When BinStar opened its third location in Saugus, Massachusetts, on May 11, the scene was “crazy,” founder and CEO Jack Laughlin told Retail Brew. Cars orbited the lot, whose ~200 spaces were filled, and as many as 500 shoppers lined up outside the store.
“I went to Walmart three times just across the street to get water, snacks, drinks [and] sodas to give to people waiting,” Laughlin—who volunteered as a copy editor and writer for Morning Brew while in college—told Retail Brew.
It was in keeping with what Laughlin described as the “loosely organized chaos” of BinStar, which opened its first store in Avon, Massachusetts, in June 2023, with plans to open its fourth, in Kingston, Massachusetts, on June 8.
Like bin stores across the country, BinStar is making lemonade out of particularly mouth-puckering lemons: the avalanche of e-commerce returns.
- Returns for US retailers were valued at $743 billion in 2023, according to the National Retail Federation.
- The returns rate was 14.5% of sales for 2023, NRF found.
Many retailers find the challenge of reselling returns so intractable that they throw them away, with returned inventory accounting for 9.6 billion pounds of landfill waste annually, according to Optoro, a returns management company.
Bin stores aim to divert those returns from trash bins to their bins, which in BinStar’s case are wheeled metal crates that look like the offspring of a shopping cart and dumpster.
How you bin? For decades, deep discounters and dollar stores have acquired overstocked, liquidated, or even salvaged items, explained Laughlin. Those items often are sold in bulk, meaning a deep discounter would buy a pallet of, say, fidget spinners.
But Laughlin, giving us a virtual tour of his Avon location, showed us a bin of merchandise to demonstrate that it’s decidedly less uniform.
“It’s a random assortment of items,” Laughlin said, noting a puzzle leaning against a yoga mat in the same bin. “It doesn’t really look like inventory that you would see at like a TJ Maxx or Marshalls.”
As for where BinStar sources its merchandise, Laughlin said the exact sources of his merchandise are proprietary, although a cursory internet search reveals pallets of returned and liquidated items from numerous retailers are available from companies like American Liquidations.
What’s atypical about BinStar is what it does with one retail partner that it doesn’t name but calls “a large international retailer.” It regularly sends trucks directly to five of its stores in Massachusetts and New Hampshire to collect returns, which streamlines retailers’ typical process.
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“It allows us to circumvent the status quo national process where big box retailers would otherwise…ship two, three, [or] four pallets of returns from the store to a national depot, which if we’re in Massachusetts, could be in Nevada, where it then aggregates and then is sold to liquidators on a full truckload basis,” Laughlin explained.
In other words, BinStar saves the retailer the bother of sorting and shipping its returns, since it takes everything (except food).
“We’re taking your returns away, which are operationally taking a pallet space [and] jamming your back rooms,” Laughlin said. “Our value is to be able to make the problem go away.”
Another day, some other dollar: The way BinStar sells merchandise is as atypical as the way it acquires it.
The stores are restocked before they open on Saturday, when everything is priced at $19, dropping to $15 on Sunday and successively cheaper for the week’s remaining days, starting Friday at $2 and dropping to $1 after 4pm. (Clothing, however, is not subject to the pricing scheme, but rather typically sells for between $5–$15 irrespective of the day.)
“Most of the highest-ticket stuff goes out on [the floor] on the weekend,” Laughlin explained, adding that associates constantly restock the bins, including sprinkling in higher-value items during the week.
On a recent Tuesday—an everything-for-$8 day—for example, he said they scattered a bunch of Bluetooth speakers and JBL earbuds in the bins, even though they’d be a steal for $19 on Saturday.
Such Easter eggs offer “surprise and delight,” Laughlin said. “Customers were like, ‘Oh my gosh, I was not expecting that!’”
It’s not your typical merchandising approach, but it’s working for BinStar, which boasts a gross margin of 51% so far this year, Laughlin said. The retail sector average was 22.11% for the first quarter of 2024, according to CSIMarket.
Laughlin is the first to admit BinStar is what he called a “weird concept,” but less than a year in, the company is already profitable, he said.
“Our store is not for everyone,” he said. “But if it’s for you, you feel like you’re home because it is a bargain hunter’s paradise.”