Meet Steve Stoma: A look at a decades-old reselling business

Few businesses stand the test of time like S&M Family Outlet. This family business in particular has a unique history spanning 65 years! But before internet and eCommerce businesses ran rampant, there were always deals to be found. Joe Stoma, father to Steve Stoma, owned a wholesale store and was buying closeout inventory from small stores going out of business. (Now, we know, liquidating is often part of most retailers’ reverse logistics strategy, while remaining in business.) Steve and his family have found a way to continue that tradition of buying liquidation inventory and discount stores and turned it into S&M Family Outlet.

With three retail stores in Texas and Louisiana and a 20,000 square foot warehouse, they specialize in liquidation, overstock, closeouts, and catalog buyouts for designer clothes, women’s shoes, and home goods. Decades later—and not to mention their Hurricane’s Laura and Delta recovery journey—Steve is still looking forward to the future. One that might even include passing the business down to his own son.

We chatted with Steve to hear more about their resale business, S&M Family Outlet. In this edition of our Reseller Community Spotlight: Meet Steve Stoma!

The beginnings of S&M Family Outlet

Q: When did you start?

This is a family-owned business dad had started about 65 years ago. I grew up in the business and we have been doing this all along. So different ways, different bits of working with vendors, but know we’ve been doing it for that long.

Steve’s son, student at the University of Alabama, helping out with the family business.

Q: Was the business always selling liquidation inventory?

Yeah, it was always off-price. Dad started buying little stores going out of business and liquidating them on the spot. They started doing factories that popped up in the south during the 50s and 60s. We’ve grown since then doing different things. We started doing some of these internet buys even before B-Stock, like Sam’s Club, Southern Textiles, and Macy’s. Macy’s we have bought and used to buy direct from them where we’d fly up to the stores and actually physically look at the stocks. It’s evolved a little bit how we do it, but it’s the same concept— buy cheap, try to sell cheap.

We have sourced over the years from all major department stores and hundreds of specialty stores and manufacturers.

Discounted apparel offered at S&M Family Outlet

Q: Do you do this full-time or part-time?

It’s a full-time job for me. Dad’s 95, so he’s pretty much retired. My son is trying to get out of college and has worked a little during the summer for us and may come into the business. We’ll see what happens.

Q: How did you first learn about reselling?

I think we invented it, but I’m not sure.

Q: What’s been your proudest accomplishment running the family business?

I started out of college when I was about 22-23. By the time I was 40 we decided to build all our own stores. So we built three stores in about three years. I got them paid off fairly quickly. I like having my own locations and owning my own real estate. It was fun building the buildings.

Lessons learned along the way

Resellers, regardless of operation size, know how to spot a deal. But being savvy with numbers or having a business background aren’t the only things you have to be good at when running a company. When you’ve been in the business since before the internet, there are plenty of other lessons learned along the way. Here are a few highlights:

Liquidation migrated online

S&M Family Outlet has been in the liquidation business since before “shopping online” was born. Years ago, the way most liquidators operated was by having you come physically in person to check the goods. As relationships with businesses have evolved over time, so have sourcing practices. With the ability to purchase liquidation pallets by store and online, less face-to-face time is required but you still keep direct access to merchandise.

“Sometimes the technology makes it easier. Sometimes it makes it harder. You don’t have the personal relationships you used to have. We’d go over to Houston or go and fly up to Boston, come have lunch with somebody and then go look at the goods and buy them. So it’s just different.”

Maintaining personnel is key

Whether you’re working with contractors or hiring part-time employees, maintaining personnel is often one of the most challenging parts of running a business. A lot of time and money goes into hiring, and retention rates in the middle of a global pandemic can be even more challenging.

“The most challenging part I would say is dealing with personnel. This COVID deal just really exasperated and made it worse. We’re fortunate we have a lot of good associates that work for us, been with us for a long time. We do have turnover and trying to replace people, in this environment, has been challenging.”

Keep in mind, labor costs will also come into play when you’re calculating your profit margins—so consider labor, listing time, selling fees, and more, if you’re just coming into the resale space.

Disaster can strike even the most established business

Despite being seasoned pros, there are some challenges that no one can quite predict. Including back-to-back natural disasters. Back in 2020, Hurricane Laura struck; three weeks later, Hurricane Delta. Storm surges, strong winds, and flooding caused serious damage to businesses and residential areas. Unfortunately, the Stoma’s Lake Charles warehouse was one of those impacted and has been recovering since.

“Last year we had a hurricane blow through and wipe out about 10,000 square feet of warehouse and about three-quarters of a million dollars worth of inventory. We’re on the recovery path now but things seem to be going well.”

A view of the damaged Lake Charles, LA warehouse

Specializing in what the big retailers can’t

The difference between a business like S&M Family Outlet and off-price retail stores like TJ Maxx and Marshall’s isn’t the product lines. S&M Family Outlet has clothing, shoes, and home goods—same as TJ Maxx. The big differentiator is that Stoma’s business is also able to order from small retailers and manufacturers that bigger companies, like TJ Maxx, wouldn’t look at just because of the size of the deals.

“That’s kind of our specialty— to pick up the things that are too small for the big guys to deal with and try and offer some value there. There’s a lot of small, boutique-type companies that we work with that have high-end products that we’re bringing in at low prices.”

Home decor offered at S&M Family Outlet

Be willing (and expecting) to learn new things

Over 40 years of working with retail and liquidation merchandise will teach you a lot. Depending on the time of year and your geographical region, there are even more considerations. For example, wedding dresses and snow boots sell better online versus in-stores and an excess amount of candy inventory can lead to some unwanted visitors!

“Whatever you think you know, you probably don’t know. You need to be learning every day. Fashion changes, competition changes. Things that I thought I knew 20 years ago probably don’t work today.”

Buy out of season & stock up

Shoppers aren’t buying summer items in the fall and vice versa. That doesn’t mean you shouldn’t stock up if the opportunity arises. Retailers are always trying to get rid of excess and customer-returned inventory once the season is over. That means you’re able to snag that out-of-season inventory at a great deal!

“What really works for us is buying out of season…The other thing is having plenty of cash available. You don’t want to have to miss a good deal because you don’t have the money to buy.”

If you can afford to hold onto that merchandise for several months until the season comes back around, you have an advantage. The reason for that is when you try buying in-season, everybody wants it at the same time and the price goes up.

Looking ahead for S&M Family Outlet

We asked Steve what the future of S&M Family Outlet looks like. Here’s what he had to say:

“I think the next couple of years will be good, as soon as we get over this COVID deal. We had a really good increase for May, June, and July, then this Delta variant popped up and things kind of froze. They seem to be coming back around…

Beyond that, it’s probably going to be my son’s decision to decide what he wants to do with the business. I’ll be 64—I have a few more years and that might be just about enough.”

We at B-Stock hope to see S&M Family Outlet around for years to come!

S&M Family Outlet has three locations, including Beaumont, TX; Port Arthur, TX; or Lake Charles, LA. You can find the best deals in designer clothing, shoes, and home goods in person at one of their three storefront locations. Check them out and give them a like on Facebook, too!

B-Stock’s Reseller Community Spotlight is an ongoing series that aims to highlight our unique buyers in the B-Stock network.

Are you a B-Stock buyer and want to tell us more about your reselling business? Let us know and we can feature you in B-Stock’s Reseller Community Spotlight series.