After my little sister had her first child and realized how expensive baby stuff is, she started a lucrative side-hustle and ran with it for years. Basically, she bought baby stuff from a warehouse that got their inventory from returns at large retailers like Target and Walmart. She focused almost entirely on baby strollers, but also backyard swing sets for kids, and got it all for pennies-on-the-dollar. She became friendly with the customer service repos at the stroller manufacturers and could usually get replacement parts for free (it's a warranty replacement if the service rep says it is). She knew all the stroller model numbers and their associated various part numbers. She got really good at repairing the strollers in her garage, and then flipping them on Craigslist. Her garage looked like a baby stroller showroom. She made decent money doing it, but the best part is her "customers" (other new mothers, most of them poor) were always so happy and appreciative because of the deal they were getting. Everyone was happy.
The real secret sauce to her side-hustle was the relationship she had with the lady who managed the warehouse where she bought the baby stuff. The warehouses usually have auctions on large lots or pallets of stuff; you bid on whatever's on the pallet, you've got no choice. The lady used to let my sister come to the warehouse periodically (usually just before a big auction) and cherrypick what she wanted, which was always the baby strollers and swing sets. The side-hustle wouldn't have worked without that. (My sister (and her husband) used to flip houses, too, and I think she sold the warehouse lady a house.)
> The real secret sauce to her side-hustle was the relationship she had with the lady who managed the warehouse where she bought the baby stuff. The warehouses usually have auctions on large lots or pallets of stuff; you bid on whatever's on the pallet, you've got no choice. The lady used to let my sister come to the warehouse periodically (usually just before a big auction) and cherrypick what she wanted, which was always the baby strollers and swing sets. The side-hustle wouldn't have worked without that. (My sister (and her husband) used to flip houses, too, and I think she sold the warehouse lady a house.)
Did she bribe the warehouse manager explicitly or just implicitly via some quid pro quos?
This. If I am about to post something I don’t need anymore to FB marketplace, first I will hit up a friend or two of mine who I would have in mind as people who might want it. And only if they don’t want it, then it goes to FB marketplace. I don’t expect or accept any “bribes” or favors for that. It is just a natural choice for me to go through them first, as that’s just a win-win for both of us, and everyone involved is a known entity.
I would bet the same principle works here. The whole idea of the auction is to get rid of unwanted items and get paid for it, and that’s exactly what’s happening here as well.
The distinction here is that the warehouse manager is not selling her own stuff. Her job is to manage the auctions and presumably get the highest fees possible (for the warehouse) by allowing an open market to bid on the merchandise.
If her company knew she was doing this I’m sure they’d oppose it and likely fire her.
Apologies for a delayed reply, but I concur, you made a very valid point for why my analogy wasn’t the best in that scenario.
It would only work if the person running the warehouse was an owner. But if they were an employee, like you suggested, then my take would be very obviously flawed.
Interesting and impressive hustle, and some delicate lines to be careful of.
> She became friendly with the customer service repos at the stroller manufacturers and could usually get replacement parts for free [...] The real secret sauce to her side-hustle was the relationship she had with the lady who managed the warehouse where she bought the baby stuff.
I think both of these could be OK. Such as if it was within the manager's/rep's authority to do this, and it was aligned with the business.
(For example, the appropriate level of decision-making might have decided that the business gets better rates, or has lower headaches, from letting certain good buyers cherry-pick. And a quality brand of baby stroller might prefer not to see the brand associated with "broken" strollers on the used market, and has an interest in someone repairing them, even if that cannibalized some new sales.)
> and I think she sold the warehouse lady a house.
Where I'd guess this might be a problem is if some question came up over whether the warehouse manager was supposed to be letting cherry-picking happen, and then there's this big-ticket transaction, in which the manager, hypothetically, could've gotten a quid pro quo deal (e.g., preferential access, or a discount on fees, or even discounted pricing).
The deals with these warehouses generally forbid it, and there are in fact investigators working on supply chain compliance (warehouse police). There is a line out the door for these mixed pallets, and if you are caught fucking around they will sell to someone else.
If you want pallets of baby strollers, or even a specific model/type of stroller, for refurbishing or whatever - the retailers want you to go direct to them. They'll happily sell direct to you, but you need to buy a truckload or more at a time.
>and there are in fact investigators working on supply chain compliance (warehouse police).
So much for right of First Sale I suppose. Or has licensing so pervasively invaded our economic system that there isn't even the pretense of an equitable position in mercantile activity anymore?
Honestly, the further I dig into modern colloquial business practice, the more and more it appears everything is predicated on bad faith from the supply side from the start.
Warehouse lady might also have added value by turning 5 pallets of low-value junk into one pallet of slightly more value plus 4 pallets of low-value junk.
If pallets normally bring say $100 each but by letting the stroller lady consolidate the strollers into one pallet that she'll pay $250 for, everybody won.
Except for all of the customers who ended up with less valuable pallets assuming they expected more quality items to be there. If they knew exactly what quality they were getting and paid less then I agree it’s a win for all.
If you're just buying pallets of random returns, removing one category of items from that random pallet may not even devalue the pallet for that customer either. Heck, it might even make the pallets more valuable to have less variety in them (after all, the stroller-only pallets became more valuable when they are stroller-only).
Cherry picking pallets is a big deal and all the warehouses try to say they don't, but everyone does it. The only one I went to that was legit, had people line up outside when a truck arrived and everyone bid on the pallets as they were coming off the truck. Not surprisingly the value I got out of those pallets was 10-20x more than from other pallet warehouses.
All of the other places are cherry picking and reorganizing pallets to elicit higher bids and tend to run their own parallel retail / resale operations. It's probably necessary though because the guy selling directly off the truck went out of business last year.
I maintain those pallets might be more valuable to other sellers with other stuff instead of strollers. If I'm running a business selling small stuff in flat rate postal boxes, and I don't want to deal with being a stroller mechanic, having broken strollers out of my pallets (and having other stuff instead) is actually a positive for me.
I’ve looked at many founders I considered successful, and they all had some card to play that others either: no longer could because the law changed, a relationship nobody else had, or was outright illegal but didn’t matter
I would say that there are no rules, only consequences. Or, the consequences are the rule.
Often you don’t know the consequences. This is sometimes a reason to live by self-imposed rules, because there are risks and they can’t easily be calculated.
FTX had consequences, but people had a very hard time predicting them for some reason.
It's a tidy idea, put in a concise and catchy way. It even sounds bold and empowering.
One problem with applying it is that could violate social contracts. When most people are playing by the rules, but one person gains advantage by cheating. Suddenly, it's more a freeloader/jerk move, than anything else.
Admittedly, things get more complicated when many people believe that the social contracts have already been violated, so there's no longer a contract (or "less" of a contract), so they might as well get the advantage, too. Before it got to that point, it started with early cheaters.
I don't think it sounds bold or empowering. I think it describes reality accurately, without bullshit. I wish someone had explained it to me as a young man. In my father's home, any rule was absolute law, and the consequence was always outsized.
I'm reminded of some popular news reporting of a psychological study (who knows whether it's reproducible), something like... People who behaved in some specific dishonest way also thought other people tended to have a similar level of honesty to themselves. Compared to people who didn't behave in that dishonest way, and who thought others tended to have a similar level of honesty to themselves.
How the causality works there, I don't have good guesses.
But the supposed phenomenon could reduce to simply differing conceptions of what the real world is.
I am surprised at all the legal nitpick and enforcement-oriented scrutiny about the warehouse lady in this thread. Women with small children form informal networks - it is as old as dirt. What is the actual net value of these industrial goods anyway? excess retail inventory is excess for a reason - there is so much of it, it is cheap to make in large quantities.
It is almost like the legalistic, rule oriented mindset of techies plus the isolated in-the-spotlight story here invites a sort of dog pile of finger wagging. Does anyone have any idea how much random preferential treatment is involved in commerce overall ? Some mid-level after-market warehouse manager just has to get busted for this benevolent side hustle with a person of their choice, over baby supplies? Sure strictness has some virtues but overall with this story, give the people a break and find something actually significant and monetarily weighty to pick on..
Slightly related - I overheard a little argument at my local (hospital charity) thrift store yesterday.
Turns out some of the volunteers were marking down items - which may be within their authority to do - and then buying these marked down items for themselves ... before they even hit the store shelves. Oops.
I was in a charity shop recently and the manager explained to me that a big pile of recently-arrived stock (of clothing in this case) was not yet for sale because it hadn't been picked by the volunteers yet.
Since the shop is staffed by unpaid volunteers they get first bite at anything coming in. I gather they pay normal rates for whatever they take.
I have no problem with this at all. This seems like the very least perk they could be offered. Frankly, if I was running the place each volunteer would get their stuff for free (up to some value per month.)
Giving volunteers huge deals on potentially expensive stuff (some over $1000) seems against the spirit of "volunteering" at a store whose proceeds go to the Children's Hospital.
Now that I think about it, this may even be against some IRS regulation governing non-profits.
> I gather they pay normal rates for whatever they take.
Well, what's "normal" is the question. At the store I frequent, the volunteers themselves set the rates.
The charity shop in question wasn't selling stuff for $1000. I suspect you'd be hard-pressed to find something for $100.
Of course this approach is open to abuse. But I suspect pricing was usually on the "low end of normal". There are multiple volunteers, all donating their time so the charity gets some income. I don't think there's much risk of there being excessive abuse.
I'm pretty sure the IRS isn't interested. If the store wanted to give stuff away they could.
The problem is they degrade the value preposition of the shop. If it's understood that the shop doesn't have enough things people want then people will go elsewhere and the charity raises less. The volunteers reallocate the producer surplus meant for the hospital into their own pockets.
There were plenty of people in the shop, so I don't think this is in play for them.
It's not like the volunteers are carting of say "the best books". They just get to see the books first, and there might be something they like. Ditto clothes. Ditto kitchen, dvds, and whatever else was coming in.
Clearly though context matters. This in a jurisdiction that doesn't offer tax incentives for donations, doesn't have $1000 items, and wouldn't know what 3D filliment is, much less anyone to sell it to.
If, over time, a thrift store gets a reputation of never having great stuff or great deals (because the volunteers take the best for themselves), over time that store will lose customer and donor interest and momentum.
This is also why these stores don't like people shopping with price-comparison scanners.
I see what you're saying, I just don't agree about the incentives.
The donors want to get a tax break, and I suspect lack even token concern about what happens to the goods as long as they get that tax break.
The store and charity want money in exchange for those donated goods. They don't care who is paying nor why, they just want the money.
If the volunteers are picking up all of the items worth anything, that's likely fine with all of the involved parties other than other customers. The donors are still getting tax breaks, the charity is still getting their money. The stuff left over wasn't going to sell anyways (otherwise customers would still come in to buy that stuff).
The volunteers are still customers, they're just also unpaid employees.
> This is also why these stores don't like people shopping with price-comparison scanners.
Anecdata, but the ones I've been to don't care. There's about a 50/50 split in my area between stores that pay employees to pick out anything obviously valuable before selling the rest, and stores that have presumably decided it's better/easier to just leave everything intact and sell as is.
I still go sometimes, because there's a wide range of items that either their employees don't know to pick or just aren't worth trying to resell. Eg they almost always pass over 3D printer filament (maybe because of shipping costs), so I buy it up for ~$5/kg. There's really quite a few niches that they either don't think are worth reselling or just lack the knowledge to know to resell.
Very adjacent, but if you have an infant or a small child, look for a “Buy Nothing” group in your area. It’s a gifting group and makes the cost of caring for a young child much more manageable. Clothes, diapers, formula, toys, other care items. It was absolutely crucial for us with our little one.
And you can feed all your unused stuff into it as well.
Nah because they have nicer stuff that can more easily be resold and micro-optimizing personal finance is a cherished cultural practice of the american professional classes.
Those groups are fewer, and less active, than they are in less affluent areas.
This was a rabbit hole I was not prepared for tonight.
Target electronics returns - auction ends tomorrow, current bid $200.
The stuff in there I'd be semi interested in: $500?
Total value: ~$9000 @ 300 pounds in a box in Kentucky.
Okay. Lets say this auction ends around $1000.
You then pay an 11% premium, $1110.
Shipping 300 pounds from Kentucky to Pennsylvania? $500, maybe?
$1600 later, you get a whole slew of sellable good that you got at nearly 17 cents to the dollar.
Sell most of it off and you've got yourself a years worth of free legos.
Yes, the free market. The commodities biz has an old adage; “long-term contracts solve supply problems; spot prices solve inventory problems”. This is a clear instance of the latter. Arbitrage is an essential facet of marketplace correction, it’s practically the first derivative of pricing. One may also see it as a reminder that economies are a gestalt.
What? she was fixing strollers?? ask her to STOP immediately and pray none of the customers will sue if the stroller breaks and child is hurt in the process. Your little sister has no idea in what kind of trouble she might be and could be criminally liable and state attorneys do not play nice when it comes to neglect of children wellbeing. Unsure which state this is in, but most have 5 years statue, so if she stops selling today she should be in clear by May 30, 2029. Please pray for her!
Would you also recommend parents not sell or give away strollers or toys, lest they be sued in the event of an injury? I've been on both sides of these transactions (and am a lawyer), and it never occurred to me that a lawsuit might occur.
I'm also unaware of any possible criminal liability — this seems even more farfetched than the notion of a civil lawsuit.
To be fair, strollers can get away from you, and they can get moving pretty fast. This is especially terrifying around traffic. Having your child strapped in adds to that terror.
Tons of big-box and department stores do this. It's not just Target.
Where do you think all those "open box" items on eBay come from, from sellers with 50,000 reviews? When a single seller has 18 Logitech mice of the exact same model, and won't show you photos of the one you'll receive, but guarantees that it's functional and has no major cosmetic damage?
They buy pallets of returned and excess merchandise for cheap, go to all the work of making listings and setting prices and shipping it all, and (hopefully) turn a profit at the end of the day.
There are a lot of product categories -- including things like computer peripherals and accessories, or department store suits -- that are known to be extremely overpriced when bought at retail. While on eBay they can go from reasonably priced to downright cheap.
From what I've seen on Ebay in the last couple of years, it seems like this kind of stuff isn't all that cheap any more. Like the sellers saw the inflation going on in the US, and decided that was a good excuse to double or triple their prices for overstock stuff.
> A Target spokesperson confirmed to Modern Retail that the company that runs the Bullseye Deals account does buy salvage merchandise from Target and sells it.
You can buy Target return/overstock pallets at auction, and a deals account likely just resells that. Target doesn’t have to deal with it on an item level at that point.
Target does have some really restrictive rules on those pallets however that Bullseye deals doesn't seem to follow so they have either some form of an agreement in place where they don't have to or they're just a spinoff totally-not-target corp.
No they don't, I bought a box of Target returns from American Liquidations and I didn't have to agree to any rules, just bought the box. Target can't enforce any rules on me, as I have no relationship with Target whatsoever. The absolute worst thing Target can do is stop selling to American Liquidations.
It's exactly the same - they aren't buying directly from target, they are buying thorough Liquidity Services, Inc.
"Sources tell Modern Retail that all the listings are salvage merchandise from Target that’s been purchased by the reverse supply chain services company Liquidity Services, Inc."
Not really? I said they likely have a different agreement with Target. What I was saying is from my experience trying to buy pallets from Target. I linked to one of the requirement documents in another comment.
Target requires delabeling on most items in pallets that are Target branded and at least when I last looked they said no exporting. I went down the path of trying to apply to purchase pallets myself but opted against it even if a lot of other resellers ignore the rules. Not worth it - plus good chance of getting stuck with school supplies like reams of paper which you really can't do anything with when selling online.
Can confirm, bought a pair of jeans from Bullseye Deals on eBay for under $9. It was the same as the in-store Target brand (Goodfellow & Co.), same tags and everything. One of the most comfortable jeans I own.
> Retailers are often unable to put returned items back on the shelves if, for example, a box gets opened or a product gets lightly used before being returned.
Not so my local Walmart. I returned a jar of peanut butter that turned out to be open (the seal under the lid). That type was sold out; I took the last one without checking. Ten minutes later, I went to that shelf and see that it was still sold out. No wait, there is one, again! OMG, is that the one I just returned? I unscrew the lid: yep, broken seal.
Restocking an open food item returned by a customer is gross.
I worked for target 2021-2022 during their massive inventory crunch and selloff. Most of the excess, damaged/returns and recalled product gets sold off to salvage companies for pennies on the dollar by the truckload.
Very interesting article. Even more interesting when you consider Target used to sell on eBay directly from ~2012-2018.
They gave the expected diplomatic corporate answer at the time as to why they left, saying they were focusing on their own direct digital efforts instead, but I have reasons to suspect Target may have encountered some not insignificant triangulation fraud issues on eBay that could have factored into the decision to stop selling there as well.
why do you have to assume fraud? it could just be a big effort / PITA to do the auctions.
there is a reason why "channel sales" are a thing, as are VARs, etc. sell to a few middlemen and let them deal with ebay auctions and other petty details
I know that Target sells excess inventory on secondipity. I've got a few extremely good deals there, on kitchen appliances, Gillette razor blades, other stuff. All appeared to be in brand-new condition.
Sometime started a fire in a backyard fire pit, IN my local target. Due to smoke damage, they donated almost the entire store inventory to the local goodwill, who in turn (based on my past experience volunteering there) probably threw 90% of it away.
Anecdotally, I bought a hoodie from GOAT offer and had it show up with the tags from a large department store still attached. I don't care, and it's the most comfortable hoodie I've ever owned (Essentials), but there are definitely more liquidation channels in use than we think.
I'm reasonably sure a local target is dumping excess inventory at a nearby Goodwill. The amount of target store brand clothing, tags still on, at that Goodwill is pretty inexplicable otherwise.
"Sources tell Modern Retail that all the listings are salvage merchandise from Target that’s been purchased by the reverse supply chain services company Liquidity Services, Inc."
> A Target spokesperson confirmed to Modern Retail that the company that runs the Bullseye Deals account does buy salvage merchandise from Target and sells it.
> Target doesn’t control this Bullseye Deals inventory, but it is aware that its reverse logistics partner is doing this.
What's the difference between selling exclusively to a third party (against whom they don't enforce their trademark) who buys exclusively from them, and actually answering the headline with "yes"?
I understand there's a legal distinction, but there's so little practical difference that you'd be hard pressed to explain the distinction to a layperson.
Unless maybe you got hurt by a defective item and tried to sue Target for damages. I assume this scheme is intended to insulate Target from that possibility, their lawyers would argue that you'd have to sue Bullseye Deals, LLC which has negligible assets, not their multi-billion-dollar corporation..
> What's the difference between selling exclusively to a third party (against whom they don't enforce their trademark) who buys exclusively from them, and actually answering the headline with "yes"?
The article doesn't make any claims about exclusivity for target selling or this company buying. I didn't spend a lot of time looking, but I don't think the trademark claim is very strong either. Target's logo is a red circle surrounded by a white/transparent circle, surrounded by another red circle (bullseye). Their trademark application says "The mark consists of concentric circles representing a target or bullseye design." This seller's logo is a silhouette of white bull in a red circle.
There's some similar elements, but I don't think there's confusion. Target is affiliated with bullseyes, and uses bullseye in some of its trademarks, but the word bullseye by itself is not a trademark of Target.
How is this an exception? Bullseye Deals is an independent company, and there is a middleman (Liquidity Services, Inc) between them and Target.
From the article:
> Bullseye Deals technically falls into this latter category, though it is branded in a way that at least hints at it being associated with Target. Sources tell Modern Retail that all the listings are salvage merchandise from Target that’s been purchased by the reverse supply chain services company Liquidity Services, Inc.
> A Target spokesperson confirmed to Modern Retail that the company that runs the Bullseye Deals account does buy salvage merchandise from Target and sells it. Liquidity Services, Inc. did not respond to a request for comment.
I hadn't thought out the reasoning behind Betteridge before, the highlighted portion below rounds out the law's method of action.
"Betteridge's law of headlines is an adage that states: 'Any headline that ends in a question mark can be answered by the word no.' It is named after Ian Betteridge, a British technology journalist . . . . It is based on the assumption that if the publishers were confident that the answer was yes, they would have presented it as an assertion; by presenting it as a question, they are not accountable for whether it is correct or not."
This isn't even the most interesting deal in this space. There are some people that have established some pretty sweet gigs with some key eBay partners directly. Won't get into details because I'm moderately close to an involved party, but if you've sold a lot on eBay there's a nom-zero chance you know who I'm talking about.
The real secret sauce to her side-hustle was the relationship she had with the lady who managed the warehouse where she bought the baby stuff. The warehouses usually have auctions on large lots or pallets of stuff; you bid on whatever's on the pallet, you've got no choice. The lady used to let my sister come to the warehouse periodically (usually just before a big auction) and cherrypick what she wanted, which was always the baby strollers and swing sets. The side-hustle wouldn't have worked without that. (My sister (and her husband) used to flip houses, too, and I think she sold the warehouse lady a house.)