on Claude or Perplexity. I’m here to tell you that won’t work because what happens is the large language models. If you just go dump a manifest on there, it’ll come back. It’ll make up pricing. If it’ll find it’ll find something close like you have red pajamas, well, it might find a red dress and give you that retail price. Well, you’re never going to know that. So you need something that you can run. Be careful with AI because without a proper harness on it. If you don’t have something around that can control it, you’re going to get the wrong answers. And by the way, it won’t tell you it’s the wrong answers. And if you call it out on there, I love this part. When you call out AI on anything and it’s the wrong answer, you’ll go, “Oh, thanks, my bad. I, you know, thanks for bringing that up. Fair point. And then they charge you again. And by the way, the other thing is it’s real expensive? Is you can spend a lot of money looking up a lot of tokens, looking up all these 6000 Amazon manifest lists. Thank you very much. I don’t know who asked that, but I’ll buy you a drink.

Speaker 1 23:11
Who here uses AI in liquidation right now? All right, how about who does not use AI in liquidation. Come on, not everybody raised their hand the first time. Listen, if you’re not everybody, look who’s not using it. Okay, you’re going to beat them out in the future, right? Using AI. I mean, I don’t know. Two years ago, I don’t think we saw any AI companies in the liquidation space, and now we have liquid data. We got many fast skins. We get all these different companies that are popping up. I mean, at trade shows, there’s at least 10 or 20 now distributors showing AI. You know, you you have to use AI, but you’re right. The retailers are going to get smarter too, so that means their margin is go up. Our margin has to either go down or you know, hopefully we can still make a little money. But AI is changing the world, changing the world. Where you at? Any other questions out there? Come on, guys. 50 years of experience. Anybody have a question? Anybody want to come up here? You got one.

Speaker 1 24:13
All right. This one is from Kev Joswell, 2422. How do you typically source your inventory and approach large retailers to build direct relationships or contracts with them. Come at ASD.

Speaker 5 24:32
I’ll I’ll start. I mean,

Speaker 2 24:33
Curtis, you have 2030, years in the industry, right?

Speaker 5 24:36
Yeah.

Speaker 5 24:38
Yeah, I had contracts with Amazon, Walmart, Kohl’s, Lowe’s, all those guys. I would tell you first of all, you got to be prepared. Do you do you really want a contract with a major big retailer like that? Because you will be drinking out of a you will be drinking out of a firehouse. Then I would always I would always say that you’re better off that next layer down because then you have the ability to say no. You know, otherwise, and I know geek like this. Otherwise, whatever they send you, you got a price. If it’s ugly, if it’s the wrong kind of too bad, you got to sell through it the best you can do. But but for the most part, if you you know you’re better off going to that second and third tier of liquidators who who have the direct contracts, because you know I I I consulted with a guy a couple of months ago, and he called up. He said, “Hey, I just got a contract with Amazon. I told you about this earlier. And I said, “Well, you know, Amazon’s like buying a plane. The second best day in your life is when you buy the plane. The best day is when you sell it, because I mean, you are you’re going to get drowned, and you better be ready, because there is no forgiveness. Because the major thing a retailer wants, they want that product to move. They don’t want it backed up, and they’re not going to put up with anything that causes them to back up. Because when that backs up, it backs up their distribution centers, which backs up their supply chain, which backs up their sales. Cardinal sin, you get killed. There’s a lot of gravestones out there that had big contracts with big retailers, and they just overextended themselves.

Speaker 2 26:06
So, so to expand on that, right? As a discount retailer myself, I don’t want the contract. I’m going to be real with you. I don’t want to be the guy holding that contract. I’ve done it, and it kills you so fast. Because if you’re discount retail, right, you’re not focusing on your lane. If now you have to wholesale six trucks a month, seven trucks a month, whatever, because now you have to slit your focus, right, which can make your storage go down, which can make your quality go down for your customers, and then you’re putting stuff on the shelf that you would have never bought in the first place. But like you said, you don’t have a choice. When they say go, you go, and at that point you’re working at Amazon’s pace. You’re not working at your pace, right? So if you have a slow month, don’t care. They still need to get rid of it. So you have to like figure out the cash flow. You have to figure out the space. You have to figure out how am I going to get rid of this truck that just don’t sell. What am I going to do with all this product, right? It creates such a bottleneck within like having a discount store. It’s better to you know work with people like Excess up here and and things like that, so that way you can pick and choose the load you need. You can adjust with your flow, and you can really really hone down on what’s going to sell inside your store.

Speaker 1 27:17
Before you go, Ray, I know you got a lot to say here. We’re we’re about to be cut off, so we got to make it short. But I know you know that you’re going to tell the opposite of what Ben just said because you’re super successful at being a contract holder.

Speaker 3 27:28
Yeah, I mean that’s kind of how I started the business. Like I, we started as a bin store and a pallet warehouse, and my goal in order to quit my job was to figure out how to be direct. And I went to trade shows. I met with Walmart. I met with Amazon. Met with Target, and really tried to figure out what do they need from me for me to be successful with them. Start like really learning that and trying to put yourself in that place to be successful has been super important for my business. We’re moving over 250 trucks a month now, but like what I didn’t really understand at the time was the seasonality. A site that says it’s going to be five trucks a month this month come January is 15 to 20 trucks a month, and when you have multiple sites like that, it’s really really hard, both from a cash flow perspective and a space perspective. But I know we have to wrap. Anyone wants to talk more about truckloads and and that journey, I’m happy to talk to them. Come to Top Golf tonight, and we’ll see you then.

Speaker 1 28:27
7o’clock tonight, Top Golf guys. Let’s have a big round of applause for everybody up here on stage, guys. Thank you for sticking around. We appreciate it. Thank you, guys, 100% Thank you.