OCTOBER 2010 CUSTOMER OF THE MONTH
Bernard McCLay – Owner of Kokoro Shopping, Inc.
Bernard McClay, a long-time customer of Via Trading, recently gave us some insight into what it’s like to run a brick & mortar discount store with a specific focus on hardgoods: tools, home & garden, industrial products, etc.Mr. McClay runs a warehouse outlet in Rancho Cucamonga, and has grown his business considerably over the last few years. “I started selling pallets of merchandise at yard sales and quickly realized there was an opportunity to do something bigger and increase my sales. In less than two years we’ve grown from purchasing single pallets at a time, to buying whole truckloads of tools in one go.”
McClay focuses on reselling customer returns, liquidations and some overstock items. “I decided to get into selling hardgoods when i realized the kind of demand there was for these types of items, and that the profit margin potential was there. I surveyed and tested several categories but I found that- especially when you plan to test the items - it’s best to sell things you know something about.” He added that it does take a certain level of skill and service to resell certain types of items and differentiate yourself from the competition.
McClay’s primary business is his warehouse outlet, which supplements with online sales. “I list items on eBay and Craigslist, and I often use other channels to move merchandise like consigning the products to other businesses, selling them at auction, wholesaling them or even bartering them. “We’ve even traded merchandise for food!” he stated.Aside from the aforementioned secondary resale channels that McClay uses to move his merchandise, he has launched three websites that he uses both to drive traffic to his primary business (the warehouse outlet), and where he resells different types of products and services.
www.industrialsurplussupply.com is a retail website for industrial supplies including industrial equipment, power tools, cleaning & janitorial supplies, furniture, hand tools, vehicle maintenance, etc.
www.hollywoodbluejeans.com provides an avenue for McClay to liquidate branded clothing at significantly discounted prices. You’ll find great deals on Levis, Dockers, Dickies and other famous denim brands there.
www.bargainoutletstartups.com provides information and seminars on how to sell merchandise using various resale outlets (online, flea markets, etc).
“I take a well-rounded approach to the business. My brick & mortar store allows me to resell the returns and salvage items I buy, while my online sales allow me to make a little more off of higher ticket and newer items. I complement all of this by selling services and knowledge, and teaching people how to make this business work for them. There is a learning curve involved and I’ve been through it, so I teach others how to get there too.”
When asked how much of a return on investment he typically expects to make on any given load that he purchases, Mr. McClay replies “Realistically? 20% net. We research every product in the load and try to sell most of the items for 40% to 50% of its retail value. That allows us to remain competitive but does cut into our profits a little bit. The point of this is to offer merchandise for a lot cheaper than what people can get it for in the store, so it makes sense.”
Over the years, Mr. McClay has honed in on the types of products that suit his business model and that do well for him. He now typically purchases truckloads at a time, though occasionally he sources individual pallets if he has customers with specific needs he needs to fill. He works with 3 different suppliers, depending on the product they are offering and what he might be looking for at any given time. These days, over 90% of his purchases are made at Via Trading.
“One thing people should look out for in this business is to find reliable suppliers. This is a dog-eat-dog industry and it’s important to look at a supplier’s reputation and the customer support they can offer you. Since it’s not a clean-cut “buy it, it’s brand new, resell it for a great profit” kind of business, customer support is paramount- you need to know that your supplier is there if there’s a problem with your load.”
Other aspects Mr. McClay stressed as important things to look for in a supplier were locality (if you can visit the supplier in person and inspect the goods, more power to you), consistency of product (you want to make sure you can build a loyal customer base for a type of product that will be available consistently), and quantity/qualify of supply (that the goods be of good quality and plentiful). “The success of your business largely depends on the product you get – how consistently you get it – what quality of product you get. Don’t be afraid to interview your suppliers and find those that fit your standards.”
As an entrepreneur, Mr. McClay recommends to all who are considering entering into business for themselves reselling merchandise to “learn from others and know all your options before you leap.” It’s much harder to get back on your feet after making poor critical decisions, and much easier to plan things out correctly from the start. “Consider attending one of our start-up seminars – they give you a lot of valuable information and help you make some more educated decisions from the get-go.”