BOARDMAN – A curved gaming system monitor, a baby bassinet, a large quantity of industrial paper towels and a rod and reel combo were all up for bid on auction website M@C Discount this week.
Need a twin umbrella stroller or a chair floor mat for the office? Again, they were all up for bid. Interested in honing your disc golf skills? A practice basket was on the block. Need to transport the family dog? A folding metal crate was also available.
Larger items such as hot tubs, vanities and kayaks can also be found at mac.bid.
M@C Discount – the name stands for “merchandise at cost” – recently opened its newest warehouse on McClurg Road and they are currently negotiating an additional space in Warren according to co-founder Shawn Allen. The proposed Warren facility would be 140,000 square feet with an anticipated workforce of 90 and offer larger items such as hot tubs, bathtubs and hot water heaters.
M@C Discount has six other locations where winning bidders can pick up their merchandise: five in the Pittsburgh area and one in Spartanburg, South Carolina.
Allen, a Pittsburgh area native, said nearly anything that can be found on Amazon, Wal-Mart, Target, Lowes and Home Depot is available through M@C Discount, but at a 70% to 80 % reduction in price.
The majority of items are overstocks or items that have been returned for any number of reasons. Perhaps it arrived in the wrong color, the wrong size or just was not the gift that fit the recipient during the holiday season. Maybe it was a tool used once and then returned to the Lowes or Home Depot where it was purchased.
While Allen said sometimes even bigger bargains can be seasonal, such as a snow blower in April or an air conditioner in October, there are few limits to the items that can be purchased by individual auction.
“A tool is returned full of sawdust,” Allen said. “Lowe’s can’t put it back onto the shelves. How can we keep it out of the landfill, get it to someone who can use it and create jobs?”
RESALE PURCHASES
More entrepreneurial shoppers looking for a large number of bargains or items that can be divided up for resale will find entire pallets for auction with many items grouped together. The pallet description comes with a long list of items contained within.
Many times, smaller or lesser-valued items that do not meet the value threshold needed for profitability as an individual item and are combined and sold as a pallet. Allen said those pallets are often purchased by someone interested in resale, who then divides the products up and offers them at a garage sale or online.
Other new items, such as larger quantities of the same products purchased by M@C Discount as overstocks, can sometimes be found on the Tuesday TurboClock Auctions. A reverse auction or a “Dutch auction,” the bidding starts at a higher amount and reduces until reaching the point where someone is willing to make the purchase. At that point, the highest bidder is given a chance to say how many items they want to purchase at that price, up to the entire quantity. If they do not purchase them all, the next bidder is given the same option.
A PARTNERSHIP
Allen and his business partner, Kellen Campbell, both University of Pittsburgh graduates, founded the company in 2018. His background in reverse logistics, which Allen says is a fancier name for returns, started by working at another company that was acquired by Federal Express. The shipping company was no longer interested in that portion of the business, which was dealing with the returned items many retail stores accumulate.
As they created the concept for the business, Allen utilized his background in auctioneering and Campbell his expertise in buying products. Together, a business model was formed to resell those products that were returned, especially the ones where the boxes have been opened. The business has grown rapidly, starting with their first space in Washington, Pa., in January 2018 to seven locations, including their newest at 365 McClurg Road in Boardman, which opened in January.
“This was an empty warehouse and we were fortunate to get in here fairly quickly,” Allen said. “We’ve been able to hire about 60 employees.”
While normal brick and mortar retail locations traditionally experience 10 percent returns, the growth of online shopping in recent years compounded by the pandemic has increased the rate. Allen said online return statistics are now as high as 30 percent of purchases.
According to the National Retail Federation, returns accounted for more than $761 billion in lost sales for U.S. retailers. For every $1 billion in sales, $166 million of that merchandise is returned.
When they started mac.bid, Allen and Campbell rolled up their sleeves and unloaded many of the 53-foot trucks of returned items themselves. Now they have about 450 employees at the seven locations, including the 60 newest team members working at the Boardman location. There are 600 trailers of products arriving daily at all the M@C Discount operations.
One crew of employees unloads the products and places them in the scanning and unpacking area.
The next crew opens and scans the boxes, looking for major damage as well as making sure the barcode on the box of the scanned item is actually the item inside the box so it properly appears on the auction website. Next, an auction number sticker is placed on the item before it is stored on the shelves.
A final crew assist helps customers who won an item at auction load it in their vehicle and drive away.
Besides offering competitive wages, Allen said the employees are given a $25 weekly credit to use toward auction items. By saving those credits for a few weeks, employees are able to purchase higher ticket items for themselves, like a new TV.
The company currently has about 750,000 square feet of combined space and sells more than 12,000 items each day. Although there is no way to know how many people are browsing, Allen said M@C Discount is approaching 200,000 people who have won an auction.
“I think it’s because everyone can be a customer,” Allen said of the company’s quick growth. “We have something for everyone at a price everyone can afford.”
Allen said the average bidder will win about two auctions per week. Then when they come to pick those items up, they also will look at newly arriving items they may be interested in bidding on, which have been placed on the shelves for auctions currently underway.
Since items may come in with scratches or flaws, Allen notes it can be helpful to check out the item before bidding. Other items, like mattresses, sometimes come in still shrink-wrapped.
With two days to bid, items move quickly. Those pallets and boxes pulled from the trucks today are bid on, sold and gone within seven days.
Although the arriving items are opened to make certain there is no major physical damage, the company does not test the products for “functionality.”
For an additional 10 percent, the company does offer buyer’s assurance for those not comfortable with the “as is” purchase.
Items must be picked up at the M@C Discount facility within three days of the end of the auction. They will not be shipped.
However, for a small fee, items from one auction location can be transported to another of the company’s auction facilities.
The McClurg Road warehouse is under the direction of General Manager Nik Poiarkoff.
Poiarkoff said the facility currently does pick up times from noon to 6 p.m. Those with a membership can participate in an earlier pickup between 10 a.m. and noon. The facility’s busiest times are around the lunch hour and after 5 p.m., when he said there can be several hundred customers there to pick up items at the same time.
The co-founders’ hands-on approach to operating the business has not changed from the beginning. Poiarkoff said before the McClurg Road facility opened, Campbell was there helping to build the racks for storage and paint the lines on the floor for the 1,000’s of items that were to come. Both men are known to drop by and in contact with Poiarkoff daily. Even as he manages of the location, Poiarkoff jumps onto a forklift himself whenever possible.
CONTINUED GROWTH
Most M@C Discount warehousers are in southwestern Pennsylvania – Beaver Falls, Butler, Washington, Tarentum (Pittsburgh Mills) and McKees Rocks. The exceptions are Boardman and Spartanburg, South Carolina.
The company is expanding again. The Akron location being considered would add another 80,000 square feet for the business. Indicative of the types of spaces the company likes to use, one space being considered is an industrial space like the one on McClurg Road, while the other is a former retail location. Utilization of large retail space brings new life to the facilities that once housed department stores recently abandoned. The business model rehabilitates what had become a dead retail space into one that is functioning again.
Allen points out the other stores in the mall or shopping plaza love when M@C Discount comes in, bringing foot traffic back to the site and to their smaller retail locations.
The business model also finds reuse for consumer goods which otherwise could end up in landfills, finding them buyers willing to take a chance on them for a large discount.
Even the large amounts of cardboard that come through the operation are recycled. At the McClurg Road location, the large stacks of the cardboard used for packing the items when they arrived in the facility are baled for recycling, utilizing a partnership with Gateway Recycling in western Pennsylvania, which services all of the locations.
Pictured at top: Co-founder Shawn Allen stands in front of hundreds of pallets of merchandise.
Copyright 2024 The Business Journal, Youngstown, Ohio.
