#6: Real Housewives Husband: Seth Marks

Speaker  0:00  

We'll talk about the $800 billion growing conundrum of customer returns and end of life inventory because it's insane how much it's growing. It returns in aggregate. We're a company, it would be 300 billion more than Walmart alone. Like it'd be the fortune one company.

Speaker  0:19  

I'm Gabriela Tavakoli Bailey and I've worked in unscripted television as an executive producer and TV executive doing what I love most, storytelling. I'm an extremely curious person and I decided to do this podcast so I can dig in and learn about fascinating people living extraordinary lives. And I called up my very talented friend Orly Minazad who is a writer and journalist. And together, we are going to learn about people's journeys and provide you with a fun listen and a good time. Welcome to Tell Us Something We Don't Know.

Speaker  0:59  

Have you ever wondered what happens when you return your products back to Amazon or target? Most people assume returns get restocked until they find a new home. Well, there's more to the story. Our guest today is Seth marks. And he's here to tell us exactly how off price retail and end of life inventory works and is a billion dollar business. Seth currently serves as the chief merchandising officer for channel control merchants, the world's largest reverse logistics retailer. And he's also here to teach us how we too, can make money by doing some treasure hunting of our own. Welcome, Seth.

Speaker  1:39  

Thank you, Gabby.

Speaker  1:44  

And Orly

Speaker  1:46  

Nice to meet you guys. Gabby, good to see you again. What's up with Orly? What's Orly’s introduction? I can't. Everybody wants to know about everybody, right. But we'll talk about the $800 billion growing conundrum of customer returns and end to life inventory, because it's insane how much it's growing. It returns in aggregate were a company, it would be 300 billion more than Walmart alone. like it'd be the fortune one company and the GDP of customer returns. If it were a country, it would be a top 12 Country 800 billion a year in return. Where does that shit go?

Speaker  2:28  

That's insane. Orly and I were talking before and I feel like you're gonna teach us so much like, we're gonna get some tips. And probably everybody's gonna quit their jobs and just try to kind of get into the world. But you've been doing this for 30 years, right?

Speaker  2:42  

I grew up in it kind of my grandpa was in what we call close out wholesale. And my dad was in that business. We had a family business. And then third generation gets three times the tension headaches, and I spread my wings and left and went to more than a liquidation customer return reverse logistics side. And now I'm working for KKR, which is the third biggest private equity fund in the world. They own our company. We're the first reverse logistics retailer. So we take all these returns and sell it back to the public. We're headquartered in Mississippi. And we're purposely kind of off the grid a little bit in nondisruptive. Real Estate, Mississippi, Alabama, Louisiana, in tertiary markets because we deal with famous brands, famous retailers, our partners are some guaranteed retailers and websites that you guys shop, we get luxury brand. And they don't want those popping up back online are holding companies called channel control merchants. So we sell it in a kind of a cooperative under the radar way in tertiary southeastern markets. We have 100 stores and we're growing. So it's pretty cool. And we have a wholesale business. So if someone wants to start their own treasure hunt business, we could set them up and get them in business. But I still forgot what's up with Orly. We never I know about Gabby, like you're this amazing television, you know, creating programming and doing really cool stuff I've read about you learned about you, but what's up with Orly?

Speaker  4:25  

So sad. Gabriela was one of my first bosses ever when I got out of high school. I think she wasn't that much older than me, but she was a badass. Okay.

Speaker  4:35  

And Netflix were no no, this was this is

Speaker  4:38  

that foxes I started at Fox. And I was working with a small team and I was looking for an intern. So I put out a post and then orally your dad saw the post in my name or something.

Speaker  4:51  

I had printed it and then he saw your last name and he's like, Oh, she's Persian. Good. You should go. We're always like that. He doesn't work for each other. And he had no idea what it was. He didn't even give it shit. Yet you go for it, and that's a good last name. Okay. Yeah, I went and I was 90, I was so excited, you know. And then I went to college. And then we just stayed friends. And then I came back and we did some more shows. I think I did pa work and all of that. I went to school for writing. So I'm a freelance writer. I write personal essays. Oh, cover TV and all of that stuff. So I cover it. She actually makes it nice. You got your story?

Speaker  5:35  

Yeah, you've taught you're a writer, you're a journalist. I mean, give us some more. Give us some more orly Come on. Talk about yourself. Come on.

Speaker  5:43  

No, no, no, I'm telling you. I want to hear about the 800 million billion billion but

Speaker  5:48  

billion, but thankfully, they don't teach this otherwise, you know, you'd have all these Ivy Leaguers, and really smart people coming into the space. Nobody at Wharton or Kellogg, you name your favorite business school teaches the liquidation side, the destructive side, nobody wants to talk about what happens when a business doesn't grow. Right. So they don't teach any of this. But nobody grew up saying, Man, I want to be a consumer product garbage man, which is basically what I am right? We're a waste management. We're the equivalent of what happens to all that inventory that consumers return and has no demand anymore. How do you create demand for inventory people don't want it's a function of ultimately creating crazy prices, right? Everything we sell, priced to liquidate,

Speaker  6:35  

we're gonna break it all down, Seth, because there's different categories and facets to what you do. There's some complicated parts of it. But it's also incredibly fascinating. You were mentioning that you kind of work out of Mississippi, but you also live in Utah. And a fun fact about you, is that your wife, Meredith marks is on Real Housewives of Salt Lake City.

Speaker  6:58  

Yeah, it's not, it's not.

Speaker  7:01  

We want to define nuts. But so what would you say 5050. In Mississippi 50%. In Utah, how does that work? Exactly, I'd say

Speaker  7:10  

a third of third of third am on the road a lot like chasing opportunities. In any life inventory, it's kind of the early bird gets the worm, you got to physically we want to see as much as we can see before we take it to make sure we can monetize it effectively. So a third of the time I'm traveling, looking at inventory all over North America, third of the time, refueling filling my cup and Park City crushing spreadsheets and doing a lot of business development work. And then a third of the time I'm in Mississippi driving the business. So that's really kind of how it works. And then when I'm in Utah, a third of that time, there's cameras in our house for three months a year. My wife is on this housewives show, which has been an incredible experience. I've really learned to embrace it. You know, look, if you're living your life, and you don't want cameras on you need to rethink the way you're living your life. I don't give a shit. I am who I am. My favorite thing to do is laugh Gaby more than anything. I love to laugh. My humor is off the mark more than it's on the mark show. I get criticized a lot because it manifests is like inappropriate humor. But I know I'm making my friends from high school laugh and that's what's important to me. That's key.

Speaker  8:29  

Never comfortable with the cameras always in your house.

Speaker  8:33  

Originally, no, super uncomfortable. But season three, we're we're badass naked in the bathtub. Right? Literally, you had all these cameras, right? You just see marathan I in a bathtub. And I've always wanted to know in movies and TV and you guys know this? Like, what level of coverage when you're in a bubble bath? Are they really totally naked underneath it? And they're like, well, it's up to you. If you want to be totally naked, you can be naked, you could have a sock or you could do this and have a Cricut you know, I'm gonna go completely naked and Meredith was completely naked. And so we're trying to be as real as we can be. And I think the more real you are on this stuff, the more criticized you get. I think other people try to portray a more perfect version of themselves, which is more bullshit version of themselves. And where hey, I'm broken AF there's no question I know it. I've been a lot of therapy. I I love therapy. I used to fight therapies to say that's not for me. And then our marriage almost fell apart. And as a Whoa, whoa, whoa, I better go to therapy but want to save this things. And then they started filming at that point of our life. Wow, birth and I were trying to put our marriage back together and next thing you know, we're on a reality show. We're like, Well, should we do this? And I was like, Yeah, we should do it because we have people watching us will be able to watch it like people that go to golf school and they video their swing You know, we can watch our behavior but you weren't listening to me right there, right? Like,

Speaker  10:07  

our marriage helped us one of the few couples. I told Andy Cohen like, Dude, you have no idea you saved our frickin marriage. He's like, no, no one's ever told me that before. There's no way Yeah, I said we're not out of the woods yet Andy, but it's been working.

Speaker  10:23  

Oh, man.

Speaker  10:24  

So what are you naked in the bathtub?

Speaker  10:28  

100% 100

Speaker  10:30  

So no sock, no, nothing. Let's do this.

Speaker  10:33  

Yes, why not?

Speaker  10:34  

So let's start from the top. What does end of life inventory mean?

Speaker  10:40  

segue from the life and the life inventory. So you really have three swim lanes of end of life inventory. swim lane one is customer returns customer returns on the.com side are enormous right in apparel. I'm sure you guys when you buy apparel might buy the same style in two sizes, sometimes three sizes. Return the two that don't fit. Keep one. What happens to those other two digital as gaslit customer returns physical returns in a bricks and mortar environment. You can try it on you buy the one that fits, but there's still a lot of buyer remorse. So you don't want that and bring it back. Right? I don't like the way the Keurig fits on my counter, but it's across every category. Its massive. 800 billion is customer returns. And that's just one piece of the end of life puzzle. So what they try to do is if you send Gabby in orally, if you guys are considerate returners, you leave the tags in on the ones that don't fit. Some people take the tags out, wear it for a night like a prom dress and return it. What has the tags in goes back to stock, they inspect it as there is back so about 400 billion half of it gets repurposed back into the live inventory. The other 400 billion it's got the tags it was worn, there might be some spray tan on it, whatever. I'm talking about apparel, but it's across all categories of merchandise. That stuff's what we get got him. It's perfect inventory. And historically, a lot of that's been going into landfills. Which is crazy when you think about it. How much there is that going offshore? There's you look up garbage Island literally Have you ever seen this literally an island of just used and the life inventory piling up so it's horrible for the environment. So we believe everything has a price in swim lane one we get customer returns from some of the biggest retailers in the world we sell in our stores and we wholesale it to strategic partners that's in swim lane one 400 billion and live life swim lane two is close outs where the demand for the product you know loses traction or you guys a lot of people have great ideas at the time. And then the products made and it's not such a great idea when you guys get thicker though, like the GL H nine hairspray that Ron propel, like, Hey, I got a receding hairline. I'll just spray some brown over on my forehead, right? Remember that commercial? You guys might be too young. But there's so many products made and what happens to those products they get closed out close out like TJ Maxx Ross Burley

Speaker  13:32  

St. Those are the products that go to the TJ Maxx Ross Marshalls.

Speaker  13:37  

Yes, okay, factory fresh, perfect condition just never had a demand that's a close out. That's billions of dollars a year also. And then store poles, the stuff that made it to swim lane three is store stock store poles, stuff that gets to the shelf, very heavy and seasonal. What happens to Christmas, when you have Easter coming like that stuff doesn't 100% sell through, you got to reset that area of the store, it comes back. That's the term reverse logistics is stuff that doesn't go through the front door of the store. You go in the back room of a retail you'll see tons of boxes and things that they're returning back to the distribution center or the vendor. And where does that stuff go again? That's hundreds of billions of dollars and so there's certainly one customer returns when like to close out swim lane three is storage stock and the season that stuff that comes back. The fourth thing is pilot error liquidation Toys R Ross pure one retailers you're like why used to love this retailer what happened? Right where they for whatever reason, they lose their way and it's 90% of the time bad management. They throw the baby out with the bathwater many times in retail like just close a third of your stores and focus on your good stores. You don't need to close the whole chain and so that full blown retail liquidations, which we're gonna see go through the moon and this year 2023, we might see the most we've ever seen before. But so that's another that's just where the whole damn thing evaporates. And what happens to those assets? That's real estate. There's a lot of other things in that swim lane.

Speaker  15:17  

And then there's also insurance claims, right?

Speaker  15:19  

Yes, swim lane five. Lane five insurance claims that hurricane that hit the Naples Fort Myers area in September, early October, when a piece of the roof goes off, and the water comes in and your boxes, you know, the cards are damage, like what happens to that stuff, insurance claims. We just bought a bunch of that in the fall. You know, every season, there's hurricanes, the insurance company gets possession that inventory, they got to repair the buildings, and then bring in new inventory. Where's the old inventory? go swim lane?

Speaker  15:52  

Do we call that five? Five? I think that's for I'm losing track of all the swim lanes.

Speaker  15:57  

So the facts of the matter is that there are these those multiple lanes. And that's why this is a billion dollar industry. So what do you guys specifically do? And what is your role? Because I think now it's about people understanding the kind of the nitty gritty of it.

Speaker  16:12  

Yeah, the details,

Speaker  16:13  

we work at all those swim lanes. So we take all this stuff in first, we got to find it. Like I'll be this weekend at the National Retail Federation, that Sundance of retail, if you will, where every retailer being the Javits Center will be filled with the top 2000 biggest retailers in the world, we'll come to New York City, everything that services retail will be under one roof, we'll be there selling our services of managing their end of life inventory in a sustainable way that aligns with their sustainability objectives, and gets them more recovery dollars, what we recover through our point of sale through our cash register, we give that transparency to our partners, before we started this model, there are a lot of jobbers and intermediaries that would just try to haggle and get the better of the like convinced a retailer why I need to pay 510 cents on the dollar. And don't worry about what I do with it, versus where we're coming in saying, hey, we'll show you what we get with it and share it with you upside like so we're changing the model, we've got the best retailers in the country working with us. We're going to get some more this weekend in New York, we go fishing for business development. And then we bring that inventory in we sort it, we process it, sell it in our stores. And then we also have strategic wholesale partners.

Speaker  17:41  

So my question is, and I'm gonna need you to explain this in layman's terms. Because you very seasoned businessman, I am not. So let's say for example, I'm returning a pair of socks to Amazon. Okay, what is the life journey? That being burned? So let's say I opened it, okay, so they don't restock it? What happens to this pair of sad socks? So how does it get to you? What is its journey? So your

Speaker  18:10  

socks? Yes, you don't want them you wore off, they can't go back to stock with Amazon and we work with Amazon, they have a huge amount of returns. And they're totally committed to improving their sustainability objectives, making sure nothing goes into landfills. So those socks probably end up with us. And then we'll recondition them, we'll price them we'll look at them. 90% of customer returns are not worn.

Speaker  18:41  

Okay, sounds good. Yes,

Speaker  18:43  

the big idea orally is to reduce the carbon emissions on that pair of socks. And working with our partners, we can take it directly from the return origin. So it doesn't have to go to a return center, and then get out another truck and then come to us so you can be flying southwest from Cleveland LA. The sustainability aspect returns is huge. Might end up in Mississippi. So how do you reduce that? That's our mission this year. We have partners where they're taking the returns and sending them directly to us once they know they can't go back into stock. That's a big initiative for everybody is reducing the carbon emissions on the unnecessary additional miles of a return.

Speaker  19:30  

Basically, let's say the best case scenario comes to you guys. You make sure it's okay. And then it goes on the shelf and to one of your stores directly, right. Yes. And one of your stores for example is called Dirt Cheap, correct? Yes. dirt cheap. What does that look like? What does that store all about?

Speaker  19:49  

We're an agnostic retailer. We sell everything in anything. We don't do refrigeration or frozen like a TJ Maxx and Burlington. And Ross and home goods and national stores and name an off price retailer everyone you've ever been in, put it in a snowglobe shake it up and that's our store. It's a little bit of a swap meet feeling to is not very pretty. We don't spend a ton of money in making sure we got the greatest fixtures are all about the processing every single thing our store is the lowest price you will ever find it out in your life. We're all about extending value to the consumer. Do we have a very eclectic mix? Gaby, the next question is who's our customer? It's amazing. All my kids are Gen Z and my daughter is all into shopping through the ESG sustainability lens.

Speaker  20:47  

Secondhand shopping is huge.

Speaker  20:50  

It's huge. And so Gen Z's are leading the way and setting the bar and making it cool. The shop secondhand years and years ago used to be the paycheck to paycheck customer. Now you pull into the parking lot of our stores and you'll literally see like a $90,000 cars next to cars with the muffler dragging the idea of shopping secondhand and the idea of saving money. This the kind of retail it's growing right now.

Speaker  21:16  

So you have a physical store, right? Yeah, Mississippi,

Speaker  21:20  

we have 100 and in Canada 125. stores. They're big, big stores. Yes. So you come in and the ultimate treasure hunt.

Speaker  21:29  

What about LA stuff? How do I get my? Yeah. My sucks that

Speaker  21:43  

might be on the horizon. But yeah, it's blue ocean out there right now.

Speaker  21:47  

Okay, well hit me up when it is out

Speaker  21:50  

of you went into like, oh my god, like and you actually your name on it like your mom made you do with a Sharpie? Like star? By name right?

Speaker  22:02  

What is the number one product that makes the most money for you guys,

Speaker  22:07  

the better the brand, the better the recovery always right? Like anytime we get prestige brands, you know, that you would find in luxury department stores. That stuff's like commodities. You know, when you think about handbags, literally, those are like basically like gold, if it's got a Gucci handbag or whatever, that stuff. It's phenomenal. We get a lot of that. So we work with luxury department stores, we get a lot of prestige brands that are returned that can't go back to stock because it doesn't meet their criteria that you guys would lose your mind over it that has the best value. And believe it or not consumable products that haven't been compromised that are still in the original carton, like Amazon sells a lot of value packs stuff. So you buy like a shrink wrap three jars of Nutella, and somebody might pull one of the jars out of the shrink wrap but the other two are still the seal has not been broke. So we'll get two of them to tell us back. You put the towel on a shelf, it'd be that stuff evaporates. Who would

Speaker  23:09  

make the effort to return that? That's my question. I mean, I get returning some things. But I mean, it takes time to drive and say I'm going to return these two jars.

Speaker  23:21  

I brought three jumbo Nutella jars are pretty sure Meredith would be like, get that out of the house.

Speaker  23:28  

Yeah, that's why I don't eat at all.

Speaker  23:31  

Are there certain brands that you know of that refuse to even go into your guys's market? Because it diminishes brand value?

Speaker  23:38  

I've heard rumors about that.

Speaker  23:40  

Yeah. But that's a great question. There are brands that whether it's us or anybody that they don't want their product showing up on the secondary market at all, and they burn it, right? I mean, which is not very sustainable. So they're polluting, you can do the research on am I going to call anybody out, but they should be called out these brands that are super high end. But were there like, the environment like what their brand, yeah, over the social responsibility of how do I liquidate this in a sustainable way, I don't give a shit. I'm gonna burn it right and create pollution, like those brands should be identified and called out whether it's 60 minutes, or Gaby and orally like somebody, bring them to the carpet. It's gonna be me.

Speaker  24:33  

Going back to the insurance lane that you're explaining. I think it'd be fascinating to just have a camera on you in the time that you have to go on when that happens, because it's like a ticking clock. kind of talk a little bit about that with us and how people are kind of chasing products. And it's like in a very short amount of time, like 48 hours, right?

Speaker  24:55  

Yes, those are people that have been unfortunate to experience Natural disasters you know, everybody's leaving the insurance companies and the salvage companies are coming in. And it's a horrible seeing the aftermath of these things. With started doing this in Katrina and Rita, it's one of the worst natural disasters we've ever seen in our country. Just more recently in Naples and Fort Myers, you're pulling up to the outlet ball and there's dead fish in the party like Todd not just a couple like 1000s of fish that came from the tide going in, and the windows of the stores Majan like a sawgrass mills in Naples, Fort Myers area where the tide got so high. It comes all the way into this mall, every single storefront, those windows were shattered, water got in, there's 1000s of dead fish in the parking lot. So it takes these hurricanes 24 hours, they're gone less, right. They just can't it's like almost like a nuclear bomb hitting these areas of the country. Now you got to restore these communities, you got to get the retail and the commerce up and running. You got these restoration companies like cleaning you've never seen before. And then what happens to the stuff, a lot of the stuff is just wet. So the faster you can get to it and dry it and restore it. And it's almost all salvageable. Like I would say 90 plus percent of it is salvageable. So you got to fix the store, get everything out of the store, and it has to happen so fast. To your point, Gaby, so I have a 21 inch roller bag, literally since I was how old you guys think I am. 51 years I slipped a little bit. By the way. No one's ever said I look older than I really am. So Orly, you and I are right now is our first issue. So I love you though. Let me take that back. I love you because you're honest.

Speaker  26:57  

Because you said F O before these, but you have like kids who are in college, how is that possible? Did you start when you were 10

Speaker  27:07  

know about my brain definitely wasn't fully developed. My therapist didn't tell me that. 24 I had a child but first,

Speaker  27:17  

you will be? Yeah. Okay. So I'm

Speaker  27:21  

52 you up with you on I'm really 50 I keep bags was sad since I started in this business. If I hear about a deal I go that day I hear about it. I don't go home and go the next day. Because you want to get there first. I don't care what anybody tells you in anything in life in every industry, the early movers advantage, you know, that's the name of the game.

Speaker  27:47  

But how do you drop everything to actually do that? Almost lost

Speaker  27:50  

my marriage as a result of that for almost 30 years now. And it becomes a breaking point where the most important thing in the world is getting this end of life inventory in some point.

Speaker  28:05  

Did you do less of it once you started therapy, and you saw what was at stake?

Speaker  28:09  

Yeah, what was crazy is my marriage was falling apart. And then COVID hit at the same time. And the whole world shut down. And I couldn't get on planes for a period of time is bad as I wanted to. There were companies getting pushed into bankruptcy that were still paying the rent, no one saw it didn't know how to react to COVID. So COVID created a massive influx of inventory and so many levels, and we're still seeing some of the results. In the immediate side. A lot of the non essential retail stores kept paying the rents but didn't have the sales you're gonna go bankrupt inevitably and a lot did and what happened to that inventory. They couldn't even sell it to the public. Usually you just have those sidewalker saying everything must go and you liquidate to the public like toys or Ross and Pier One before COVID did. And then you got COVID hitting you can't liquidity to the public. What do you do that stuff? Stuff March comes in with a team of people, we put it in boxes and take it into our warehouse and then sell it in our own stores. Give you a we were essentials in all the COVID Yo we did we said let's get Clorox let's look for food and so on told you Gabby and Orly that you're not an essentials retailer, you would do everything frickin possible to become an essentials retailer. That's what the country needed at that time. So we're calling Clorox we're calling ConAgra. We're all p&g. We're calling everybody and anybody saying hey, we'll take anything you have that fits the essentials criteria, and we got as much as we could and got qualified. It was a big government debate the states we operated in, we refuse to close our doors. When we said we're going to fight like heck to bring essentials inventory in our store. Had we not done that our 3000 employees we I'll be looking for work right now. Wow, early mover's advantage and agile thinking Gabby and Orly, like, across all industry

Speaker  30:07  

real quick talking about orderly socks, before we bought the socks,

Speaker  30:11  

name of the episode. A lot of clicks

Speaker  30:16  

if Orly bought the socks on Amazon for $20, and then she returns them because she opened the package, but she never put them on her feet, nothing like that. And then you guys get them. And then you go to put it on the shelf. How much will you guys price it out for?

Speaker  30:31  

Did you go to business school at UCSB also, I love that your major UCSB. So those socks, if they were $20 Originally, we'll put the original retail right on it, we usually start everything at 30 to 40 off. So those socks will go in with a new QR code on our sticker. And our customers have an app, they could scan the QR code to see the price. But they'll see the original price.

Speaker  31:00  

So $20 And then it'll go to $12. Right?

Speaker  31:04  

Yeah, math on

Speaker  31:06  

you. And we progressively mark it down. So if the socks are perfect, and her mom didn't make her put a sharpie or name on it will probably go at 30 or 40 off. But if one's a little dirty, you might have to go to 60 off. So we keep turning it eventually they go to 90 off. And then after the percentage off, we'll be like everything $1 Everything a quarter just to make sure it 100% sells through and then you just take the blended average of that recovery. So I'm that truck with the socks were 1000s of other things and they all have a lot number so that all comes to the store as one big deal lot. And Orly socks are in that deal. A lot of Keurig might be in that do a lot a Schwinn bike might be in that do a lot like all the things people returning are in that do a lot. Then we just launched it on 30 off. And then we watched the sales week over week, how much of that lot sold a double digit sell through in a week is good. So 10% of that lot sold in the first week. Right? That means we're training to be done with that lot in 10 weeks. So we look at the next week, if only 5% After the first week 10%. So it's time for a markdown we look at it week over week. If we see 10% of that lot sold in in the second week 15% of that lot sold, we're like yes, we don't have to mark it down, we'll get a higher recovery.

Speaker  32:32  

got it got it. A store, though, like TJ Maxx. That's not the second hand. But specifically, TJ Maxx and companies like that. I heard that there are certain days of the week that they will price down their products, and that they kind of follow the same type of model is always good, for example, to go into a TJ Maxx on a Tuesday morning at nine o'clock or something like that. Do you have any kind of tips for us on that?

Speaker  33:01  

So markdowns that's a form of new but a fresh receipt, like when the lettuce is green? If you want to be there, when the green lettuce hits the back, and you know the new stocks come into the floor. So you get first look at that distribution from their warehouse. Ask the manager when do you get your shipments in? Right? And then you get first bite at the apple? So finding out from the store manager when they get their shipments. How many a week do they get? And when do they put them on the floor in a very nice way, like a manager? You know, I love your stores the best store I've seen in the chain. Oh my God, I want to tell corporate what a great manager you are. Can you tell me when you get your inventory and I love treasure. And that's how you get the best deals you got to get there first, the best stuff always sells the first couple of days.

Speaker  33:51  

But what didn't you also say that what they do is when they get that new inventory, they also will then go price reduce their old inventory. Right? So she went hand in hand, don't they?

Speaker  34:03  

Yes. So the question is when do you get to do the markdowns? And that same conversation with the manager? What are you putting red stickers on the stuff? When is this going to clarify? But when you get the new stuff it more than likely is on different days it with Clarence it might be a little bit of that happening all the time. TJ Maxx they don't care that much stuff. You know, they try to get it right the first time. And so getting the newness is probably a better deal than getting their clearance.

Speaker  34:32  

That makes sense. Yeah. All right. So treasure hunting. I think something that people are gonna want to understand about is if oily and I wanted to get into this business and with the pallets that you guys have, how do we do this? How do we make money off of this in more of a wholesale bigger picture kind of way?

Speaker  34:52  

Channel control merchants, we have more pallets than anyone in North America unequivocally like we literally have hundreds of millions of dollars of inventory on pallets in millions of square footage. So it's a natural progression for us to work with independent entrepreneurs that may want to buy some opportunistic inventory and take it to their local flea market or become an eBay seller digitally. There's a lot of ways you can take opportunistic inventory. If you have the product at the lowest price, it's impossible not to make money. It's all about how you buy it, you buy it right, you've won the game already. Now you just need to play it. It's the ultimate treasure hunt, right? You're buying a pallet without knowing what's on it. Maybe it came from this retailer, maybe some of its from this retailer, some of its from that retail, you might have a mix of various retailers end of life inventory on that pallet. And the biggest cost in our business. When you break that pallet down in our distribution centers, there's a lot of friction and labor costs to go through every single item. So the math of selling to an entrepreneur who's a merchant, who likes to buy and sell, they could break it down on their own and saves the seller the cost of having to spend that labor. So they'll sell it at ridiculously low prices, like ridiculously low, like 1012 15% of retail. So you could go out and sell it at 5060 off of retail, and still make like 60% margin, which is incredible, right? Incredible when you do the math on this stuff. So it's all in the buy, you buy anything for 10 cents on the dollar, you pretty much can't go wrong.

Speaker  36:45  

It really is the saying buy low, sell high. And that's just bottom line. Right? That's how it is. That's how it works.

Speaker  36:52  

Yeah, this is the epitome of that. And then you get in a little bit of everything. So you don't really get too much of anything. And so you get the scarcity, that fuels the treasure on, it's never really a good treasure on experience, if there's piles of the same thing. So what a pallet might have a name brand handbag in there with oily socks and a coffee maker, and you have no idea what you're gonna get. And it's super exciting. If you're a merchant, and you got that in your DNA, the best way to make money, every great town, almost everyone I've ever been around has some kind of flea market or swap meet. And those things are alive and well. So you go to these flea markets or swap needs, and you put your picnic table of stuff you got on your pallet, you're going to sell every single thing you bought that weekend. So you can go spend, you know, let's say $1,000 on a pallet and come home with $4,000 that we get that is a real thing that happens, like people are now doing this for a full time living.

Speaker  37:53  

I'm definitely going to get me some pallets. I have another question for you. Your company is the last stop. What if this would be a tragedy, but my stocks don't get sold. So what happens after that what happens after you guys,

Speaker  38:09  

we take what doesn't sell it's generally 5%. So we sell 95% If Orly Sachs had a rip in them, and they had the Sharpie and people didn't know you are so the value went down and they knew you weren't it said or be different story, Mark, it was 30%. They don't know you in those socks come back super damaged, and no one wants to put them on. They come back to us. And then we have a partner that recycles textiles. So every type of material gets recycled. And we work with recycling partners.

Speaker  38:45  

In general, I think the digital world has completely changed everything from us from reviews and getting information about something to how easy it is to return something. And so I wonder in five years from now, how it's going to evolve. And I mean, do you have any thoughts? Where's it all going?

Speaker  39:03  

Yeah, it's incredible. I think the VR, like the way you could probably walk a retail store and almost I don't know if you'll be able to smell it. But you'll be as close as you can to touching it. And I know this technology is happening and exist at some level. There's an obsession about how do you mitigate returns upstream? Everything in reverse logistics is addressing the symptom. Back after the return happened, how do you mitigate the return from happening and get to the root cause and so digital innovation where you could virtually put on clothing that technology is happening. And so if you could take apparel returns, you're ordering three in the same size and order the one that actually fits you in theory, the only return logic for apparel would be buyer's remorse or flexing one night on something you can afford. And you gotta return, but the wrong size stuff that would go away completely. So you would see billions, hundreds of billions of dollars solving that riddle Gabby through technology. Is it obsession, and there's a lot of great work happening around it.

Speaker  40:16  

I have another question. That's so knowing that you know so much about all these products and money and deals and whatnot, you got your dad hat on, and you're buying your son Christmas presents, you're walking into a Nordstrom? Are you like, I'm not paying that? Are you getting deals? Or how are you actually buying this?

Speaker  40:34  

I am a bit allergic to all the prices, it drives my wife crazy, because I like to value everything. Before I see the price in my head, I'd say that's how much I think it should be. Right? And so when you're shopping luxury, now I know how inflated those prices are. So I can be more accurate. Like everything's Bob Barker prices right to me. And everything's overpriced. In this country. Everything is priced, right. And so the game is how much can I get the American consumer to pay me and keep putting the price up, like Amazon has algorithms that do this, literally, oh, thereby it raised the price to buy it, raise it a little more, they're still buying at the same rate of sale, raise it a little more, I raise it now I'm selling a little less, I'm going to lower it find the perfect price, the way retail said is to find the top. So everything's overpriced. Therefore, it's very hard for me to engage in regular retail, unless it's a partner that I work with. I refuse to buy anything at retail unless it's somebody that we work.

Speaker  41:43  

On. Alright, we're gonna go into some rapid fire questions. But going back to real housewives, how many times a day do you get asked about that? Are you in meetings and people like so tell me about you know, I mean, is it it must have changed your life.

Speaker  42:01  

I don't talk about it. In my work and business. I literally will never, ever, ever bring it up unless somebody else does. So today, I was on a call talking to a big retailer. And I was talking to their chief merchandising officers like what are the top three executives, and he had one of his associates on the call. And we're talking and I've known this executive for 20 plus years, you know, we're talking about business, we're inventory traders. And he says, hey, you know, this guy is also he's a celebrity or whatever he says, and I'm like, come on, come on, man. That his wife is that he's your sidekick, right? Oh my gosh.

Speaker  42:48  

How did you and your wife meet?

Speaker  42:50  

By date after college? I got bowl season tickets. Michael Jordan was planning like I'm single. I'm working in the family close out wholesale business life was good at my own condo. But Michael Jordan bowl season tickets, great seats very easy to get a date very easy to get. And it was like having the Beatles like when Michael Jordan played the wanted to reach me to Meredith and we've been together literally ever since took me to a bowls game without Michael Jordan the balls, there's zero chance I would have landed

Speaker  43:19  

married. And then how long after you guys get married?

Speaker  43:21  

We got take about two and a half years. She was 22. I was 21. Yeah. And then we just jump right in. She's my best friend. I love and that's why I'm still married.

Speaker  43:35  

Just looking back. It just seems like you were children? Would you have done it differently? Would you have waited till you were older to get married and have kids?

Speaker  43:43  

It's a great question. Because I feel badly for people that are now older and don't have kids. Like I think I got super lucky. Because I'm still a kid. It's like kids having kids, right? Yeah, I could go on either side of it. Like I think there's tons of positives. Like I'm going to New York tomorrow. I'm going to have dinner with my 25 year old son and we'll have fun. And then at the table next Sunday, you'll see a 25 year old with Michael Douglas's father. I think there's an advantage. You can be action and you can be current and my son could confide in me and I kind of know what he's talking about. I can relate to it. And then if you're older, there's tons of advantages to I wonder who which kids are more messed up with younger parents or older parents? Probably both.

Speaker  44:36  

Because Because Gabriella has young parents. Gabriela has extremely young parents. I have very old parents, but actually you're more normal than me. So I guess it's the one with the older. I am not normal.

Speaker  44:49  

At all, there's for sure data behind that. It's just how do you get to that data,

Speaker  44:54  

but there's also the whole like background of where the families are from and all those socio economic issues and all those things. I think there's a lot of things that factor in.

Speaker  45:02  

Yes, yes.

Speaker  45:04  

I'm laughing about the best friend comment that you called your wife, your best friend, which is very sweet. But I think you're one of me dating my husband. So we've been married for five years now. But you're one. He told me that I was his best friend. And then I said, Oh, well, I already have a best friend. Now he's like, I'm not your best friend. He teases me about all the time. But the truth is, he's one of my one of my best friends.

Speaker  45:33  

Oh, I guarantee you you asked Meredith. I wouldn't be in her top 10 Then I'm okay with that. I mean, being a number two, I don't care what anybody says. You could still get paid like a number one, right? Give me the chief revenue officer, whatever, right? If they'd see your dollars, I I'm definitely not very best friend. I'm not good enough listener. And that's what I'm obsessed about. Contrary to how much I've been talking, because I love talking to you guys. You asked amazing questions, and my brain gets cooking. I'm obsessed about listening. Like when Merritt talks used to be like, 7030. And now it's 7030 the other way and it's deep in the relationships so much more that listening. Yeah, the more you listen, you know, if she just wants you to listen, or if she's looking for an opinion, and so you don't step on her words. In your listening. You know, you'll say you guys know you that well. What do you think? And then if you just wanted to get it off your chest, and didn't want to hear what they thought, you read that energy, and you know,

Speaker  46:42  

thanks for telling me that. Yeah, just moral support. Yeah,

Speaker  46:45  

yeah, that's been the change. I wasn't like that was therapy did for me.

Speaker  46:49  

Good for you. I love that. So you are having fun going back to the beginning, when you were talking about having cameras all over the place now in my life currently? Is that still happening? Are they still filming? Yeah,

Speaker  47:02  

they've been super flexible. Because I usually 66% of time either at a deal or in Mississippi working in the offices. Take it well, let's film Seth and marathon a weekend because then we'll get Seth. My family is number one. And then my work is number two. And I have a ton of fun with both of them. So it's not like make time for fun. Yeah, I work does define me. I love my work doesn't define me. Fuck, that sucks. Like, you're spending so much damn time on your work. It should define. That's a little bit of a contrarian theory. But when people say work, life balance, something's wrong. If you're not loving your work, and you gotta be like work life balance. If you're chasing your dream, then you've never worked a day in your life. That's how I feel. I love what I do. It doesn't feel like work. I'm making deals every day saving people money, making the seller more money and saving money for the customer. It's one of the few things where everybody's winning. Nobody's getting screwed. And me.

Speaker  48:05  

I can tell that about you. Because you seem so excited talking about it. I love that, that you've been doing this for 30 years. I'm like, Oh, wow, he's still really excited about it. I hope I feel that way. Having done something for 30 years, you know,

Speaker  48:18  

find your passion, you got to lead with your passion, and then you'll figure it out. But I got $12,000 in my pocket and 18 years old from selling broken stuff at a flea market. That was exhilarating to me, right? And then it just got in my blood.

Speaker  48:35  

All right, let's get into some rapid fire questions. What I love most about my wife is

Speaker  48:46  

Oh, my gosh, she's such a No BS person. She's so principled. She has exceptional core values. And she just makes me a better person, which is like one of the most important things for me to have in a partner.

Speaker  49:03  

Life mantra you live by. The only thing greater

Speaker  49:07  

than the will to win is the will to prepare and take risk. It's not just about saying you want to win, are you willing to put in the work to prepare? And then are you willing to have the intestinal fortitude to take risk people have never taken before the will to win everybody talks that game. And this is where I said there is no work life balance. If you feel you're in that situation, get out of that situation and make your passion, your work and that becomes your life. And it should define you. When you do that preparing becomes natural because you love it. And then you take risk because you're so convicted in it. And you win more than you lose in life becomes beautiful.

Speaker  49:54  

The greatest lesson my kids taught me

Speaker  49:57  

ah evolution is Evolution like the shit we have to unlearn my kids taught me the lot of things I grew up with. I need to unlearn right like, probably just as much as you need to learn like the shit my generation. What what's my generation again orally? It's not

Speaker  50:22  

really yours this after

Speaker  50:24  

the baby boomer Yeah, Gen X Gen X. So that's like 50 to like 70 Baby Boomer or like 70 and dead. So each generation is more effed up and less evolved is the evolution of humans and socially, evolution happens at the same rate, just as an example, the gay community, I have a gay son. I always knew, right? You don't want to say anything. The only thing I care about more of my happiness is my kids happiness. Actually, my wife's after me. Nerds happiness before me for like the first 25 years of marriage, marital happiness second to me. 25 And then we'll go to even Yeah, but Bigler with my son is that this whole coming out thing with being gay is he's like, Dad, did you come out? And I'm like, some of that gay. He's like, That's my point. It's not equality, if anybody has to come out. So I have a boyfriend. Let me tell you that Dad, I have a boyfriend. And I don't believe I have to announce that. I agree with him. But that know me know me and I am who I am. And no one ever dad should ever have to come out. That's not equality. And he when he told me I was crying, it was so powerful. And it just made me realize how I look at that whole thing the wrong way. Yeah, just be be who you are. Be Your true self. He say like things motto. That's more of a business motto. The world of prepared needs to be greater than the will to win and my life's motto is becoming your true Tao fridges every single day. Right? Being true to yourself. Now easy.

Speaker  52:12  

list off some of your resolutions for 2023

Speaker  52:17  

Oh my gosh, I just posted on listening was the main one for me. I want to listen so hard that people like Seth, please say something. You know, I wrote them down. Is by Seth stock shout out. I started Seth stock when I was working@overstock.com. So that Instagrams out my kids are all like 1215 17 They don't listen to me anymore. I saw they're on this thing Instagram and so I started an account I call it Seth stalk and I started saying nope, younger self. Because I wanted my kids I knew they would read it on my Instagram because they would criticize me right Dad says stupid or whatever. But I knew they read it. So I started no to younger self in 2015. And actually, you know, on the reality show so now I got more followers and I keep doing it. It's for my own kids. And now there's other people that get it so like I didn't

Speaker  53:17  

know the backstory to that I have gone on your Instagram and I like your life lessons. Okay, so what are those resolutions?

Speaker  53:24  

The resolutions thank you by the way, I'm just gonna read you what I wrote. Here's to a year filled with authentic and positive vibes only a year of sharing next level kindness from our hearts and wanting zero in return making someone smile every day even from a How are ya? May the Jordan year 23 be a year of always passing along positive vibes and values to all humans we come in contact with May we always be empathetic but firm with our decisions? Here's to removing expectations for everyone but ourselves. Lastly, here's to a year of being immensely grateful for the opportunity to become better every frickin day. Amen.

Speaker  54:11  

Amen. Clear with your intentions and that's all you got to be right that's what they say put it out there and it'll come true. Yes. orally hates it when I talk like that. But anyway, I'll give her after Yeah. Okay. Most embarrassing moment.

Speaker  54:25  

Go getting excited in the bathtub. Cameraman nod

Speaker  54:33  

you froze anyway, you froze when you're saying that too.

Speaker  54:37  

Oh, thank God got lucky. Yeah, I don't know me. This is embarrassing. I was on an airplane and I forgot to lock the door and it opened and yeah, and that might not have been that long. Walk back to your seat. You're like how are ya?

Speaker  55:00  

Have you put a smile on his face? Yeah.

Speaker  55:04  

You happen.

Speaker  55:06  

That's happened to all of us. That makes you feel better. Yeah, yeah.

Unknown Speaker  55:10  

But it's always embarrassing isn't always embarrassing.

Speaker  55:13  

It will always be embarrassing.

Speaker  55:15  

Yeah. Biggest fear?

Speaker  55:18  

Oh, that's such a good question. Because you work so hard on not having it. I find that fears are all con men. They're all bullshit. So my biggest fear would be like being fearful. I'm fearful of getting the universe pissed off at me. I'm fearful of fucking with karma. My core values like it just that one thing. Like if you just are fearful of that your compass will be good. If you respect karma. And know it will pay you back like a MF. Or if you've F with it, that's my biggest fear. Because I think that'll make me a loser.

Speaker  55:51  

biggest pet peeve.

Speaker  55:53  

Oh my gosh. It used to be like little things like people that would jog in place at a stoplight. Get your car like their Steve Gutenburg jogging in place at the stoplight? Right? Like, chill out like also people that spend more than two hours in Starbucks with their laptop. Little things. Yeah,

Speaker  56:18  

those are good examples of pet peeves because they are so packed.

Speaker  56:23  

That they do I mean, otherwise, like I'm open minded, but there's certain things people do, like come on.

Speaker  56:31  

Most Holy shit life experience,

Speaker  56:34  

separation from my wife, because we were together for 24 years. So it was like a matter of 21 I didn't know what you know, life could be without her. So living on my own without my wife. And then Holy shit. I don't want that I love this woman. That was a holy shit experience. There's a lot of pain in that a lot of pain in that. So I think a holy shit experience to really qualify at the highest level is that a lot of pain and joy.

Speaker  57:00  

Best advice you've ever gotten? would be

Speaker  57:03  

to take that risk. Don't overthink it, work from your instincts and pounce. And I still overthink it. And I'm still afraid to risk but I take enough of it that I wouldn't more than I lose targets.

Speaker  57:18  

Thank you so much for being with us today.

Speaker  57:21  

It was so fun to talk to you.

Speaker  57:23  

It was so much I mean I feel like the audience is gonna get a lot of tips and dark some side business. Side Hustle one tip

Speaker  57:31  

neither one of you shared and I can't believe you didn't is that on Tuesdays Ross gives a discount to senior citizens. But none of us qualify. So just just for our senior citizen listeners

Speaker  57:43  

get a good makeup artists. Do they check IDs?

Speaker  57:47  

I don't think so. I really think I could pull it off. On that note.

Speaker  57:54  

So awesome. 

Speaker  58:00  

Thank you so much for listening to Tell Us Something We Don't Know. You can find us on Instagram and Twitter at TUSWDK. Or email us at info@tellussomethingwedontknow.com. Audio and editing by Simon Grefenstette and theme Music provided by Signature Tracks

Transcribed by https://otter.ai