How has the lack luster economy affected your store?

Well honestly, this is why Mel and I started this business. We knew we could capitalize within a struggling economy providing a solution for struggling families trying to make ends meet. I would be lying if I didn’t tell you that at times we feel a little guilty about this, but honestly, at the same time we know we are meeting the needs of many families providing an alternative solution when it comes to the high cost of grocery shopping. Sales are strong and we both feel our little business just might be recession proof.

Steve, I wanted to ask about the aggressive advertising campaign you launched a few weeks ago. Have you noticed an increase in foot traffic to the store?

Melissa has commented a few times about the number of daily transactions increasing. No we haven’t analyzed the full ROI from our advertising dollars, but I believe it has made a difference. Especially the half page flier we had inserted within our local newspaper. We made sure to include a 10% off coupon for total store purchases, and I have a stack of redeemed coupons in the back office. I think the most important aspect of advertising is the fact that we get people through the doors who normally may not shop with us. Hopefully, those new people turn into regular shoppers.

Have you guys experienced any issues with customers returning merchandise? Can you go into detail in reference to your store’s return policy?

Inevitably, product returns are a part of any kind of retailing, but I think the salvage grocery business offers an increased opportunity for people to be dissatisfied with products due to the nature of expiring products. Even though we try to explain about product dating, some people return merchandise stating the product is unpalatable. Our store policy concerning returns has evolved into a a 100% satisfaction guarantee through either store credit or full cash refund. We have found that since the majority of the items we sell are priced no higher than $5-$8, it makes good sense to insure complete customer happiness. The last thing we want is to have someone spread negative, word of mouth advertising about our store. Even though our town is not very small, word can spread, and we do not want to make a bad name for our business.

About how many returns does your store experience within a month?

Well, at times, it seems as though the number of people returning food products is high, but when balanced over a month we are averaging about twenty transactions due to freshness and overall dissatisfaction. We really try to maintain a 100% “no questions asked” policy to insure a no hassle shopping experience within our store. I can tell you with certainty, that each returned transaction walks away with our stores’ flier that explains product dating.

What is the hardest part about operating a salvage food store?

That would have to be the consistency of the food loads, or I should say lack thereof. We purchase from thew same sources each week, but every now and then we still get a load that seems to be heavily damaged, of if not damaged, less of an assortment/variety. It’s not too troubling now that we are ordering a load every week, but when we started, we were only re-ordering every two weeks and that made a bad load difficult to deal with.

There will be a segment of people, in any market, that will avoid salvage food grocery stores simply because they do not want to take a risk with expired or unsanitary conditions when shopping for food items. It’s these people, this segment, for which an aggressive marketing campaign will do the most good. If you can help dispel some of the myths surrounding salvage food, your store will prosper as your customer base grows.

How can you effectively advertise the bargains, while at the same time, dispel negativity?

Commit to an aggressive local social media campaign- Allow your customers to interact with each other through a blog, Facebook page, and a company Twiter account. If you’re not up to speed with today’s social media scene, it would be best to take a seminar or hire someone part time to assist with all things internet related.

Publish a bi-weekly or monthly store newsletter- Keep customers up to speed when it comes to in-store sales, educational information, recipes, and community happenings within your town by publishing a newsletter that can either be mailed or emailed.

Create an informational flier that can be handed out to new customers- Keep a stack of fliers up by the front entrance explaining the definition of salvage food. Within the flier you can explain the basics of food dating and put ill feelings at rest.

Creating a Facebook page for your salvage grocery store will give you an opportunity to reach out and connect with shoppers in your local city. Your Facebook page should offer information about your business including store hours, address and phone numbers. Once you have a Facebook page published offering business details it’s time to start connecting and marketing. Share your page with all of your current friends on Facebook and encourage them to share your business link on their own wall.

Posting to your business wall should be done as often as you can, but make sure you are sharing relevant, worthwhile information. You can share news about your store including current sales or upcoming promotions. When you share on Facebook remember that you are trying to build a list of followers who want to view your content and links. Do not limit your Facebook postings to store specific information, in fact create a buzz by offering other information your customer might appreciate. Since the very essence of the retail salvage food business is about helping people save money, you could continue on this idea showing people where they can find other products at deep discounts. Another great idea is sharing links to recipes online.

Lets go over the pros and cons of selling salvage groceries at the flea market:

PROS

No Overhead – When you set up shop at the flea market you are only responsible for paying your space rent. Fees for selling will vary widely fro market to market, but cost is usually based upon market traffic. If in a given weekend a market boasts 20-30,000 people obviously the fee to sell will be relatively high. The more visitors to the market means more sales opportunities for you! Average booth rent will range from a low of $10 per day to a high of $50-$100 per weekend.

Shoe String Startup – The flea market can be used to build your business with little startup capital. Your basic expenses will be booth rent and inventory! Because the overhead is non-existent you save the money necessary to open a traditional brick and mortar storefront within a fews months of flea market operating.

CONS

Logistics – The flea market may offer low overhead, but the labor effort to bring your salvage food inventory can be intense. You will have to load, unload, merchandise, and then pack up again at the end of the day.

Temperatures Controls – If you are reselling food you must keep your stock at a consistent temperature or contents of canned good can become compromised. Shelf life depends on how well and what temperature food is stored at. With this in mined, it might be best to resell only dry goods at the market.

Please weight the pros and cons when thinking of setting up shop at the flea market, especially when reselling salvage groceries. The market can offer the potential to stair step your way to a more traditional store front, but it is very hard work.

“Hello, I have been reading your blog for sometime now and I have a question about our first 12 pallets of salvage food we bought last week. Let me give you a little background information about our business…My wife has owned a trendy little clothing boutique here in Vero Beach for sometime and we had the opportunity to lease the adjacent store front this month with the intent to start a small salvage food store. The store is approximately 1200 square feet and we feel it will fit right in within others stores, here at the plaza. It was my idea to start this discount food store after careful research of the salvage food industry. Here is my question: we just bought our first load of inventory, which was twelve pallets and I must say it has taken a lot of time to sort and price the grocery items…how do we know when to reorder? Should we get started on our next purchase or wait a week or two?

Answer: Congratulations is in order for your new store, and I wish you and your wife all the success hard work brings! It is not possible to give you a definitive answer as far as when to reorder as it will depend on several factors including:

Inventory Mix – If your first twelve pallets of salvage food arrived with a good product mix (assortment of various staple grocery items) your opening inventory should be fine. But, if the first load was not very assorted you might consider a quick reorder to even out your stores’ inventory.

Store Traffic – Take into consideration how many customers you have on a daily basis to decide when to reorder your next load of salvage food. Obviously, if your store is constantly experience heavy traffic, stock levels will give you a clear indication of when it is time to reorder. I would say, on average, a store with moderate traffic will reorder a new load about every 12-15 days.

The best way to overcome this challenge is to educate your client base and keep you store, and it products clean. I know several salvage food store who prepare and hand out a flier to new shoppers explaining salvage food and how it is, in fact, safe to consume.

A flier containing information about the salvage food process from store to reseller might be a good idea as most customer will question how inventory was obtained. An educated customer is a wise shopper and will look past dented cans and crunched boxes!

The other part of the equation is to keep your stores interior and exterior clean at all times. If the aisles are cluttered and messy this will not sit well with most shoppers. A clean, inviting environment is a healthy and safe environment.

Most loads of banana box salvage food come un-manifested, meaning you have no clue as to the pallet or truckloads’ contents. With uncertainty, you should opt for larger loads to get the best merchandise mix. Take for example a load available today from the supplier GDC Commodities Exchange, here in California. The load they are offering consists of 1152 banana boxes filled with salvage food for a total price of $15,500.00. They are advertising the load as a mixture of salvage food, HBA (health and beauty aids), Pet Food and general merchandise.

You could open a store with this load, but there are some issues to take into consideration…

• The shear size of this load will take a lot of processing room. 48 pallets is a huge undertaking. You will need to sort and categorize the load before merchandising in your store. I am always advocating plenty of back-store processing room for salvage food stores. We are talking a single 53 foot truck filled with pallets!
• If you can properly categorize the load once delivered, a shipment this size can be used to open and restock within 1-2 weeks.
• You will need a forklift and pallet jack to process this load. If delivered in a 53 foot truck, most do not come with a lift-gate.