How to Start or Grow a Successful Bin Store

Purchasing liquidated merchandise on B-Stock can be a great way to keep a consistent flow of inventory and save money. To sell your inventory can be challenging, but this is where bin stores come in. In this article, we’ll explain what bin stores are and how they can help you sell your B-Stock inventory. By the end of this article, you will know:

• What are bin stores?
• How to start your own bin store
• What are the costs of running a bin store?
• How much money can you make running a bin store?
• Tips for running a successful bin store

What are bin stores?

Bin stores, loosely known as discount stores or pound stores, are a type of brick-and-mortar location where large quantities of inventory are distributed in bins made for customers to dig through. These can be filled with anything – from electronics and gadgets to toys and home goods. Customers can find a variety of merchandise for extremely low prices. Think: finding a $30 phone case in a bin where the deal of the day is $3 for anything you can find. This type of treasure hunt is what bin store shoppers are after as their biggest priority is to save money. With inventory changing week-to-week, there is always a new deal to seek out.

For a bin store owner, keeping customers coming back for more means you must constantly be acquiring new inventory to refill the bins and offer sales on specific days of the week. Bin stores can help you sell your liquidation inventory–like from B-Stock–if you’re focused on volume over value. You read that right. If you want to deal in more select quantities, with higher profit margins, bin stores aren’t for you.

Never fear! There is still a healthy business opportunity ahead of you if you’re looking for a fast-paced environment that will keep you on your toes for deals. And the best part is once you know how to open and run one bine store, you can open more!

How to start your own bin store

Location, start-up costs, and inventory sourcing are your biggest concerns. We’ll go over the step-by-step process of how to run, open, and fill up a bin store:

1. Choose the right bin store

The first step is to select the type and size of bin store that best suits your needs. Consider the size and shape of your inventory items, as well as the amount of space you have available in your warehouse. (We’ll talk more about those costs below.)

2. Set up the bin store

Once you’ve chosen your bin store, you’ll need to build or assemble your bins and arrange them according to the store layout best suited to your space. That could look like six rows with 10 bins, or even more per row depending on the bin’s size.

3. Start sourcing inventory

Bin store owners must be an expert in inventory sourcing. You can source locally, or online. But a direct connection to a big supplier is key. Online liquidation marketplaces are the most accessible–and often the most affordable if you’re utilizing an auction platform like B-Stock–in securing that steady stream of inventory. You can access excess inventory and returns from retailers like Amazon, Walmart, Target, The Home Depot, and so many more. We go over more tips for the type of inventory and quantities that you should be purchasing down below.

4. Sort and organize your inventory

This is an optional step depending on how you want your bin store to function. If the goal is to create a treasure hunt for customers, then you won’t need to spend too much time on this step. You may consider separating rows by category: home goods in one row, toys in another, and so on. If you have a separate business for eBay selling, now is the time to set aside the items that aren’t going in the bins.

You may choose to have a retail section in-store. These bin stores will separate larger, more expensive items into separate sections. But again, this would be more of a liquidation store model, where you’d be looking to sell items for a discount, but significantly closer to MSRP (manufacturer’s suggested retail price).

5. Fill up the bins

Once you’ve sorted your inventory–however little or much you like– begin filling up the bins. Start with larger or heavier items at the bottom of the bin and work your way up to smaller or lighter items–this keeps goods from getting damaged or crushed. But keep in mind that as customers start to pick through bins, this can cause things to shift.

6. Track and manage inventory

While bin stores don’t require you to keep any particular order to quantities and SKUs, it’s important to still track your inventory levels so you don’t run dry by Thursday and you have your biggest sale days on Saturday. Don’t rely on simply eyeballing this–you should be in a regular cadence of ordering inventory! There are more sophisticated tools that exist for tracking inventory levels like Shopify.

What are the costs of running a bin store?

There are various costs associated with running a bin store. Entrepreneurs should consider the following:

Real estate

The physical storefront that a bin store requires means you will need to budget for a monthly rent, or for your own real estate. Bin stores can be compact or spacious. Do you want to have space for storage and excess truckloads? 1,500 sqft on the more compact end and 5,000 sqft on the more spacious end. Location can also help keep your rent price point low enough so that you can profit from your bin store. Commercial space outside of the city center or in older plazas might be more cost-effective.

Insurance

Insuring your brick-and-mortar store is essential to protect your business from unexpected events and mitigate potential financial losses. A brick-and-mortar store faces many risks such as fire, theft, natural disasters, and accidents that could lead to property damage, inventory loss, and liability claims. In addition to financial protection, having insurance can also give you peace of mind and allow you to focus on running your business without worrying about the potential risks that could occur.

Utilities

Utilities are a necessary expense for running any brick-and-mortar business. As opposed to an e-commerce store that would require a simple internet connection, a physical bin store will need electricity, water, and likely waste management depending on the city/ county. Regionally, you will also want to consider when your utilities will be the highest. In the summertime, this will be the hottest time of year and likely run your AC bill higher.

Internet

The cost of internet service for a brick-and-mortar store can vary depending on several factors such as location, internet speed, and the service provider. However, on average, a basic internet service plan for a brick-and-mortar store can cost anywhere from $50 to $150 per month. Keep in mind these costs can vary state by state.

Inventory

There will be a learning curve to estimating how much inventory your bin store will go through. Additionally, depending on the inventory condition, MSRP, and retailer, the price of inventory can vary. Using B-Stock, you can participate in auctions that start as low as $100 and you only bid what you are willing to pay for the inventory. Keep in mind: a bin store primarily focuses on volume over value. This means you don’t necessarily have to go for the auction with the highest value items, but instead, the auction that will give you the largest amount of goods within your budget.

Less than truckload orders take up only a portion of the truck, so this could be one to 10 or 12 pallets. A truckload of liquidation inventory has about 24 pallets in it. If you have no problem working through a full truckload of inventory, it’s best to avoid multiple smaller shipments with individual shipping costs. However, if you don’t need a full truckload, B-Stock offers down to a pallet for purchase. You can be flexible with your inventory sourcing to accommodate demand.

Building costs

Budget in the cost of lumber or building materials that your bins will require. Some bins can be deep with similar goods, while others can be shallow for smaller or fragile items. Overall, don’t worry too much about the perfect interior. Bin stores can exist anywhere with zero frills. Your other material costs are going to be mostly inexpensive – your main concern should be how much and how often you can bring in new inventory. Customers are just looking for a deal, after all!

Permits

Opening a brick-and-mortar business, like a bin store, requires you to have your permits in order. A business license, to start. This is a basic requirement for any business to operate legally. It may be obtained from the city or county where the business is located. A few others you will need to research and apply for would be a zoning permit that ensures your store is zoned for commercial use; a fire permit; a signage permit; and a sales tax permit. The sales tax permit is especially important as resellers can purchase goods tax-free and then later collect it from customers.

On B-Stock, you will need a Sales Tax ID, or the number used on your resale certificate, to purchase liquidation goods.

Employees

Hiring staff is another cost of running your business. For bin stores, they will be especially important in keeping the bins restocked, cleaning, and running the registers. You may also consider having an internet-savvy person on staff that can help with additional selling needs like running an eBay storefront or Facebook page.

How much money can you make running a bin store?

A realistic outlook for potential entrepreneurs looking to run a bin store should expect lower profit margins to start. You are running on volume over value – which means you will make a consistent stream of revenue if you can keep up a consistent stream of inventory.

As a reseller, you typically look for higher profit margins on individual items. For example, a washing machine with an original price tag of $900 that a reseller bought on clearance for $650, can later go on to sell that unit for $800 once the sale is over, with a total profit of $150. The profit margins are higher with appliances–not the kind of inventory you will find in a bin store. Bin store items are typically $50 or less and sold for as low as $1-$5.

In one bin store owner’s experience, monthly sales were just under $40,000 and with expenses at about $33,000, profits were around $6,400 for the month.

Keep overhead expenses in mind

Rent

•Location: lower rent outside of the city center versus high foot traffic areas
•Size: 1,500 sqft on the more compact end and 5,000 sqft on the more spacious end

Insurance

Protection against:
•Property damage
•Inventory loss
•Liability claims

Utilities

•Electricity
•Water
•Waste management

Employees

•2-3 employees
•Minimum wages vary by state

Subcontract selling

You can make an additional source of revenue by subcontract selling. If your business is the one buying the bigger loads, supplying other bin stores with pallets that they wouldn’t otherwise be able to access is more change in your pocket. You will need to negotiate with the buyer and account for your shipping costs.

Tips for running a successful bin store

Tip #1: Staying ahead of inventory

Opening and running a bin store is going to be next to impossible if you don’t have a steady source of inventory. You can search locally for suppliers that are ordering their own truckloads and buy off of them, or split the costs of a truckload together. Alternatively, you can use an online liquidation auction platform that gives you direct access to thousands of retailers’ liquidation inventory.

In order to have enough inventory on hand to keep refilling your bins, you will want to ensure you order enough to last until your next load comes in. Due to shipping and logistics, you might not get inventory for weeks, or you might not secure the deal you were expecting. So staying ahead of inventory is key to maintaining your bin store’s profitability.

You may also choose to stock up on off-season goods. As retailers are trying to offload this inventory quickly to make way for their new merchandise, there may be less activity on these auctions and cheaper acquire. Typically, an online reseller or liquidation store owner may choose to hold onto these goods until demand arises for better pricing.

Tip #2: Volume over value

Bin stores run on one very important concept: volume over value. To illustrate this, imagine a pallet holding a thousand items, with an average unit cost of $1 per piece. Profits come from $5, $4, $3, and $2 day, and on the $1 day, you break even with the rest. Keep that steady stream of inventory up, and you’re running a profitable bin store.

Credit: @LiquidationMotivation

That is why you must stay ahead of the inventory and keep your bin store stocked at all times. As we said, source your inventory weeks ahead, and maintain a direct connection. If you can get direct access to inventory, look for high piece count loads. That way you get a good product mix while keeping the cost per unit low. Check out How to Buy Liquidation Pallets for Sale Near Me for more information.

Tip #3: Cash management

Opting to go cashless or cash-only? There are pros and cons to both. A cashless operation won’t require daily trips to the bank to make deposits. It can also protect against internal theft.
The upfront cost would be a POS system that will allow for credit and debit payments. Cons here would be payment processing fees and the potential for chargebacks.

Tip #4: Pricing strategy

You will typically see bin stores with pricing strategies like $5, $4, $3, $2, and $1 days. You will quickly learn that the busiest days are the ones where customers can find a fresh batch of inventory not yet picked through – likely your $5 day – and the lowest deals – $1 day. If an item is considered too expensive at $5 day, the customer can come back another day when it could be a few dollars less (if it’s still there).

@Liquidation Motivation advises that $1 day is the best for clearing out the last of your inventory before refilling the bins. Otherwise, less-desirable inventory will pile up at the bottom. Once a month, his bin store will run a ‘$10 bag day’ and a ‘$20 bag day.’

Tip #5: Building a loyal customer base

The ultimate driver of success will be your loyal customer base. Customers are after one thing: deals. If your bin store can consistently meet customer expectations–by remaining fully stocked–then they will always have a reason to come back.

Consistency also translates to your business hours. Something easy to remember, like Thursday through Monday gives you time to restock your store in the middle of the week and catch the weekend shoppers. You never want to stray from this routine because you’ve run out of inventory.

Your bin store becomes a destination location that people will seek out once word-of-mouth spreads. Over time, you can easily see lines out the door from the same people coming back for more deals. Remember: these customers are likely sellers and flea market vendors themselves, they need access to inventory at heavily discounted prices so they can resell it for a profit.

By setting up a bin store, you can turn your B-Stock inventory into cash. It takes some work and investment, but with the right approach, it can be a profitable venture. Follow these tips and guidelines to set up your own bin store and get started on your journey to successful inventory selling.