We recently expanded my wife’s Event Decorating Academy to sell wedding and event decorating supplies to students and professional decorators. We were buying from distributors who supply various retailers and small wholesalers such as ourselves.
End of last month my wife and I attended the ASD retail merchant trade show. This trade show is held in March and August in Vegas. They also have one in NYC in September.
As a result of attending the ASD show are now buying directly from the same sources as many of our suppliers, cutting 35-40% off the distributor price we were paying. Many of these items we buy by the pallet so savings is huge. The largest example is curtains used for fabric draping at weddings and events. We sell thousands of these a month.
Cool, but what does this have to do with landlording?
A lot actually. At the show I found a number of products that we buy in quantity for the properties we own and mange at prices that were surprising. For example passage sets and deadbolt locks for $3.00 a piece. These are steel latch ANSI Grade 3, similar to the Defiant or Legacy brands at Menards and Home Depot. We actually upgraded to the “off brand” a number of years ago when Kwikset changed to a plastic latch in their 200 series that would break and lock tenants in their room.
We found nylon polyester paint brushes with long wooden handles. They look, feel and are packaged, with the exception of the name, the same as what we are buying today at Sherwin Williams at twice the price. As I am examining a brush the rep walks over and says ‘It’s a very good brush. We sell that same brush to Sherwin williams by the container.’ (a container is those semi trailer sized boxes that travel by ship and then are loaded onto rail cars and trucks)
When the CO detector law first went into effect I ordered thousands for our use. The price was to be just under $15 apiece. I told buddies of mine in the industry who couldn’t believe the price we negotiated. So I ordered more to cover these needs. The price dropped for all of us to $13 something apiece. So helping others we in effect helped ourselves. At the ASD show one vendor offered us the same US branded model at $9 a piece in the same quantity as we currently have to order.
At the show quart bottles of brand name cleaning supplies; 60-80¢ each in mixed lots pallet. Add about 35¢ apiece for shipping and you are still well below the three four bucks you find them for at Pick N Save. We go through cases of these products getting properties ready to rent. As I reviewed our purchasing over the past year, it looks like we consume the equivalent of a pallet of cleaning supplies every three and a half months. While we don’t pay four bucks a bottle, we are paying more than two times what we can get it directly from the distributors.
There were a number of other products we buy in bulk that we got pricing on. It is going to take a while to digest all that I saw and learned.
For the most part these sellers are the direct importer from China. Yes, much of the American branded products are made in Asia. Hate that as you may, it is a reality. One of our newly found curtain suppliers claimed to be supplying Target. I walked into target and to my surprise was able to find the same curtain he is selling us on their shelf in the same packaging as the ones we are receiving. While I know Target gets a better price than us, I doubt that many of our direct competitors do.
Last year we had met with Chinese manufacturers trying to get product at a better price. That path seems fraught with dangers. Dealing with US based importers and manufacturer reps is easier. So far every thing we ordered for the Event Decorating Academy is arriving in the quality, quantity and condition were anticipated without any odd financial issues. While eventually going directly to China may save money, I doubt we would have achieved the same level of satisfaction until we were well seasoned. That is assuming we did not make mistakes in China that would have left us broke. They clearly do not subscribe to the same laws as the US.
Cool for you, but why would this interest me?
Some of these things I do not need full pallets of, but maybe some of you in the Milwaukee area could take advantage of the deal and in the process make it reasonable for me to bring in a pallet. Similar to what we did with CO detectors in the past.
If you want two smoke detectors and a lock this obviously isn’t worth the effort for either of us. But if you need dozens or hundreds of something maybe there is an opportunity here. I would be very interested in hearing what products you buy in bulk and at what price you pay today. Email me or post to the comments. I will share what I learn directly with those that respond.
The neatest thing I saw at the ASD show …
There was a young Korean lady selling an air cushion shoe insert. The insert works by pushing air from the sole to the arch as you walk. We bought some samples. My wife (size 5 shoe) loves them. I like the concept but the size is wrong for my big feet. The arch part isn’t really at my arch so the effect isn’t what it is designed to be.
But what was so cool was there was an older guy in the booth with her that spoke no english. While we were buying our samples she introduced him as her father, the inventor and patent holder. She was obviously so proud of her father. It was very cool to see.
Most interesting thing I saw at the ASD show…
Pallets of returns
You know when you are at the returns desk of Wal Mart, Target etc and see all the stuff that people return. I assumed returns will be placed back on the shelf. Actually they package it up and intermediaries sell it for a couple of hundred dollars a pallet.
