Pallet Kings Makes A Splash Offering Closeout Goods For Resale

By Tim Feran The Columbus Dispatch, Ohio

WWR Article Summary (tl;dr) A big part of "Pallet Kings'" allure, is treasure hunting. The company sells people pallets of merchandise (sometimes you know what's in the box, sometimes you don't) and then teaches them how to resell the items at flea markets or online via eBay and Facebook. The Columbus Dispatch, Ohio

It's 11 o'clock on a quiet weekday morning in a scruffy Lancaster neighborhood, and the Pallet Kings already have sold 15 of the 32 pallets of merchandise that came into the store just an hour before.

What exactly is in the shrink-wrapped pallets is a bit of a mystery. And that's part of the appeal -- and one reason for the early success of an unusual business.

Pallet Kings is the brainchild of Kyle Horton, one of the owners of the 3-month-old business.

Its roots began years ago, when Horton went into the business of buying "loads of stuff from big-box retailers, shelf pulls, overstock, returns," then selling them to auction houses and flea markets. In the retail business, people like Horton are known as "jobbers."

A little more than a year ago, a friend in Kentucky needed a hand financially. Horton, the energetic son of a minister, decided to help by selling the friend a pallet of merchandise and then teaching him how to resell it and make a profit.

Something clicked.

"I saw an opportunity to change everything," Horton said. And he turned the experience into a business.

Together with Horton's in-laws, brothers Cortez and Clarence Sayles, he set up shop at a long-closed Dairy Mart at 700 N. Columbus St., then started marketing pallets via a Facebook page.

The business now has grown to more than 1,500 followers who check in daily to find out when a shipment of merchandise will arrive -- usually on Tuesdays, Thursdays and Saturdays.

"It's the same deal that auction houses have always had," Horton said. "I pay for the truckload by the size of the load, which is 25 to 40 pallets. We know as much as the customers do about what's on the pallets."

The merchandise can be just about anything -- from small appliances and tools to camping equipment and electronics. (They won't sell clothing, however, preferring to focus on items such as electronics that have greater possibility for profit. If any clothing comes in, it's donated.)

Pallet Kings sells pallets for between $250 and $550, but typically they go for around $285. Horton assigns the price based on little more than gut feeling.

The pallets are covered in clear plastic, which means that customers can easily figure out what is in some -- such as one recently that contained nothing but electric window fans -- but they can have a harder time discerning what is in other pallets whose contents are hidden in large cardboard bins.

"What's in some of the pallets is as big a surprise to us as it is to our customers," Horton said.

The Pallet Kings business model is "really cool," said Lee Peterson, an executive vice president at WD Partners, a Dublin retail-consulting company.

"There's a lesson to be learned here for all retailers," he said. "One of the things that's terrific about this is the element of surprise."

The company is trading on what used to be the franchise of outlet stores. "Back in the day, you knew when they got shipments in and there was that element of surprise to see what came in," Peterson said.

"It's great way to get people to come into the store, which is something that retailers are obsessed with now."

Because Pallet Kings' merchandise is being liquidated from other stores, all sales are final, even for the "mystery box" pallets. But that's just fine for some customers, who say that the surprise element makes unwrapping a pallet feel a little like Christmas morning.

"There's so much good stuff," said customer Troy Lee of Lancaster.

"This is Lancaster's little secret. I bought some pallets the other day and they had seven air conditioners, 15 microwave ovens and miscellaneous stuff. I got a 500-pound safe the other day. If I get a pallet with no guessing, my 12-year-old son will be mad because it's not like Christmas.

"We found seven Fitbits in a box I got for $290. So if you sell them for $50 apiece, I've paid for the whole pallet and am into profit."

While treasure hunting is a big part of Pallet Kings' allure, the practical appeal for some is that Horton will show customers how to resell the items at flea markets or online via eBay and Facebook.

"I'm here to educate and inform and help them sell, because if they can't sell the stuff, I'm the bad guy," he said. "I'm helping people be entrepreneurs -- and half of them don't even know what that word means. These people aren't lawyers or doctors. If they make $1,000 selling stuff from a pallet, that's everything to them."

The lure of a good payoff has kept Ruth Klein of Columbus coming back.

"It's addicting," Klein said as she loaded up her minivan with son Tyler. She pointed out some of the items found in that day's pallet.

"This one's got air mattresses, which sell like crazy, and a lot of fishing stuff. See this?" she said, pointing to a box of golf balls. "It's missing two balls (out of 45), but who cares? I'll sell it for half price."

Horton looked on and smiled.

"These people are my warriors," he said. "If you see a pickup truck driving around Lancaster loaded with pallets of stuff, you know it's been to Pallet Kings."

Business is going so well that Pallet Kings has already outgrown the original location, he said.

"We're going to move in the next few months, so we can have a couple of truckloads in at a time." Where?

That hasn't been settled. Pallet Kings will let its Facebook followers know when the time comes.

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