Running a Successful Resale Business: An Interview with The Family Flips

Business Education, Guides, Liquidation, Wholesale Industry

2021-08-25

The Rensings are a family of five from Central Arkansas. The parents, Joe and Jessica, have set up a successful liquidation resale business, and involve their children as much as they can. The Rensings have also started a popular YouTube channel to share their story and their pointers as to how to turn entrepreneurship into a thriving family business.

In this interview, Joe and Jessica passionately describe how they quit the daily grind to move into reselling full-time.

Top Tips from The Family Flips

Don’t overlook product conditions when buying pallets.
Lower-value items are not suited for online sale. Sell smalls through bargain stores or to other local resellers in bulk.
If you’re starting with limited capital, invest in pallets you know you can resell for small profits (for example, shelf-pulls).
Keep records of your sales in spreadsheets, use past selling history to guide your pricing and help you calculate what you should source.
Grow organically, don’t force yourself to expand too quickly.
Get your family involved in the business. It’s fun family time with educational benefits.
Don’t try to imitate other businesses. They have different circumstances, geography and levels of investment.
Keep focused and don’t give in to failure. The path to success is rarely straight.
Don’t set your expectations on your first pallet. This is a long game. Lead with logic, not emotions.

The Beginning of the Business

How did the couple get started in the liquidation resale business? Joe started by selling items from around his house to raise money in a difficult situation. He then started going to goodwill and thrift stores and buying items such as women’s jeans, which he knew he could resell for a profit.

After his financial situation improved, Joe found that he didn’t want to give up this side hustle, as he was enjoying it too much. “I just loved my own business.”

Source: TheFamilyBusinessCenter.com

Joe branched out to selling cell phones, and was planning to expand. This was when Joe and Jessica discovered a new way to source their merchandise. “We stumbled across the wonderful world of liquidation, and buying pallets, truckloads, boxes… You name it, we have bought it.” The couple now work full-time on their business and have their own warehouse shop.

However, it hasn’t always been plain sailing. Without realizing that there are different grades of liquidation items, they bought a pallet of Insta-pots without noticing that it was listed as a salvage lot. “We pull an Insta-pot out and the front panel just falls off… We pick up another one and the bottom just falls out… I put all the good stuff together to make one good pot . it was like a Franken-pot.”

However, in the next set of pallets they bought they unboxed a 3D printer, which made their money back.

When Joe and Jessica moved up to buying truckloads to resell online, they found another problem. They bought a truckload of smalls and found that 60-70% of the items were worth $10 and under. “There was no way we would be able to sell them all online, so we had to pivot our entire business just like that in order to be able to move them”, Joe explained. “So we ended up opening a bin store… It wasn’t geared towards resellers, it was more geared towards the bargain shopper”, Jessica added.

Source: ScrapeHero.com

The couple found an effective way of maximizing both sales and profit from the store. They set prices on the first day, and kept reducing them over time, and ended up selling very quickly. They made the difficult decision to close the store as they didn’t have the resources to hire employees, and they were not spending enough time with the family – the main reason they started this business.

When COVID hit, in-person sales plummeted and Joe and Jessica decided to give up the warehouse, and instead focus on big-ticket small items (mostly electronics) they could sell out of their garage. This was a successful business model that kept them going through the pandemic.

The Rensings use every opportunity to get their children involved in the business. “My four-year-old loves to put stickers on our resale items, my older daughter is able to pull items for shipping… When we unpack a pallet, we have her add up all of the stuff to find out what our potential profit is going to be, so she’s learning not only business skills but basic math skills”, Jessica explains.

How The Family Flips Choose Liquidation Pallets

We asked the pair how they make their sourcing decisions. Jessica explained that they focus on 3 main questions before choosing merchandise:

How much time do we have?
How much space do we have?
How much capital do we have?

Jessica also explains that items that have the biggest profit potential are usually also those with the most risk. If you’re starting with a limited amount of capital, it’s better to buy pallets that are more guaranteed to make smaller profits, rather than riskier pallets that might have more high-profit items, but could lose you your money.

Source: TheFamilyBusinessCenter.com

According to Joe, buying shelf-pulls is a great way of guaranteeing you’re getting brand-new items you’ll be able to resell, but at a lower profit margin than a pallet of untested returns might offer.

What Do The Family Flips Do With Damaged Items?

“If it’s a quick fix, absolutely I’m going to try and fix it, but at the very least I’m going to try and part it out. That’s taking the good parts if something is broken, taking as many parts as I can and selling them as replacement parts. At least I can recoup some money there”, Jessica notes. She then added that the decision really comes down to how much it is going to cost to repair, and if your time could be more profitably spent elsewhere.

Joe adds that the items they can’t repair he can share through their reselling community. Someone will take them and do the repairs themselves. At least that way the items don’t end up in the landfill, something that the Rensing family is passionate to avoid.

Source: ProfitableVenture.com

What Key Lessons Have the Rensings Learned?

Joe explained that having the right mindset was important when buying liquidation pallets to resell. “It’s like playing baseball. Sometimes you get up to bat in baseball and you hit a homerun; that might be a pallet you’re quadrupled or made ten times your money on. Something you might hit a double, and you double your money, but sometimes you might strike out. But you’ve got to think about it: it’s a long game. You’ve got to look at it over the course of time.”

You can’t set your expectations based on one pallet. Your first pallet may be a homerun, but if you expect that to be the result every time, you’re setting yourself up to fail. Likewise, if you start with a bad pallet, don’t expect all of them to be like that, as you will quit, and, as Joe puts it: “Then you’re stealing from your future self by not continuing to try. As long as we make our money back, that’s a win for us.”

Source: GoodHousekeeping.com

Jessica agrees: “I think one of the dangers in somebody starting a reselling business, and either stunting the growth or failing altogether, is leading with emotion rather than logic and business sense.”

Through experience, Joe is now able to say that certain items in his local area, such as new furniture, baby items or household goods, can achieve 80-90% of retail value, whereas other items, even in brand-new condition, can only make 40-50%. As these are local sales, there are no historical sales data or software tracking trends. These numbers are only obtainable by experience and trying out different products locally. Joe suggests you keep Excel spreadsheets, charts and tables. Build up this data over time and use it to guide your sourcing.

Jessica adds that you should grow your business carefully and organically. “Anytime you transition, whether you’re moving spaces, adding spaces, adding employees, you have to expect the level of productivity to go down. The more change, the more the productivity level goes down. Do you have the resources you need to sustain you through this lower productivity time? Most people don’t.”

Source: StartupsAnonymous.com

Jessica’s final point was to emphasize the importance of planning and determination to make a liquidation resale business work. “When you’re starting this business, know there are going to be challenges and know that the first time you fix it, it’s not going to be perfect. Just keep working at it, work back and forth, and eventually you get to this point where it’s fine. And then the season changes and then you have to adjust all over again.”

Joe’s final remarks were on not comparing yourself to other similar businesses. “You are operating under a completely different set of circumstances, geographic area: what I buy and sell for me, other people aren’t going to want to do because it’s not on the cards for them, where they live, how much money they have, the time, the space, all those things.”

However, Joe thinks this is a positive thing. “That’s the beauty of reselling. There are millions of different ways that you can be a successful reseller. Find the items that you like, find the items that you can sell in the ways you want to sell them. That’s where you’re going to find success for you.”