TJ Bandiera of Wake County Restores talks with Kyle Payton to discuss the behind the scenes workings of running a Habitat for Humanity Restore.
TJ’s experience managing restores and lately analyzing sales data has given him great insight into how to maximize sales. They talk about what categories of product to focus on, how to standardize pricing, and getting the most foot-by-foot in a thrift store.
TJ Bandiera is an experienced manager for reseller retail. He has developed strategies for looking at discounting and sales data to get hundreds of thousands of dollars added to sales.
https://www.trianglerestores.org/
[00:00:22] Kyle: Today we have TJ Bandiera with Wake County and we’re happy to have him here. TJ, thanks for stopping by.
[00:00:28] TJ: Yeah, thanks for having me.
[00:00:30] Kyle: So you’re in charge of the ReStores. So really just kind of give us the listeners here a rundown. What is Wake County all about? What are the ReStores? A lot of people don’t know, so just kind of educate us on really Habitat in general, how ReStores fall into that and how it kind of fits into the thrift world.
[00:00:46] TJ: Got it. So that’s a lot of questions, but basically ReStores are affiliates. We have Habitat for Humanity International, which is kind of like the parent organization. Inside of that we have affiliates. There’s probably about 900 of them around the country and there’s about 50 around the world.
[00:01:05] TJ: And in essence, I always like to describe it like a franchise. So, it’s county based, so it’s not city or state, but it’s based on the county that you live in. So, here in the Raleigh Durham area, we actually have three affiliates. The Wake County affiliate, which is basically Raleigh. We have a Durham County affiliate, which serves Durham County and then Orange County, which is like Chapel Hill area.
[00:01:28] TJ: The three cities together are called, down here, we call it the Triangle. So we had the three affiliates and over the years, each affiliate has their own ReStores that they can set up. So there’s the, in Habitat, obviously the whole mission is to build houses for people and provide affordable housing for people.
[00:01:47] TJ: The ReStore is a fundraiser. That is all that the ReStore is and so over the years when they first started Habitat, they were trying to figure out ways to raise more funds to build more houses, and the ReStore concept got born because people were donating a lot of items and we suddenly were like, if you open a store and start selling these items, we can make more money to build more houses.
[00:02:10] TJ: Our affiliate in Wake County was opened in I think 1995 is when it was founded. And for a long time it had one ReStore based in the city of Raleigh. Wake County’s a very large county with a lot of different cities. And over probably starting in, I think it was 2013, Wake County opened a second ReStore in a town called Carey.
[00:02:32] TJ: And then over the next number of years, it’s almost like every year another store was opening. And when I started with the organization in 2016 range, 2017, we had six ReStores just based in Wake County. So then Durham County, Durham and Orange kind of worked together and they had one ReStore in the city of Durham. And so our whole area had seven stores.
[00:02:55] TJ: the three affiliates got together and said, you know, we want to be more efficient in How we manage our stores. So an agreement was reached that Wake County would take over management of the store in Durham. and so we became seven stores.
[00:03:11] TJ: And at the same time, there’s a county next to Wake called Johnson County and they didn’t really have any house building. There weren’t any ReStores, there wasn’t any organization. So Wake simultaneously took over Johnston County and became a two county affiliate. So we are now the Habitat of Wake and Johnson Counties and we opened a store in a city in Johnson County called Clayton.
[00:03:33] TJ: So we had a ton of stores on this one side of town, but only this one store in Durham. So we opened two more stores, more on the Durham side and then we actually opened one store in Orange County in Hillsboro. So now totally, we have 10 stores that we manage. It’s managed through one central group. We have a VP of ReStores, Emily George. She’s my boss. We have one director, Jason Nestler. And then I am, my title is the ReStore Operations Manager. It’s pretty much encompasses almost everything if you can operationally minded,
[00:04:04] Kyle: More like a jack of all trades, let’s just call it what it is.
[00:04:06] TJ: It is. It’s everything from building security all the way through to Thriftcart, into managing our computer systems and how we do pricing in our stores, sales analysis, you know, all that kind of fun stuff. So, for the purposes of this podcast, like in terms of a big portion of my job then is to really look at our business model and then, you know, obviously our goal is to keep increasing sales, keep, you know, figuring out new ways ,to have either cost savings on this side, on the spending side, or how are we gonna raise more net sales inside of our stores.
[00:04:43] TJ: So for those in the audience that don’t really understand how the ReStore works, everything that we sell is basically donations. So the general public will donate to us household goods, furniture, tools, and hardware. There’s a lot. it’s almost a, sometimes easier to describe the list of things we don’t sell. And there’s that…
[00:05:01] Kyle: That you guys don’t take. Now one thing I think listeners are gonna wanna know is do you guys also buy product? Cuz I know Habitat being a nonprofit, I know Wake County’s, I mean, you guys do things a little differently. Is there a percentage of product that you do buy? Are there certain categories that you buy? I mean, is that, and really what’s the reasoning for that?
[00:05:20] TJ: So the answer is yes, we do purchase some items. The items that we purchase from that perspective, we try to buy items that don’t generally get donated to us. For example, we sell waterproof laminate flooring.
[00:05:34] TJ: Typically people don’t donate… if they donate one, they’ll donate like a box. Well, a box is gonna have, you know, 20, 30 square feet in it. That’s not enough to do a project in your house. So we wanna be able to have our customers have the option to buy, you know, two, three, you know, I’ve had customers buy, you know, two or 3000 square feet of flooring all at once.
[00:05:53] TJ: We also sell brand new area rugs because a lot of the rugs that come in have, you know, cuz all of our items are used and, you know, the, you know, you get the uh, pet stains, I’ll call it like that. Uh, Different smells or whatever. So, brand new area rugs are actually a decent seller for us.
[00:06:10] TJ: And then, now, every Habitat Affiliate and ReStore has different philosophies. We’re more of a conservative affiliate. There are some tax laws and it’s kind of, very technical, but we can’t have too much of our net sales come from purchase product because we are a 501(c)(3) and we’re not paying taxes on the money that we’re making. So we have to be careful that we’re not going over that limit and potentially getting ourselves into trouble.
[00:06:36] Kyle: Yeah there’s like a threshold that you guys have to stay within. Right. Gotcha.
[00:06:39] Kyle: I wanted to back up just a second because I, and I didn’t know this either, so, if I were to ask you, Hey, TJ, so of a ReStores business and revenues, obviously that goes towards the affiliate, but of what the affiliates, you know, collects in terms of revenue, what would you say is the proportion that comes through ReStores? Like how important are ReStores to the overall mission, you know, to the overall affiliate?
[00:07:02] TJ: That’s a great question. You know, when I was talking earlier about the resourcing being a fundraiser, 100% of the profits that come out of our stores is given back to the affiliate to build houses.
[00:07:11] TJ: So this is a true non-profit type of, you know, retail business. So this year we have 10 stores, and that’s a lot. We’re the biggest ReStore chain in the United States in terms of number of stores. But we service, our money is given to all three counties to help build houses, so we just wanna look at it as total number of houses. This year we were budgeted to give money back to build 14 houses. In our area in Raleigh and Durham, it costs us $170,000 to build a house now. Five, six years ago, it was $90,000. So just in five years, it has really gone way up. So this year our net revenue that we’re gonna give back to the affiliate, to the three affiliates would do 14 houses, but we’re having such a good sales year that our re-projections that we just did here at the beginning of January says that we’re gonna probably, we’re gonna do at least 18, we’re gonna fund at least 18 houses, and one of those houses is gonna be funded strictly from Roundup money that happens at the register. During a register transaction your total comes to $10 and 52 cents. We asked the customer, would you like to round up to $11 and donate the change to us and given with our 10 stores we’re on track to raise about $200,000 this year just from asking for some extra donations at the register.
[00:08:25] Kyle: That’s absolutely amazing. I am so glad you quantified that cuz that was always something, being a feature of Thriftcart, you know, the Roundup donation was always wondering like how much of that did you guys actually get in a year and to know that the Roundup donation is actually paying for someone’s house. I mean, that’s awesome. That’s remarkable.
[00:08:41] TJ: And just, you know, as a side note for us, our employees and staff, I mean, this is the best group of people I have ever worked with in my entire career. But they’re so passionate about it. And our CEO, we had a meeting this week with all the store managers and the assistant managers and the CEO came in. And this one house that we’re funding, we’re gonna brand it the ReStore house. The staff from the stores are gonna go help build the house, and then when the family moves in, we dedicate every house and we’re gonna go and be able to dedicate it and that really helps us connect to the mission because when you’re in the store, you’re selling items and you can forget that, Hey, the reason why I’m doing this is we’re trying to raise money to build houses. So we really try to bring that focus back to our employees. That’s our reason for existence.
[00:09:23] Kyle: I mean, that’s amazing. And I love the tie in with the ReStore and how that directly goes back to the county, back to people, back to the overall Habitat mission.
[00:09:31] Kyle: I wanted to go back to something you said. You mentioned that the ReStores in the Triangle area were having a great year. I know for a lot of other businesses it’s been pretty trying. It’s been a difficult, you know, past couple months, past year. What is Wake doing differently that has helped you guys kind of weather the storm? You know, there’s obviously inflation, there’s a downturn in the economy. What have you guys seen and what are you guys doing differently to help kind of offset that?
[00:09:57] TJ: So when I first started in this business and in general, I visit ReStores when I travel, I think the mentality is you get these items in, you price them, you know, you probably have a range of how you price stuff, but it’s basically get the amount of money you can get for it and move on.
[00:10:12] TJ: Because in our area, the general public is very generous. They donate a lot of items to us. We took a different approach. Not to be too complicated, but we had 10 stores and over the years, like different stores were doing things differently. We didn’t have any standardization. These different stores are pricing in different ways. We had four different register interfaces through Thriftcart that we were using cuz different stores were one of things in a different way. And we took a step back and said, okay. What is important to how we’re gonna make our sales? Because not everything that comes in, while we can sell it, there are certain things that have more value or can really contribute to the net sales at the end of the day.
[00:10:53] TJ: So we came up with six categories that we call our revenue drivers. And the biggest category of item that we saw in our stores was furniture. In a lot of our stores, you, it’s. Could be 40 to 50% of the total sales just come from furniture. so this took us a couple years to do. So the first step that we did was we said we have to standardize how everybody is pricing and Thriftcart provides us to be able to create a barcode, so like, pricing barcodes for all of our items. So when it goes to the register, it can be scanned. So inside of that, originally, like we would have categories.
[00:11:29] TJ: Furniture and then everything that went into that one category just fell into that, just, yeah, I just saw in the category. So we went back and actually decided to do some, a lot of subcategories. So we have, you know, in furniture alone, I have 39 different types of items. So coffee tables, I separate sofas versus loveseats versus an upholster chair versus a recliner, dining room tables with chairs, without chairs, et cetera. So all we had the stores do was just price in these categories.
[00:11:59] TJ: And then the next phase of that was also to look at our register interface and get everybody pricing the same way and then selling the same way because before that we had really bad sales data and it it was literally all over the place and you couldn’t make sense of it. So once we got everybody on the same process and pricing and selling the same way, then we could go back after, you know, three to six months and actually start to look at data that actually made sense to us.
[00:12:25] TJ: So we realized that, you know, when you get, you’re gonna get a million wine glasses and plates and dishes and doorknobs and whatever. And we’re telling stories like, that stuff’s important. It matters, but we’re just gonna make these items standard price. So the advice I would give to people is, focus really on pricing and understanding the value of the items that you have to price. But like, you know, I’ve been in enough ReStores where people look at a dinner plate and should I put a dollar on it or $2 or three, you know, and they’re trying to make this decision. We’re all like, every plate’s a dollar, it’s great. You know, let’s move on. And so we took a look at all of our different categories of furniture and then Thriftcart, the nice thing, we have a colored discount policy, so I’m maybe skipping a little bit, but when we price an item in our store every two weeks, that item reduces and price by 20%, and it happens on the same day every month. So our custom ers know like on the first day of the month and then on the 15th day of the month, everything in the store goes down by another 20%. So it’s full price, then 20% off, 40% off, 60% off…
[00:13:28] Kyle: all, all the way down to… when you get all the way down to the bottom, what do you guys do? Do you like, donate it? Do you scrap it? Is it just kind of like a fire sale?
[00:13:36] TJ: The answer is, you know, the secondary mission statement habitat that people always don’t realize is that part of our mission is also to reduce the amount of things that go to the landfill. So we take that very seriously. So we try to make throwing something away like the last thing that we do.
[00:13:51] TJ: So after 60% off, if something doesn’t sell, most stores will do what they call a markdown. You can call it purging. Maybe you’ll put the item out for free. So you might take the sofa you had put a hundred dollars on it, it went down to $40. Maybe you’ll put $20 on it, or even $10, try to get something for it so at least it doesn’t get thrown away.
[00:14:10] TJ: And then if it doesn’t sell after two more weeks at five or 10 or $20, put a free sign on it. At least somebody can get some use out of it. And then if it doesn’t, if it’s the items, you know, just not something that somebody wants, then at that point we would throw it away but we really try to make that the last step.
[00:14:28] TJ: You know, we never want to discourage someone from donating to us, but there are items that we can’t take for, you know, it might be too stained or the cat, you know, clo at it. And it’s all kind of shredded, you know,
[00:14:40] Kyle: No one’s gonna buy that, right.
[00:14:41] TJ: Right. So we, but we try to, you know, We never want to discourage people from donating cuz at we’re getting all these items for free. It’s tax deductible. We can, we give a receipt to the customers so they can do whatever with their taxes. And we have kind of like the 80 20 rule sometimes too. Like if they come up with a carload or a U-haul full of stuff and 80% of it’s good, we’ll take the 20% that maybe we can’t sell because we wanna encourage them to come back again. And we also offer free donation pickups as well. So, if somebody can’t get a large item to us, we will go out and pick up that item for free.
[00:15:13] Kyle: Actually pick that up for ’em and and take that burden off of them. Wow.
[00:15:16] TJ: It is good in this business model. Even though there’s a cost for a procurement team, we have seven trucks with probably 20 guys on staff that are on our donation ambassadors is what, how we term them. That cost though is, it’s worth it to have that cost because we’re making so much money off the items that we can pick up because a lot of people don’t have a good way to get this….
[00:15:37] Kyle: A good way to get it there. I was gonna ask you, what would you say is your ratio of your overall donations that you guys. How much of it is picked up versus dropped off?
[00:15:46] TJ: I would say probably 60% is dropped off and maybe 40% is picked up. It’s kind of hard because a lot of the carloads that come in, you know, it’s boxes of home goods. But you know, people do have, you know, they have their pickup truck, a trailer, you know, they rent a U-Haul, they’re moving. It’s so funny. I was a ReStore manager for a number of years. I managed two of our stores in this area. I actually opened one from like, it was a brand new store. And you know, in talking with customers, you just get to, you know, kind of… Part of the reason why I would ask questions is I’m just trying to learn and understand why people donate or, you know, what is the reasoning? In some cases, it’s somebody moving to the area and they’re downsizing. They get a lot of downsizing. I was in a four bedroom house and I’m in a two bedroom, you know, so yeah…
[00:16:29] Kyle: I have too much stuff. Like, I gotta get rid of some things.
[00:16:31] TJ: And then of course, when you know, the kids, you know, the parents pass away and they have the house full of stuff, they don’t know what to do. they take whatever they want and then there’s the rest of the house and so a lot of times, you know, when you Google search in our area, “places to donate”, we have done one of those things where we pop up at the top of the list of the Google searches. Yeah.
[00:16:50] Kyle: Some search optimization. Alright.
[00:16:52] TJ: Yeah, exactly. Yeah. So that we can make sure that, you know, we’re the first, you know, that somebody sees us first.
[00:17:47] Kyle: So let me ask you, so with donations, so within Thriftcart, obviously Thriftcart can handle the scheduling of that. So how do you guys, is someone on the dock at all of these stores all the time to handle donations? Do you guys have a kiosk? Cuz you know, within Thriftcart you can set that up. And how do you guys handle the drop-offs there within Thriftcart?
[00:18:05] TJ: So the drop-offs are, You know, there we do have a, you know, a person every day assigned to the, you know, we call the warehouse door, the dock door whatever you want to term it. And they can, you know, right there is where our pricing stations are at. So, okay, as the items come in, you’re generating the donation receipt and you’re, you know, pricing, you know, kind of, processing and then pricing right there.
[00:18:28] TJ: Now, on the scheduling side, because we’re so large in a lot of smaller habitats, they kind of handle the scheduling in the store. Now we have four counties that we’re picking up donations in and so we have two donation schedulers. We, so people can, don’t go to our website and they can schedule an online pickup and that’s usually what we try to encourage people to do. But um, they want to talk to someone cuz they’re not sure if we’ll take the item or there’s some different, you know, issues with like the driveway, right?
[00:18:57] Kyle: Yeah. They just want to, yeah. Talk to someone live just to understand and make sure, okay.
[00:19:01] TJ: And then all that’s happened. And then all, and so all of those pickups are scheduled to Thriftcart. And then there’s, you know, there’s ways inside of there to look at, like heat mapping and kind of understanding where your donations are coming from and like how where they’re concentrated at is actually a good way to understand where to open a ReStore. Because I…
[00:19:18] Kyle: I was gonna ask that. Have you noticed like certain parts of your geographical area, like do you get certain kinds of donations from certain parts? And I was, I always wonder, is there seasonality to donations? Have you noticed that?
[00:19:31] TJ: It is. So I laugh every year at Christmas time because you know what the hot item was that people got for Christmas because they’re donating the old, like for example, a couple years…
[00:19:41] Kyle: the old from the prior year.
[00:19:42] TJ: Yeah, the old one. Yeah. So like for example, a couple years ago I was managing our, one of our stores and we got in like 75 kids bikes. And I was like, I said, well, I guess all the kids got new bikes this year for Christmas. And then a different year, like we got a ton of TVs, like flat screen TVs, but like the older models. So, you know, when you go to a ReStore, you always are like one cycle behind, especially technology wise of like, what, what is going on in, in that. So, but yeah, it is seasonal. It’s funny how people will donate a lot of patio furniture in the wintertime, but it doesn’t sell very well in the wintertime because….
[00:20:15] Kyle: Right. So that leads to a question. So, I mean, knowing that they’re gonna donate it in the winter, cuz obviously they’re gonna go to, you know, Ikea or Home Depot or whatever and buy something new in the spring. my, immediately I would make me think, what about inventory and space? I mean, you know, that can sell. Do you guys have, really the capacity just to hold onto those things? Are those donations you turn away?
[00:20:36] TJ: No, we don’t turn them away, but we do know that we’re gonna have to slightly, so when my stores in the wintertime, I would tell my staff during these months, usually, you know, December through the end of February, because down in Raleigh, March, you know, really starts to get warm again, price 20% less than which you would normally price, you know?
[00:20:55] TJ: Okay. Just to kind of move the move. But then as soon as March, I literally, I would have a calendar imagined myself that, like on March 1st, we’re gonna re-raise those prices again a little bit higher. Most of our stores, we have a store that’s like 8,000 square feet. Most of our stores are somewhere in the 12 to 15,000 square foot range. And most of ’em don’t really uh, apply too much of the square footage to the back room. So pretty much it’s mostly the sales floor. And maybe a little bit of office space. So yeah, once you get something in most stores, you don’t have the luxury, unfortunately.
[00:21:27] TJ: Now recently we have an acquisition specialist. So, you know, businesses, you know, there’s a lot of times businesses will donate brand new stuff. They’re trying to clear out their warehouse. They’re, you know, there’s a Lowe’s and Home Depot and some of the furniture companies, appliance companies will sometimes donate new stuff to us. And recently we got two truckloads of brand new patio furniture, but it happened in the early January, and we’re like, you know what? This stuff is so valuable. We wanna really maximize what our sales are gonna be. So we we had a couple storage containers at one of the stores. We cleared ’em all out through the patio furniture in, and we’re gonna now pull that back out at the beginning of March and actually start to sell it because we know we can get the more value for it at that point.
[00:22:05] Kyle: You can get that and you know that through, you know, your historical sales data.
[00:22:08] TJ: Yes. Exactly.
[00:22:09] Kyle: Obviously with running that many stores.
[00:22:12] TJ: The nice thing about how we’ve gotten with Thriftcart is the first and foremost, you guys are great partners with us and I really appreciate all the support. We have asked for specialized reporting that we’re kind of using for how we want to see our business and so, you know, some of the normal sales reports, we’ve actually kind of gone in and said like, we wanna see our data this way in this kind of report versus like having to run 10 different reports to try to get the data that you need me to run all in one place.
[00:22:39] Kyle: Well, let’s touch on that because I, the kind of, the joke is here, I mean, you know, it’s Wake County that needs the new report. You know, that’s kind of the joke here. Like, oh, hey we gotta get with Michael. Like, we gotta give you some dev work. Let’s create a new report. Yeah. But I want to touch on that because I think Wake is a great proving ground for looking at thrift and looking at retail differently. So what are some of the like reporting or metrics that you guys are looking at that have really been a catalyst and a driver you know, for your business that has led to that success you alluded to earlier?
[00:23:07] TJ: So, first and foremost we identified what our revenue drivers were gonna be for this year. And given that furniture’s our number one category, of course we’re gonna spend the majority of our focus on that particular piece. When I mentioned earlier, the discount policy, the thing that I like about Thriftcart is when something sells, The system also knows what percentage discount it’s sold at. So I actually used the metrics in two ways. So when you go in the back room in price, the system, if you click on a sofa, it’ll give you pricing options, like a range, you know, and originally there was three options and once I started getting good sales data, I started running reports to see like what we were pricing at and to a fault on every single subcategory, the employee was picking the middle button on average. Okay. So what I realized was, they weren’t really looking at the item and like trying to understand what the value of it was. They were literally like, so if I gave them like 95, 125, and 175 is a price…
[00:24:08] Kyle: They’re doing average price 125.
[00:24:11] TJ: I mean, and it was like that for every single category. So we spent a lot of time with training and helping people understand, and I actually expanded that. So there’s now like six options, five to six options, depending on the item. Cause I wanna give them a better range of understanding like what the item is.
[00:24:24] Kyle: Is quality built into that as well? , you know, cuz when you say moon, you mentioned like, okay, there’s a loveseat, right? So there’s, these options are pricing, but is there an implied like quality level associated with the pricing?
[00:24:36] TJ: Yeah it’s a learned skill. Yeah, the be the way I teach pricing, the way I have taught pricing all over the years, especially with new employees, when a load of furniture comes in from the truck or a large U-haul comes in, I just give him a set of post-it notes and I. , tell me what you think you’d price this at Cause I wanna see where their baseline is. And two, almost, I’ve had one employee, I, there’s one employee that’s going to break the, there’s the exception to what I’m about to say, which is everybody that I’ve ever taught has priced sometimes at 50% higher than what we would actually price in the ReStore.
[00:25:05] Kyle: Oh wow. Okay.
[00:25:06] TJ: Because they think of the Walmart, Target, you know, Home Depot pricing. So we’ve actually, in most cases, had to bring people, you know, interestingly. And then, you know, over time you just, you start to learn as you start to see multiple items. But what we did this year with our, what we call our focus categories is once I had all the sales data, cuz we have really moved to a data-driven business. I mean, there’s a reason why there’s, you know, books and seminars and all these things that you can, and we had never been applying traditional business principles to this resource business. Cuz every, I think the thought before was, well it’s so different, but it… it is and it isn’t.
[00:25:43] Kyle: It’s still retail.
[00:25:44] TJ: It’s still retail, you know, and you can take those principles and if you apply ’em correctly, you can increase your sales. I’ll give you to the end point of this, is we did a focus thing on furniture and every store we did it like we gave them their own categories that they were pricing too low and I’ll explain in a second how I knew they were pricing too low, but, and I said, these are the categories you need to price higher. You’re the public is saying you can price higher. And in the first, now we’re in month seven of this fiscal year. Year over year, we have made $400,000 more in furniture sales, selling less units because we focused on pricing the items that we figured. Through the reports that we get…
[00:26:27] Kyle: Too low. So, how did you figure out that they were too low? Because you said the consumer was telling you, but what did the data tell you?
[00:26:33] TJ: So how I figured it out was that’s, now I’m gonna go back to the color discount policy, cuz that’s a key piece of this information is when you, we saw something, the system knows if it sells a full price or 20, or 40 or 60% off.
[00:26:47] TJ: I started analyzing the data, I realized that in order to maximize my sales, when I price it, I need something to sell a full price or 20% off to get the most money that I’m gonna get for it and if it goes too often to 40 or 60% off, you know, if I price it too high the, the other thing inside of that is if you price two high and it and you sort of 60% off, that’s about eight weeks of time, six to eight weeks of time and that floor space in the store is super valuable cause you’re getting valuable stuff in
[00:27:13] Kyle: So valuable. You gotta turn stuff.
[00:27:15] TJ: Turn it over. That’s the key to this is turnover. So, as I was looking at the data for some stores, if I noticed that items in a certain subcategories, say coffee tables, that more than 90% of the time they were selling at full or 20%, I realized they were pricing too low because if you’re selling too quickly, that means that people are like just snatching it right up.
[00:27:39] Kyle: They come in and say, wow, that’s a great deal.
[00:27:42] TJ: And I’ve had times like, I’ve been walking out to the sales floor with an item I priced they just grab it right out of your hand and then you always say to, and if you’re in a ReStore, I promise you the phrase you’ll hear is, “guess I priced it too low” because the employees even know, I should have priced that higher because I could have gotten more value.
[00:27:58] TJ: So I went through all 39 categories, every store individually and I looked at where they were selling too fast at full or 20% and I said, you need to raise these prices. And so then I looked at what they were averaging. I came up with a range that they should go to and then, you know, I can give all the plans that I want. Our employees embrace this program. They’ve stuck to it. They have really, like followed it. They’re excited about it. We have like, you know, friendly email, you know, Hey, you know, my store did, you know, average unit retail, AUR is what, you know, average unit retail, we’re at like $60 on our furniture this week and, you know, and kind of like bragging a little bit some friendly competition amongst the stores, so as I’ve been analyzing the data, I realized that the sweet spot for maximizing your sales, but also selling was we needed to be about 80 to 85% selling at full price or 20% off. That seems to be where the best range is.
[00:28:58] TJ: So, we talk about this, we have many sales metrics. We have a whole scorecard that we put out and it’s for all the managers to see and I, every week I update this with like the weekly numbers and we compare, now this will be a total furniture, AUR, so all pieces of furniture and what you average sold them at that week versus how fast you were selling ’em. So you want to be at this level, okay, but you want this percentage, and if you’re, if that percentage goes up, we need you to raise your prices. If that percentage goes too far down, then you’re actually too, the public’s saying you’re way too high.
[00:29:31] Kyle: You’re way too high. Okay.
[00:29:32] TJ: Yeah. So we don’t wanna turn off, listen, a ReStore is a thrift store and it is, exactly, people come in because they want to get a deal. So we don’t wanna turn off and have people not come in. But we also don’t want to devalue stuff and not make enough net sales that, because ultimately we wanna make as much money as we can.
[00:29:49] Kyle: Yeah. As much as we can cuz that goes back to the affiliate to build the houses that you mentioned. So essentially what you’ve done is you’ve taken a pricing metric and then essentially cross categorize that with time to determine that sweet spot and so you were able to do that looking at the data within Thriftcart.
[00:30:06] TJ: Within Thirftcart is, it’s exactly how I did it. Exactly how I did it.
[00:30:09] Kyle: And just for listener, and it was $400,000 selling less items year over year.
[00:30:14] TJ: Yeah, we sold about, yeah, I don’t know the metric of how many less items. I know it’s not like five less items, right? I mean, it’s a significant number, but we’re fine with that because, you know, when we see the flip side, which is the 400,000 extra dollars, you know, that’s really what we’re obviously trying to, you know, make them better net sales and this, like I mentioned it a little bit earlier the key part of this for me personally is I always tell when I train, I don’t sweat the small stuff, right. You’re gonna get a ton of all of these little tchotchke, whatever. we actually have 101 items in our store that we standard price.
[00:30:51] Kyle: Wow. So, okay.
[00:30:51] TJ: Now any, so say for example, we have like, for example, vases. Vases are a dollar.
[00:30:57] Kyle: Doesn’t matter, size, shape, color, anything? No, it’s a dollar? Interesting.
[00:31:01] TJ: Okay. But if the crystal vase comes in that we know has higher value, the employee, all of our signs say, unless you know it’s standard price, unless otherwise marked. So if we get the really nice vase in sure. Put $20 on it. Of course. Okay. You know, you don’t wanna sell that for a dollar.
[00:31:16] Kyle: Right, exactly.
[00:31:16] TJ: But we want, we don’t want. What we’re trying to teach our employees is yes, this, we value the stuff. We don’t want it to go to the landfill. We want to sell it in our store. But where are you gonna make your money and where, you need, to spend your time? Because we’re a skeleton crew in our stores, you know, we don’t have the luxury of having five, 10 employees. You know, most of our stores have four employees and that includes the store manager and assistant manager and two associates. That’s it, you know?
[00:31:40] Kyle: Yeah, really skeleton crew. Yeah. So you guys don’t have the luxury of being extremely detailed and granular with the pricing, so No. Thus the over a hundred items that are standard price. Okay. Yep.
[00:31:50] TJ: And that way you can just go to the floor. Sure. They’ll sort through it real quick and if they find a nice item put off to the side, we’ll check it later and, you know, it really helps people to understand, like we are, Emily’s good phrase is water over Iraq. She wants us to just keep saying the same stuff. We don’t need to have the flavor of the month strategy, you know? Right. Because then it confuses everyone. We have these six revenue drivers this year. That’s all we talk about. We don’t bring up anything new and everybody knows this is what we’re, and every time we, I go, I do store visits and we go in. The first thing I talk about, how’s the six categories going for you now?
[00:32:25] Kyle: How’s your top six? Okay.
[00:32:26] TJ: Yeah, exactly.
[00:32:27] Kyle: And that’s such sage advice right there, because what I see so often in ReStores is the opposite of what you guys are doing. They’re trying to figure out, price every single thing, rather than looking at the data, what is the data telling me, okay, this is what’s driving our revenue. Let’s focus on this. Everything else: standardize it, you know, so that’s a fantastic business model. And would you say that’s been one of the biggest catalysts to your guys’ success?
[00:32:52] TJ: Once we got everyone to buy in on the standard pricing, that was a, that was a tough sell. It was tough and there’s, you know, people, you know, I have a store that, so we get a lot of like, electrical sockets and, you know, the light switches and all these different things. And, you know, he’s a big space in the store that has like a huge bin of these things. And you know, and I keep saying we need to, you know, reduce that size footprint in your store so we can put the more valuable stuff. Well, people buy ’em. Yeah. But when I look at the data you’re making uh, $50 a month off of this huge space, and I want that space to make me a thousand dollars a month, you know, not 50. So we can use the data too to help us understand how to allocate our square footage for, you know, when we. Section off our store for the different names that we sell.
[00:33:40] Kyle: Right. And that’s another key thing that I’ve seen that you guys are so successful at and there’s a report in Thriftcart. So it’s essentially sales by square foot. Now you have to go in and allocate . But you know what you have for square footage. But that right there, to your point, couple that with, you know, your pricing strategy and your returns, that is really how I imagine you guys maximize the footage that you have, the inventory that you have to drive your revenue. You know, cuz to your point, you know, if I can sell furniture, In that space, I would much rather do that as opposed to selling, you know, light sockets. So knowledge is power, right?
[00:34:11] TJ: I, you know, in a previous life I worked in food manufacturing as a quality assurance manager. But it’s so funny how I never even worked retail until I started with the ReStores. And that was like about seven years ago now. But the principles are the same, you know, and operations are the same and really all I’m doing is just simply taking the data that is generated in my store and I’m looking at it, and then I’m literally making the decisions and my…
[00:34:36] Kyle: Data-driven decision making.
[00:34:39] TJ: A hundred percent. I can’t even begin to tell you, like before when I first started this, and we did, weren’t doing that, we’d all be like, what do we do? I mean, it kind of felt almost fr you know, kind of weird. And now that we kind of have a set plan you know, and people are buying in. Right now, my office. I’m in my office and I’m in Durham. I live in Durham. And the assistant manager here is, he is great cuz he’s got all these like, graphs on the board. He’s tracking his sales and we want that. We want to have that engagement with our employees.
[00:35:05] Kyle: That visibility, that engagement to, to know where you’re standing, right?
[00:35:08] TJ: Yep, exactly.
[00:35:09] Kyle: The old saying is like, you don’t know if you’re winning if you don’t keep score, right? So I love that.
[00:35:15] Kyle: So one of thing, and I think this is a nice segue because I think what Wake does and the Triangle does, I think stands to reason that almost all resources should is I, there’s this perception that I see that because it’s thrift, that the principles of retail don’t apply and I think Wake is the poster child are saying that’s not true. You need to make data driven decisions and the proof is in the revenue that you guys generate. So Wake does a fantastic job.
[00:35:41] Kyle: I want to segue though, into where do you see, I mean, so ReStores are part of overall thrift, but where do you see thrift, you know, in taking in the context of where do you see it going in the future? How do you see your business model changing and what are some of the things that Wake County and the Triangle’s looking to do?
[00:36:00] TJ: So, you know, while we’re the biggest, you know, we have the most stores or whatever, there’s some things that other, there’s some other ReStore chains out there that are doing that we want to now start to model and the name of the game is gonna be e-commerce. That is where the next phase of this, and there’s a ReStore chain out in LA that is generating closer to like a million dollars a year in an e-commerce kind of world.
[00:36:22] Kyle: Oh wow. Okay.
[00:36:22] TJ: So that is, yeah. And that, you know, that’s significant. You know, that’s basically a whole, like our, one of our stores on an average budget is between six and 800,000 for net sales. So, you know, a million dollars in e-commerce is, you know, that’s huge. Go find that number, okay. You know.
[00:36:38] TJ: But, you know, given our business model it’s a little tricky to try to set it up. I’m actually working with Thriftcart right now. We’re starting our first baby steps into figuring out how we’re gonna make this happen for us. But we know that online shopping is different and that there’s certain items that, like collectibles especially, and certain items that come in the store that we cannot get the right value for inside the store. It’s just impossible…
[00:37:03] Kyle: In a brick and mortar, right?
[00:37:05] TJ: Yeah. In brick and mortars, just, there’s certain things that come in. I’ve, a couple years ago I got in all these sports memorabilia, collectible, like little figurines and I went online and they were, you know, selling for 15, 20, 30 bucks a pop and by the end of the day, I maybe got $2 a piece for ’em because my reseller, you know, nobody was buying ’em. They wanna buy ’em to resell ’em themselves, you know?
[00:37:25] Kyle: Well and you don’t normally think of those kind of items and associate it with a ReStore. Right. But you guys still get them.
[00:37:31] TJ: My joke I always make is if mankind has made an item on this earth, it has come into the ReStore.
[00:37:36] Kyle: It’s gonna end up at a ReStore.
[00:37:37] TJ: I have seen everything and I’m not shocked anymore. I used to be like, well, why are they donating this? And now it’s just like, if it’s in somebody’s house…
[00:37:46] Kyle: …there’s a good chance it’s gonna end up there.
[00:37:48] TJ: Yeah. It’s kind of a bit of everything, I mean, I’ve seen comic books, I mean, everything. So, but then the flip side of that is, okay then how do we sell? You know, we talked earlier a little bit ago about how we’re maximizing our furniture. We’re at that sweet spot. We’re not gonna, you know, that. We’re just gonna keep going with that track. But that’s probably mostly a done. Project because our public has now said, this is what we’re willing to pay for these items. And so that’s great. So now what’s gonna be our next way to generate some more revenue? And I really, you know, we actually have two ways.
[00:38:21] TJ: One of the things we did, which It’s very interesting to me, that how successful it’s kind of been is, we call it ReStore treasures. So we have some, we have gone out with our volunteer group and found people in our community who are, have more expertise about antiques and, you know, wall art and different things, and they actually come into our stores and they’ll walk around and they’ll find items that we’re selling for 10 or 15 bucks and they’ll go, you need to pull this back and put like a hundred dollars on it cuz it’s actually that much more valuable.
[00:38:51] Kyle: It’s almost like Antique Roadshow. You have experts coming into the store. That’s fascinating. And that makes me, it jogs my memory. I was in a store in Asheville, a very similar thing. And I was just walking through, they were showing me their operation, how they do production and I saw over to the side, I saw an antique. You know, mid-century modern Coca-Cola cooler and they had a sticker on it for $5, and I grabbed them and like, absolutely not. That’s worth at least a couple hundred bucks. Put that on eBay. So I think that’s kind of what you’re saying is because a ReStore seems to be this collection point for all things using those experts. So you have them just come through the store, pull things down, like you could get a lot more for this than what you’re pricing it. And that’s where you’re thinking e-commerce will come in.
[00:39:34] TJ: Right. So I think this is like the ReStore treasure part is maybe a prelude to ultimately identifying what items we’re gonna sell better online. You know, when we go to e-commerce, you know, when you hire in a ReStore, I mean, you know, we actually had to raise our wages because we wanna make sure that we have good, stable, you know, staff in our stores. Of course any business will say that’s a good key to success.
[00:39:58] TJ: But, you know, nobody’s an expert in antiques or are typically, you know, and you know, I’ve seen art pieces that I thought were 25 bucks, and then the ReStore treasurer person would be like, forget the artwork. The frame alone is worth $150 on this thing, you know? So, you know, sometimes you have to start looking at it from those eyes too, that it’s not about the print or whatever’s inside of it. Sometimes it’s about the frame. And then the different furniture pieces. So we have identified, we actually have a little card called ReStore Treasurers, and we actually write, so when we ask for more money, we don’t just put $200 on something. We actually say, the reason why we’re doing this is because this is from the 19th century, you know, in England…
[00:40:37] Kyle: So you justify and educate, you know, your customer base. So they’re not just like, wait why are they…
[00:40:42] TJ: Are they crazy enough people? That makes sense. But I think that’s a good prey to when we start to do online selling because, you know, my, my goal in the beginning is to start small and grow. Of course, that’s, you know, how you’re gonna do it. But, you know, what is it that we’re gonna sell? Or, you know, what’s gonna sell well on a Facebook marketplace or an Instagram versus eBay? Because eBay is, a lot of people are going there for the collectible items, and we do get those in our stores. I mean, it’s not all the time, but I mean, it’s enough that there’s value to try it out and I think, it’s like any startup. You’re gonna have to invest some money, you know, to try to get it going, find the right people to run it, you know, and there’s, and there’s a lot of, and not to get, I don’t wanna get too technical here, but there’s a lot that goes into just setting that up instead of a ReStore environment because, in most cases, we are only gonna have one of the thing to sell. You know, this is not like a traditional, when you go online and you wanna buy whatever. Well, they just go to the warehouse and there’s 50 of ’em on a shelf.
[00:41:35] Kyle: And they have a whole bunch of inventory. It’s a one off unique item.
[00:41:39] TJ: Yeah. Yeah. So one off. So that’s the tricky part of understanding like, how we’re gonna identify what’s gonna sell well and I think I’ll end up using, I mean, my goal eventually will be see how that kind of sells. And then we’ll start doing the same thing we do in our stores, to use our data driven analysis to figure out, oh, we really need to start targeting this area better cuz this sells well and let’s stop selling this stuff online cause it’s really not making us any money. Right. And kinda go from there.
[00:42:02] Kyle: Using the metrics so that the future, what I’m hearing you say is, you know, e-commerce, and just because the changing demographic and, you covid changed a lot of buying habits and a lot of buying preferences, you know, so I think it’s what you’re saying is, you know, the ReStore, traditionally brick and mortar, but to continue guys’ growth and to continue honestly, your mission, right? We gotta start to branch into e-commerce. So, and yeah, and that’s something that Thriftcart is built for and we’re gonna be helping you guys get there, so I’m excited for that opportunity.
[00:42:30] Kyle: So, you’ve been so gracious with your time. I wanted to give you the opportunity just to kind of wrap things up, you know, any sage advice, anything you would say to, you know, not only other ReStorers that are listening to this, but just people in general with thrift and yeah, just give ’em some advice how to maximize their business like you guys have.
[00:42:47] TJ: I’m gonna go back to kind of what we’ve been talking about all along, you know, if you’re gonna use Thriftcart, you know, first and foremost have a discount policy. I think that is a really, we didn’t really have a coherent one a few years ago, and we kind of changed to a different model and it’s something that has really driven some of our sales. I mean, we have customers like on the first day of the month and the 15th day of the month, the sidewalk, you know, right. When you’re gonna open the store, there’s like sometimes 15, 20 people waiting because they’ve seen that piece a week ago go yeah, exactly.
[00:43:18] TJ: And they’re waiting to come in and hoping, you know, it’s a gamble because if they walk away and didn’t buy it and they come back because they know it’s gonna be 20% cheaper when they come back on this certain day, you know, then if it’s there, then you know they got it for cheaper and it’s not, then yeah.
[00:43:31] Kyle: You just created demand. I mean, you’ve already set that precedent in their minds, like, hey, on these dates I’m gonna come in and, hey, hopefully that item I saw, like now it’s 20% off. So you just, by having a discount, then create consumers, I mean, which is fantastic and it drives foot traffic, I’m sure.
[00:43:46] TJ: Although sometimes I’ve played the game with customers where I’ll say like, if they’re, I’m with them and they’re kind of going, well, should I, maybe I’ll wait and come back to get it cheaper. You know, I know it’s gonna be discounting in a few days, and I’ll be like, but don’t you wanna give us the money and help us build more houses in our communities? There you, I’ll say that, like, you know, the money, you know.
[00:44:03] Kyle: You pull on the heartstrings a little bit. Yeah, I gotcha.
[00:44:06] TJ: If anybody that ever watches this from the ReStore, they’ll understand what I’m about to say is so funny how so many of our customers don’t understand how the ReStore works in the Habitat world. They don’t know. Like they know that we’re a Habitat ReStore but they don’t understand what our role is. And I’ve had countless conversations with people just cuz say, they’ll say, where does the money go? And I’m like, and I, in my head I think it’s kind of, you know, you would know it. Very obvious. But I’ve had to tell people over and over again all the money that we make goes to build houses like, it’s literally like, we give all of our profit to that. So, you know, when you said wrap it up, I, you know, it’s like, have a discount policy. Really, the key is to make sure that how you’re pricing, If you have multiple stores, standardize that. Standardize your register interface. Do standard pricing on some of the small stuff that changed our whole world. I mean, we had some of it here and there, but I mean we really went all in and, you know, identified a hundred items that we standard priced that really made a difference for us as well. And by the way, we’re still, a lot of that stuff is either home goods or tools and hardware. I’ve been watching, you know, I watch all the data. We have not lost any money. If anything we’ve made more money by going to standard pricing, you know, interestingly enough. And then, you know, just you, once you get those systems in place, you know, there’s a lot of nice reports inside of Thriftcart. I probably run 50 Thriftcart reports a day, you know. But there’s, I mean, I literally, I live my whole life inside Thriftcart.
[00:45:36] Kyle: Our servers can tell when TJ is running a report.
[00:45:39] TJ: I’ve had to, a couple of times I’ve had to not run certain reports because I didn’t wanna like, make our registers run slower, or something. But the point is, there’s a lot of good data there. You have to be disciplined and you have to, you know, come up with your plan and stick to it. You know, for anybody that’s watching, I know every so often Kyle will have me talk to someone. More than happy to share. I mean, if you have a great idea that you’re doing your ReStore that works for you, I will totally steal it and best practices and all that. But the flip side is we’re more than happy to have you come visit us or come, you know, come and I can, I’ve done some screen sharing with a couple of the ReStores where I’ll, you know, I’ll just kind of show them our reports or our metrics or how we use the system. And it’s working for us. You know, the results are there, you know? Yeah. We’ve seen the growth this year and we expect nothing more, but just to continue that.
[00:46:29] Kyle: Well, that’s fantastic. So I honestly, wrapping it up here, TJ, I just want to thank you. That was a wealth of knowledge. That was a great conversation. For everybody listening, take TJ up in his offer. I mean, the man knows the stuff. He knows how to run a ReStore, and the principles here apply not only to ReStores, but all thrift in general. So with that said, TJ, thank you so much for your time. Yeah, thank you for being a part of the Thrifty Business podcast, and we appreciate your business here at Thriftcart. Thank you so much.
[00:46:53] TJ: Thank you. Thanks a lot.
[00:46:54] Kyle: All right. Take care.