One thing John knows how to do is sell. Sure he knows how to buy, how to build relationships and how to get great deals. But he knows where his products will sell before he buys them. So buying a large amount of inventory doesn’t seem so daunting when you have so many channels to sell the inventory on. Experience comes with bumps and bruises, John has had some, but also allows a much more rewarding life.
John’s email contact: email@example.com
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Here is transcript- It is automated so it is not perfect but it does seem to get better over time.
John: 00:00 I may sell it. If I got a truckload of product, I may sell 30 or 40% of it at a whopping loss. It’s the other side of the product that I need to make the money back on, but I know it’s going to be gone and it’s going to be gone fast. The biggest problem that I had when I first got the warehouse and when I first opened my store is I would sit on product too long. The stuff that isn’t, you know, glamorous and fun to sell, it would just get kind of shoved in the corner.
Cool voice guy: 00:26 Welcome to the ecommerce momentum bud jazz, where we focused on the people, the products, and the process of incomers selling to those. Here’s your host, Steven Peterson.
Stephen: 00:40 He wanted to take a second and talk aboutGaye Lisbey and Gary Ray’s, Amazon Seller tribe and their daily lists that are put out, um, and incredible stories that you can read if you go out and check out a amazing freedom.com forward slash momentum hyphen arbitrage. I know that’s a lot to put in there. Amazing freedom.com forward slash momentum dash Arbitron and you’re going to get 14 day free trial, no money risk, no, no challenges. You don’t want it when you’re done, you get out. But imagine getting lists as grateful as I like to call it, mailbox money. I love that term. Mailbox money. It’s where you can work from your house, buy things online, having them delivered to you and then sell them on various marketplaces. But imagine you can have somebody else do that for you. So you want to buy time, you want to control, uh, what they’re buying.
Stephen: 01:36 Well, you take these lists and you can join multiple lists if you’re interested and then you can segregate them for the merchandise you want and send them to them. They can make purchases for you on your behalf. Have it delivered to you or delivered to them for prep. Boom, sent into these marketplaces and you could sell. How about that? When that be awesome. I spoke at their conference and there were so many million dollar sellers just using online arbitrage. It’s still available. And again, 14 days. The only way you’re going to get 14 day free trial. So if you come through my link, um, it is an affiliate link. Uh, they do pay me. So I don’t want to mislead you in any way. Um, I would appreciate it, but I’d like to see you try the 14 days. I’ve had so many people that have joined and have so much success.
Stephen: 02:19 It’s very exciting to me and you know, quite humbling to me, um, that they trust me to recommend this group and I 100% recommend this group. I’ve seen the results. These are great people that will also teach you to fish. This isn’t just a, hey, here’s the list. You’re on your own. No, this is, hey, here’s why that wasn’t a good deal. Or here, hey, there’s another opportunity and you get to join their groups. And it’s just a phenomenal group of people. Um, just great, great, uh, leaders in that group and these lists are phenomenal. So again, it’s amazing. freedom.com, forward slash momentum, how you Finn arbitrage amazing freedom.com, forward slash momentum, hyphen arbitrage. Use that. Get weeks free. Try it. You don’t like it, drop out, but give it a shot if you want to add that to your business. Welcome back to the ecommerce woman, a podcast.
Stephen: 03:08 This is episode 394 John Duke. And what a great conversation. What a great, uh, what a great place. He’s taken his business too. I don’t want to downplay it. A, it can’t be easy. Uh, it wasn’t easy. It might be simple. We use that phrase simple, but it’s not easy. 100%. And he’s figured out some things that I think are so powerful. I think we’re, most of us get stuck. He’s pushed past it and you know, I think that’s grit and determination that gets you there. And one of the cool things, we talk about a liquidation.com in this thing. He mentioned to me after the, you know, when we do our, you know, wrapping it up or whatever, after we’re done recording, he mentioned that, you know, they’re publicly traded. I think they’re on Nasdaq. And I think that that’s so important to note because that puts them in a whole bunch of rules that keeps them a lot more honest.
Stephen: 03:56 Um, there’s a lot of other government agencies making sure that they are legit and they do the right thing. That’s some kind of protection. And I just think that that’s important to remember that if it’s too good to be true, it’s too good to be true. I had a friend call me, um, at very well educated guy call me and say, Steve, you won’t believe this deal. There’s a trailer for sale on Ebay and it’s half the price of a normal, that thing. It’s incredible. And he goes on to describe it. He says, only thing, it’s a little odd as you have to pay with Amazon gift cards. I’m like, dude, scam, absolute scam. Don’t, don’t do anything. Do Nothing. Well, you know, I’m like, trust me, that is a scam. He messaged me later on, he says, I called Ebay and they said a hundred percent scam, you know, and I blamed them for allowing that on there.
Stephen: 04:40 That that’s a side issue. But having the ability to trust something because you know that they have regulation and they have to follow rules I think really should help you make better decisions. So very, very cool story. Let’s get into podcast and welcome back to the ECOMMERCE momentum podcast. Very excited about today’s repeat guests and bringing them back. And it’s funny, we were talking to the precall, it’s two years since we last talk and boy has situations changed. Let me read this. This is my, uh, lead in back then. X Name 300 Hotel Nights. All right? People are guessing who it’s going to be. Then we’re going to add in 42 states. All right? So that’s the formula 300 hotel nights plus 42 states and then add in 49,000 miles and then you kind of have to somehow factor it with negotiation and then there’s an equal sign and its success. That’s the formula. John Duggan, welcome back, John. Thanks for having me. That is, that’s a lot of moving pieces that when you, when you think back to those days, that was two plus years ago. When you think back to those days, uh, a miss it be, have you ever thought how, how you got through it? To me that would be the hardest thing cause it had to get
Stephen: 05:58 old.
John: 05:59 Um, there were times where it got old. It’s kind of funny. In 2015, I had to take a vacation from it. I just happened to be in Nashville, Tennessee at the time and uh, a couple of weeks to sit in one place turned into six months and I had been living in Nashville for six months because I, I needed a break. But I definitely do miss it now. I often look back and my Facebook memories of all the places that I’ve been and I, I love traveling. So it’s something that I definitely missed.
Stephen: 06:28 Did you make the most of each place you went to when you were doing that?
John: 06:33 Um, yeah. I tried to. The, the beauty of my job is, you know, most people take a vacation, they have a finite amount of time there and if they can’t go see a museum or, or, or something, they have to skip it. Me If the weather isn’t perfect or if we’re really close to close, let’s say screw it, I’ll stay an extra day or I’ll stay an extra two days so I can see what I want to see. And uh, being able to work while doing that, it really gave me that freedom.
Stephen: 07:00 The only barrier would be where you’re staying and you can always find a place to stay. Right? It might not be the best price, but you can always find another place.
John: 07:07 For the most part. There are a couple of times where I had to sleep in my car because there were no hotels, but most of the time there’s always a hotel nearby.
Stephen: 07:15 And what would cause that just because you happen to hit a town that had a convention or something like that?
John: 07:19 Usually it’s something like that. Um, the, the most recent time was actually just a few months ago was that while I was on vacation, I wasn’t even working that week. But I went out to state college, Pennsylvania for a Penn state versus Ohio state game. And I had a hotel booked, uh, in a small town about halfway between state college in Pittsburgh, but they overbooked. By the time I got there, it was like 2:00 AM and there were no hotels within like 300 miles. So I had to sleep in, in the cold, in my car, and I woke up very sick.
Stephen: 07:52 I could’ve put you in the warehouse. You were very close to me. I couldn’t give you a space in the warehouse. I’m not a 2:00 AM I would’ve given you the warehouse key in a code or something, but not, not the house cause. All right, so, so that life is behind you now. So a couple of things, uh, and I don’t know if they’re dramatic, but significant things to happen to you. At one point you were on the road and then you decided to come off the road. What was it that you were thinking you were going to do?
John: 08:22 Um, my plan was to grow into overstock and customer returns, buying truckloads of product and selling it on Amazon. So I got myself a warehouse in Greenbay, my hometown and started with that.
Stephen: 08:39 And at some point you even opened a retail store short, very short term
John: 08:45 [inaudible]. Shortly after I started doing that, I saw a lot of opportunities on product that I really can’t sell it on Amazon. Maybe it’s too big and heavy to make it worthwhile or it’s more profitable to sell elsewhere. So I saw opportunities to open up a retail store and moving all of the product that I couldn’t sell online. How different was the retail business versus what you know of? Very different, you know, with, with online sales, we don’t deal with the customers. We don’t deal with their drama and the issues they have. Occasionally we’ll get an email from a customer that is problematic, but for the most part it’s very hands off. You’re very separated from it. Once they get into retail, it’s a whole different ballgame. Especially discount retail. You’re getting the lower income people who have, they bring a lot more drama into the store.
John: 09:39 Well, let me ask you this, because a couple times you did some liquidation out of your warehouse, almost like a yard sale in theory, right? Maybe a rummage, I dunno. Like a flea market almost that customer is different, has different expectations than your customer that comes to a retail even if it’s a liquidation retail. Correct. Um, you know, I saw a lot of the same customers on both sides. There really wasn’t a lot of difference. It’s discount retail, whether it’s out of a warehouse as an event sale or a regular full time retail store. But there was no difference in expectation. Cause I would think like when I do a yard sale, you know, you know that you go up and you can ask for a better price and if they say no, no big deal, you just walk out and you move on. But when I come to a retail store and I want, you know, hey, I’m the customer John.
John: 10:23 Yeah, I’m never doing business with you again. You know, do, you didn’t notice a difference in it even though they might be the same person, they didn’t treat you any different at each one? I’m not really, the only big difference I’ve noticed is when I had the store, you know, it felt like a store. It was relatively calm. People come in and they’re shopping around what I have the event sales, it’s chaos. It’s like black Friday because it’s one weekend every, you know, three, six months. So we get just mobbed with people and there are times you can barely walk around in there. People outside making their own parking spots because all the parking spots are full. It’s a lot more chaotic when we do the event sales. And you still do those every so often? Yeah. Periodically we’re actually getting ready to do one a in the next couple of weeks.
John: 11:08 Well, let’s talk about that for a second. What’s the preparation look like? Because you know, I mean I’m, maybe I’m wrong, but not everything in your warehouse I assume goes up for sale. Right? We have a section of the warehouse we use, so we kind of clear that area out is by our loading dock. So we closed the bay doors. Um, we put tables up in front of it, we put shelves up, we had clothes on hangers and we just try to fill as much inventory as we possibly can in that small space. What’s the math that goes through your head in deciding whether that those product school over there or do you, you know, send them other venues to sell them, which we can talk about in a minute, but what, what do you, what goes through your mind? Um, in most cases the items going into the event sale are strictly items that I, I can’t sell online. I like customer returns or just items that just don’t make sense to sell online. If it can go online, if it’s at all possible to sell online, it’s going online. I would rather take less money selling it online because it’s going to sell faster. I don’t need to wait for the next event sale and I don’t need to deal with the customer. I don’t need to touch the product. I send it off and I’m done with it.
Stephen: 12:20 So in your mind, all the product that’s going over there has gone through that whole mental, uh, formula, right? They need to, like you say, if you could do it, boom. Done. If not, it goes over there. How about overstock? Like if you get too many of an item D, is that part of your decision making?
John: 12:37 I’m not typically, unless it’s an item that I can get a comparable amount in the sale. It’s all set out at as long as I need to for a online. If I’ve got just an absolute ton of an item
Stephen: 12:48 and, and it makes sense because that’s where the likely buyers are going to be. The of the likelihood of finding one person who happens to walk in your store looking for that item is probably going to be hard. When when you’re now buying overstock, do you think about that sale and buy with that stuff in mind in any way?
John: 13:08 Typically, no. The sales that we do are a way to purge is stuff that we don’t want. Um, you know when we’re doing, we do some events sales with pre owned product stuff that comes out of delinquent storage and whatnot. Those ones, it’s full of stuff that we used to just donate to the thrift stores to St Vincent Depaul or goodwill. So we would just give it away and get nothing for it. So the events sales are a way to actually generate a couple thousand dollars out of what essentially to me is garbage. What we’re doing when we’re doing events, sales on new products, stuff that we got on on pallets of overstock or customer returns, it’s usually kind of the same thing. Now maybe I wouldn’t have donated it originally, but it’s product that I don’t want and that’s what goes into those sales.
Stephen: 13:53 And to be fair, I mean I understand you didn’t pay much for this stuff, but the new merchandise specifically, you really only get pennies, pennies on the dollar, correct. When you’re selling it the way you’re describing,
John: 14:03 right. We’re moving like clothing. We’re moving between one and $4 depending on, you know, if it’s new or used or what it is, and it might be a $50 pair of jeans going for three bucks, but we’re just trying to move it out, turn and burn and get as much volume out the door as possible.
Stephen: 14:20 So it’s not a business model that you would go after and say, Ooh, I’m going to buy liquidation, Steve. I’ve got this big plan and I’m going to have these events, sales and I’m going to make millions. That’s not the way it’s designed.
John: 14:32 Not The way my business is designed. I mean, you could price stuff higher and still do well with it, with an event sale. My goal in these sales isn’t so much to generate revenue, it’s to get rid of dead inventory to liquidate
Stephen: 14:48 and get some return on it. And then with the stuff that doesn’t sell, even after that, what do you do with it?
John: 14:55 Um, then we palletize it and try to move it as a single piece. And that’s when we’re really getting pennies. I will feel a Gaylord, have a thousand pieces of clothes and move it at 25 bucks just to get it out the door.
Stephen: 15:06 Yeah. That’s happened for you. Yeah, no kidding. So really then in the end there, no waste. Right? Hmm. Um, and they’re doing the work, right? So you filled the Gaylord, they come over, you dropped that in their truck or whatever, and then boom, it’s gone and you’re out.
John: 15:21 Exactly. And it’s amazing when you’re selling a Gaylord of clothing for 25 bucks. How many people want to come in and pick and choose and ask what sizes are in there and whatnot.
Stephen: 15:31 And you’re like, no chance. This is what you get. It’s all or nothing. Yeah, exactly. What you see is what you get. How different than is your thinking now? Cause that’s, you know, that 100% of everything you have is gone. Right. So that’s a plus, right? You’re not stuck with anything. You’re not donating. You don’t, I mean you’re gaining that time back. So now when you’re making buying decisions, I guess that really helps. Right. You know, no matter what everything’s going to go. So when you’re buying, have you changed the requirements of your buying because you, you don’t have to worry about getting rid of it. Cause I, I think that’s a lot of people’s issue is that that’s the hardest part is finding a way to get rid of it. You figured that piece out,
John: 16:11 right? I know it’s going to be gone now. I may sell it. If I got a truck load of product, I may sell 30 or 40% of it at a whopping loss. It’s the other side of the product that I need to make the money back on. But I know it’s going to be gone and it’s going to be gone fast. The biggest problem that I had when I first got the warehouse and when I first opened my store is I would sit on product too long. The stuff that isn’t, you know, glamorous and fun to sell, it would just get kind of shoved in the car and all deal with it later and I’d forget about it and that really piled up. And so that’s, that’s my big thing that turn and burn. I don’t want to hold product, I don’t want to sit on it, sell it at a loss if I have to just get it out the door as soon as possible.
Stephen: 16:55 So let’s go through your model. So you’re selling on Amazon. So when you do order, right, you’re ordering from knowing these giant liquidation companies and you have a couple of little secret ones that you buy from correct. [inaudible] okay. So people can go look at that and then you’re sitting there saying, okay, I can sell your, you’re cherry picking for Amazon, you’re cherry picking for Ebay. Uh, maybe Facebook, local marketplace or whatever, depending on what it is. And then you’re sending a scale to auction and then you’re doing an event sale and then you’re selling in bulk. The last remainder did I hit them all?
John: 17:28 Oh, for the most part, I do want to clarify one thing that when I’m buying product from a liquidator, um, none of that goes to Amazon. Okay. There’s no invoices or anything. That’s kind of how I started it. And uh, that, that ended a couple of years ago. So what I’m getting liquidated product from a liquidator, it’s going to, Ebay is going to local auction companies, it’s going to consignment stores. Some of US getting sold in bulk to retailers. And then the rest of it is just being sent off. And our events sales.
Stephen: 18:02 Look, I’ve seen you buy some office supply stuff from me, no office Max or one of those kinds of companies, staples in and you’re right, there’s still a marketplace for some of that stuff. And so selling to local retailers, how did that evolve? I mean, how did they find you or how did you find them?
John: 18:18 Are you just build up connections over time as you deal with more and more people?
Stephen: 18:23 Hmm. And so, I mean, do you have like a kind of a, a database of hey, when I get legal pads, Stevie still uses legal pads, show my age. I used legal pads for everything. I know that Steve’s the buyer because he sells those in his office supply store or whatever. Is that kind of what happens?
John: 18:41 That’s basically it. When, uh, when I get to see in our offer for a type of product or a store, a chain going out of business or something, first thing I’m doing is going down my list. I’m reaching out to people, seeing if they have any interests and I’m trying to sell the product before I even write
Stephen: 18:56 get it to now you’re getting smart. Oh my God. And you know what? You could sell it to them for. So that helps you make the purchase price to be able to make the margin you want. [inaudible] or even if you broke even on that piece, that helps you justify buying the other piece that you know you can make money on. Right. You know, I use this description, this is the way retail used to work, right? They make a purchase, they didn’t pay for it, and then they would sell as much as they can at full price and then start liquidating and all the way down. And then the last little bit gets really sold at pennies. Right? Complete loss. Right? But collectively, you know, if they paid $1,000 a night, took in $1,500 they’re thrilled to death because then the bill comes due, they paid their thousand, they got 500 bucks in their pocket to pay their staff and all the rest of that. You’ve kind of taken that same approach, but on liquidated or, or overstock, I guess, cause not everything you buy is liquidated overstock merchandise. Correct. In a way. When, where did you learn that? Because I think, you know, it sounds really cool but I mean, was it easy?
John: 20:01 Um, I, I guess I learned it a long time ago. The, the concept when I didn’t have a lot of money to buy a product where, you know, if I saw something that I knew I could sell but I can’t afford it, I’d go and spend my rent money to buy it. But I’d only do it if I had a buyer in advance. So I knew I’d be able to pay my rent and it just kinda grew from there.
Stephen: 20:21 When, when you think back, you know, I’m sitting here looking again at this title, 300 Hotel Nights, 42 states. Um, it’s a pretty simple but not easy model there. Would you argue the same thing for the model that you’re in right now? It’s simple. Cause the way you described me make it sound really simple, but it can’t be easy.
John: 20:44 It’s simple. But it takes experience and a little bit of infrastructure to to build up being, you need to know how to sell the product. There’s no one way to sell it. I can’t get a, there’s no truckload or pallet or store of product that I can bring in and only sell via one channel. So people who are looking at overstock saying they’re only going to do ebay where they’re only gonna do Amazon or they’re just going to open up a store or a flea market booth or something like that. You have to look at other options because you’re going to be selling some of it here, some of it there, some of it and the other place. That’s the only way you can really do well in this industry
Stephen: 21:23 no matter what. Right. I mean you’re saying that no matter what, no matter what you buy, there is not 100% cause I, I buy a lot of overstock and you know, you end up with four cases of it. Well you might be able to sell half a case or maybe a case even. What do you do with the other three cases? How important are the manifest? I mean is there a trust factor for you? I mean maybe in the beginning where you is rigid and where you sloppy in any way and now you’re very disciplined
John: 21:51 were I rarely even look at manifests. Usually they’re not a hundred percent accurate depending on where they’re coming from. And one PR, a lot of retailers don’t even manifest the product. You know for example, target, you’re not getting the manifest with your product. That’s just the way they handle it. If you see a pallet or a truckload of product out of target and it has a manifest that means a company bought it out of target and then went through and created the manifest and probably cherry pick some stuff as well. So I don’t even bother. I’m looking at what MSRP is, I’m looking at what the categories, the types are, what the condition of the product is and what my cost is.
Stephen: 22:29 And that’s again experience. So you’re saying that if it is, you know, for that particular example, target, if it’s manifested, somebody did it not target and therefore, like you said, more than likely it’s been cherry picked when you’re factoring cause that’s really what you’re doing. You’re, you’re factoring those con those, that stuff in, right? You have to, uh, you know, calculate that as part of risk. Um, when, when you see an offer for a liquidator in, Oh and it says it’s $1,000, I’ll make it up. Is it always a thousand or are you able to negotiate on that?
John: 23:03 Um, usually it’s pretty flat on the, these companies who do liquidation first up, you’re never dealing with the retailer. Uh, when you’re buying overstock, the retailer deals with one or two companies that move thousands of truck loads per month. You’re dealing with one of those guys. And, and when you’re, you’re buying from them, they have very slim margins. There are the cases where there might be making 15 bucks on a pallet. So it’s the volume that that really does it for them because they’re moving thousands of truck loads a month. So that really makes it difficult to negotiate if the margins are that slim for them. Sometimes you can work something out with them and there’s some cases where they are piecing it out, take a truckload of general merchandise and split it up between electronics and apparel and housewares and whatnot, and then they’re selling it for a higher price and you have a little more wiggle room. But in general there isn’t a lot of room for negotiating.
Stephen: 23:58 Hmm. When you say there’s so many thousands of pallets, are there other people doing what you’re doing or what are they doing and what have you seen? Maybe that’s a better question.
John: 24:08 Um, there are people all over the country in this industry. A lot of, from my experience, a lot of people who buy overstock, they either have a thrift store or an overstock type store or they’re selling on Facebook marketplace. There are people who make Facebook groups just to sell their own product and they do well with it. There are people who bring it to the flea market, people who you try to sell what they can on Ebay and sell the rest and bulk. There are so many different facets of this industry, ways that you can sell the product. And because of that, there are a lot of people who do it. Even goodwill for example, they buy pallets of target overstock and sell it in their stores.
Stephen: 24:46 Hmm. Now have you been able to find groups similar to, to the FBA or the Ebay groups that we, we’ve been part of forever. Right. You’ve been part of them forever. Have you been able to find, find groups that are in the liquidation model or the overstock model where he’d been able to find and share information similarly?
John: 25:06 Yes. Um, there are a couple out there. One that comes to mind off the top of my head is called product sourcing one o one. And they actually vet a lot of the suppliers that do liquidation. Uh, so you can feel a lot more comfortable buying from them. And then they have a series of groups than that extremely active, but a series of groups that are kind of a subset of that for retailers and for flea market sellers and so on and so forth where you can kind of ask questions and share knowledge, but there are a couple out there. What you really want to do is find people doing it, the groups you get a little information, but finding people who are doing it, you can kind of share your experience back and forth and, and really work together on it a lot more.
Stephen: 25:47 But how do you recommend that they find people? Because I think it, I agree with you. I would think that they would tend to keep that stuff close to the vest because the sources, you know the probably the dye, the diamond in this business in that model you’re using is that company that you’re sourcing from, are they reliable? Are they accurate? Can you trust them? Will they be around? Right. Those are probably really important things and people might keep that stuff close to the vest. Maybe they don’t.
John: 26:13 And that’s that. As far as suppliers, that that really is something that, that’s the only trade secret in this business is your suppliers. Um, because you’re talking when you’re, when you’re networking and working with people and, uh, who are in the same industry as you, you’re, you’re working with people all around the country. So, you know, I’ve got a store in Alabama that I constantly interact with back and forth and a retailer in Michigan and, and we just kind of share our ideas on, on the sales side, on marketing, on how sell a certain product and so on and so forth. As far as finding suppliers, that’s the tough part because people really don’t like to share that. When, when you’re sharing information, can you share
Stephen: 26:54 something, what you would say is one of the best things that you learned or you know, without giving away your secrets? Secrets.
John: 27:03 Um, I would say probably the best tip that I can give you is a w when you find a new supplier start small because there are so many companies out there that brand themselves as liquidators or just buying product and selling the garbage out of it as untouched product. I have been burned by so many liquidators or want to be liquidators out there who will sell returns, but they’ll say it’s brand new shelf pulls or something like that. So don’t go out. You find someone that’s seems like a good look. A good liquidator don’t go out and buy a full truck load right out the gate by a pallet or two to test them out to see what the quality of their product is. First you’d save yourself thousands of dollars that way
Stephen: 27:47 in, in, in, in your experience where the people that you did buy from, did they, you know, one or two pallet purchase, was that really a representation of what you got when you bought the full, uh, the full truck load? Um, generally, yeah. Okay.
John: 28:05 So taking a look at is it’s not just the liquidator, it’s also the type of product as well. Uh, there’s one liquidator. I, if you watch my youtube videos, you’ve seen me show a lot of pallets from them and I won’t say who they are, but I’ve by usually by electronics pallets from them, I’ll spend between one and 2000 on a single pallet or electronics. I recently bought a palette of tools and um, they were absolute trash. Over 50% were defective and these are returns by the way, over 50% were defective and junk. Where’s the electronics pals that I get from the same liquidator? I’m at a 90% success rate on these. So it, it could also be the type of product and the retailers coming from rather than the liquidators.
Stephen: 28:54 That too, I mean, um, because our, the electronics people who regret the purchase, so they’d send it back or whatever or it was a gift, but tools they get beat up in used. What would you say?
John: 29:07 Um, I’ve got some, some theories. I couldn’t say for sure what the issue is. I don’t tools are going to get used and abused a lot more. Um, the other thing with the electronics, you’ve got a lot of user error. People who don’t know how to use it. You know, moms, grandmas, they don’t know how to use the Bluetooth headphones so they’ll return them. Whereas a guy by on tools, he knows what he’s doing with them. So you’re going to have a, you know, a lot less user error returns.
Stephen: 29:35 What’s been your experience when you’re selling via local auctions per dollar wise? Right. I mean, you know, I would assume this is Steve’s assumption, so maybe I’m wrong. Your most profitable sale is probably a local Facebook marketplace, meaning that you don’t have to pay fees. That’s the only reason. Second, most, which probably is almost the same would be like selling it on Ebay or something like that. And then then third would be auction. This is me guessing. And then fourth, uh, that final liquidation thing where the event sale and then the complete liquidation. Is that accurate or am I wrong on those top two?
John: 30:10 Um, as far as, you know, gross sale compared to net sale, you know, your costs to sell, it’s, you’re going to get the most of the Facebook marketplace, like you said, with no fees. But I almost never use Facebook marketplace because it takes so much extra time out of it. If I’m selling an item, let’s say for 50 bucks and I’m selling it on Facebook marketplace, I have to take an hour out of my day just to wait for someone to show up because people are always late or they don’t show up or they don’t show up. And I’ve get, I’m getting a million messages. Um, it’s just a nightmare. I would rather sell that $50 item for $30 on Ebay because I take two minutes to list it. Once it sells, I take two minutes to ship it out and I’m done. My hourly rate is much higher on Ebay. Time is the most important thing for me, uh, because that’s the only thing that I have a finite amount of.
Stephen: 31:00 When you think about, you know, where do you scaled to, um, obviously the warehouse is critical for what you’re doing. Could you do it on a smaller scale at the pallet level or maybe two pallet level and, and, and find success with it. And I guess success is relative but being reasonable.
John: 31:17 Absolutely. I know people who see us have a semi truck deliver a couple pallets right to their garage or have a drop it in the driveway and they bring it all onto the living room. Now, personally, I wouldn’t want to do that because that’s a lot of product to be bringing in the house, but it can be done. One thing worth note, if you’re doing that though, if you don’t have a commercial, address your pain a little bit more for delivery. And if you need a lift gate, meaning a essentially an elevator on the back of the truck, the lower the pallet down, you don’t have a forklift or a truck dock, you’re going to be paying a little bit more there. But as long as you buy the right product and have the right sales channels, you can absolutely do this from your house or even out of like a small office or something.
Stephen: 31:55 You know, I’m sitting here thinking about this because I mean, how many units do you receive in a truck load? How many, you know, dis, is there a way you can calculate the number of units you get?
John: 32:05 It really varies on what it is. That could be over a million units. I don’t truck load. There could be as little as 500 units on the truck load,
Stephen: 32:12 but it’s still material. Right. How, how do you process, because that must be the hardest part, right? The processing. Because if you’re topping volume,
John: 32:24 yeah, it depends what it is. Some products are neatly organized. If you’re buying stuff that is case packed is neatly organized, you don’t even need to open the boxes, you know what’s on it. Or You could buy pallets of, they call them smalls. It’s just a lot of little things you get out of home depot where it’s, you know, drill bits and screwdrivers and there might be 5,000 items on one pallet. You see a lot of smalls out of Amazon too, where there’s thousands of items on a single pallet. Those can be a bit of a nightmare to process and I personally don’t really do those much because those are a lot of low dollar items where you really need to have that flea market booth or that full time retail store to move them.
Stephen: 33:05 Well, even with the flea market booth, you’re still talking, like you’re saying, if you get thousands of items, it’s going to take you forever to sell them and get your money back. So yeah. Um, can you, uh, give us a recommendation of a site that that’s trustworthy and reliable without giving away your secret ones that everybody would know.
John: 33:25 Um, liquidation.com as assuming you buy it from liquidation.com [inaudible] April, this is the thing that a lot of people don’t understand, that you see a lot of people say and how liquidation.com is a scam. And there they ripped you off and everything, liquidation.com as a marketplace, anybody can create an account to sell on there. It’s like Ebay. So you’re going to have bad sellers on there. You’re going to have scammers on there. Don’t buy from them. You want to buy from the stuff that is owned by liquidation.com they do Amazon, they do bed, bath and beyond. They do home depot, they do Sony. Um, if you’re buying it and it’s coming from their warehouse, then you know, you’re, you know, you’d be comfortable buying from them.
Stephen: 34:11 But now how do I tell that? So look, I’m, I’m on liquidation. You’ve got come. I went there and I went and tools and machinery. Just figured I’d glance here. And so when I go down through here, it shows two different warehouses, a Garland, Texas, or Las Vegas. But then the seller, there are one, two, three, four, five, six, seven, eight sellers.
John: 34:30 Well, I know Las Vegas, one of their warehouses is there. You should be able to see an icon or something right on the screen that will tell you, uh, that it’s coming from them.
Stephen: 34:42 Hm. Okay. So this whole one, this is a, this must be a bad category to go in because the company’s name or h variety fc underscore sourced underscore from underscore Amazon’s underscore liquidations. So I assume
John: 34:55 that one is actually Amazon. That’s, well, it’s a liquidation.com selling the product from Amazon. Okay. Okay. From
Stephen: 35:01 Amazon prime global, is he sails? College Cap Steel Makers USA? They are not. Okay. Right. Okay. And so again, there we’re going to cherry pick and this is what’s left because if, right, they’ve, they’re doing the same thing. All right. Let me see if I can find one that has their little logo because I’d like to see the difference because I think that’s such a pro tip what you’re describing. Um, yeah, I’m not seeing any in toys either. Very interesting. Um, lot of Amazon, it looks like Amazon liquidates a lot through here. Correct? Right. That’s pretty normal. Um, I know sometimes they liquidate locally, Amazon to have, have you been able, because you’ve mentioned a couple of retailers, it sounds like you’ve been able to get to the retailer level and take them in. Oh Man. Out every so often.
Speaker 5: 35:48 Oh, with the stores that are all the retailers that have been closing lately, I’ve been doing a lot direct.
Stephen: 35:54 And are they using liquidation companies and then you’ve developed a relationship or have you been able to buy right directly from the store themselves? Sometimes.
Speaker 5: 36:02 Well what a store files bankruptcy. They go through a liquidation company. It could be tiger, great America, Gordon Brothers, those are probably your three bigger ones that handled most bankruptcies. I go through those companies, but it’s on a store level. So I do have a lot of connections with these companies now with the liquidators. But I usually just walk right in the store and say, who’s the consultant from the liquidation company? Let me talk to him. And uh, go from there.
Stephen: 36:30 And how does that conversation go? You walk up to him, Hey, I’m a John and I’m a buyer. I mean, is that, I mean, can you walk us through a little bit of that?
Speaker 5: 36:39 Well, these, uh, these companies or these stores, when they filed bankruptcy, everything is left up to the courts. The liquidation company doesn’t get to make any decisions. So as far as price structure and how things are sold, a lot of that is the court’s who decided, so I don’t really have a lot of negotiating power what I’m coming in and and say asking do you have an end buyer lined up yet? And if not, I would like to uh, discuss that possibility of me buying out the store. And this is usually towards the last final days.
Stephen: 37:10 So it’s already been cherry picked by the people who are just looking for a deal. Then the resellers who can find flip things, they’ve already been through a couple times. Um, then I don’t know who else went in there. This is the stuff that’s left even after that they’re still paying staff. There’s still incurring costs, I guess is the right way to say it. And so you might be the answer. So the end buyer, that’s the key word, right? Or key phrase, right. And there is there competition to be the end buyer? And if there is, are there any tips or tricks that you can give that would help with that kind of discussion? Because it must be a negotiation, you know, why choose you versus choosing me?
Speaker 5: 37:52 Um, there is competition on both sides. You’re competing with the general consumer too. I’ve had stores that sold out. Uh, for example, I was scheduled to do two Shopko stores, uh, near between Milwaukee and Chicago. So a good three hours away from me. I had a crew, two crews of people going down to those two stores, two trucks going down. One of them sold out, the other one was almost sold out. We spent 150 bucks in there. That’s it. Uh, so you’re competing with them and hoping they don’t buy out a store. And then as far as other people who were interested in being an end buyer, you’re basically all putting in bids. Whoever offers the most money, and it’s usually a percentage of retail. Whoever offers the most money is the one who gets it.
Stephen: 38:34 So it’s, I mean, but you
Speaker 5: 38:36 don’t get to see a manifest at that point, so you literally have to go through and kind of mentally do, okay, there’s $300 in this corner. Mean is that how you approach it? You can get that walk into a store the morning of the day they close and then walk into a store at 4:00 PM that day. It’s a completely different store. You, there’s no way to know what you’re going to get until you are, they’re buying it so you’re committing. Knowing there could be anything. A lot of stores, some stores you could walk in and there’s barely anything left. You’re spending 150 bucks on product and then the next store you’re spending 10 grand of, which actually happened to me this past couple of weeks, so you have no idea what you’re getting. It could be garbage, it could be a lot of stuff. We just throw it right in the trash after we buy it. You have no idea until you get it.
Stephen: 39:25 Let me ask you this because I think this is interesting. How did you know that this was the right term? Because it sounds to me like this, this fits pretty well with you. I mean, if I had to ask you five years ago what direction you would go, could you say it would go this direction? You know what I mean? Is that weird the way I asked it?
Speaker 5: 39:46 Um, I would say I’m not surprised that has gone in this direction, but I wasn’t anticipating or have to go in this direction, if that makes sense at all.
Stephen: 39:56 Well, I mean, when I think back to you negotiating at pawn shops, I mean that was definitely one of your skills, right? I mean you, you definitely had an eye for that. You did well in that market, correct? Right. Is there, cause you’re dealing with not only, I mean, can I, could I liken it liquidation? I was going to say, I’m putting words in your mouth and you’re gonna accuse me of this, but is it liquidators similar to a pawn shop owner or manager, I mean in any way? Or is that, is that weird?
Speaker 5: 40:23 Not really. It’s, um, it’s a completely different ball game. When you’re on a pawn shop, then know what they paid for that item. They know exactly what it is and you’re negotiating on that item. And that’s one item. It’s a $50 item. When you’re negotiating with a liquidator on closing out a store, you’re negotiating on what could be tens of thousands or hundreds of thousands of dollars worth of product, but it’s imaginary because you don’t know what it is, is, or how much it’s going to be. And neither does the liquidator,
Stephen: 40:55 do they, I mean, how do they get paid? How does the liquidator generally get paid?
Speaker 5: 41:01 Um, I, I, from what I understand, and I’m far from an expert in this, I know very little. I’m always asking, but I know very little from what I understand, the liquidation company gets. Either they get, they’ll get a percentage of the sales or they will buy out the, the company as a whole and then peace liquidated out and essentially the differences there. Profit. But definitely don’t quote me on that because I’m far from an expert on that.
Stephen: 41:31 Now it appears, I mean, I think this is a, uh, you’re going to be like, Duh, of course Steve, that this, um, businesses are closed. It, retailers are closing faster. There seems to be an acceleration. Am I correct with that in your experience?
Speaker 5: 41:45 Um, if you look at a larger scale over the past decade or two, yes, absolutely. But it seems almost like it’s slowing a little bit. If I remember right, and I don’t know the stat in front of me, but if I read this recently, 2017 there around 8,000 stores that had closed a 2018 there were around 5,000. So it’s quite a drop, but I mean that could go anywhere. You know, with Payless shoes closing, they had an unbelievable amount of stores closed, so that’s probably going to really bump it up this year.
Stephen: 42:18 Have you been seeing a lot more competition in what you’re doing or has that waned as the store closings have gone down?
Speaker 5: 42:26 Honestly, it really just depends on the retailer. We tried to get two toys r us stores and I’m someone bid way higher than what I’d be willing to pay. Uh, because it’s, it’s all a single niche. It’s toys, it’s good product. Where’s these Shopko stores? I’m getting them for pennies because there’s so much garbage left at the end and there’s such a broad array of what’s in there.
Stephen: 42:49 And what do you do with the garbage? I mean, I, you know, the true garbage, are you responsible, is it like a storage unit where you’ve got a broom sweep it or, or is, are you able to just push that stuff that aside and take off?
Speaker 5: 43:00 The way it works as an end buyer is I’m just buying merchandise first of all, our fixtures that are not part of the deal that you can be an end buyer for fixtures. But I don’t, uh, so it’s just merchandise. But I do need to buy everything. Uh, with Shopko, the most annoying thing with shop goes to cosmetics. I am getting maybe three or 4,000 pieces of just cosmetics in a typical store and maybe a hundred of them are usable. Most of them are opened, leaking, damaged, and those literally go right in the trash. I have to buy them. I’m also buying mismatched shoes. A lot of times shoes get mismatched. So I’m getting out of each store. Uh, 20% of the shoes I buy are either a single shoe or two different sizes in the box and I have to buy it. Uh, some of the stuff I’ll just throw away right at the store. Like I, the last store I was at, there was a bunch of poster board and it was all bent up and wrinkled and dirty and stained. As soon as it went through the cash register, I bought it, I put it right in the garbage cart. But other stuff I just bring in my warehouse and throw on our dumpster.
Stephen: 44:02 Okay. So I think, I mean it blows my mind. I, it’s a very, it sounds very exciting cause I’m assuming you still get the benefit of the hunt. Right? You still get the thrill and then the ups and the downs and I’m sure its ups and downs. Right. It’s not always ups ready campy. Right. When you think back versus the model where you were the hunter gatherer where you literally were traveling 300 hotel nights. That means you’re traveling the United States hunting for that product in some way or another, which which do you enjoy more, which are you better suited for? And maybe the better question is when people are listening to this cause there’s a shiny object syndrome that are going to be like, oh this is definitely the way I should go. I this is the way. Right. And then tomorrow they’ll listen another one and there’ll be one. That’s the way I should go. Right. What would you say would, would be the type of person that would, would do well in that world?
Speaker 5: 44:56 The type of person that would do well in liquidation. Yeah, I know stores
Stephen: 45:01 well you know stores and then being able to get rid of it. Cause I think that’s an art. John, I think you figured out an art cause I don’t think every, I think 90 I think every person here, I’m going to raise my hand, has death piles piled up in the corner that they’re going to get to. I’m going to get to that John. It’s gonna make me money. I’m going to get to it. Never really gets to it.
Speaker 5: 45:22 I’ll, I’ll say this, if you have piles, if that’s a problem for you, this side of the business is not for you because you’re gonna get, you’re gonna get either a truckload of product. Are you going to buy out a store and five to 10% is going to be exciting? It’s going to be cool, and then maybe another 30% is going to be mundane, but you can deal with it at least half of the product. You’re not going to enjoy it. It’s not going to be fun. It’s not going to be cool products. It’s going to be boring and you’re not going to want to list it and it’s gonna pile up. If you’re, if death piles are a problem for you, if you can’t motivate to move the, the non sexy product, you’re not going to do well in this business, you’re going to end up being a hoarder. And I can say that from experience.
Stephen: 46:04 And so that’s the, and here’s the professional advice. Okay? So if that’s you and I look out in my warehouse, I would not fit this model because like you, I like you say, it’d be awesome to find, oh, look at this, look at this. And then all of a sudden I’d be like, okay, there’s another box. Oh my God, I’m done. I’m done. Right? And so if that’s your model, um, however, if you’ve been the guy who’s got a warehouse that’s empty because you are a girl at that, you’ve got an empty, because you sold everything one way or another, and you’re willing to part with things. I think that’s critical. This might be a model. Yeah. Hmm. How about you, when you look back then answer that question about which, which you prefer or which, um, which you’re getting the most satisfaction from.
Speaker 5: 46:50 I definitely had more fun being a treasure hunter traveling around the country. That was a lot more fun for me. Problem is, um, from a business standpoint, I had to transition. I have a lot less faith in the future of my place on Amazon than I did before. And that kind of stemmed from a lot of the changes that have been making over the past couple of years. And I did briefly get suspended. So I don’t want to put all my eggs in the Amazon basket anymore and to be traveling, eating thrift stores all over the country that has all my eggs in Amazon. Um, so by being in one place like this, I’m able to diversify my business a lot more, which is going to guarantee that I’ll be in business a lot longer and not flipping burgers at Mcdonald’s in two years.
Stephen: 47:37 Hmm. I think it’s a very powerful, I think it’s, I think it’s exactly the smart move with this model that you’re using. You’re right, you, your ability to stay where you’re at, the ability to for product to come to you. Um, you can build the processes. How hard was it to build these processes that you’ve evolved into?
Speaker 5: 47:57 Um, I, I don’t want to say it was hard. It was just time consuming because it’s something from experience. You do something one way and figure out a better way to do it and then you, you find a another way you can do it and you’re constantly improving on your processes. What I did a year ago, the processes are very different than what I’m doing now. And a year from now it’ll, it’ll continue to grow and evolve.
Stephen: 48:19 Okay.
Speaker 5: 48:20 All right. The way I, the way I always like to look at it is if you want to open a store, don’t try to be Walmart because Walmart has 60 years or 50 years of, of growing and evolving their processes. If you’re trying to start a business, try to be you and try to start and grow and evolve yourself because you can’t jump in and do what somebody has been doing after evolving and growing for a number of years.
Stephen: 48:48 That’s a lot of strikes and swings at the bat, right. To get to that position and you can’t just jump to that place. [inaudible] hm. Okay. I love, uh, I love the story. I love the fact that you transitioned to find the model that’s working for you. Um, you know, I don’t want to downplay this. You get rid of pro, you’re moving scale. Have you ever thought about how many, how much money you worth, the product you bought in the last year or two? All, I have no retail value. I mean, just retail bout iffy. I mean, could it be millions
Speaker 5: 49:24 easily? I can tell you, sitting in my warehouse right now, there’s over half a million dollars worth of product just from a couple of purchases.
Stephen: 49:33 Now you didn’t pay a half a million, so let’s be careful about that. Right,
Speaker 5: 49:36 right. I’ve got, for example, I’ve got $200,000 worth of apparel from target I have six grand into, and that was from a store that closed, uh, and overstock store that closed in Minnesota. I’ve got another $200,000 worth of product from office depot that cost me about 10,000 that I brought in just a couple of weeks ago from an office depot that closed. And I’ve got six Shopko stores sitting in my building that range from 30 to 50,000 each. So I paid a tiny fraction of that amount. But retail value, there’s over half a million dollars with the product just from the past, a couple of months sitting in there.
Stephen: 50:13 That’s crazy. I mean, you gotta think about that. It’s crazy. It really is. And yet you’re not operating it in some giant staff. You don’t have, um, all the buyers, you don’t have all the cashiers, you don’t have all staff putting them up on shelves and all that kind of jazz. Um, is that the secret? Right? Obviously you paid pennies on it so you can give it the effort, you know, equivalent effort. Does that make sense?
Speaker 5: 50:41 I paid pennies on it so I can sell it for nickels. Whereas the, the stores that have the massive buildings, the slew of employees and whatnot, they’re not paying pennies for the product. A $10 item, I might pay 50 cents, whereas it they’re probably paying six, $7. So it’s very different on how you would have to manage that.
Stephen: 51:03 Love it. Okay. We’re still doing resale rabbit, youtube. Um, and you know, it’s funny, you go back and you’ll see John had a viral video. How many, how many downloads did that viral one go?
Speaker 5: 51:15 Uh, that one has over 6 million views. Last I checked it might be closer to six and a half now.
Stephen: 51:21 And do you made out on that one? That’s a fair statement.
Speaker 5: 51:23 I would. That one was insane. I was a trendsetter. After that video went viral, all of a sudden every other youtube were big and small was doing Amazon returns. I saw a youtube is with multimillion subscribers, the big heavy hitters and youtube modeling their videos after mine. And that was really cool to see.
Stephen: 51:44 Best way for somebody who wants to follow up with you. What, what is the best way back then? I used to have your Facebook connection there. Is that still the best way or would you rather they connect you on Youtube?
Speaker 5: 51:53 Oh, I am so bad at responding to Facebook messages. I, I’m probably have a few thousand of them. Um, if you need to get ahold of me, best way is probably via just via email resale firstname.lastname@example.org and even then, I can’t guarantee your response because I get so flooded with, with emails that I don’t have time to get through them. Especially, you know, right now when I’m so busy.
Stephen: 52:15 Well I think my advice to people is go out and do the work, go out and watch you do a lot of videos explaining a lot of this stuff. Um, and that’s the work, right? You gotta put in that thousand hours or 10,000 hours, I think the real number is right. And to go out and do the work, go out and check this. I like that. liquidation.com. I like what he’s saying is go through and sort it kind of the way I’m doing and then start looking at who the sellers are and say, Huh, okay, so here for example, Home Depot stores is actually selling. So that’s home depot themselves selling liquidation? Correct. Okay. So you’re not dealing with the middleman you’re dealing with quite frankly, the retailer now I’m assuming liquidation gets some kind of percentage or some, some, they must get some kind of a vague on that, right?
Speaker 5: 52:58 A liquidation actually in pharaoh buys the products. Like I’m looking at their website right now under consumer electronics, the top items here, uh, the, you see a audio touch wireless, that’s a source from Amazon liquidation. So that is liquidation.com from there, Nevada warehouse. Uh, here’s Sony noise canceling headphones, uh, from Sony that’s in there. Liquidations, Texas warehouse, because they do. So the one is Samsung Galaxy s eight from buyback hub. That’s a, just a random person on here. So that’s one that you want to watch out for. And then the fourth one is another one from Sony. So they don’t make it 100% clear. But you can kind of deduce on, on where it’s going from. And then when you go click into the, um, the actual item, it says, right under view manifests, says fulfilled by liquidation.com warehouse.
Stephen: 53:53 And so that in your experience, and you’re not endorsing them, but that is, you’re getting it right from this liquidation.com company.
Speaker 5: 54:02 Right? That’s what you want to look for, fulfilled by liquidation.com warehouse. And I do endorse them. I actually met the CEO of the company, uh, I was out in Vegas at a conference with a lot of the executives from the company. I love this company and I highly recommend buy in from them.
Stephen: 54:19 Okay. And that’s an experience thing, right? That that’s something that you’ve done. Okay. And that gives you, you know, you’re going to get it right, because I’ve heard those horror stories too. I paid this company, I still haven’t received my merchandise. That’s not your experience with liquidation.com. Correct.
Speaker 5: 54:33 Right. As long as you’re buying from, you know, the, the right company for, you know, you’ll, you know, you’ll be good. Awesome.
Stephen: 54:42 Dude, I love it. I love, I love that you figured this out. I mean that’s impressive. And again, to me the most impressive thing is you figured out how to get rid of this stuff. And I think that is where I’m the artist and I just think it’s, it’s very awesome dude. I wish you nothing but success. Thank you so much.
Speaker 5: 54:59 Thank you. Appreciate you having me.
Stephen: 55:02 Great Guy. Great Story. Is it a call that he was doing one thing and realize that he wanted to do something else? I love the story that he took six months because he wanted to take a break and he took it in Nashville, which is like one of my favorite places to go. I can see that John, I get it. Um, but again, I get the self awareness. I get the fact that you realize that this is kind of what you’re good at and you’re very comfortable with it. And not only are you good at it, you found a way to become an outlier in it. I think that’s awesome. And I think, um, and I applaud what you’re doing, but I just think that that just doesn’t happen. That’s hard work. Put your head down doing the work. So great story, a great guy and reach out to him if he, uh, if you’re interested in that, um, but to the work, you know, don’t just say, hey, how can I get started? Go to the work, go watch all those videos, go to liquidation.com. Go through everything and take his advice, buy one pallet and make sure this is what you want to do. Because if you can’t sell it, then this isn’t your thing. Okay? Nothing wrong with that and you move on to the next thing. So don’t, don’t get mad. Just say, Hey, it only costs me and my tuition was a per cost of one pallet and it didn’t work out. Okay, boom. You’d rather know that before the tractor trailer shows up. ECOMMERCE, momentum.com ecommerce, momentum.com.
Cool voice guy: 56:14 Thanks for listening to the ECOMMERCE momentum podcast. All the links mentioned today. Can we found that incomers momentum dotcom under this episode number, please remember to subscribe. And like us on iTunes.