Does anyone have any experience in the retail sale of salvaged groceries? I am considering it as a part-time (four days a week) homestead business in a 20'x40' metal building I already have on the property and am pretty well only using for limited storage now. On paper it looks promising IF (and a big IF) it can be done with minimal overhead. Once you start having to pay rent, utilities, hired labor, extensive advertising, insurance, etc., it would seem you would have to have high sales just to break even. For example, say your overhead was $2,500 per month. At an average 75% markup, you would have to generate about $5,800 in sales just to break even on inventory cost and overhead.

For those with experience here, who were your customer base? Were they repeat customers? How much was an average customer purchase? What were your sales per square foot per month? Did the wholesaler provide enough different inventory to keep it fresh (not the same items every time)? Were you satisified with the quality and mix of what the wholesaler provided? What was your average markup over cost? Were you able to successfully compete against local chain discount groceries, such as Save-a-Lot?

I would be interested in only non-perishable foodstuffs (e.g., cans, bottles and boxes) at least initially. There is probably a good markup on home and beauty aids, but I wonder about turnover and shoplifting here.

It would require a food sales license from the TN. Dept of Ag, but I am pretty sure with some minor modifications to the building I can satisfy their requirements.

Along the same lines, if you are a regular customer of a salvaged groceries outlet what is your experience with them as far as quality and prices compared to normal retail? Would you drive a couple of miles out of your way to shop there?

-- Ken S. in WC TN (scharabo@aol.com), March 17, 2002

Answers

Since the mark up for regular grocery products is said to be about 15- 20%, and the waste/excess inventory costs are said to be high, how are you going to get a 75% mark up and still sell foods that are healthy?

-- BC (desertdweller44@yahoo.com), March 17, 2002.

I've been to 'day old bread' stores, but that's the only 'salvaged' food I've _ever_ heard of. Nothing, I mean nothing, like that around these parts! Guess I wouldn't go in one, sounds like a used food store, and that just doesn't appeal to me at all!

Obviously you have done some research, and there must be these types of stores in your region. I know it is legal in most places to sell food that has expired dates on them, but I think it would be a hard thing to do. Is this the concept of the business?

Since I know nothing about it, I won't coment any more. I don't want to be negative about it - just surprised by the whole idea I guess.

--->Paul

-- paul (ramblerplm@hotmail.com), March 17, 2002.

Ken, if there was a salvaged groceries outlet here, I would definitely be shopping there, even if it was a couple miles out of the way, IF I could save some money. I would expect prices to be a lot lower than retail. As far as quality goes, I can't help you there not having one around here, but I already buy store and discount brand canned and packaged goods, so if the quality was close to that, I would definitely go.

-- Gina NM (inhock@pvtnetworks.net), March 17, 2002.

Morning Ken: The one thing that I would want to be sure of was a continual supply at WELL below wholesale prices of the can goods. Make sure that where You are getting your stock from doesent get you started and then raise the prices. Maby even locate more than one source of restocking. For those that dont know these are not nesesarly out dated goods, many are from bankrupsy sales and truck turnovers...dented cans.At one time there was one located in Bay St. Louis Ms. We always stoped in when we went to gamble on the Casino Majic...cheep food tell the next trip over from Tx LOL. Seriously tho we found the prices wernt always the best and a lot of the brands are unknown to me...generic and sub quality.

I am assuming that the cost to operate was for help to man the check outs not rent ect. Something to think about would be running it yourself like a Mom and Pop store until uit gets going good. I know this will be harder to do for You with the farm but what about having it only open on the weekend or one day a week.

Hope this works well for You should it become a realiaty(sp).

God Bless.

-- Charles Steen (Xbeeman412@aol.com), March 17, 2002.

Ken, on the consumer end I have a good friend who visited here yesterday and she mentioned this type of store. She has one locally and visits it regularly, and she has only had one really bad purchase that turned out to be rotten/bad and had to be tossed. I can't recall what it was, but whatever it was, she considered that fine and continues to buy there.

There's no such store close to me here, or I'd purchase from it myself.

-- Jennifer L. (Northern NYS) (jlance@nospammail.com), March 17, 2002.

I know of two businesses that do what you are talking about. One is no longer in business, the other is an Amish gentleman that added it to his hardware business and is doing quite well - even gets a lot of non-Amish to buy there.

The one that went out of business was a friend of ours. His problem as I see it was that he did not do ANY advertising plus this little community is a bedroom community - people were shopping where they work. Personally, I think he gave up too soon. He quit just before the recession hit and right now he would probably have plenty of business. He didn't really let people know he was here. He needed to run an ad in the little ad newspaper for several weeks to get things going and he wouldn't.

-- beckie (none@this.time), March 17, 2002.

I go to the "scratch and dent" grocery about once a week. I get flavored coffee (kroger brand, usually, but I've seen Starbucks there, too!)for $1.50, salad dressings (8oz- 4/$1), pasta, candy, sweetened condensed milk(2/$1), crackers and cookies(2 boxes or bags/ $1), some canned goods and I'm really hoping she'll get in some more Crystal Light Lemonade mix. I generally spend about $12-15 each time, most people it seems spend maybe $20-30. All kinds of people shop there, from very poor to quite well off, judging from the people and cars I've seen there. Of course this is just an observation from a customer, I don't operate one!

From what the owner has told me, they can't pick and choose what they are going to get each week- they never know what's going to be available. Sometimes they'll get get lots of cookies or candy, other times they'll get a whole bunch of cereals or maybe diapers or pet food.

The store I go to is quite large, it's got to be at least 3000 sq.ft, probably more. I've noticed that the smaller salvage groceries don't seem to stay in business very long- I stop at any one that I see- always in search of cheap Crystal Light!- and often times the next time I go by maybe a year later it's gone.

Hope my non-expert observations helped a little.

-- shakeytails in KY (shakeytails@yahoo.com), March 17, 2002.

I was raised on dented cans! My Dad was in the Grocery Business, back than he recived credit from the Grocery Distributor on any dented cans or crushed boxes, torn bags. The Distributor would count and mark the damaged items and my Dad would bring them home.

I occasionaly shop at a salvaged Grocery store, but lately the quality of the items have been real bad, I don't mind a little dent in a can but I won't buy them if the can is dirty and sticky.

Recently a Discount Grocery store (Save-A-Lot) has moved into the area and I find that their prices on canned goods to be as good the Salvaged store, and the products are all new.

My concern with selling salvaged groceries would be with liability, someone eats from a dented can that contains spoiled food you might have a lawsuit on your hands.

-- Mark in N.C. Fla. (deadgoatman@webtv.net), March 17, 2002.

I think a salvaged grocery store is a great idea! I have always wanted to open one, but haven't. Keep your prices low and people will travel to get to you. When we lived in Lancaster, PA we shopped at one and people would travel from as far as Ohio to shop at it. I would go atleast 1/2 hour before the store was to open and I would often be 20th or so in line! They had GREAT prices, about 1/2 to 1/3 of the regular store price. It was run by amish and they were only open 4 days per week and stocked 2 days per week. When they opened their doors at 8:00 the store was pretty much empty by lunch time. They didn't have a real large building, but the groceries they stocked were all things people used. I could get 90% of my weekly groceries there. They also had cold and frozen item. From what I understand about how you buy the salvaged groceries is you can either buy lots that you don't know what you'll get and you can pay a little more and get a skid of a certian companies products. I think they bought only the skids of brand name products (or atleast it was pot luck). I am now living in a different part of PA and shopping a different salvaged grocery store (the other one to far away) and their selection of groceries are not as good. I think they buy the skids of "what ever they get", because this store sells alot of good things, but they also get alot of odd groceries that people don't normally buy. They are just starting out and as word gets around they have been picking up new customers. I think most people who have never shopped at a salvaged grocery store think dirty, unuasable and outdated, but the stores I've shopped at were great! They were neat and clean and almost looked liked a regular grocery store. We also shop at one once in awhile near Altoona, PA called Bickle's. They not only sell salvaged groceries, but they have other things too like diapers, make-up, tools, toys, paint, dishes, tents, etc.... People travel for miles to shop at this store. We live about 50 miles from this store and go a couple of times a year on one of those odd days when we just feel like doing something different and go their for a day off the farm. In our area salvaged stores are becoming popular. I think the main thing in making such a store successful is to keep you prices as low as possible (and still make a profit) and to keep it neat. I was in such a store one time and the man just opened the boxes the stuff came in and set them on the floor! They were a MESS! He never priced anything. I only went there once and I later found out the store didn't last long. I'd say go for it, if you feel it will work out for you. Good luck.

-- Jo in PA (farmerjo02@yahoo.com), March 17, 2002.

Ken, we have a store like that close to where I live. I went one time and they were too expensive for the shape the merchandise was in. But on about the same line, a friend of our in another town has a salvage store. He sells damaged merchandise of all kinds. He also buys out places that are going out of business. Then sells the merchandise in his store. Has been in business at least 20 years.

-- ruby (rubyfmc@cs.com), March 17, 2002.

Ken

How about selling some salvaged corned beef tomorrow.

But seriously.........We used to have a guy locally who did this, and he made a killing. I have no experience, but I do have some thoughts.

Seems like the dollar stores have a lot of food that must be salvage.

Your problem may be where to store all of the product that you come up with, as it seems like it might be pallets at a time. Would you have to make contacts on a national level, to locate the stock from distributors?

As far as customers, are you on a road with good traffic? If so how about a sign that says-

"free coffee, 50 per cent off store price of food, while it lasts, Tuesday only". Better locate a couple of cases of dented coffee cans if you do this. You could also hold a Farmers market on one other day a week.

Good luck.

-- Rick in SW West Virginia (Rick_122@hotmail.com), March 17, 2002.

A bit of information about the supermarket trade. Only about half of their profit comes across the checkout counter. The rest comes from manufacturers and suppliers who pay for the privilege of having their merchandise stocked. They pay essentially per square inch of shelf space at a variable rate depending on where on the shelf it is located. If you want the premium eye-level space, then it will cost you substantially more than the lowest shelf. If you want to introduce a new product, and about 80+% of new items don't last a year, you have to pay them to drop someone else's merchandise. The merchandise which is pulled is sold to a jobber, who in turn, sell to salvage merchandise wholesalers. When a supermarket closes, they may have a going out-of-business sale, but it can reflects badly on the company's image, so they just sell all non-perishables to a jobber. Items reaching their expiration date may or may not be pulled from the shelves and sold. If I remember correctly a supermarket stockage is 4-5 times average daily sales, so you basically have a daily inventory turnover of 20-25%. If something doesn't sell by the expiration date, chances are it would have been picked up by the store's computer system and marked to be dropped from stockage as it isn't generating the revenue something else might (thus, a candidate to get replaced by something else.) One place in Mississippi said they are the exclusive agent for all of the Foodliners (she might have said Food Lions - that southern ascent thingy) and Walmarts within a geographic regions for this type of merchandise.

Part of what comes out of these wholesalers is manufacturer overruns. They simply overestimated demand, but they have a continuous production system which cannot be shut down for demand to catch up with supply. The excess inventory is sold to a jobber or wholesaler directly. Also, if they are a seasonal producer (such as canned vegetables) they need to clean out the warehouse before production for this year begins.

And part of it is busted or broken cases. If a case falls from the shelf or pallet the entire case is set aside for sale to a jobber. Same if a forklift punches a hole in a box. Also to be sold to a jobber would be boxes which were rained on or had water damage.

When this merchandise finds its way to the wholesaler the items which are still sellable are divided out into banana boxes (which are 16"x20"x10". When full the banana boxes are put on pallets. You have to buy by the pallet, but have a little discretion. For example, you can ask for mixed groceries, or home and beauty aids or apparently an entire pallet of one product, say canned dog food. The boxes apparently are priced from $7.50 to $9.25 each. One guy told me he thought a banana box held 50 regular size cans. Thus, the per can cost for a $8.50 box would be $.17 per can. If you can mark it up to $.35 per can, that is a 100% markup. If the local supermarket has the same item for $.50, a $.30 to $.35 price would seem appropriate. If they have them for $.33, when you might have to only mark them up to $.25. I suspect some cannot be marked up much. For example, I've seen Vienna-type sausages (not necessarily that brand name) at $.45. The area supermarkets sell them for $.50. I recall dented cans of Campbell Chunky Soup with the pop-off lid marked at $.80, when they are either $2.09 or $2.69 in the local supermarket.

Go to www.bananabox.com and look at the time for audited products. The percentage you see is the price they charge for this category of normal wholesale. for example, 65% - Beauty Aids means they charge 65% of typical wholesale price. Thus, if the standard markup for a full retail outlet were 40%, you would be paying $.65 for what they priced at $1.40.

I am only checking this out since my overhead would be very, very low. I own the building so wouldn't be paying rent. The building has skylights or the need for electric would be minimal. Neither heating nor A/C is a requirement. I could use fans in hot weather and not open during the couple of cold months we get (or put in a wood burning stove). This past winter it could have been open all through it without supplemental heat. It would be my labor. I've cut way back on my farming (cattle) activities so I'm here most of the time (Weds - Sats) anyway. If it were slow, I could just stay in the trailer, being alerted to shoppers via a driveway alarm system. Advertising should be less than $10 per week. My current liability insurance policy would cover it as a farm activity. I would build my own cheap shelving. Thus, probably something like 90% of the markup would come to me as sweat equity so to speak.

I'm still doing the research, but apparently there is active competition between these wholesalers. I have been told there are three within a two-hour drive of Waverly. Thus, I could alternate between them, or simply drop one which seemed to be overpricing their goods.

I figure it would be worthwhile if it would average $200 per day in sales. If the average purchase was $10, that would be 20 customers over a seven-hour period. However, since my overhead would be relatively fixed, each sale over my minimum requirements to stay in operations would result in the markup coming to me, not going to meet some expense.

All of the people I have floated this concept by say they would shop there, but who knows if they would or not.

On the observation of why most of the smaller places don't last long, I suspect it is they didn't realize how much sales they would have to generate just to break even on the cost of merchandise and overhead. Rent, hired labor and utilities can be shop killers.

Also, my down side rise would seem to be minor. If it doesn't work out I'll just have a going-out-of-business sale, use the fixtures elsewhere and use the building for storage again.

-- Ken S. in WC TN (scharabo@aol.com), March 17, 2002.

P.S. As noted quality would need to be essential. When there is only a price difference of $2.00 per banana box, it would seem to make sense to get the higher priced boxes. Logic is the merchandise would be better, and thus would be more saleable. Say there were 50 items in the box, the difference per item would be $.04. Thus, say you priced a so-so item at $.50 (from a cheap box) or a high-quality item (from a higher priced box) at $.60. The $.04 difference would be more than made up. If you are stuck with something, put it on a special sales table at your cost. Items which didn't sell could be marked down by stages until they finally sell, even if at a loss. It's part of doing business.

Someone asked about storage. After cleaning it up, I plan on using my 16' cattle trailer as a transport and storage vehicle (parked inside a building). When it is empty, time to go for another load.

-- Ken S. in WC TN (scharabo@aol.com), March 17, 2002.

Ken

We have a fellow that opened at store like that here a few months ago in a small shop and he seems to be doing pretty well, but he does have a good in-town location. I go there on a weekly basis and can pick up some good deals compared to the grocery store. His store isn't much to look at, but there are always several people in there shopping. If you like, I would be willing to ask him if he would talk to you. I'm sure he would he seems like a very friendly person. Let me know.

-- lee (larnold88@hotmail.com), March 17, 2002.

Another advantage would be donating your losses (if any) to charity, and taking the retail value off of you income taxes.

-- Rick in SW West Virginia (Rick_122@hotmail.com), March 17, 2002.

Ken I didn't read all the posts so maybe someone mentioned this. In Indiana salvaged groceries are sold at misc. auctions or food only auctions. I don't know of any salvage "stores". You might be sure you have some kind of insurance as here unless food is given away the seller can be held responsible if some one gets sick from the food or if it was tampered with before you got it and someone get sick. Just a word of caution. Linda

-- Linda (awesomegodchristianministries@yahoo.com), March 17, 2002.

There has been one of these stores in Brighton, CO for years. The name is Rob's. It's not too big. Call them!

-- DW in CO (djwallace@sotc.net), March 17, 2002.

Have a Mennonite salvage grocery store near by. Went once and and was really surprised at the "JUNK" they were selling to the public. Dented cans that we bloated and rusty. They had cheese that had been out dated 6 months !! Yet...6 months...cakes etc. Called the Dept of Arg and asked them about it. They told me only baby foods and dairy procucts have to stay within the code date the rest is up to the store's disgression. Now this is in PA. I think with the 2 for 1 sales and the discount gocery stores you usually can find good bargains if you shop well. Daughter use to live in Lancaster also and shopped at their stores...did pretty good back in the 80's but before the now discount food chains started coming along. I am usually not impressed with these stores as I think that a lot of the foods aren't really good. Guess it depends on your area and hopefully you would be honest and try to keep good quality foods the priority and not the profits. Good Luck !!!

-- Helena (windyacs@npacc.net), March 17, 2002.

The only salvage stores I've been in, the food prices weren't all that good of a deal. Maybe one or two items that they ran as loss-leaders. A few of them also dealt in more salvaged items than just food. This was back before 'dollar stores' were around. Many times the stuff didn't have expiration dates and you really had to wonder how old the food was.

There's a chain out here called Food4Less. It appears to me that they take other stores overstock or rotated close to expiration stock and sell it a bit cheaper. They sell several different store brands. One is Kroger, right now they're selling Kroger coffee .99/can. I shop there but I'm cautious about expiration dates. Many times there's only a few months left.

-- Dave (multiplierx9@hotmail.com), March 17, 2002.

I work for a trucking company. Trucking companies often get OS&D (overage, shortage & damaged) goods at free or close to zero-cost from the manufacturer. What happens is, when the trucker delivers to a grocery warehouse, often times some part of the load is rejected. For example, grocery warehouses will not deal with less than a caseload. If the outer case is torn, wet, etc etc etc, they will reject it, even though everything inside is fine. I drove a truck for several years and ended up with lots products to take home. Then when I moved into the office, i got even more stuff to take home. Everything from laundry soap to toiletries to dry goods, a lot of produce, to fresh and prepared meats of all types. There were times when I was far away from home, and had to give away, or try to sell, but usually ended up giving away, a lot of food that needed either refrigeration or freezing. I recall giving away 3 pallets of frozen stouffer dinners because I was over 1,000 miles away from home.

So therefore, you should make some phone calls to trucking companies in your area. Ask them what they do with their OS&D. Also, if you live anywhere near a truck stop, listen on cb channel 19. You will hear truckers trying to give away, or sell, stuff that you are looking for. Or you can ask on the cb, "hey anybody got any os&d to sell?"

-- gene ward (gward34847@aol.com), March 17, 2002.

Bear in mind the printed expiration date is someone's best estimate of when a product will start to lose its maximum quality and nutrition. It is both edible and nutritions well beyond the printed expiration date.

-- Ken S. in WC TN (scharabo@aol.com), March 17, 2002.

Right Ken, but if I'm buying something, I'll gladly pay a bit more for fresher stuff. And if you're stocking up to the point you're going to have stuff in the pantry for the next year, I'd also want the freshest possible. Most of the time it doesn't come into play with me because I don't buy canned food except once in a great while. I notice alot of times you can't find expiration dates. I see a bunch of numbers on the products but I guess you have to know how to decipher them.

Gene, that osd stuff is a heck of a deal. I have a few driver friends, one hauls for Walmart sometimes. Even if the box just has a tiny rip, they reject it. Last time he came through I got a few years supply of paper towels and t.p. for a couple dollars.

-- Dave (multiplierx9@hotmail.com), March 17, 2002.

Ken, some friends of ours had a grocery store and salvaged merchandise was their big seller. People would come from as far as 30 miles away to shop. On Saturdays, they would put banana boxes of food outside, ready to run them inside if it rained. They bought from the south, there are some states that don't let dented cans be sold. Soup size cans were .19, medium cans, .25 and large cans,.50. Boxed goods were also cheap, including cereals. They never knew what they were getting. One week they would get lots of pickles, next week none. They also took dog and cat food and rebagged it and sold it cheap. Good luck, it sounds like a great business.

-- Joanie (ber-gust@prodigy.net), March 17, 2002.

All this talk got me searching for a gov. site to explain this food dating thing, for anyone interested: Food Safety and Inspection Service, http://www.fsis.usda.gov/OA/pubs/dating.htm United States Department of Agriculture Updated June 2001

-- BC (desertdweller44@yahoo.com), March 17, 2002.

Ken, There are a couple of grocery salvage stores here in this area. One is very small and the owner stocks absolute junk at prices that are way to high. I think he buys the stuff that the other salvage places don't want. The other one is larger and does very well. It is located in a nearby city and does very well. I've shopped there several times. Their prices are much lower than regular grocery stores and quality is good. This store is about 20 miles from home so I don't shop there unless I'm going to be stocking up on enough to make the higher gas expense worth it. I do stop quite often when I'm in the area for other reasons though. If they were closer (5-10 miles), I'd shop there more often.I think they keep their margins fairly low and make up for that with higher volume.

Good luck with the store. It's great to see you back at the forum again.

-- Murray in ME (lkdmfarm@megalink.net), March 17, 2002.

Ken, there are a couple in Ogden, Utah, where my family lives. I stock up big time when I go to visit. Probably spend between $100- 200, depending on what they have. My best deal last year was on flour- they had 50 pound bags, white and whole wheat, as well as bread flour, for $1.45 per bag! They must have gotten it free, and certainly didn't make anything on it. Some things, they have priced at what I can get them for at the military exchange store, so I don't get them, but occasionally, they have a really good deal on meats (frozen) or butter, etc. Good luck, I hope you can make a go of it! Jan

-- Jan in Co (Janice12@aol.com), March 17, 2002.

I ran a snack bar for an auction house. The lady that owned it used to sell salvage very cheap and had more than enough customers. I don't know how legal she was(as far as to resell the food) but she made a killing on bringing in frozen/cold food every week. She also had h@b and canned/bagged stuff whatever she could get on her truck. She did really well until her suppliers started having trouble getting stuff. I went with her one time to locate new suppliers and we had a tough time finding them. We did find a couple of places that did the banana boxes but did not find them to be a good deal at all. All of the boxes that we saw were lucky if they were half full and at the prices you quoted. I did not see one box that had anywhere near 50 cans in them. We did find some good deals for fresh fruits and veggies though. Another auction house I go to does very well on the h@b stuff along with returns of regular merchendise that they buy by the truckload for 2-4000 bucks.They sell alot outright and run some through the auction. My brother had an auction for awhile(closed for now, pending divorce) and did very well at return merch. pallets. You might want to lean in that direction-no worries about bad food, people gettin sick etc...and everyone loves a good deal on household products. If you have any ?'s about that you can get in touch with me.

-- Terri in WV (mrs_swift_26547@yahoo.com), March 18, 2002.

The state Ag. inspector is coming later this morning to do an informal site survey to see if the building would be suitable and what modifications would be required. If they given an initial OK, I plan on going down to the banana box wholesaler in MS to physically see that would be on some pallets selected at random. If they won't show me, then there is no sense doing business with them.

From the above, and local comments, apparently quality would be every bit as important as price.

-- Ken S. in WC TN (scharabo@aol.com), March 18, 2002.

there is an amish or mennonite store in kalona iowa like this that used to be called the bent and dent. now it is bigger and i am not sure of the name....maybe stringtown? anyway, their prices are great, they ahve a lot of organic items, and i always go there when i visit the area! i get so much for so cheaply, and this place seems to do a thriving business in a small area.

-- marcee (thathope@mwt.net), March 19, 2002.

Site survey was Monday AM. State Ag. Inspector was very nice and helpful. Noted things, for the most part, I knew I had to do anyway. These were: sealing off the old garage from the addition I would be using, either painting or covering the concrete slab floor, replacing the weather strip under the large door, sealing openings where old roof meets side of new building and I will have to install self-closing screen doors.

Going down to the wholesale supplier tomorrow to see what they would provide at what price.

Actually, I am probably more afraid of it become too much of a success than a failure. I don't want to spend all of my time restocking. Could always price away some customers to keep it in check.

-- Ken S. in WC TN (scharabo@aol.com), March 19, 2002.

Just returned from the salvage groceries wholesaler. They have three aspects there, a retail store, banana box warehouse and full case warehouse.

Many of the items in the retail store seemed to be priced at or near to typical supermarket prices. Some good deals, some ho-hum. Looked like, and was probabaly about as busy as, a small supermarket.

On the banana boxes, they do not do anything to them except to receive, warehouse and ship out. The boxes are filled at their point of supply, such as a major supermarket chain warehouse. They determine prices ($8.50 to $10.50 per box) largely based on their source of supply, rather than what physically is in the boxes. For the higher priced boxes they know from past experience what will be in the boxes is fresher and contains more national brands. The $8.50 boxes may come from the warehouse of a discount chain. The banana box warehouse supervisor said about the worst one would do on these is to not be able to price up higher than the initial cost, but some may have $30-$40 worth of retail value in them. How they know the quality of their sources is through using them (the boxes) in their retail outlet.

I was not impressed by the case goods area. There you can buy by the case basically putting together your own pallet. However, much of it was store brands and/or outdated. For example, large bottles of Kraft mayo for $.50 per bottle, but a year past expiration date. Prices seemed to be about what I would expect supermarket wholesale to be. Thus, most couldn't be marked up much and still be significantly below supermarket retail. Only real good deal I saw here were 24-packs of generic dog food cans for $3.00 per pack, or $.125 per can. This is a very popular item for them so it goes out about as fast as it comes in. For most of it, I suspect once you were a going concern, you could open an account at a supermarket supply warehouse and get recently produced products for about the same price as these. If you just tell them to send you a pallet of case goods you are at their discretion. It would be a 7-8 hour trip for me to go there and pick out my own cases. Didn't seem much dented merchandise.

Head guy estimated initial stockage for my size building at about $8,000. That is higher than I estimate. May compromise at a figure between his and mine.

I was impressed by their candor and openness. Head guy said he would recommend using them as a primary source, but to also cultivate other sources to widen the mix of your inventory. He also said those outlets which seem to do best were those who undercut local retail prices by 20-25%. He also said there is not a national directory of operations like his. You have to find them yourself. The only one I could find through www.google.com under salvaged groceries is www.bananabox.com out of Fall Branch, TN. However, I wasn't impressed by either their web site or in talking to them.

Now I need to make a decision as I don't know of any other information I need to gather.

-- Ken S. in WC TN (scharabo@aol.com), March 20, 2002.

The salvage grocery I go to gets their stuff in Louisville. Would this be a closer drive for you? I'm sorry I don't have any more info- and I really don't want to ask them more about their business, I just feel it would be inappropriate. Have you checked yellow pages in the big city directories for grocery salvage warehouses?

-- shakeytails in KY (shakeytails@yahoo.com), March 20, 2002.

Shakeytails:

Probably the only way to find out if one is in a large city is to do a yellow pages search on wholesale grocery suppliers. Then just call one or more and ask if there is a wholesale banana box supplier in that area (apparently a common industry phrase). The folks you are referring to may get their supplies from another retail who wholesales on the side. Say the guy in town with the produce stand, and who has some salvage groceries on the side, wanted me to order him a pallet with my order. I'd do so for say $50 extra per pallet, which would cover about 1/3rd of my cost of delivery. If he wanted individual boxes, then I'd up my box price accordingly. With these folks (those who retail and wholesale on the side) one would have to be careful they didn't pick through the boxes and pull out the good stuff first, such as coffee, replacing it with other goods. I'd want to see them take the boxes from a pallet on which they had to remove the plastic wrap used around the entire pallet.

Since the box contents are so varied, you couldn't just use a consistent markup on every item in the box, as some would support it while others wouldn't. You would pretty well have to find out what the local retail price is and then price accordingly, such as 75% of normal retail. For example, a three-pound can of national brand coffee may provide several times as much gross profit as a half-dozen cans of store brand vegetables. A simple PC data base would be great for this. (If you can't keep a particular item in stock, chances are you are underpricing it.)

-- Ken S. in WC TN (scharabo@aol.com), March 21, 2002.

I don't know of any salvaged grocery places here, and I'm between Ken and Louisville. All we have is Save-A-Lot and the discount Bread store.

-- Cindy in KY (solidrockranch@msn.com), March 21, 2002.

I would have to agree with those that wouldn't buy outdated stuff. I want it to last on my shelf a while. I don't buy dented cans period. We have a Save-A-Lot and Aldi's where everything is well-priced and clean, if not name brand. I shop there. Plus I shop at Big Lots (they get stuff like you would Ken) and buy food stuff there, but never again crackers. They haven't been very fresh. I buy oil and spices there though, as well as juices, canned crab and such. I would think some bulk ethnic stuff might be good. Such as large cans of olive oil, variety pastas, etc.

-- Anne (HealthyTouch101@wildmail.com), March 21, 2002.

Ken--we have two in our little area here in SC TN. They are doing great business here. I'd say that 1/2 of the products are non- perishables (laundry detergent, wd-40, kitchen utensils....) I haven't noticed too many outdated items--mostly labels that are ripped, boxes taht are damaged. I don't buy the canned goods--not because they are dented, but because we grow our own veggies.

I buy all my paper products, hair care products, some pet food there. Occasionally I've found blank CD's, new paperback books (good ones!)potting soil.

It is a great deal..While I may not feed my family outdated, dented cans--you can be sure that this would be a welcome blessing to people on fixed incomes or very poor families that must survive. As far as I can tell--things are selling.

Yesterday all of his parking spaces weree filled when I was there. He hires school bus drivers that can come when they aren't neededon their routes. They are reliable and very loyal because they need the money and can work a schedule that benefits employer and employee.

The owner said he's not getting rich, but doing fine. Since you wouldn't have to rent your building--you might actually get rich!

Email me privately if you want more specific info.

-- Ann Markson (tngreenacres@hotmail.com), March 21, 2002.

Ken, Just checking up on how you're doing on your search. I went and searched a little to see what I could find for you. Have you checked amerisurplus-they showed photos of their pallets and banana box contents, you can buy by the pallet or truckload and should get much better deals with truckload buying. Also have you tried using distressed, overstocked or liquidations as key search words?

-- Terri in WV (mrs_swift_26547@yahoo.com), March 22, 2002.

Someone else gave me several other wholesalers as well. Apparently the differences between them is cost per box/pallet and shipping charges. From what I have seen, the sellability of boxes is pretty well related to cost. For example, if a box were to contain ten large jars of outdated even national brand mayo, you simply couldn't mark it up enough to cover the cost of the box even at $7.50.

Freight on a pallet can eat up a significant portion of any potential gross profit. A truckload is a bunch of boxes which require storage for what can't be put up on the shelves initially. The place in MS (Silver Dollar Sales, 75 Red Bay Road, Golden, MS 38847) will send a van-type truck load which will delivery one pallet or an entire load at a shipping price of about $150. Spread out over six pallets, that's about $.50 per box. A full-semi size-load (the equivalent of two van-types) would be about $180.

Here also, you pay the same freight for a truckload of good boxes or poor boxes, so it makes sense here also to go with high-end boxes.

Thank you for the other key search words, to which I would add outdated groceries.

Just to put it into the records, here are some other sites someone found me me as well: www.captivacompany.com, www.traderstation.net, www.surplus.net/evergreen/goods (in CA), www.gdsdistribution.com, and www.closeouts.digiscape.net/products.

A national discount wholesaler periodical is www.thecloseoutnets.com. Cost is about $50 for 12 issues. Does anyone have an old issue they would send me if I cover postage?

-- Ken S. in WC TN (scharabo@aol.com), March 22, 2002.