Amazon Bin Store

Hello Investors!

When you return something to Amazon, what do you think happens to it?

In many cases, it gets sent to a warehouse, gets put onto a pallet with a lot of other returned items, and then that pallet gets sold to someone for pennies on the dollar.  But who’s buying these pallets?

In some cases, they are getting bought by the operators of discount retailers, also known as Bin stores, and they are located throughout the country.

My colleague at Progressive Real Estate Partners, Monica dal Bianco West recently completed a lease with Fire Deals, which is the official name of an Amazon Bin store in Ontario. She said that on opening day, people were lining up outside the door at 4:30 in the morning!

Until Monica had done this lease, I hadn’t heard of this concept, so to fully understand the appeal, I drove over to check it out.

This is how the business model works:
Everything in the store is the same price on that day.  New shipments come in on Thursdays, so the best items are available on Thursdays, and everything costs $25 that day.  As the week goes on, the prices drop as the good stuff has been purchased.

Thursday: $25
Friday: $10
Saturday: $8
Sunday: $6
Monday: $4
Tuesday: $3
Wednesday: $2

Here’s a look inside the store, which I visited on a Tuesday:



You can see that the decor of this store is pretty bare bones.  The bins are built out of plywood and 2 by 4s.



This chart shows how housing prices have gone through the roof over the past two years. A recent article in Forbes doesn’t believe that we’re in a bubble, and I tend to agree. Here are four reasons why:



There was a lot of clothing, but of course, none of it is organized in any way.  I could see if you wanted to take the time to dig through it and were shopping for a few people at one time, you could find something that you like.


I ended up buying a chalk set for my kids, which they loved. And even though it was $3 Tuesday, the employee said I could have it for just a dollar. Can’t beat that deal!

In the future, I’ll head over there on a Thursday or Friday sometime to see the difference in inventory those days.

I hope you enjoyed this week’s newsletter. Thanks for reading, and I’ll see you next time!

Connect with me here:

Mike Lin, CRE