Michael Prendamano - The Bin Store

Business brain episode 592. No. Yeah, 592.

Wow.

Have we done that many of them? For Wednesday, October 23rd, National Slap Your Co Worker Day 2024. Greetings folks and welcome to Business brain, the show where we take a few ide, we crunch them, we dissect them, we analyze them, we use them to tune our business brains so that we can each keep living those charmed lives. Our sponsor for this episode is a new one, it's Vanta.com brain Vanta automates your ISO 27001, your SoC2, your GDPR. And at that link you can save a thousand bucks. So we'll talk more about that in a little bit. For now, here in Durham, New Hampshire, I'm Dave Hamilton and I'm still out.

Here in Northern California. I'm Shannon Jean. I love that Vanta is sponsoring us. I was just driving through take my kids back to the airport in San Francisco and there's Vanta billboards up there. And one said something to the effect of. I'm not going to say it right, but it said something. Use Vanta so your security doesn't sock too, you know, because it's the play on Soc 2. And I was like, oh, that's cool. And my, my son in law uses their stuff so that's great. I'm glad to have them aboard. I'm also super stoked because I'm going to get to learn the most here today. I always talk about how now my.

Brain is a sponge. It's going to be me. I get to learn.

Yeah, it's going to be. So we're joined by Michael Prendomano who runs a business called the Bin Store. And you know, I'm a huge product sales guy, liquidation guy. Aqua Auctions. Aquadation.

You almost coined a new term.

I'm going to say it. I'm going to come up with it.

I'm in.

So yeah, let's do it. So I've, you know, Michael and I talk a lot. He, you know, on the X platform, he's got a great business. I'm fascinated by the business model. Michael, thank you for being with us today. I'm really happy to have you.

Yeah, thanks for having me on. Appreciate it.

Absolutely.

Yeah, it's great. Go ahead.

I want to dive right in, man. Like what is same. What is, what do you do?

Talk.

What's the Bin Store?

Sure. So I guess kind of the elevator pitch here is the. The Bin store is kind of an interesting spin on liquidation in a retail setting. So we have a fixed pricing model. So what that means is, for instance, Friday is our six dollar day. Anything you find in the bins on Friday is $6 per item. It could be literally a Apple MacBook. It could be a gaming system, it could be a luxury purse. Anything in the entire store is $6 per item. We have two days like that called our restock days, which is Friday and Saturday. Then the price drops a dollar per day. This is where it gets interesting. Sunday is $5, Monday is $4, Tuesday is 3, Wednesday is 2 and Thursday is 1. We usually get cleared out on Wednesday and Thursday and then we do it all over again for the next week. That's.

Dude, I have so many questions.

How many? Like, I mean obviously you've got to be able to make money, so there's some scale here. Many, many six dollar purchases. And, and, and you know, probably a bunch of folks that are trying to game the system and time it right and all those things. And that and the gamification makes it, makes it interesting. How many customers do you see in there a week?

So I can tell you by the numbers. So there's, there's, and Shannon will appreciate this. There's in season and there's off season. Okay. So we're, we're kind of coming out of off season going into in season right now, off season between the two stores, we'll move 25,000 products a week. In season, we move about 40,000 plus per week. Individual products.

Love it.

In total, we move again between two locations. 1.75 million products a year.

And this is a guy that started this in his storage shed in his backyard. I want to just point that out that this is something that, you know, when, if you read his story, which we'll link in the show notes, his profile on X. You know, Michael started this by selling stuff around his house and learning this system and moving from in the house out to his storage shed and then figuring it out and taking one step at a time. And that's why I love this. Not only I love the business model because I don't know how it works, but I love the, I don't know how you make money at it, but I love the, the talk about that. This gradual, you know, what was the timeline that got you moved out and got your storage shed and then got your first retail space? Because it's, it's powerful, man.

I think, I think you'll appreciate this, Shannon. You know, I started like you said, I started in retail arbitrage. So I'd Go around to stores, I'd look for products that I could sell online for more money. And that was great. Made a little bit of money, but there was not a lot of scale there. And I'm always trying to scale whatever I'm doing. So then I jumped into pallets. I started buying individual pallets. Did really well profit wise. It was fantastic.

And you were still in your shed, you're still selling this stuff like that? Okay, great.

I was in my shed, I was in my garage, I was in my living room. And I have an extremely tolerant wife.

That's important.

We always say that you gotta have a partner that at least is willing to accept your brand of crazy.

Yeah.

Yes, yes. And there's a lot of it there, so she's fantastic. But I was kind of all over the house doing this. And then, Shannon, the part that I think you'll appreciate is my death pile started to grow. And essentially what that is, when you're buying in bulk, you know, you, what I do is I put things into buckets as I break down products. So I know, okay, here, I can sell these easily on ebay. I could sell this on Poshmark. I could sell this here, this here. And then once you get through all that, sometimes you're left with a pile of stuff that's just not suitable to sell online. It could be because of the price, it could be because of the weight. You know, there's a lot of different factors there. But my death pile was, was growing substantially and I was just looking for a way to, to move that product. I don't like any waste, you know, like everyone else, trying to maximize as much as I can. And I sat down one day with a piece of paper and kind of started sketching this idea out. And one side I put, you know what I thought all the, the potential expenses would be for a venture like this, and the other side, the potential revenue. And it balanced out and went forward.

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Absolutely. And this was during a time where people were starting to shy away from retail a bit.

Oh yeah.

I launched the first store kind of in the middle of COVID So it was really a wild idea. But I felt that if we could, you know, something I always focus on with my managers, with my team, you know, we have over 60 employees now, is what kind of value are we delivering to the customer today, this week, this month? And when you make that the focal point, I believe it helps you drive the volume that you need to drive to be successful. You know, I think that a lot of us have lost sight of the customer these days. Experience and value and everything.

I, I giving value first. Right. That you, you guys are doing that first and then it comes back to you.

I've absolutely, I've long said many times on this show that every business is the customer service business. And the, those of us that understand that, it's like we have the magic bullet because there's so many businesses that just don't get it. And it's weird to me, but it's just, it is. So it's fine.

Like, yeah, so, yeah, so, okay, you're, you realize you got this death power. You got to get something going. Did you start out in a small space or did you think, hey, we're going to need a big warehouse or, you know, tell us how that worked.

Yeah, so I, I, I would say I probably went to like a medium sized space right out of the gate. You know, I figured if I was going to do it, go big and see, see if it has legs or not actually pulling from, from one of your previous episodes in terms of risk aversion, you know, money, not wanting to sign a personal guarantee, afraid of failing, you know, all the things that you guys spoke about, it was definitely going through my head at that time. But I found that, you know, the more successful you are, the more Risk you take on and you have to be okay with that. So I went ahead and I have a real estate background, so I negotiated a really great lease for my first store. I got, if I'm recalling correctly, I think it was eight months free rent right out the gate.

Nice.

It was about 9,000 square feet. And that gave us the ability to get propped up and running within about two months. And then I had six months of no rent to start paying back. A lot of the huge, huge rent in this business is you're second line item in, in terms of expenses. You know, obviously product is first.

Okay.

Wow. Okay. So.

Right. Because you need space. Yeah, yeah, yeah. That makes sense.

Yeah. And I love that this stat you're, you know, using your talent stack to, you know, all the things that you've just learned over time that you're like, okay, I know this real estate game that's going to help me with my other business. It's going to be, you know, it's, it's, it's huge. It's, it's important.

What Also to add on to that previous failures too, you know, not, not everything that you touch is, is instant success.

You're preaching, preaching.

Wait, what?

But it surprised me to hear you say that, you know, number one inventory, I get that number two is rent versus I thought number two would be, you know, employees. You've got 60 employees, but they're close.

And I have, I have 60 employees that are siloed into different companies. So I have a parent company which is Bin Store brands and that, that oversees all of the companies. And then there's one set up for each individual store. I have one set up for our warehouse and pallet business, you know, and down the line. But when I, I run a P L every week for the stores, which is not, not very typical. But because of the nature of this business, I felt like it's necessary. There's, there's a lot of variables. A lot of things can change quickly. And running a P L every week allows me to see where the numbers are coming in and then I can use my levers and my levers are. There's not a lot of them, but you know, how much product we put out, I could throttle that.

So I see.

Yeah. When you buy a truckload in this business, each, each individual box represents X amount of dollars. So if sales are light one week, I'll pull back maybe a box or two. But as we go, like currently, as we go into the holiday season, I'll ramp it up and I'll put an extra six boxes in because I know that we're going to sell more product.

That's fascinating. I have lots more questions now. Okay, so you get set up and this model is what I'm fascinated about with the pricing. Talk about inventory purchases that allow you to, you know, offer this $6, 6, 6, 5, 4, 3, 2, 1, whatever, and, and still profit and grow your business. Yeah. Tell me. Just pretend I know nothing because I know nothing. So tell me how it works.

Oh, no. You know a lot. And one of these things may actually make you gasp, but. So I buy a lot of product from our largest online retailer.

Sure.

And that product is actually manifested, but this is the part that's probably going to make you gasp. I don't, I rarely look at the manifest. Oh, gasp.

Yeah, yeah.

You know, I, I'm concerned with, and I'll explain why in a minute. I'm concerned with piece count. I, I know the condition of the product based on the facility that it's coming out of. We pulling out of certain facilities for a very long time. So I'm comfortable with the product condition and the product mix. And, and what I mostly care about is the, is the piece count. You know, what is my cost per piece. And that is driven by our, our pricing schedule. So if I was trying to sell things at $10 or $12 per item to start the week, I'd be much more concerned what was coming in. But you know, at $6, we have, you know, there's waves of people that come in throughout the day. The first wave is the treasure hunters. They're interested in the drones and the gaming systems and you know, all the, the great stuff that comes in as, you know, a lot of people are. But then we're open for eight hours. So once that stuff is found, you know, you want people to still come into the store. What are they looking for? Well, at six bucks, they're buying detergent and they're buying clothing and they're buying bedding and you know, a lot of the, the consumables that you need for everyday life. And that, that, that wasn't by mistake, that was by design. And, and on the purchasing side, this business can get extreme, extremely complicated sometimes, especially when you're diving into a lot of manifests, it's very time consuming. And when you're running a business like this, I'm concerned with product. Obviously we need good product for stores, but I don't, I don't dive into the, into the weeds on that stuff. I care about cost per Piece.

No, that.

That. That makes sense when you put it out that way because. Because of the. The retail price that you're selling each piece for, it. It. You're. You're not dealing with people that are buying $300 items. I mean, there might be a Item that's worth $300, but they've only paid 6 for it, so.

Yeah.

And that gives us a customer for life.

Yeah, I can imagine.

And, you know, exponentially, because they tell everybody forever, you know, that they got. So do you seed the bins? I've seen pictures of your store. If you go to the links that we'll put in the show notes at BusinessBrain show, you can see them, too. Do you seed stuff in there or you just dump it in? And I don't want to say dump. If you place it in carefully and what's in there is what's in there.

Yeah. So, I mean, there's. There's a business behind this.

Sure.

I'd love to have you out to. To the warehouse.

I'd love to come.

Yeah. But, you know, we. Everything that comes in those 24 boxes every week goes into the bins. Now what we do is we. We set up the store for convenience. Right. We want to make this. We want to make it bright. We want to make it, you know, cold in the summer and warm in the winter. And these things, as I say, these things, you know, it's. You're like, of course, but people in this industry don't necessarily do that. But we'll set up. One bin will be just for fabrics, and one bin will be for bedding, and one will be for food. And then we have a lot of general merchandise bins, and we make sure that there's a lot of small products and a lot of large products, and it's all measured and it's all by design to make sure that we have enough products in the bins every single week to sell 12, 13,000 per store in the off season and sell 20,000 in season.

Yeah, that's really cool. Was it difficult to find suppliers or. Yeah. Talk about the supplier acquisition and how important that is.

Sure. I would say in the beginning, it was definitely difficult. The more you sell and the more product you can move, the more valuable you are. You know, these major retailers have a lot of the same issues that we have. You know, that you think about these fulfillment centers that are 2, 3, 4, 500,000 square feet, and you're like, oh, my gosh, how could they ever run out of space? They do. They Do. And it happens often. And if you are in a position to move that product for them, you're, you're solving a problem for them.

This is like what you did, Shannon, when you started out. You bought, People said, I'll buy everything.

Sure, yeah, yeah. You're adding value to both sides of the, of the chain or both sides of it. Right. The equation to the customer because it's such a great price and the product quality, whatever, and then to the supplier because you're going in there. I've stood in those warehouses, man, and had people like, I was like a rock star because I was like, well, I'll take this quarter of the whole warehouse. And they were like, what? You know, thank you so much. You know, that kind of thing. So, yeah, it's that, that's really cool. Okay, so the flip side of that question is, how do you guys get your customers?

That's a great question. It's a multi prong approach, I would say. I, I believe in everything from what we call like guerrilla marketing or, you know, the, the ground game. You know, I do flyers, make sure that every customer comes to the store gets a little postcard flyer that they can put on their refrigerator. If they still do that. I don't know. It's 2020.

Nice.

We do that. We do digital advertising, we do YouTube videos, we SEO. SEO is extremely important. Yeah, we, we have someone in house that, that handles all of that for us. And that, that was his business prior to this. And he, he said, you know, we, I love what you're doing and I want to, I want to jump on board.

Nice.

That's cool.

Yeah, yeah. And, and Facebook, Facebook is still pretty important.

Yeah, you put reels up and stuff and talk about, you know, show people about shopping and all that kind of thing and get excitement going.

Yeah, we do that. But I, but what's interesting is probably the, the most traction that we get are from our static photos. So every, every Thursday night before $6 Friday, we'll put out 30 photos of what's going to be in the bins.

To wet the appetite of the treasure hunter.

Give them, give them an idea of what's going to be in there. If they, you know, do they want to get up early on Friday or not? And a lot of times those pictures will, will dictate that. And we do the same thing on Friday night for Saturday.

That's so great. You know, I have no interest in starting a bin store, but listening to Michael talk, I have interest in starting a bin store. Yeah, I just can't help it. You know, I'm always just like, okay, I can see how do that.

Do that.

And everybody loves a bargain. I love the treasure hunt. I love auctions. I love liquidation stuff. And it's great. Fascinating to hear this story. If you don't follow Michael Prendomano on X, you should. We're live streaming up there now, but if you're just listening to the audio, if businessbrain show will have his account linked. I know he's helps other people now start bin stores and he also sells you wholesale stuff to other bin store operators. Type things. Right?

Yeah. So two other divisions. We have a 25,000 square foot pallet warehouse that's open to the public. So we sell all kinds of product which ties into the bin store too. If we ever buy something that pallet buyers don't want, we send it to the store. We do free consulting and we have a licensing division if you ever want to use it.

I love it. I'm super excited about this. I know we'll be seeing and hearing a lot more. Thank you for coming on and explaining how this works. Once again, I learned the most on this show.

This is it's it. It's@shopbinstores.com is where people can learn more about this. Right, Michael?

Perfect.

Great shop. Binstores.com Brilliant.

Thank you. Like he said, thanks for coming on the show, folks. If you have questions for Michael, you can find shopbinstores.com you can find them on X, you can email us feedbackusbrain show and we're happy to pass your questions along to Michael or answer them if they're for us. Thanks for hanging out. Keep living that charmed life. We'll see you on Friday.