Staying True To Closeouts

CloseoutsDoug Hipps, owner of Bargain Max, Charlotte, NC, reports that his customers get the best value at the lowest price from name brand merchandise, thanks to his business focusing on one thing and one thing only: closeouts. “We have stayed true to the closeout business, where a lot of folks put stuff in a package and call it closeouts,” he says. “We stay with what comes in, and we do not augment it with a lot of ‘me-too’ stuff. We are a legitimate liquidator. We get name brands for a fraction of their wholesale cost, as opposed to a no-name or generic brand that sells for just slightly off price. We have been in business since 1985 and have many long established relationships. We are known as a company of our word, and we keep it and follow through. They reward us for that. We have closeout suppliers we have been doing business with for as long as 20 years.”

Bargain Max uses its own trucks to pick up closeout merchandise, so suppliers are never left wondering and waiting for a third party hauler to show up. “We also dropship a tremendous amount of merchandise. This is dropshipping straight from a reclamation center. The less merchandise is handled, the lower the cost we can sell it for,” continues Hipps. Hipps contends that business is very deal specific today. If you have the right closeout merchandise, it flies off the shelves. If you have other categories that are not hot, the merchandise can sit. “For example, there is big demand for our food items. It is not a recession proof category, but it does sell well. There are other areas like generic garments where there is no movement at the moment. There is apparel that we used to wholesale for $3 a unit that we sell for $1.25 a unit wholesale today.”

Bargain Max’s area for buying closeout merchandise is the East Coast, all the way to the Mississippi, to Chicago, and Florida. “When we go out west,” he says, “the freight and logistics part of it are cost prohibitive.” The company buys merchandise in a variety of ways. Hipps says that if the deal is relatively small, the closeout seller can send Bargain Max photos, if Hipps feels comfortable with the supplier. If it is a large deal, the company wants to inspect the merchandise personally. When Bargain Max likes what it sees, it cuts a check on the spot and watches while the merchandise is loaded into Bargain Max trucks.

Doug Hipps got into the closeout business through his parents. “I had always been around buying and selling, and my parents had an antique shop. I was in the medical business when my parents asked me to liquidate their business. At one point, I was in the medical business, I had a side warehouse business, and I worked at flea markets on the weekend. My flea market business began to eclipse the medical business. Pretty soon, I got a big warehouse and went from a flea market business into closeouts.”

Today, Bargain Max will handle any area of closeouts. For example, the firm carries high end apparel and designer clothing. At the same time, it has moved into selling heavy construction equipment. “Heavy equipment currently is the strongest part of our business,” explains Hipps. “This is all used equipment, and a lot of it is being sold on the continent of Africa. There is no recession in Africa currently; it is a boom continent. I continually look for pockets of strength here in the U.S. and abroad. For example, Oklahoma City does not have much of a recession, and Texas has little recession as well. You have to look for different pockets where there is not much recession influence.”

While Bargain Max is constantly seeking profit opportunities, its main focus is food and designer clothing. “We sell different product differently. If it is high end goods, it is usually sold by the piece. We will sell anything by the piece to our smaller customers, and we also do pallets. We have a lot of $500 pallets that are clothing pallets, and grocery pallets. We also have health and beauty pallets.”

Bargain Max likes to keep away from returns pallets, because its customers cannot get a great deal from returns at this juncture. “Although we have done return pallets over the years, they have gotten a little crazy on the price. We did a huge return business years ago, where we would get a pallet for $100 and sell it for $150. But now, the return pallets are between $700 and $1,200. The attrition on a return pallet can be as much as 50 percent. We want good relationships with our customers. Having them spend $1,000 on a pallet, and then having to throw away 50 percent of it, is no way to engender good relationships. Our goal is always to deliver the best attention and service we can to our customers. We want to make sure that they are satisfied with every purchase they make with us.”

Doug Hipps
Bargain Max
1000 East Sugar Creek Road
Charlotte, NC 28205
Tel.: 704-277-8007